Town of Barnstable v. O'Connor

United States Court of Appeals
For the First Circuit

No. 14-1597

TOWN OF BARNSTABLE,

Plaintiff, Appellant,

HYANNIS MARINA, INC.; MARJON PRINT AND FRAME SHOP LTD.; THE
KELLER COMPANY, INC.; ALLIANCE TO PROTECT NANTUCKET SOUND; SANDRA
P. TAYLOR; JAMIE REGAN,

Plaintiffs,

v.

ANGELA M. O'CONNOR, in her official capacity as Chair of the
Massachusetts Department of Public Utilities; JOLETTE A.
WESTBROOK, in her official capacity as Commissioner of the
Massachusetts Department of Public Utilities; ROBERT HAYDEN, in
his official capacity as Commissioner of the Massachusetts
Department of Public Utilities; JUDITH JUDSON, in her official
capacity as Commissioner of the Massachusetts Department of
Energy Resources; CAPE WIND ASSOCIATES, LLC;
NSTAR ELECTRIC COMPANY,

Defendants, Appellees.

No. 14-1598

HYANNIS MARINA, INC.; JAMIE REGAN; ALLIANCE TO PROTECT NANTUCKET
SOUND,

Plaintiffs, Appellants,

MARJON PRINT AND FRAME SHOP LTD.; THE KELLER COMPANY, INC.;
SANDRA P. TAYLOR; TOWN OF BARNSTABLE,

Plaintiffs,

v.

ANGELA M. O'CONNOR, in her official capacity as Chair of the
Massachusetts Department of Public Utilities; JOLETTE A.
 WESTBROOK, in her official capacity as Commissioner of the
Massachusetts Department of Public Utilities; ROBERT HAYDEN, in
his official capacity as Commissioner of the Massachusetts
Department of Public Utilities; JUDITH JUDSON, in her official
capacity as Commissioner of the Massachusetts Department of
Energy Resources; CAPE WIND ASSOCIATES, LLC; NSTAR ELECTRIC
COMPANY,

Defendants, Appellees.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard G. Stearns, U.S. District Judge]

Before

Lynch, Chief Judge,
Stahl and Kayatta, Circuit Judges.

Ira H. Zaleznik, Joshua M. D. Segal, and Lawson & Weitzen LLP,
on brief for appellant Town of Barnstable.
Matthew E. Price, with whom Adam G. Unikowsky, Jenner & Block
LLP, Robert A. Bianchi, and Robert A. Bianchi & Associates, were on
brief, for appellants Hyannis Marina, Inc., Jamie Regan, and
Alliance to Protect Nantucket Sound.
Laurence H. Tribe, Jonathan S. Massey, and Massey & Gail LLP,
on brief for appellant Alliance to Protect Nantucket Sound.
Timothy J. Casey, Assistant Attorney General, with whom Martha
Coakley, Attorney General of Massachusetts, was on brief, for
appellees Angela M. O'Connor, Jolette A. Westbrook, Robert Hayden,
and Judith Judson.
David S. Rosenzweig, with whom Erika J. Hafner, Michael J.
Koehler, Keegan Werlin LLP, Geraldine E. Edens, Christopher
Marraro, and Baker & Hostetler LLP, were on brief, for appellee
Cape Wind Associates, LLC.
John D. Donovan, Jr., Matthew L. McGinnis, and Ropes & Gray
LLP, on brief for appellee NSTAR Electric Company.

May 18, 2015
 KAYATTA, Circuit Judge. This appeal arises from the

latest in a series of lawsuits by opponents of a proposed off-shore

wind power generation facility in Nantucket Sound. Plaintiffs--who

include the Town of Barnstable, a non-profit advocacy group named

Alliance to Protect Nantucket Sound, and businesses and individuals

residing near the proposed facility1–-sought an injunction and a

declaratory judgment in federal district court against officials of

the Massachusetts Department of Public Utilities ("DPU") and the

Massachusetts Department of Energy Resources ("DOER") (together,

the "state defendants"),2 and two private parties, Cape Wind

Associates, LLC and NSTAR Electric Company,3 whose contract to buy

wind power DPU approved. The district court granted defendants'

motions to dismiss after determining that the Eleventh Amendment

precluded the assertion of federal court jurisdiction. For the

1
The other plaintiffs are Hyannis Marina, Inc., Marjon
Print and Frame Shop Ltd., The Keller Company, Inc., Sandra P.
Taylor, and Jamie Regan.
2
The state defendants are Angela M. O'Connor, in her
official capacity as Chair of DPU; Jolette A. Westbrook and Robert
Hayden, in their official capacities as Commissioners of DPU; and
Judith Judson, in her official capacity as Commissioner of DOER.
The officeholders for the above-listed positions have changed
multiple times during this appeal. We list the current
officeholders in accordance with Federal Rule of Appellate
Procedure 43(c)(2), which provides that "[w]hen a public officer
who is a party to an appeal . . . ceases to hold office,
. . . [t]he public officer's successor is automatically substituted
as a party."
3
Cape Wind and NSTAR were added as required parties
pursuant to Federal Rule of Civil Procedure 19(a).

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reasons explained below, we disagree that the Eleventh Amendment

bars the assertion of federal court jurisdiction over plaintiffs'

claims, and we remand for resolution of the case's status and the

possible need to resolve a litany of other issues concerning the

viability of the complaint.

I. Background4

Cape Wind has pursued development of offshore wind power

in Nantucket Sound since at least 2001. See Alliance to Protect

Nantucket Sound, Inc. v. U.S. Dep't of the Army, 288 F. Supp. 2d

64, 67 (D. Mass. 2003). The company has faced a series of

challenges against its attempts to acquire the necessary permits

and approvals for a planned 130-turbine, twenty-five square mile

facility in the Sound. See Town of Barnstable v. Berwick, 17 F.

Supp. 3d 113, 116—20 (D. Mass. 2014).

Cape Wind's efforts at convincing electric utilities

(also known as "electric distribution companies") to purchase its

wind energy received a boost in 2008, when the Massachusetts

legislature enacted the Green Communities Act (the "GCA"). 2008

Mass. Acts ch. 169 ("An Act Relative to Green Communities").

Section 83 of the GCA requires each Massachusetts electric utility

to "solicit proposals from renewable energy developers and . . .

enter into cost-effective long-term contracts" with such developers

4
Our recital of the facts traces the allegations in the
complaint, although for context we flesh out the story it tells
with some additional facts from the record.

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for up to three percent of the total energy demand in the utility's

service territory. Id. at § 83. Section 83 further provides that

"[t]he timetable and method for solicitation and execution of such

contracts shall be proposed by the distribution company in

consultation with [DOER] and shall be subject to review and

approval by [DPU]." Id.

As originally enacted, Section 83 permitted Massachusetts

utilities to fulfill their renewable energy obligation only by

entering into contracts for power generated "within the

jurisdictional boundaries of the commonwealth, including state

waters, or in adjacent federal waters." Id. In 2009, while that

geographic limitation was still in place, Cape Wind entered into

no-bid negotiations with National Grid--a competitor of NSTAR

operating in Massachusetts--for National Grid's purchase of fifty

percent of the wind energy generated by Cape Wind's proposed

facility. Cape Wind and National Grid later executed a contract,

which they called a Power Purchase Agreement ("PPA"). According to

plaintiffs' complaint, "[t]he National Grid contract prices were

significantly above the market price for electricity and above the

price of other renewable energy generation."

In 2010, a Canadian energy generator named TransCanada

Power Marketing sued DPU, alleging that Section 83's geographic

limitation unconstitutionally discriminated against interstate

commerce in violation of the dormant Commerce Clause. DPU settled

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the suit by suspending the geographic limitation5 and directing

utilities such as NSTAR to reopen bidding opportunities to out-of-

state generators. DPU did not, however, require National Grid to

back out of its agreement with Cape Wind. DPU instead approved the

Cape Wind-National Grid PPA in DPU Order 10-54.6 See DPU Order 10-

54 (Nov. 22, 2010) (final order).

NSTAR, for its part, subsequently received bids from

forty-four renewable energy developers and entered contracts with

three land-based wind generators, one located in-state and two out-

5
The geographic limitation was initially suspended by
Emergency Regulation. DPU later made the Emergency Regulations
permanent, see 220 Mass. Code Regs. §§ 17.00—17.09, and the
Massachusetts legislature subsequently removed the limitation from
the statute by amendment, see 2012 Mass. Acts ch. 209, § 35 ("An
Act Relative to Competitively Priced Electricity in the
Commonwealth").
6
DPU's approval of the Cape Wind-National Grid PPA was
unsuccessfully challenged by the Alliance before the Massachusetts
Supreme Judicial Court, Alliance to Protect Nantucket Sound, Inc.
v. Dep't of Pub. Utils., 461 Mass. 166, 167—68, 189 (2011), and by
a separate group of plaintiffs before the Federal Energy Regulatory
Commission ("FERC"), Californians for Renewable Energy, Inc.
(Care), 137 FERC ¶ 61,113 (Nov. 7, 2011) (Order Dismissing
Complaint) (the "Care Complaint").
The Massachusetts SJC rejected the Alliance's argument that
the fact that the geographic limitation was still in effect
"'tainted' the contracting process and [DPU's] approval of [the
PPA] in violation of the commerce clause," finding instead that
"National Grid entered into [the PPA] for reasons unrelated to the
geographic limitation provision" and thus there was no commerce
clause violation. Alliance, 561 Mass. at 172—74. The Care
Complaint, according to FERC, "consist[ed] of a string of vague and
unsupported allegations that [DPU's] order violates the [Federal
Power Act], [Public Utility Regulatory Policies Act] and previous
[FERC] orders," none of which had merit. 137 FERC ¶ 61,113 at
para. 32.

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of-state. According to the complaint, NSTAR contracted to buy

energy with those three companies at half the initial price Cape

Wind was charging National Grid pursuant to the Cape Wind-National

Grid PPA.

Later in 2010, NSTAR filed an application with DPU

requesting that it approve NSTAR's proposed merger with Northeast

Utilities, a Connecticut-based electric utility distribution

company.7 At the time, DPU applied a "no net harm" standard in

assessing merger applications, meaning that mergers would be

approved so long as the public interest "would be at least as well

served by approval of a proposal as by its denial." See D.P.U.

Order 10-170 (Mar. 10, 2011) (interlocutory order on standard of

review). Cape Wind and DOER, among others, intervened in the DPU

proceeding. DOER proposed a more stringent "substantial net

benefit" standard that would take into account "the advancement of

clean energy goals established by the [GCA] and the Global Warming

Solutions Act ['GWSA']." DOER also asked DPU to require NSTAR to

purchase off-shore wind energy as a condition for approving the

merger with Northeast Utilities.

After taking the parties' and intervenors' positions

under advisement, DPU chose to adopt a "net benefit" standard for

7
DPU approval is required for all mergers of utilities
subject to its jurisdiction. Mass Gen. Laws ch. 164, § 96 (2012).
Approval is only permitted if DPU finds the merger is "consistent
with the public interest." Id.

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electric utility mergers, which was more demanding than the

existing "no net harm" standard but less stringent than the

"substantial net benefit" standard that DOER requested. DPU

justified the new standard in part by pointing out that this was

its first opportunity to consider a merger of electric utilities

since the Massachusetts legislature enacted (1) the GCA, which

specifically provided that DPU, in reviewing a merger transaction,

must consider whether the merger will contribute to a "reliable,

cost effective energy delivery system," 2008 Mass. Acts ch. 169,

§ 69, amending Mass. Gen. Laws ch. 164, § 96, and (2) the GWSA,

which required that all Massachusetts state agencies "consider

reasonably foreseeable climate change impacts" in issuing

administrative approvals and decisions, 2008 Mass. Acts ch. 298,

§ 7, amending Mass. Gen. Laws ch. 30, § 61. DPU reasoned that

these legislative changes required it to put more emphasis on the

"benefits" side of the equation than it had in the past.

DOER then moved for a stay of the merger proceeding,

ostensibly so that it could determine the effect the merger would

have on consumers' utility rates. NSTAR and Northeast Utilities

contested the stay, informing DPU that the delay jeopardized the

merger agreement due to the agreement's internal deadlines and

evolving circumstances that could "affect the financial

underpinnings of the transaction." The complaint alleges that the

foregoing actions of DOER represented an "implicit threat to

-8-
scuttle the merger unless NSTAR entered into a contract with Cape

Wind."

Of course, it was DPU, not DOER, that got to decide

whether and on what terms the merger would be approved.

Nevertheless, the theory of the complaint is that DOER's

politically potent advocacy was enough of a threat to cause NSTAR

to enter into "secret negotiations" with the Massachusetts

Governor's administration in order to win the administration's

support for NSTAR's merger with Northeast Utilities. Those

negotiations culminated on February 15, 2012, with a settlement

agreement between NSTAR and DOER.

The settlement agreement included, among other

provisions, a clause that NSTAR would purchase 27.5% of Cape Wind's

output under a proposed fifteen-year power purchase agreement ("the

PPA"), and a clause stating that DOER agreed that the merger "is

consistent with the public interest." Under the settlement

agreement, Cape Wind and NSTAR's contract would contain terms

substantially the same as the terms of the Cape Wind-National Grid

PPA. Performance of that contract would cause NSTAR's renewable

energy usage to rise from 1.6% to 3.5% of its total production

portfolio, thus exceeding Section 83's statutory threshold. The

proposed contract was contingent upon, among other things, Cape

Wind's timely procurement of financing and building permits, DPU's

approval of the PPA itself, and FERC's approval of the PPA's rates.

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On February 24, 2012, after entering the settlement agreement,

NSTAR, Cape Wind, and DOER submitted a Memorandum of Understanding

("MOU") to DPU seeking approval of a method and timetable for

negotiating the Cape Wind-NSTAR PPA. DPU approved the MOU (but not

yet the PPA itself) on March 22, 2012, see DPU Order 12-19 (Mar.

22, 2012) (final order), and Cape Wind and NSTAR executed the PPA

the next day. On April 4, 2012, DPU approved NSTAR's merger with

National Grid. See DPU Order 10-170-B (Apr. 4, 2012) (final

order).

After three public comment hearings and two evidentiary

hearings, DPU issued a final decision on November 26, 2012,

approving the Cape Wind-NSTAR PPA. See DPU Order 12-30 (Nov. 26,

2012) (final order) (hereinafter "Order 12-30"). Pursuant to Order

12-30, DPU has an ongoing responsibility to review NSTAR's recovery

of above-market costs in its annual reconciliation filings.

According to the PPA itself, DPU will also serve as the arbiter for

determining when "Physical Construction" of the Nantucket Sound

facility commences under the PPA. The PPA provides that if Cape

Wind fails to begin Physical Construction prior to December 31,

2015, NSTAR "shall terminate" the PPA on that date.

Plaintiffs declined to appeal Order 12-30 directly to the

Massachusetts Supreme Judicial Court, as was their right under

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Mass. Gen. Laws ch. 25 § 5,8 and instead filed this action in

federal district court fourteen months later, claiming that they

would incur higher electricity rates under the PPA and suffer

"negative impacts to the environment, regional economy, historic

and cultural resources, public safety, and recreational

opportunities."

Plaintiffs' complaint sought "a declaration that the

Commonwealth of Massachusetts violated both the dormant Commerce

Clause and the Supremacy Clause when it used its influence over

NSTAR's merger request to bring about NSTAR's entry into an above-

market wholesale electricity contract with Cape Wind," and

"appropriate injunctive relief to remedy the constitutional

violation and invalidate the contract that Massachusetts compelled

NSTAR to enter." More specifically, Count 1 of the complaint

alleged that by "requiring" NSTAR to enter the PPA with a

particular party at a particular price instead of allowing NSTAR to

freely negotiate the contract, DOER "violated federal law and

policy which requires wholesale electric energy prices to be set

pursuant to freely-negotiated market transactions."9 Count 2

8
"An appeal as to matters of law from any final decision,
order or ruling of [DPU] may be taken to the supreme judicial court
by an aggrieved party in interest by the filing of a written
petition praying that the order of [DPU] be modified or set aside
in whole or in part." Id.
9
The Federal Power Act places the regulation of interstate
wholesale electric energy transmission and rates exclusively under
federal control. See 16 U.S.C. § 824(a) and (b); Nantahala Power

-11-
alleged that "[b]y conditioning its approval of the merger on the

execution of a PPA between NSTAR and Cape Wind, DOER prevented out-

of-state generation facilities from competing with Cape Wind," and

"[t]herefore, DOER's actions had a discriminatory effect on out-of-

state business and violated the dormant Commerce Clause."10

The state defendants (collectively), Cape Wind, and NSTAR

each submitted their own motions seeking dismissal on grounds of

sovereign immunity, preclusion, lack of ripeness, and plaintiffs'

failure to state a plausible claim under either the Supremacy or

Commerce Clause. The district court, in an opinion we describe in

more detail below, determined that "the debate begins and ends with

the Eleventh Amendment," and held that sovereign immunity barred

the court's jurisdiction to hear plaintiffs' claims. In a series

of footnotes, the district court also expressed doubts about

whether plaintiffs had standing to press their claims and the

merits of their underlying substantive allegations. This timely

& Light Co. v. Thornburg, 476 U.S. 953, 966 (1986). As the Third
Circuit recently explained, "[w]hile FERC once directly considered
whether the wholesale rates submitted to it were 'just and
reasonable,'" the agency now "favors using market mechanisms to
produce competitive rates for interstate sales and transmissions of
energy." PPL Energyplus, LLC v. Solomon, 766 F.3d 241, 247 (3d
Cir. 2014).
10
The clause of the Constitution granting Congress the
power to regulate interstate commerce, U.S. Const. art. I, § 8, cl.
3, "embodies a negative aspect as well--the 'dormant Commerce
Clause,'" which "prohibits protectionist state regulation designed
to benefit in-state economic interests by burdening out-of-state
competitors." Alliance of Auto. Mfrs. v. Gwadosky, 430 F.3d 30, 35
(1st Cir. 2005) (internal quotation marks omitted).

-12-
appeal from the district court's dismissal with prejudice

followed.11

II. Discussion

A. Standard of Review

A district court's dismissal for lack of subject matter

jurisdiction under Federal Rule of Civil Procedure 12(b)(1) is

reviewed de novo. See Murphy v. United States, 45 F.3d 520, 522

(1st Cir. 1995). As when we review a dismissal for failure to

state a claim under Federal Rule of Civil Procedure 12(b)(6), "we

construe the Complaint liberally and treat all well-pleaded facts

as true, according the plaintiff[s] the benefit of all reasonable

inferences." Id.; accord Negron-Gaztambide v. Hernandez-Torres, 35

F.3d 25, 27 (1st Cir. 1994).

B. Sovereign Immunity

1. The Applicable Law

The Eleventh Amendment of the United States Constitution

provides that "[t]he judicial power of the United States shall not

be construed to extend to any suit in law or equity, commenced or

prosecuted against one of the United States by Citizens of another

State, or by Citizens or Subjects of any Foreign State." U.S.

Const. amend XI. "Long interpreted as an affirmation of state

sovereign immunity[,] . . . [the] amendment (despite its literal

11
The Town of Barnstable and the Alliance (joined by
Hyannis Marina, Inc. and Jamie Regan) filed separate notices of
appeal, which we consolidated.

-13-
text) also bar[s] a citizen from bringing a federal court action

against his or her own State," Maysonet-Robles v. Cabrero, 323

F.3d 43, 48 (1st Cir. 2003) (citation and footnote omitted),

including instrumentalities of the state, such as state agencies,

see Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 429–30

(1997).

Broad as it may seem, "[t]his proscription is subject to

a well recognized exception memorialized in Ex parte Young," 209

U.S. 123, 159—60 (1908), which permits "federal courts,

notwithstanding the absence of consent, waiver or evidence of

congressional assertion of national hegemony, [to] enjoin state

officials to conform future conduct to the requirements of federal

law." Rosie D. ex rel. John D. v. Swift, 310 F.3d 230, 234 (1st

Cir. 2002) (alteration in original) (internal quotation marks

omitted). A "pivotal question" under Ex parte Young is whether the

relief "serves directly to bring an end to a present violation of

federal law." Whalen v. Mass. Trial Court, 397 F.3d 19, 29 (1st

Cir. 2005) (internal quotation marks omitted). The exception

memorialized in Ex parte Young, in turn, itself has exceptions.

The Constitution does not permit relief that "would have much the

same effect as a full-fledged award of damages or restitution by

the federal court, the latter kinds of relief being of course

prohibited by the Eleventh Amendment." Mills v. Maine, 118 F.3d

37, 55 (1st Cir. 1997) (internal quotation marks omitted) (quoting

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Green v. Mansour, 474 U.S. 64, 73 (1985)); see also Edelman v.

Jordan, 415 U.S. 651, 668 (1974). And Congress may render the Ex

parte Young exception inapplicable by "prescrib[ing] a detailed

remedial scheme for the enforcement against a State of a

statutorily created right." Seminole Tribe of Fla. v. Florida, 517

U.S. 44, 74 (1996).

In Verizon Maryland, Inc. v. Public Service Commission of

Maryland, 535 U.S. 635 (2002), where, as here, plaintiffs sued a

state regulatory commission for issuing an order that was allegedly

preempted by federal law, the Supreme Court articulated the

sovereign immunity inquiry as follows: "In determining whether the

doctrine of Ex parte Young avoids an Eleventh Amendment bar to

suit, a court need only conduct a straightforward inquiry into

whether [the] complaint alleges an ongoing violation of federal law

and seeks relief properly characterized as prospective." Id. at

645 (alteration in original) (internal quotation marks omitted).

The Court reasoned that a request "that state officials be

restrained from enforcing an order in contravention of controlling

federal law . . . clearly satisfies our 'straightforward inquiry.'"

Verizon, 535 U.S. at 646. Moreover, a declaration of the "past, as

well as the future, ineffectiveness of the [state commission's]

action" was not barred because it did "not impose upon the State 'a

monetary loss resulting from a past breach of a legal duty on the

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part of the defendant state officials.'" Id. (quoting Edelman, 415

U.S. at 668).

Critically for our decision in this case, the Supreme

Court in Verizon also expressly rejected the Fourth Circuit's

suggestion that the claim could not be brought due to the latter's

view that "the [state commission's] order was probably not

inconsistent with federal law after all." Id. The Court responded

by stating that the "inquiry into whether suit lies under Ex parte

Young does not include an analysis of the merits of the claim."

Id. (citing Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261,

281 (1997) ("An allegation of an ongoing violation of federal law

. . . is ordinarily sufficient to invoke [Ex parte Young].")).

This "straightforward inquiry" is not always so

straightforward. See Verizon, 535 U.S. at 648—49 (Kennedy, J.,

concurring) (calling the Verizon test "deceptively simple").

Rather, "the difference between the type of relief barred by the

Eleventh Amendment and that permitted under Ex parte Young will not

in many instances be that between day and night." Edelman, 415

U.S. at 667. Also, there are "certain types of cases that formally

meet the [Ex parte] Young requirements of a state official acting

inconsistently with federal law but that stretch that case too far

and would upset the balance of federal and state interests that it

embodies." Papasan v. Allain, 478 U.S. 265, 277 (1986).

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 With the foregoing as our guide, we examine plaintiffs'

complaint, with special attention to the ongoing nature of the

alleged offense and the type of relief sought.

2. Application of that Law to this Case

The complaint first asks the court to "[e]njoin[] the DPU

from enforcing its order approving the PPA"--a contract that is

enforceable purely due to DPU's (allegedly unconstitutional)

Order 12-30. And it requests a declaratory judgment that DPU

Order 12-30, which plaintiffs say is in effect "forc[ing] [NSTAR]

to purchase power pursuant to the Cape Wind-NSTAR contract," be

nullified. As pled by plaintiffs, the continued enforceability of

the PPA represents an ongoing violation of federal law because

Order 12-30 binds the parties to abide by the PPA's allegedly

unconstitutional terms. The relief requested is "properly

categorized as prospective" because it is trained at preventing

future contract performance and avoiding damages that plaintiffs

have yet to incur. Verizon, 535 U.S. at 645 (internal quotation

marks omitted).

The district court did not claim that plaintiffs sought

damages from the state treasury. It also implicitly recognized

that a claim for money damages is not a sine qua non for finding a

lack of federal court jurisdiction. See Coggeshall v. Mass. Bd. of

Registration of Psychologists, 604 F.3d 658, 666 n.4 (1st Cir.

2011) ("We do not imply that the Eleventh Amendment bars claims

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only for money damages. That is not the case."). In this manner,

the district court correctly reached the key question: is the

requested relief "properly characterized as prospective." Va.

Office for Prot. & Advocacy v. Stewart, 131 S. Ct. 1632, 1639

(2011) (quoting Verizon, 535 U.S. at 645 (internal quotation marks

omitted). In answering this question in the negative, the district

court found that:

[T]he effect of a declaration that
Massachusetts had illegally compelled [NSTAR]
and Cape Wind to enter an above-market price
contract for wind energy would inevitably lead
to restitutionary claims against the
Commonwealth by NSTAR and Cape Wind, while an
injunction ordering DPU to cease enforcement
of the PPA and to take remedial measures for
the alleged constitutional harms would
restrain the State from acting by frustrating
its efforts to implement the policies
enunciated in the GCA and the GWSA, while
further bleeding the treasury.

(Footnote omitted). We agree with plaintiffs that the district

court erred in this crucial finding.

First, the hypothetical future "restitutionary claims"

the district court forecasts are both conjectural and capable of

being addressed on their own terms. As plaintiffs persuasively

argue, "even if NSTAR or Cape Wind could identify some plausible

claim for damages against the state and were thereupon to file

suit, that suit could then be dismissed on grounds of sovereign

immunity, and the State's treasury would be undisturbed." So,

whether a future suit by plaintiffs, NSTAR, or someone else that

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would in fact "bleed the treasury" may be barred by the

Commonwealth's sovereign immunity, we need not decide in this case.

Second, a conclusion that the requested equitable relief

"would restrain the State from acting by frustrating its efforts to

implement the policies enunciated in the GCA and the GWSA" does not

resolve the sovereign immunity inquiry. The Ex parte Young

doctrine's very existence means that a plaintiff may frustrate the

efforts of a state policy when those efforts violate or imminently

threaten to violate the plaintiff's constitutional rights and the

plaintiff confines its request to the proper form of relief.

Defendants also argue that DPU has no ongoing role in

enforcing the PPA, and that therefore there can be no "ongoing

violation" of federal law under Verizon. They reiterate the

district court's observation that the complaint itself does not

refer to "any future actions the State Defendants must take with

respect to the contract." Thus, defendants say, the relief

plaintiffs seek is "entirely retrospective" and falls outside of

the Ex parte Young doctrine.

On this point, too, plaintiffs have a persuasive

response. DPU does in fact possess an ongoing responsibility with

respect to the PPA, because Order 12-30 states that DPU will

"review NSTAR Electric's recovery of above-market costs in its

annual reconciliation filings" to "ensure that [NSTAR] recovers

such costs in a manner approved by [DPU]." The PPA itself, which

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DPU approved, also provides that "upon petition by" NSTAR, DPU

shall determine whether "Physical Construction" has commenced by

December 31, 2015, and if it has not commenced, NSTAR "shall

terminate" the PPA as of said date.12 The fact that Order 12-30

occurred in the past therefore does not itself push the complaint

outside the confines of the Ex parte Young doctrine. Logic

supports this conclusion: most unconstitutional agency

determinations will have occurred in the past by the time a lawsuit

is brought; sovereign immunity does not necessarily prevent suits

against such state actions when the alleged violation they spur is

ongoing and no raid on the state treasury will result. See

Verizon, 535 U.S. at 646.

For the foregoing reasons, we conclude that the district

court erred in finding that the relief sought by plaintiffs is

retroactive and thus outside the reach of the Ex parte Young

exception.

12
Plaintiffs did not attach the PPA or Order 12-30 to their
complaint. Each was introduced below for the first time as an
exhibit to the defendants' motions to dismiss. Ordinarily, in
considering a motion to dismiss, we would not consider extraneous
documents unless they are attached to the complaint or expressly
incorporated therein, or unless the proceeding was properly
incorporated into one for summary judgment under Federal Rule of
Civil Procedure 56. Watterson v. Page, 987 F.2d 1, 3 (1st Cir.
1993). However, we have made an exception "for documents the
authenticity of which are not disputed by the parties; for official
public records; for documents central to plaintiffs' claim; or for
documents sufficiently referred to in the complaint." Id. at 3—4
(collecting cases). That exception applies to both the PPA and
Order 12-30.

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C. Alternative Arguments For Affirmance

Anticipating the possibility that we would reverse the

sovereign immunity holding, defendants point us to several other

alternative arguments for affirming a judgment of dismissal, all of

which were advanced in the district court, but not addressed by the

court other than signaling that it tended to find at least some of

those grounds for dismissal persuasive. Our precedent gives us the

discretion whether to reach those arguments in the first instance,

or to remand. See, e.g., United States ex rel. Estate of

Cunningham v. Millennium Labs. of Cal., Inc., 713 F.3d 662, 675—76

(1st Cir. 2013) (remanding for a determination of whether relator's

claims were well-pled under Fed. R. Civ. P. 12(b)(6) and 9(b) after

finding error in the district court's decision that it lacked

jurisdiction); Aguilar v. U.S. Immigration & Customs Enforcement,

510 F.3d 1, 21 (1st Cir. 2007) (assessing the viability of

petitioners' claims on the merits after finding that the district

court erroneously dismissed the case on jurisdictional grounds).

Our exercise of that discretion in this instance is guided by

developments that occurred after briefing was complete.

On December 31, 2014, a week before we heard oral

arguments in this case, Cape Wind notified NSTAR that it had failed

to timely meet certain financing deadlines ("Critical Milestones")

defined in the PPA. NSTAR then sent a letter dated January 6, 2015

to Cape Wind, stating that NSTAR was invoking its right to

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terminate the PPA due to that default, in accordance with the

rights reserved to NSTAR by the PPA's remedies provisions. On the

next day, NSTAR filed a letter with this court notifying us of the

termination and opining that the termination mooted this appeal.

We responded by instructing the parties to submit supplemental

briefing to explain what had occurred and to set forth any

arguments about the mootness or ripeness of the appeal following

NSTAR's purported termination. Predictably, the parties disagree

about whether NSTAR's termination is "valid" under the contract,

whether Cape Wind has taken the steps necessary to preserve the

contract in the face of NSTAR's attempted termination, and whether

Cape Wind has a plausible defense to NSTAR's termination under the

PPA's "Force Majeure" Clause.

The parties also advance different views on the

mootness/ripeness issue: NSTAR argues that the appeal is both moot

and unripe; plaintiffs argue that the appeal is unripe but not

moot; Cape Wind says it is neither; and the state defendants take

no position on the mootness/ripeness issue.

The Supreme Court has placed the "heavy burden of

persuasion" with respect to mootness on the party advocating for

it. United States v. Concentrated Phosphate Exp. Ass'n, 393 U.S.

199, 203 (1968); accord Adarand Constructors, Inc. v. Slater, 528

U.S. 216, 222 (2000). The Court has used strong limiting language

to describe the mootness inquiry: Intervening events must "have

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completely and irrevocably eradicated the effects" of the parties'

conduct in order for a case to be deemed moot. Cnty. of Los

Angeles v. Davis, 440 U.S. 625, 631 (1979); accord Knox v. Serv.

Emps. Int'l Union, Local 1000, 132 S. Ct. 2277, 2287 (2012) ("[A]s

long as the parties have a concrete interest, however small, in the

outcome of the litigation, the case is not moot." (alteration in

original) (internal quotation marks omitted)).

If Cape Wind agreed that NSTAR's termination of the PPA

was valid, we would have little difficulty determining that the

case was moot. There would be no legally binding contract

enforcement to enjoin, and a declaration of the defunct PPA's

illegality would be "merely advisory." Am. Civil Liberties Union

of Mass. v. U.S. Conference of Catholic Bishops, 705 F.3d 44, 53,

58 (1st Cir. 2013) ("The expiration of a contract on its own terms

constitutes . . . a mooting event."); cf. Lake Coal Co., Inc. v.

Roberts & Schaefer Co., 474 U.S. 120, 120 (1985) (per curiam)

(complete, uncontested settlement moots appeal).

NSTAR's termination of the contract, however, is

contested by Cape Wind. Therefore, to find that NSTAR's purported

contract termination "completely and irrevocably eradicated the

effects" of Order 12-30, Cnty. of Los Angeles, 440 U.S. at 631, we

would need to adjudicate the merits of the termination dispute.

Such a need itself suggests that there presently remains a live

controversy. See Chico Serv. Station, Inc. v. Sol P.R. Ltd., 633

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F.3d 20, 36 (1st Cir. 2011) (deciding that "[w]e cannot conclude

that [the plaintiff's] claim . . . is moot," because "there appear

to be unresolved disputes as to whether [the defendant] has met its

. . . obligations" under the relevant statute); cf. United States

v. Hahn, 359 F.3d 1315, 1323 (10th Cir. 2004) (en banc)

(distinguishing an earlier-decided, mooted case because the parties

to a civil settlement agreement did not challenge the agreement's

validity, whereas the plea agreement in the instant case did not

moot defendant's sentencing challenge because defendant sought to

void the agreement). We find particularly instructive the fact

that NSTAR predicates its mootness argument on its own

interpretations of the PPA's termination and force majeure clauses,

while simultaneously telling us that, due in part to the contract's

dispute resolution provisions, federal courts lack jurisdiction to

decide that its (contested) interpretations are correct.13

Nor does NSTAR's challenged contract termination lead us

to conclude that the ripeness doctrine divests this court (or the

district court on remand) of jurisdiction to adjudicate plaintiffs'

claims. "[W]here challenges are asserted to government actions and

ripeness questions arise, a court must consider both 'fitness' for

13
More specifically, NSTAR claims in its supplemental brief
that both this court and the federal district court lack
jurisdiction to adjudicate a contractual dispute concerning the PPA
due to the PPA's forum selection clause and the absence of federal
subject matter jurisdiction. We take no position on either
argument.

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review and 'hardship.'" Verizon New England, Inc. v. Int'l Bhd. of

Elec. Workers, Local No. 2322, 651 F.3d 176, 188 (1st Cir. 2011).

The "fitness for review" inquiry centers upon "whether

the claim involves uncertain and contingent events that may not

occur as anticipated or may not occur at all." Ernst & Young v.

Depositors Econ. Prot. Corp., 45 F.3d 530, 536 (1st Cir. 1995)

(internal quotation marks omitted). Resolution of the actual claim

here--that Massachusetts officials unconstitutionally forced NSTAR

to enter a contract with Cape Wind--hinges on an assessment of

events that have already occurred. All that is contingent and

uncertain is the possibility that the dispute about the lawfulness

of the Commonwealth's actions may become moot. If we were to find

the possibility of future mootness to be the type of contingency

that would create a lack of ripeness, we would simply be changing

mootness doctrine to signal a lack of jurisdiction not merely when

a controversy is moot, but also when it might become moot.

The hardship inquiry is best articulated in a "positive

vein." Verizon New England, 651 F.3d at 188 (quoting Rhode Island

v. Narragansett Indian Tribe, 19 F.3d 685, 693 (1st Cir. 1994)).

It turns on "whether granting relief would serve a useful purpose,

or, put another way, whether the sought-after declaration would be

of practical assistance in setting the underlying controversy to

rest." Id. (internal quotation marks omitted). That standard is

satisfied here because Cape Wind and/or NSTAR would undoubtedly act

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differently tomorrow, and be able to spend their resources with

less risk of waste, if they learned today that DPU's approval of

the PPA is invalid. See Weaver's Cove Energy, LLC v. R.I. Coastal

Res. Mgmt. Council, 589 F.3d 458, 468—69 (1st Cir. 2009) (deciding

that case was ripe in part because a holding on the merits would

cause the contested agency decisions and regulations to "cease to

be barriers to ultimate approval of the project"). Of course, the

added factor of potential mootness may make it easier to bet on how

best to act in the face of any dilemma created by plaintiffs' legal

challenge. But, again, we can find no basis for expanding the

grounds for finding jurisdictional mootness simply by relabeling

the potential for future mootness to be a lack of ripeness.

We conclude, therefore, that for our purposes there

remains a case or controversy. That being said, however, what

facially appears to be a serious potential for this case to become

moot does cause us to decline to exercise our discretion to reach

out now to decide questions of law upon which the district court

has itself not yet focused or addressed other than in passing. The

district court is better able than is this court to determine the

imminency of the contract termination dispute's resolution and,

within reason, set the schedule for resolving plaintiffs' claims

accordingly. It may be, too, that with the Ex parte Young issue

resolved, the parties may themselves agree on a sensible priority

for resolving the contract issues and the remaining legal

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challenges to the contract's validity.

III. Conclusion

We express no view on whether the complaint's factual

allegations with respect to either substantive claim are otherwise

sufficiently well-pled to survive a Rule 12(b)(6) motion for

failure to state a claim. See Schatz v. Republican State

Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012). Nor do we

express any opinion on the validity of defendants' other bases for

a motion to dismiss such as whether plaintiffs have standing to

press their claims or whether they possess a private right of

action under the Supremacy Clause. We simply hold that: the

district court erred in concluding that plaintiffs' claims fall

outside the Ex parte Young exception to the Eleventh Amendment; and

that the case is now neither moot nor unripe.

We therefore vacate the judgment of dismissal, and remand

this case to the district court for actions consistent with this

opinion.

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