-
USCA1 Opinion
UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT FOR THE FIRST CIRCUIT
_________________________
Nos. 97-1759 97-1780
97-1760 97-1805
97-1761 97-1995
97-1762 97-1996
97-1763 97-1997
97-1773 97-2070
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE, ET AL.,
Plaintiffs, Appellees,
v.
DOUGLAS L. PATCH, IN HIS CAPACITY AS A MEMBER OF THE
NEW HAMPSHIRE PUBLIC UTILITIES COMMISSION, ET AL.,
Defendants, Appellees,
_______________
CABLETRON SYSTEMS, INC., ET AL.,
Applicants for Intervention, Appellants.
_________________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Ronald R. Lagueux,* U.S. District Judge] ___________________
_________________________
Before
Selya, Circuit Judge, _____________
Campbell, Senior Circuit Judge, ____________________
and Tauro,** District Judge. ______________
_________________________
Steven S. Rosenthal, with whom Jeffery A. Tomasevich, _____________________ _______________________
Morrison & Foerster, LLP, F. Anne Ross, F. Anne Ross, P.C., John _________________________ ____________ __________________ ____
J. Ryan, Casassa and Ryan, Michael W. Holmes, James R.M. ________ __________________ ___________________ ___________
Anderson, Peter H. Grills, David E. Crawford, O'Neill, Grills & ________ _______________ __________________ _________________
O'Neill, PLLP and Thomas I. Arnold III were on consolidated _____________ ______________________
brief, for all appellants.
Peter H. Grills, with whom David E. Crawford, O'Neill, _________________ ___________________ ________
Grills & O'Neill, PLLP and Thomas I. Arnold III, Assistant City _______________________ _____________________
Solicitor, were on brief, for appellant City of Manchester.
Philip T. McLaughlin and Martin P. Honigberg on brief for _____________________ ____________________
the State of New Hampshire, amicus curiae.
Evelyn R. Robinson on brief for Ohio Consumers' Counsel and __________________
National Ass'n of State Consumer Advocates, amici curiae.
Dennis Lane, with whom Michael E. Tucci and Morrison & ___________ __________________ ___________
Hecker, LLP were on brief, for defendants-appellees. ___________
Allan B. Taylor, with whom John B. Nolan, Gary M. Becker, ________________ _____________ _______________
and Day, Berry & Howard were on brief, for plaintiffs-appellees. ___________________
_________________________
February 3, 1998
_________________________
_______________
*Of the District of Rhode Island, sitting by designation.
**Of the District of Massachusetts, sitting by designation.
SELYA, Circuit Judge. After the New Hampshire Public SELYA, Circuit Judge. _____________
Utilities Commission (PUC) formulated a plan to inject retail
competition into the New Hampshire electric power market, Public
Service Company of New Hampshire (PSNH) filed suit against the
PUC's members, seeking to block inauguration of the plan.
Several parties moved to intervene pursuant to Fed. R. Civ. P.
24. Not all succeeded. Six disappointed would-be intervenors
appeal from the denial of intervention.1 Finding no sign that
the district court abused its discretion, we affirm.
I. BACKGROUND I. BACKGROUND
Two recent opinions of the court below thoroughly
recount the complicated background of this case. See Public ___ ______
Serv. Co. v. Patch, 173 F.R.D. 17, 22-24 (D.N.H. 1997) (PSNH II); _________ _____ _______
Public Serv. Co. v. Patch, 962 F. Supp. 222, 225-29 (D.N.H. 1997) ________________ _____
(PSNH I). We draw heavily from those sources as we set the stage ______
for consideration of the instant appeals.
A. The Night the Lights (Almost) Went Out in New Hampshire. A. The Night the Lights (Almost) Went Out in New Hampshire. _______________________________________________________
PSNH is New Hampshire's largest electric public utility
and supplies approximately 70% of the citizenry's power needs.
In the early 1970s, management predicted that rising energy
demands soon would outstrip PSNH's generating capabilities. To
ameliorate this bleak outlook, PSNH undertook to construct a
nuclear power plant in Seabrook, New Hampshire. Because state
law prevented it from factoring the plant's construction costs
____________________
1Three of the would-be intervenors also have attempted to
take protective appeals from other orders entered by the district
court. We deal with these additional appeals in Part V, infra. _____
3
into the rate structure until Seabrook became operational, PSNH
relied primarily on commercial financing to underwrite the
project. Regulatory reform and public opposition hindered
Seabrook's progress to the point where the facility became an
albatross wrapped snugly around PSNH's corporate neck.
Management's forecast that Seabrook would be on line in 1979
proved much too sanguine: construction of the plant's generating
unit was not completed until 1986, and even then, commercial
operation was infeasible.
As delays mounted, so too did PSNH's indebtedness. In
1988, PSNH no longer could service the debt and filed for
bankruptcy protection in the United States Bankruptcy Court for
the District of New Hampshire. The State of New Hampshire,
fearful that its residents might find themselves consigned to an
unusually rustic lifestyle, intervened in the insolvency
proceedings. The State's participation was essential to
resolving the bankruptcy: as a regulated utility, PSNH's value
depends on the rates that it can charge for electricity, and the
State sets those rates based on its calculation of the investment
that PSNH prudently devotes to the provision of electric service
(the so-called rate base).
In the end, PSNH's creditors and equity holders agreed
to place a $2.3 billion value on the utility a value
significantly higher than its pre-bankruptcy rate base.
Northeast Utilities (NU) then acquired all of PSNH's stock at the
capitalized price. As part and parcel of this transaction, the
4
State executed a rate agreement (the Agreement) designed to
permit NU to recoup its investment over time. To mitigate the
impact of this recoupment on ratepayers while still providing
meaningful financial relief to the rehabilitated bankrupt, the
Agreement preserved PSNH's status as an integrated electric
utility (i.e., one that engages in the generation, transmission,
and distribution of electric power) and promised annual 5.5%
electric rate increases for the next seven years.
The Agreement also made provision for the gradual
recovery of PSNH's Seabrook-related costs. It contemplated that
NU would take over the operation of Seabrook via a corporate
affiliate, North Atlantic Energy Corporation (NAEC), subject to a
stipulation, contained in the Agreement, that the State would
permit PSNH to buy Seabrook-generated power from NAEC at prices
sufficient to recover the portion of the rate base attributable
to Seabrook over a reasonable interval. Finally, to ensure the
eventual recovery of PSNH's entire capitalized value, the
Agreement allowed PSNH to designate some $400 million of the rate
base as "regulatory assets." Under this arrangement, these
regulatory assets (which in this case consisted mostly of
governmentally mandated purchase agreements with small power
producers) became eligible for amortization, albeit over a long
number of years (thus cushioning the impact on electric rates).
The bankruptcy court approved the Agreement, see In re ___ _____
Public Serv. Co., 114 B.R. 820, 843 (Bankr. D.N.H. 1990); the New ________________
Hampshire legislature authorized the PUC to review it, see N.H. ___
5
Rev. Stat. Ann. 362-C (1995); the PUC furnished its seal of
approval, see In re Northeast Utils./Public Serv. Co., 114 ___ ____________________________________________
P.U.R.4th 385 (N.H.P.U.C. 1990); the New Hampshire Supreme Court
upheld the PUC's action, see Appeal of Richards, 590 A.2d 586 ___ ___________________
(N.H. 1991); and PSNH emerged from bankruptcy.
B. The Concord Tea Party. B. The Concord Tea Party. _____________________
Due in part to the annual rate increases mandated by
the Agreement, New Hampshire consumers pay one of the highest
average electric rates in the nation. Predictable discontent
prompted the state legislature to enact the Electric Utility
Restructuring Act, N.H. Rev. Stat. Ann. 374-F:1 to F:6 (Supp.
1997), a statute designed to introduce retail competition into
the marketplace as a means of reducing electric rates. The
statute directed the PUC to develop and put into effect no later
than January 1, 1998, a restructuring plan for New Hampshire's
electric utility industry. See id. 374-F:4. ___ ___
The PUC conducted hearings apace and issued its
restructuring plan (the Plan) on February 28, 1997. The Plan
provides that the PUC will continue to set all distribution
access rates. However, electric utilities must unbundle their
generation, transmission, and distribution services, as well as
open their distribution networks utility poles and wires to
all consumers on a nondiscriminatory basis. In theory,
unbundling will enable customers to select from a roster of power
generators whose rates will reflect market prices. And although
federal law requires that transmission tariffs remain the
6
province of the Federal Energy Regulatory Commission (FERC), the
Plan seeks to have the PUC exercise a modicum of control in this
area as well by directing utilities to obtain PUC approval of
proposed tariffs prior to effecting FERC filings. Finally, the
Plan imports a market domination deterrent, mandating that each
utility choose whether to operate as a power generator or power
distributor, and precluding utilities from continuing to act,
directly or indirectly, in both capacities. Utilities that
select the distribution pathway must divest all power generation
assets by December 31, 2000, and likewise must sever contractual
and corporate ties with utilities that offer competitive electric
service in the same territory. Similar restrictions apply to
utilities that select the generation pathway.
Two aspects of the PUC's edict are particularly
pertinent for purposes of the pending litigation. First, in
promulgating the Plan, the PUC declined to treat the Agreement as
a contract that constrained its actions. Second, a side effect
of the Plan's divestiture requirement is the creation of
"stranded costs." This phenomenon will occur because, under the
Plan's competitive market paradigm, the costs of certain asset
investments owned by an integrated utility will become
unrecoverable from ratepayers when the utility elects between the
distribution and generation routes. The Plan provides a
palliative in the form of interim and long-term stranded cost
recovery charges (SCRECHs). The PUC will assess each affected
utility's stranded costs and calculate an appropriate SCRECH for
7
inclusion in the rates set for access to the utility's
distribution network. SCRECHs ordinarily will be calculated by
means of a cost-of-service ratemaking methodology, but if the PUC
concludes that a utility's costs and rates exceed a "regional
average rate benchmark," then it may deny the utility full
recovery of its stranded costs. At present, PSNH's rates exceed
the regional average rate benchmark, and the PUC has ruled that
PSNH may not recover completely its stranded costs. Thus, PSNH
insists that introduction of the benchmark will require it to
write off the $400 million in regulatory assets and lead to
another bankruptcy.2
C. The Empire Strikes Back. C. The Empire Strikes Back. _______________________
On March 3, 1997, PSNH, NU, and NAEC (collectively
"PSNH" or "the plaintiffs") filed suit in New Hampshire's federal
district court against the members of the PUC. Their amended
complaint limns a litany of federal preemption claims. These
include a claim premised on section 201(b) of the Federal Power
Act, 16 U.S.C. 824(b) (1994); a claim premised on sections 205
and 206 of the same statute, 16 U.S.C. 824(d), (e); a claim
premised on the filed rate doctrine, see, e.g., Boston Edison Co. ___ ____ _________________
v. FERC, 856 F.2d 361, 369 (1st Cir. 1988) (discussing doctrine); ____
____________________
2On April 7, 1997, the PUC stayed implementation of portions
of the Plan to rehear whether the PSNH will in fact be forced to
write off the regulatory assets. The PUC at the same time
announced its intention to revisit the question of whether the
Plan repudiates an enforceable obligation of the State (i.e., the
Agreement). These developments clearly bear upon certain
contested issues in the underlying case (e.g., ripeness and
abstention), but they do not possess great significance vis- -vis
the question of intervention.
8
a claim premised on section 201 of the Public Utility Regulatory
Policies Act of 1978, Pub. L. No. 95-617, 92 Stat. 3117 (codified
as amended in scattered sections of 15 and 16 U.S.C.); and a
claim premised on the Public Utility Holding Companies Act, 15
U.S.C. 79 to 79z-6 (1994). The complaint also includes
several constitutional claims, including three separate theories
under which the PUC's orders allegedly work an unlawful taking; a
Commerce Clause claim to the effect that the PUC is attempting
impermissibly to regulate interstate commerce; a Contracts Clause
claim to the effect that the Plan unlawfully compromises the
Agreement; and a First Amendment claim that defies ready
comprehension. Lastly, the complaint contains claims that the
Plan transgresses an injunction entered by the bankruptcy court
in 1990 and simultaneously violates 42 U.S.C. 1983 (1994).3
The complaint prays, inter alia, for an injunction against _____ ____
implementation of the Plan and a declaration that the Plan is
unlawful.
On March 10, 1997, the district court entered a
temporary restraining order (TRO) that enjoined the defendants
from enforcing those sections of the Plan that purported to
restrict PSNH's ability to recover fully its stranded costs.
Four days later, the court heard argument on a gallimaufry of
____________________
3In the introductory portions of their amended complaint,
the plaintiffs accuse the PUC of affording them insufficient time
to make their case administratively, failing to enforce discovery
rules, and holding hearings that were a "mere pretense." These
allegations sound like a prelude to a procedural due process
challenge, yet the plaintiffs never make such a claim.
9
intervention motions and took them under advisement pending a
decision on ripeness and abstention (issues which, if determined
adversely to the plaintiffs, would render intervention moot).
The court scheduled a hearing on these issues for March 20 and
granted the would-be intervenors leave to file amicus curiae
briefs. On the appointed date, Judge Lagueux heard arguments and
reserved decision. The next day, he amended the TRO to enjoin
portions of the Plan that, in the plaintiffs' view, repudiated
obligations created by the Agreement. He then continued the TRO
"pending further order of the court."
In due course, Judge Lagueux ruled that the case not
only was ripe, but also an inappropriate candidate for
abstention. See PSNH I, 962 F. Supp. at 229-44. The judge ___ _______
simultaneously signaled his intent to address the motions to
intervene without further delay, noted that the TRO would remain
in effect pending further order, and directed the clerk of court
to schedule a preliminary injunction hearing in June.4 See id. ___ ___
at 244.
On June 12, 1997, the district court denied the
____________________
4On May 13, the parties to the case (not including the
applicants for intervention) agreed to mediation and stipulated
to a stay of proceedings, thereby obviating the need for a June
preliminary injunction hearing. By its terms, the stay would
expire coincident with the end of the mediation period, which was
originally contemplated to last through the end of June. As
directed by the May 13 stipulation and order, the mediator
periodically reported on the parties' progress. Based on these
reports Judge Lagueux twice extended the period. On September 3,
1997, the mediator reported that efforts had failed and the stay
since has been dissolved. The would-be intervenors did not
participate in the mediation process.
10
appellants' motions to intervene. See PSNH II, 173 F.R.D. at 26. ___ _______
The court held in substance that the appellants' interest in
securing lower electric rates was too generalized to justify
intervention as of right; that the appellants retained the
ability to protect their interests in the Plan's implementation
regardless of whether they were allowed to participate in the
court case; and that, in all events, the presence of the PUC
members as defendants ensured adequate representation of the
appellants' interests in respect to the issues raised by the
complaint. See id. at 26-27. The court did permit three other ___ ___
parties, Granite State Electric Company, Unitil Corporation, and
the New Hampshire Electric Cooperative, to intervene on the
plaintiffs' side of the case. See id. at 28. One would-be ___ ___
intervenor, the City of Manchester, moved for reconsideration,
but to no avail.
II. THE CAST OF CHARACTERS II. THE CAST OF CHARACTERS
There are six intervention-related appeals before us.
In an effort to put matters into more workable perspective, we
profile the identity and interests of the six appellants.
1. Cabletron Systems, Inc. (Cabletron) is a New 1.
Hampshire corporation with its principal place of business in
Rochester, New Hampshire. It is one of the largest private
electricity consumers in New Hampshire.
2. The Office of the Consumer Advocate of the State of 2.
New Hampshire (OCA) is a state agency statutorily authorized to
"petition for, initiate, appear or intervene in any proceeding
11
concerning rates, charges, tariffs, and consumer services before
any board, commission, agency, court, or regulatory body in which
the interests of residential utility consumers are involved and
to represent the interest of such residential utility consumers."
N.H. Rev. Stat. Ann. 363.28(II) (1995).
3. The City of Manchester is New Hampshire's largest 3.
municipality and serves as the administrator of an electric power
aggregation program that procures electricity for some 260
municipal, residential, and commercial accounts.
4. The Campaign for Ratepayers' Rights (CRR) is a non- 4.
profit citizens' group composed of several hundred New Hampshire
residential and commercial electricity consumers.
5. The Retail Merchants Association of New Hampshire 5.
(RMA) is a non-profit corporation based in Concord, New
Hampshire. RMA boasts a membership of approximately 700
businesses located in the Concord area. It acts as an electric
load aggregator. Under its aegis, members may purchase
electricity at discounted rates.
6. Community Action Programs of New Hampshire (CAPS) 6.
is an alliance of six non-profit organizations. Its constituent
organizations provide assistance programs of various kinds to
low-income families in New Hampshire.
III. THE LEGAL LANDSCAPE III. THE LEGAL LANDSCAPE
The six principal appeals stand or fall on the
12
appellants' entitlement to intervene as of right.5 That
entitlement depends, in the first instance, on Fed. R. Civ. P.
24(a), which provides in relevant part:
Upon timely application anyone shall be
permitted to intervene in an action: . . .
(2) when the applicant claims an interest
relating to the property or transaction which
is the subject of the action and the
applicant is so situated that the disposition
of the action may as a practical matter
impair or impede the applicant's ability to
protect that interest, unless the applicant's
interest is adequately represented by
existing parties.
A party that desires to intervene in a civil action
under Rule 24(a)(2) must satisfy four conjunctive prerequisites:
(1) a timely application for intervention; (2) a demonstrated
interest relating to the property or transaction that forms the
basis of the ongoing action; (3) a satisfactory showing that the
disposition of the action threatens to create a practical
impairment or impediment to its ability to protect that interest;
and (4) a satisfactory showing that existing parties inadequately
represent its interest. See Conservation Law Found. v. ___ __________________________
Mosbacher, 966 F.2d 39, 41 (1st Cir. 1992). An applicant for _________
intervention as of right must run the table and fulfill all four
of these preconditions. The failure to satisfy any one of them
dooms intervention. See Travelers Indem. Co. v. Dingwell, 884 ___ ____________________ ________
F.2d 629, 637 (1st Cir. 1989).
____________________
5In the court below, the appellants also sought permissive
intervention under Fed. R. Civ. P. 24(b). Judge Lagueux rejected
those initiatives. See PSNH II, 173 F.R.D. at 29. The ___ ________
appellants have not pressed the point in this venue.
13
The application of this framework to the divers factual
circumstances of individual cases requires a holistic, rather
than reductionist, approach. See International Paper Co. v. Town ___ _______________________ ____
of Jay, 887 F.2d 338, 344 (1st Cir. 1989). The inherent _______
imprecision of Rule 24(a)(2)'s individual elements dictates that
they "be read not discretely, but together," and always in
keeping with a commonsense view of the overall litigation.
United States v. Hooker Chems. & Plastics Corp., 749 F.2d 968, _____________ _______________________________
983 (2d Cir. 1984). Because small differences in fact patterns
can significantly affect the outcome, the very nature of a Rule
24(a)(2) inquiry limits the utility of comparisons between and
among published opinions. See Security Ins. Co. v. Schipporeit, ___ _________________ ____________
Inc., 69 F.3d 1377, 1381 (7th Cir. 1995). ____
The district court's denial of a motion for
intervention as of right lays the foundation for an immediate
appeal. See Flynn v. Hubbard, 782 F.2d 1084, 1086 (1st Cir. ___ _____ _______
1986). Although we review the district court's intervention
decisions for abuse of discretion, see International Paper, 887 ___ ____________________
F.2d at 344, that discretion is more circumscribed when Rule
24(a) is in play, see Stringfellow v. Concerned Neighbors in ___ ____________ _______________________
Action, 480 U.S. 370, 383 (1987) (noting that the nisi prius ______
court has less discretion in its disposition of motions to
intervene as of right). We will reverse the denial of a motion
to intervene as of right "if the court fails to apply the general
standard provided by the text of Rule 24(a)(2), or if the court
reaches a decision that so fails to comport with that standard as
14
to indicate an abuse of discretion." International Paper, 887 ____________________
F.2d at 344.
In the case at hand, we can narrow the lens of our
inquiry somewhat. For one thing, none of the appellants have
argued that the district court misapprehended Rule 24(a)(2)'s
analytic framework or failed to appreciate the rule's general
standard. For another thing, the appellees concede the
timeliness of the intervention motions. Thus, our analysis
focuses exclusively on whether the court properly applied the
other three elements of the test: sufficiency of interest;
likelihood of impairment; and adequacy of representation.6
IV. ANALYSIS IV. ANALYSIS
We first address the common arguments for intervention
pressed by Cabletron, CRR, RMA, and CAPS (collectively, "the
Grouped Appellants"). We then turn to the differentiated
rationales for intervention offered by OCA and the City of
Manchester.
A. The Grouped Appellants. A. The Grouped Appellants. ______________________
____________________
6The plaintiffs argue that we should affirm the district
court's denial of the motions to intervene filed by Cabletron,
RMA, CAPS, and OCA because each of those appellants failed to
accompany its motion with "a pleading setting forth the claim or
defense for which intervention is sought." Fed. R. Civ. P.
24(c). We agree that these parties were derelict in their Rule
24(c) duties, and that such dereliction ordinarily would warrant
dismissal of their motions. See Rhode Island Fed'n of Teachers ___ _______________________________
v. Norberg, 630 F.2d 850, 854-55 (1st Cir. 1980). In this _______
instance, however, the district court elected to forgive this
oversight. See PSNH II, 173 F.R.D. at 24 n.2. Because we affirm ___ _______
the lower court's denial of the motions to intervene on more
substantive grounds, we see no reason to revisit that
determination.
15
Although there are modest differences in the
particulars of their respective situations, a common theme
pervades the arguments of all the Grouped Appellants: each
strives to justify intervention as a matter of right by reference
to the same two interests. First, they assert that the
plaintiffs' action asks the district court to strike down the
Plan, and that such relief, if granted, would sunder their shared
interest in obtaining lower electric rates. Second, they assert
that their prior (and anticipated) participation in the PUC's
administrative proceedings itself furnishes an independent basis
for intervention. We find both assertions wanting.
To begin with, the assertion of an economic interest is
procedurally vulnerable. Although the Grouped Appellants
vigorously pressed this line of argument in the district court,
they devote only cursory attention to it on appeal.
Consequently, it is not preserved for appellate review. See Ryan ___ ____
v. Royal Ins. Co., 916 F.2d 731, 734 (1st Cir. 1990). ______________
Even were the asseveration preserved, it would be
unavailing. While the type of interest sufficient to sustain
intervention as of right is not amenable to precise and
authoritative definition, a putative intervenor must show at a
bare minimum that it has "a significantly protectable interest,"
Donaldson v. United States, 400 U.S. 517, 531 (1971), that is _________ _____________
"direct, not contingent," Travelers Indem., 884 F.2d at 638. ________________
Though these contours are relatively broad, the Grouped
Appellants' interest in the lower electric rates expected to
16
result from restructuring falls well outside the pale.
Potential economic harm to a would-be intervenor is a
factor that warrants serious consideration in the interest
inquiry. See Conservation Law Found., 966 F.2d at 43; but cf. ___ _______________________ ___ ___
New Orleans Pub. Serv., Inc. v. United Gas Pipe Line Co., 732 _____________________________ _________________________
F.2d 452, 466 (5th Cir. 1984) (en banc) (holding that an economic
interest alone is insufficient predicate for a Rule 24(a)(2)
intervention). It is settled beyond peradventure, however, that
an undifferentiated, generalized interest in the outcome of an
ongoing action is too porous a foundation on which to premise
intervention as of right. See New Orleans Pub. Serv., 732 F.2d ___ ______________________
at 466; Athens Lumber Co. v. Federal Election Comm'n, 690 F.2d _________________ _______________________
1364, 1366 (11th Cir. 1982); United States v. American Tel. & _____________ ________________
Tel. Co., 642 F.2d 1285, 1292 (D.C. Cir. 1980). That principle ________
is dispositive here for the Grouped Appellants' theory of
economic interest operates at too high a level of generality.
After all, every electricity consumer in New Hampshire and every
person who does business with any electricity consumer yearns for
lower electric rates.
To cinch matters, the Grouped Appellants' interest in
obtaining lower electric rates also has an overly contingent
quality. This is not a case in which ongoing litigation directly
threatens an economic right or benefit presently enjoyed by any
would-be intervenor. See, e.g., City of Stillwell v. Ozarks ___ ____ __________________ ______
Rural Elec. Coop., 79 F.3d 1038, 1042 (10th Cir. 1996). It is, __________________
rather, a case in which these would-be intervenors root their
17
professed economic interest in an as yet unrealized expectancy of
lower electric rates. As the district court perspicaciously
observed, numerous market variables will impact New Hampshire
electric rates even after the PUC implements a restructuring
plan. See PSNH II, 173 F.R.D. at 26. Whether the interaction of ___ _______
these variables actually will produce lower rates is anybody's
guess, thus demonstrating the fatally contingent nature of the
asserted economic interest. See Travelers Indem., 884 F.2d at ___ ________________
638-39.
The Grouped Appellants also claim a protectable
interest within the purview of Rule 24(a)(2) arising out of their
prior participation, and their anticipated opportunity for future
participation, in the PUC's administrative proceedings. All
profess to fear that the plaintiffs' suit will lay waste to the
efforts that they expended (culminating in the Plan), and that
this threat entitles them to intervention.
We do not dismiss this claim lightly. In certain
circumstances, an administrative-proceeding interest may well
form a sufficient predicate for intervention as of right. Since
this clearly is not true across the board, we must evaluate the
asserted administrative-proceeding interest in light of the
specific claims embodied in the lawsuit pending before the
district court and we must do so in keeping with the pragmatic
cast of Rule 24(a)(2). Furthermore, we must conduct this
assessment with an awareness that Rule 24(a)(2)'s third tine
whether disposition of the extant action may as a practical
18
matter impair or impede the applicant's ability to protect a
cognizable interest often influences resolution of the interest
question. See Conservation Law Found., 966 F.2d at 42. ___ _______________________
The plaintiffs' complaint does not frontally attack the
process through which the PUC arrived at the Plan,7 but, rather,
pleads causes of action that will require the district court to
measure the submitted Plan against federal statutory and
constitutional benchmarks. Hence, adjudication of the
plaintiffs' claims will not place the district court in the
position of having to rebalance competing policy views anent
electric utility industry restructuring or otherwise to co-opt
the administrativeproceedingsinwhichthewould-beintervenorsappeared.
The Grouped Appellants resist this conclusion. In
their estimation, the plaintiffs' challenges do not involve
"pristine" questions of federal law, and they express concern
that the district court will be forced to immerse itself in the
"nitty gritty" of ratemaking. We agree that the district court
will have to understand the Plan in order to resolve the
plaintiffs' challenges, but we are confident that the PUC is
fully capable of explicating the interstices of the Plan to
facilitate this review. More to the point, we deem it of
decretory significance that the types of viewpoint-balancing
issues that merited the inclusion of a wide array of parties in
____________________
7Although paragraph 42 of PSNH's amended complaint
attributes arbitrary and capricious procedural maneuvers to the
PUC, the plaintiffs have not based any of their federal claims on
these ostensible procedural defects.
19
the administrative proceedings are not present in this civil
action, and we therefore are hard-pressed to see how the present
litigation will impair or impede the would-be intervenors'
legitimate interests.
The Grouped Appellants' reliance on United States v. ______________
South Fla. Water Mgmt. Dist., 922 F.2d 704 (11th Cir. 1991), for ____________________________
the proposition that participation in the PUC's administrative
proceedings ipso facto justifies intervention as of right, is ____ _____
misplaced. There, the federal government brought suit alleging
that a water management district's irrigation and flood control
policies violated a state environmental statute. See id. at 707. ___ ___
The United States asked the district court, inter alia, to set a _____ ____
maximum allowable concentration of nitrogen and phosphorous in
farm water runoff. See id. The court denied various farm ___ ___
groups' motions for intervention as of right. The Eleventh
Circuit reversed. It found that the Florida statute granted the
farm groups a statutory right to participate in the water
district's administrative implementation of runoff standards.
Because the federal litigation essentially bypassed the
administrative framework, denial of intervention would eliminate
the farm groups' role in the decisionmaking process. See id. at ___ ___
708.
Such is not the case here. The would-be intervenors
heretofore have taken full advantage of their right to
participate in the PUC's proceedings, and their role in any
future administrative decisionmaking process is not in jeopardy.
20
On the one hand, if the plaintiffs lose, then the Plan that
emerged from the administrative proceedings probably will remain
intact unless the PUC, in the course of further administrative
proceedings (in which the applicants for intervention will have
an opportunity to participate), modifies it. On the other hand,
if the plaintiffs prevail, then the Plan likely will fall yet
the district court will not replace it with another of its own
creation. Rather, the PUC will be left to devise a successor
plan, and the Grouped Appellants will be able to participate
fully in any such efforts. In either event, the would-be
intervenors' administrative-proceeding interest remains
unsullied.8
The Grouped Appellants also advance the closely related
claim that the TRO issued by the district court impairs their
right to participate in ongoing or future administrative
proceedings before the PUC. This claim requires scant comment.
It suffices to say that the present litigation has not impeded
this entitlement in any real sense. To the extent that the lower
court has halted administrative proceedings, its orders are of
universal application: it did not bar the Grouped Appellants
selectively from participating in any ongoing proceeding.
____________________
8The Grouped Appellants also cite In re Sierra Club, 945 __________________
F.2d 776, 779 (4th Cir. 1991) (dictum), in support of their
contention that participation in an administrative proceeding
creates an interest that is per se sufficient to warrant
intervention as of right in any litigation related to the result
of those proceedings. To the extent that the court's broad
language can be read as stating such a rule, we respectfully
decline to follow it.
21
Indeed, the PUC itself has suspended reconsideration of the Plan
pending resolution of this case. While the Grouped Appellants
undoubtedly would prefer that the Plan's implementation proceed
immediately, the current stalemate does not prejudice their
ability to participate prospectively in resumed administrative
proceedings once the litigatory logjam clears.
Any residual doubt that might linger regarding the
Grouped Appellants' right to intervene is assuaged at the final
step of the Rule 24(a)(2) inquiry. We agree with the district
court that the Grouped Appellants simply have not shown that the
defendant commissioners inadequately represent their interests in
upholding the Plan.
To be sure, an applicant for intervention need only
make a minimal showing that the representation afforded by
existing parties likely will prove inadequate. See Trbovich v. ___ ________
United Mine Workers, 404 U.S. 528, 538 n.10 (1972). Nonetheless, ___________________
the adequacy of interest requirement is more than a paper tiger.
A party that seeks to intervene as of right must produce some
tangible basis to support a claim of purported inadequacy. See ___
Moosehead Sanitary Dist. v. S. G. Phillips Corp., 610 F.2d 49, 54 ________________________ ____________________
(1st Cir. 1979). Moreover, the burden of persuasion is ratcheted
upward in this case because the commissioners are defending the
Plan in their capacity as members of a representative
governmental body. Given this fact, the Grouped Appellants must
rebut a presumption that the commissioners adequately represent
their interests. See Mausolf v. Babbitt, 85 F.3d 1295, 1303 (8th ___ _______ _______
22
Cir. 1996). This rebuttal requires "a strong affirmative
showing" that the agency (or its members) is not fairly
representing the applicants' interests. Hooker Chems. & __________________
Plastics, 749 F.2d at 985. ________
The Grouped Appellants attempt to roll this presumption
on its side. They maintain that the PUC's status as the
principal protector of the general public interest precludes its
effective representation of their particularized interests. See, ___
e.g., Mille Lacs Band of Chippewa Indians v. Minnesota, 989 F.2d ____ ____________________________________ _________
994, 1001 (8th Cir. 1993) (finding the presumption of adequate
representation overcome where a suit against the state to enforce
an Indian treaty implicated the intervenors' interest in
preserving fish and game stock on their private lands). On the
facts of the case at bar, however, this resupinate reasoning does
not withstand scrutiny: in respect to the plaintiffs' claims,
the PUC's interests are perfectly aligned with those of the
Grouped Appellants. We explain briefly.
Although the motives that drive any individual
appellant's support for the Plan may diverge slightly from those
of its fellow appellants and also from those of the PUC, all
march in legal lockstep when defending the Plan against the
plaintiffs' federal statutory and constitutional challenges.
None of the Grouped Appellants has propounded any legal argument
that the PUC members are unable or unwilling to make, or that
subverts the PUC's institutional goals. This symmetry of
interest among the Grouped Appellants and the PUC commissioners
23
ensures adequate representation. See American Lung Ass'n v. ___ ____________________
Reilly, 962 F.2d 258, 261-62 (2d Cir. 1992); Washington Elec. ______ _________________
Coop. v. Massachusetts Mun. Wholesale Elec. Co., 922 F.2d 92, 98 _____ _______________________________________
(2d Cir. 1990); see generally United Nuclear Corp. v. Cannon, 696 ___ _________ ____________________ ______
F.2d 141, 144 (1st Cir. 1982) (discussing the factors that a
federal court must consider in the adequacy of interest inquiry).
If that were not enough and we firmly believe that it
is we note that the PUC members have launched a full-scale,
uncompromising defense of their Plan. We think the likelihood
that the PUC will capitulate cravenly to the plaintiffs'
onslaught is extremely remote. This circumstance, in itself,
weighs heavily in favor of denying mandatory intervention. See ___
Washington Elec. Coop., 922 F.2d at 98; Natural Resources Defense ______________________ _________________________
Council, Inc. v. New York State Dep't of Envtl. Conservation, 834 _____________ ___________________________________________
F.2d 60, 62 (2d Cir. 1987); cf. Conservation Law Found., 966 F.2d ___ _______________________
at 44 (finding that the Secretary of Commerce inadequately
represented the more parochial interests of putative intervenors
because he agreed, with minimal opposition, to a consent decree
drafted by the plaintiffs).
Finally, the Grouped Appellants maintain that the
courts must accept at face value the PUC's declaration of its
inability to represent their interests, no questions asked. This
is sheer persiflage. Here, as in many other contexts, actions
speak louder than words. In all events, neither the PUC
commissioners' support of and consent to the Grouped Appellants'
desire to intervene, nor the commissioners' insinuations that
24
they, alone, are not up to the task of defending the Plan, can
strip a federal court of the right and power indeed, the duty
to make an independent determination as to whether Rule
24(a)(2)'s prerequisites are met. See International Paper, 887 ___ ____________________
F.2d at 340-41; Wade v. Goldschmidt, 673 F.2d 182, 184 n.3 (7th ____ ___________
Cir. 1982).
B. OCA. B. OCA. ___
We turn next to OCA's quest for intervention. For the
most part, its arguments parallel those championed by the Grouped
Appellants the six would-be intervenors did, after all, elect
to file a consolidated brief and we reject them for the reasons
already stated. We write separately, however, to address one
idiosyncratic feature.
OCA and two amici, the Ohio Consumers' Counsel and the
National Association of State Utility Consumer Advocates, contend
that the district court should have allowed OCA to intervene as
of right because a New Hampshire statute endows it with the
authority to represent residential utility consumers "in any
proceeding concerning rates, charges, tariffs, and consumer
services before any board, commission, agency, court, or
regulatory body." N.H. Rev. Stat. Ann. 363:28(II). This
legislative directive requiring OCA to devote its
representational zeal entirely to the cause of the consumer
contrasts with the PUC's statutory mandate to "be the arbiter
between the interests of the customer and the interests of
regulated utilities." Id. 363:17a. Focusing singlemindedly on ___
25
these disparate statutory missions, OCA and its amici take the
position that the PUC cannot adequately represent OCA's interests
in this case.
A state statute can inform the Rule 24(a)(2) calculus,
but it cannot displace the requirement that a would-be intervenor
satisfy each of the rule's prerequisites. See Washington Elec. ___ ________________
Coop., 922 F.2d at 96-98. Whatever discrepancies exist in the _____
enabling statutes of OCA and the PUC, respectively, a federal
court must assess adequacy of representation in light of the
issues at stake in the particular litigation. For the reasons
previously discussed, the differences in the two agencies'
statutory missions are without consequence here; like the Grouped
Appellants, OCA can point neither to any legal argument favorable
to it that the commissioners are unwilling or unable to make in
defense of the Plan, nor to any legal position taken by the
commissioners that compromises OCA's interests in any material
way. In short, there simply is no divergence of interest between
the two bodies in respect to the causes of action pleaded in this
litigation.9
C. The City of Manchester. C. The City of Manchester. ______________________
Like the other five appellants, the City of Manchester
____________________
9Our contextualized holding should ease the amici's concern
that failure to allow OCA to intervene will impair the
effectiveness of similar consumer advocacy organizations in other
litigation. If, for example, PSNH had included in its complaint
claims that would necessitate a viewpoint-balancing analysis in
which consumer concerns played a significant role, we would see
OCA's appeal in a vastly different light.
26
advances arguments grounded both in an asserted economic interest
and an asserted administrative-proceeding interest. To the
extent that these arguments replicate those made by the Grouped
Appellants, we reject them for the reasons previously
articulated. Still, the city's position is different in certain
respects.
Manchester administers a municipal electric power
aggregation program under which it procures electricity for
several hundred municipal, residential, and commercial accounts.
The number of accounts that it represents imbues the city with
sufficient market power to acquire substantial rate discounts.
Manchester supports the Plan because it believes that increased
competition in the electric power market will allow it to secure
even lower electric rates for the subscribers to the aggregation
program. Manchester posits that this special interest as an
aggregator justifies intervention as of right.
Notwithstanding this twist, the district court did not
believe that Manchester's interest differed appreciably from the
generalized economic interest asserted by each of the other
appellants. See PSNH II, 173 F.R.D. at 23, 25-26. We discern no ___ _______
abuse of discretion in that ruling. By like token, we are
unmoved by the city's insistence that, as administrator of the
aggregation program, its interest is not merely in lower rates,
but also in fostering an electric power market open to the
greatest possible number of competitors. This recharacterization
is more froth than brew. When all is said and done, Manchester
27
seeks to promote a competitive market because it surmises that
such a development will have a salutary effect on electric rates.
Manchester also attempts to distinguish its position on
the ground that, due to the aggregation program, it is registered
with the PUC as a supplier of electric power. But this brings us
full circle. Manchester does not assert any interest that stems
from its role as a supplier other than a desire to purchase power
at the lowest possible rates and to pass the resultant savings to
its subscribers. Hence, the claimed distinction fails to set
Manchester apart from the other appellants in any material way.
Manchester has one remaining bullet in its intervention
gun, but it too is a blank. The city notes that PSNH is one of
its largest employers and taxpayers and, consequently, that it
has a vital interest in PSNH's ability to remain a viable
enterprise after market restructuring. While we have serious
doubts that Manchester's paternalistic impulses satisfy Rule
24(a)(2)'s interest requirement at all, we need not decide that
issue for two reasons. First, and most obviously, PSNH is the
party with the singularly greatest interest in preserving its
economic survival and can adequately represent that interest in
this case. Second, Manchester's positions on the issues at stake
in this litigation align perfectly with those of the PUC
commissioners.
Manchester attempts to defuse the suggestion that it
stands shoulder-to-shoulder with the defendants by loudly
proclaiming its disagreement with the PUC's method of calculating
28
PSNH's stranded cost recovery allowance. This is a very red
herring. In the context of the lawsuit, the stranded costs issue
mainly affects PSNH's takings claims. But Manchester, in its
proffered answer to PSNH's complaint, see Fed. R. Civ. P. 24(c), ___
denies that any of the PUC's actions amount to a confiscatory
taking. At any rate, PSNH itself adequately will represent any
interest that the city may have in contesting the SCRECH
methodology embodied in the Plan.
Refined to bare essence, Manchester's campaign for
intervention as of right reduces to its promise that it "will
offer a different angle on the legal questions in this lawsuit."
This campaign promise, unamplified by any specifics, cannot bear
the weight of a claim that adequate representation is lacking.
See Moosehead Sanitary Dist., 610 F.2d at 54. ___ ________________________
V. FLOTSAM AND JETSAM V. FLOTSAM AND JETSAM
Cabletron, RMA, and the City of Manchester also have
attempted to appeal from orders of the district court not
directly related to intervention. Because we affirm the denial
of their motions to intervene, they lack standing to press any
other issues before this court. See SEC v. Certain Unknown ___ ___ ________________
Purchasers of the Common Stock of and Call Options for the Common _________________________________________________________________
Stock of Santa Fe Int'l Corp., 817 F.2d 1018, 1021-22 (2d Cir. _______________________________
1987). Hence, we take no view of either their putative appeals
of the district court's May 13 and July 7 orders or their
characterization of those orders as modifications to, or
extensions of, a de facto preliminary injunction.
29
In a closely related initiative, all the appellants,
relying on Railroad Comm'n v. Pullman Co., 312 U.S. 496 (1941) _______________ ___________
and Burford v. Sun Oil Co., 319 U.S. 315 (1943), invite us to _______ ___________
scrutinize the district court's unwillingness to abstain from
deciding this case. We decline the invitation. A district
court's refusal to abstain under doctrines like Pullman or _______
Burford is not an immediately appealable event. See Gulfstream _______ ___ __________
Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 278 (1988). _______________ ________________
Thus, acceding to the appellants' request would place this court
in the bizarre situation of deciding a nonappealable order at the
behest of non-parties.
Let us be perfectly clear. We recognize that the
appellants make some strong arguments in support of abstention.
The district court, if it so chooses, is free to revisit the
issue. At this point in the litigation, however, that court is
the only tribunal with authority to address the question.
VI. CONCLUSION VI. CONCLUSION
We need go no further. The future direction of the
electric utility market in New Hampshire is a matter of utmost
importance, but parties who are merely interested in the outcome
of a case do not automatically qualify for intervention as of
right under Rule 24(a)(2). Under the totality of the
circumstances that obtain here, we discern no abuse of discretion
in the district court's determination that the appellants are
among that number.
In Nos. 97-1762, 97-1763, 97-1773, 97-1780, 97-1805 and In Nos. 97-1762, 97-1763, 97-1773, 97-1780, 97-1805 and _______________________________________________________
97-2070, the orders denying intervention are affirmed. The 97-2070, the orders denying intervention are affirmed. The __________________________________________________________ ___
remaining appeals are dismissed for want of appellate remaining appeals are dismissed for want of appellate _________________________________________________________________
30
jurisdiction. Costs shall be taxed in favor of plaintiffs jurisdiction. Costs shall be taxed in favor of plaintiffs ____________ ________________________________________________
against all appellants. against all appellants. ______________________
31
Document Info
Docket Number： 97-1759
Filed Date： 2/4/1998
Precedential Status： Precedential
Modified Date： 9/21/2015