732 F.3d 469 (5th Cir. 2013), 12-30494, Simmons v. Sabine River Authority Louisiana

Docket Nº:12-30494.
Citation:732 F.3d 469
Opinion Judge:CARL E. STEWART, Chief Judge:
Party Name:Jeff SIMMONS; Alice Simmons; Jeanne Simmons; Gerald Edward McBride; Edward Bryant Bonner; et al, Plaintiffs-Appellants, v. SABINE RIVER AUTHORITY State of LOUISIANA; Louisiana Department of Transportation and Development; Linda Curtis Sparks; Entergy Gulf States Louisiana L.L.C.; Entergy Corporation; Entergy Services Incorporated; Entergy Louisiana
Attorney:Patrick W. Pendley, Esq., Nicholas Ryan Rockforte, Pendley, Baudin & Coffin, L.L.P., New Orleans, LA, Victor L. Marcello, Esq., Talbot, Carmouche & Marcello, Baton Rouge, LA, for Plaintiffs-Appellants. John Powers Wolff, III, Nancy B. Gilbert, Esq., Martin Edward Golden, Esq., Virginia Jordan McL...
Judge Panel:Before STEWART, Chief Judge, and SMITH and WIENER, Circuit Judges.
Case Date:October 09, 2013
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 469

732 F.3d 469 (5th Cir. 2013)

Jeff SIMMONS; Alice Simmons; Jeanne Simmons; Gerald Edward McBride; Edward Bryant Bonner; et al, Plaintiffs-Appellants,

v.

SABINE RIVER AUTHORITY State of LOUISIANA; Louisiana Department of Transportation and Development; Linda Curtis Sparks; Entergy Gulf States Louisiana L.L.C.; Entergy Corporation; Entergy Services Incorporated; Entergy Louisiana, L.L.C., Defendants-Appellees.

No. 12-30494.

United States Court of Appeals, Fifth Circuit.

October 9, 2013

Page 470

[Copyrighted Material Omitted]

Page 471

Patrick W. Pendley, Esq., Nicholas Ryan Rockforte, Pendley, Baudin & Coffin, L.L.P., New Orleans, LA, Victor L. Marcello, Esq., Talbot, Carmouche & Marcello, Baton Rouge, LA, for Plaintiffs-Appellants.

John Powers Wolff, III, Nancy B. Gilbert, Esq., Martin Edward Golden, Esq., Virginia Jordan McLin, Esq., Jamie Ann Polozola, Keogh, Cox & Wilson, Ltd., Charles Brandon Brown, Brown Law Firm, Baton Rouge, LA, for Defendants-Appellees.

Appeal from the United States District Court for the Western District of Louisiana.

Before STEWART, Chief Judge, and SMITH and WIENER, Circuit Judges.

CARL E. STEWART, Chief Judge:

This case asks us to resolve whether the Federal Power Act preempts property damage claims under state law where the claim alleges negligence for failing to act in a manner FERC expressly declined to mandate while operating a FERC-licensed project. We hold that it does, and so we AFFIRM the district court's dismissal of Plaintiffs' case with prejudice.

I. BACKGROUND

A. Facts

The Sabine River meanders between Texas and Louisiana. Two state agencies jointly regulate the Sabine River's waterways: the Sabine River Authority of Louisiana and the Sabine River Authority of Texas (collectively, " Authorities" ). Upon application by the Authorities, the Federal Power Commission 1 granted a fifty-year license (the " License" ), commencing October

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1, 1963, to the Authorities for the " construction, operation and maintenance" of Project Number 2305 (the " Project" ). The Project included the construction of a dam (the " Toledo Bend Dam" or the " Dam" ), a large reservoir, a spillway, and a hydroelectric plant. The Dam spans the Texas/Louisiana state line and is located in the southern part of the reservoir.

Under a Power Sales Agreement (the " Agreement" ), the Authorities granted Defendant-Appellant Entergy 2 the right to oversee the generation of power and to purchase the generated power. Under the terms of the Agreement, Entergy is subject to the terms and conditions of the License. The License requires the Authorities to maintain a normal maximum reservoir elevation of 172 feet mean sea level (" msl" ). To generate power, a minimum reservoir elevation of 162.2 feet msl is required. To maintain the required reservoir levels, water is released through the spillway gates, the power turbines, or both. Entergy and the Authorities operate the spillway gates, which are located in Louisiana.

Between 2000 and 2003, pursuant to Article 43 of the License, FERC considered several requests to modify the Project's operations.3 FERC conducted an analysis of historical floods and found that the Dam had not had " any significant effect" on flooding. FERC ultimately denied most of the requests, including a request to raise the Project's minimum reservoir elevation, and issued a report explaining its reasoning. In declining to order changes to project operations during floods, FERC observed that the Project " cannot provide any significant flood control benefits." However, FERC did require improvements to the Project's Emergency Action Plan.

B. Procedural History

Plaintiffs-Appellants (" Plaintiffs" ) are 28 individuals who allege that their properties were flooded and eroded after the Authorities and Entergy opened the spillway gates from October 30, 2009 through November 2009.4

In October 2010, Plaintiffs filed suit in Louisiana state court, alleging negligence, nuisance, trespass, unconstitutional taking, damage of property without just compensation, and due process violations under the Louisiana and United States constitutions. Plaintiffs sought, inter alia, damages and a permanent injunction " enjoining [Defendants] from opening the flood gates of the Toledo Bend Dam in such a manner as will cause the inundation of the downstream properties of the Plaintiffs."

Defendants thereafter removed the action under 16 U.S.C. § 825p, which provides federal courts with jurisdiction over duties and liabilities created by the Federal Power Act (" FPA" ), and under 28 U.S.C. § 1331. Plaintiffs subsequently filed a motion to remand, arguing, inter alia, that their complaint did not present a federal question. While Plaintiffs' motion to remand was pending, Defendants filed a motion to dismiss the suit under Federal Rules of Civil Procedure 12(b)(6) and 12(b)(7). Plaintiffs then filed an opposed motion for leave to amend their complaint; the motion sought to delete references to

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the United States Constitution. Plaintiffs' amendments, if granted, would have left only state causes of action, but would have left undisturbed their request for a permanent injunction. Six months later, without any action having been taken on any of the pending motions, Plaintiffs filed an opposed motion for leave to amend their complaint a second time. This amendment sought to remove Plaintiffs' requests for injunctive relief.

Subsequently, without ruling on any of Plaintiffs' pending motions, the district court held a hearing on the pending motion to dismiss. The district court then granted Defendants' motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), finding that Plaintiffs' state law-based property damage claims were preempted by the FPA and the License, and entered judgment dismissing Plaintiffs' case with prejudice. This appeal followed.5

II. STATE TORT CLAIMS

Plaintiffs argue that the district court improperly dismissed Plaintiffs' claims based on preemption.

A. Standard of Review

We review the district court's grant of a motion to dismiss de novo. Bass v. Stryker Corp., 669 F.3d 501, 506 (5th Cir.2012) (citation omitted). Well-pleaded facts are viewed in the light most favorable to the plaintiff. Castro v. Collecto, Inc., 634 F.3d 779, 783 (5th Cir.2011) (citation and internal quotation marks omitted).

B. Preemption

" Federal preemption is an affirmative defense that a defendant must plead and prove." Fisher v. Halliburton, 667 F.3d 602, 609 (5th Cir.2012) (citations omitted). Defendants did so plead. If the complaint establishes the applicability of a federal preemption defense, it can properly be the subject of a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss. Id. (citation omitted).

As is well known, federal preemption is based on the Supremacy Clause, which provides that federal law " shall be the supreme Law of the Land." U.S. Const. art. VI, cl. 2. There are three types of preemption: (1) express preemption,6 (2) field preemption, and (3) conflict preemption. Kurns v. R.R. Friction Prods. Corp., __ U.S. __, 132 S.Ct. 1261, 1265-66, __ L.Ed.2d __ (2012). Field preemption occurs when

[t]he intent to displace state law altogether can be inferred from a framework of regulation so pervasive ... that Congress left no room for the States to supplement it or where there is a federal interest ... so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject.

Arizona v. United States, __ U.S. __, 132 S.Ct. 2492, 2501, 183 L.Ed.2d 351 (2012) (citation and internal quotation marks omitted). Conflict preemption occurs " where compliance with both federal and state regulations is a physical impossibility, and those instances where the challenged state law stands as an obstacle to the accomplishment and execution of the Page 474

full purposes and objectives of Congress." Id. (citations and internal quotation marks omitted). The district court was not explicit as to which type of preemption it found applicable. However, we may affirm the district court's judgment for any reason supported by the record. United States v. Gonzalez, 592 F.3d 675, 681 (5th Cir.2009) (citation omitted).

C. Federal Power Act

In order to understand whether the FPA preempts state property damage claims, we look to the text of the Act, its history, and the way in which the Supreme Court, our circuit, and our sister circuits have interpreted it. We note that this is a question of first impression in this circuit. Our analysis leads us to conclude that the FPA preempts property damage claims based in state tort law where the alleged damage is the result of " negligently" operating in compliance with a FERC-issued license.

The Federal Power Act of 1935 indicates congressional intent for " a broad federal role in the development and licensing of hydroelectric power." California v. FERC, 495 U.S. 490, 496, 110 S.Ct. 2024, 109 L.Ed.2d 474 (1990). There are several FPA sections relevant to the claims at issue here. First, Section 4(e) of the Act authorizes FERC to issue licenses for projects " necessary or convenient ... for the development, transmission, and utilization of power across, along, from, or in any of the streams ... over which Congress has jurisdiction." 16 U.S.C. § 797(e). Second, Section 10(a)(1) of the Act requires FERC to issue licenses that the Commission determines are " best adapted" for power development and other public uses of the waters, including flood control. 16 U.S.C. § 803(a).

Third, Section 10(c) of the Act is central to Plaintiffs' arguments and our analysis. First, it requires the licensee to maintain the project and...

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