Washington Elec. Co-op., Inc. v. Massachusetts Mun. Wholesale Elec. Co.

• Decision Date: 18 December 1990
• Docket Number: D,No. 112,112
• Citation: 922 F.2d 92
• Parties: WASHINGTON ELECTRIC COOPERATIVE, INC., Plaintiff, v. MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC CO., Defendant-Appellee, Green Mountain Power Corp., Village of Hardwick; Village of Ludlow; Village of Swanton; Village of Morrisville; Village of Lyndonville; and Village of Stowe, Trustee/Defendants, State of Vermont Department of Public Service, Plaintiff-Intervenor-Appellant. ocket 90-7333.
• Court: U.S. Court of Appeals — Second Circuit

Page 92

922 F.2d 92

18 Fed.R.Serv.3d 579

WASHINGTON ELECTRIC COOPERATIVE, INC., Plaintiff, v. MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC CO., Defendant-Appellee,

Green Mountain Power Corp., Village of Hardwick; Village of

Ludlow; Village of Swanton; Village of

Morrisville; Village of Lyndonville;

and Village of Stowe, Trustee/Defendants,

State of Vermont Department of Public Service,

Plaintiff-Intervenor-Appellant.

No. 112, Docket 90-7333.

United States Court of Appeals, Second Circuit.

Argued Sept. 13, 1990.

Decided Dec. 18, 1990.

William Griffin, Chief Asst. Atty. Gen., Montpelier, Vt. (Jeffrey L. Amestoy, Atty. Gen. for the State of Vt., Montpelier, Vt., of counsel) for plaintiff-intervenor-appellant.

Gerald J. Caruso, Boston, Mass. (Nicholas J. Scobbo, Jr., Ann Ryan-Small, Geraldine M. Corrado, Ferriter, Scobbo, Sikora, Caruso & Rodophele, Boston, Mass., and John Parker, Parker & Ankuda, Springfield, Vt., of counsel) for defendant-appellee.

Before LUMBARD, WINTER and MINER, Circuit Judges.

MINER, Circuit Judge:

The Vermont Department of Public Service ("VDPS") appeals from the denial of its motion to intervene as a plaintiff in a suit filed by the Washington Electric Cooperative, Inc. ("WEC") against the Massachusetts Municipal Wholesale Electric Company ("MMWEC"). In the underlying action, WEC sought to recover $924,208.71 paid to MMWEC under a Power Sales Agreement previously declared void by the Vermont Supreme Court. Vermont Dep't of Pub. Serv. v. Massachusetts Mun.

Wholesale Elec. Co., 151 Vt. 73, 558 A.2d 215 (1988), cert. denied --- U.S. ----, 110 S.Ct. 202, 107 L.Ed.2d 155 (1989). VDPS argues that the district court erred in finding that its statutory powers did not include the capacity to intervene in the action, and that, even if it had the capacity, it could not satisfy the requirements for either intervention as of right under Fed.R.Civ.P. 24(a)(2) or permissive intervention under Fed.R.Civ.P. 24(b).

We hold that VDPS has the capacity under Vermont law to intervene in this action, but has failed to satisfy the criteria for intervention as of right or by permission under Fed.R.Civ.P. 24. Accordingly, the judgment of the district court denying VDPS's motion to intervene is affirmed.

BACKGROUND

VDPS is a Vermont state agency created to "supervise and direct the execution of all laws relating to ... [the] [s]upervision and regulation of the organization and operation of electric cooperatives...." Vt.Stat.Ann. tit. 30, Sec. 2(a)(12) (1986). WEC is an electrical cooperative, being authorized to "generate, manufacture, purchase, acquire, accumulate and transmit electric energy; and to distribute, sell, supply and dispose of electric energy to its members, to governmental agencies and political subdivisions...." Id. Sec. 3002(4).

MMWEC is a public corporation and a political subdivision of the Commonwealth of Massachusetts. Mass.Gen.Laws Ann. ch. 164, app. Sec. 1-1 et seq. (West 1980). It functions as a joint planning and action agency through which member and nonmember utilities may acquire supplies of energy. Thirty-one Massachusetts municipalities presently are members of MMWEC. Since 1976, MMWEC has made energy supplies available through its ownership interests in various electric power facilities. Each ownership interest, as well as the separate planning and financing process through which it is acquired, is known as a "project." Member and non-member utilities contract with MMWEC to acquire a share of a project's power-generating capability by executing Power Sales Agreements with MMWEC. The revenues derived from these agreements are used in turn to finance further acquisitions of ownership interests by MMWEC.

In 1979, four Vermont municipalities (the Villages of Ludlow, Lyndonville, Morrisville and Northfield) and two non-profit electric cooperatives (WEC and the Vermont Electrical Cooperative) (all hereafter referred to as "the Vermont participants"), contracted with MMWEC for shares of the power-generating capability of its Project No. 6. ¹ Project No. 6 was the title given to MMWEC's 6.001 percent ownership interest in a nuclear power plant that was to be built in Seabrook, New Hampshire. Under the agreements, each Vermont participant obtained the right to a portion of "the amounts of electrical capacity and energy ... which the Project is capable of producing at any particular time."

In 1985 VDPS filed a complaint in Vermont Superior Court against MMWEC and the Vermont participants, seeking to declare void the sales agreements involving Project No. 6 on the ground that the Vermont participants were without authority to enter into such agreements. The Superior Court granted summary judgment in favor of the defendants. On appeal, the Vermont Supreme Court reversed the decision, ruling that the Vermont participants lacked the authority to enter into the broad delegations of responsibility contained in the sales agreements and declaring the agreements void ab initio. Vermont Dep't of Pub. Serv. v. Massachusetts Mun. Wholesale Elec. Co., 151 Vt. 73, 90, 558 A.2d 215, 255 (1988), cert. denied, --- U.S. ----, 110 S.Ct. 202, 107 L.Ed.2d 155 (1989).

Before the Power Sales Agreements were declared void, WEC and the other Vermont participants had paid MMWEC a After the Vermont Supreme Court ruling, WEC filed a complaint in Vermont Superior Court in March, 1989, seeking recovery of the money it had paid under the sales agreement. In the complaint, WEC prayed for a judgment of $924,208.71 against MMWEC and for the issuance of trustee process for the purpose of reaching any part of that sum that might be found in the hands of the other Vermont participants as a result of their dealings with MMWEC. On March 27, 1989, MMWEC removed the action to the United States District Court for the District of Vermont. On October 30, 1989, VDPS filed a motion for intervention on behalf of the Vermont participants' ratepayers. Through this device, it sought on behalf of the ratepayers not only the money paid by WEC to MMWEC, but also the money paid by the other six Vermont participants in Project No. 6. The district court denied VDPS's motion, finding that the Vermont statute did not confer upon it the capacity to intervene in an action brought against an out-of-state wholesale supplier of electricity and that, in any event, it did not satisfy the prerequisites for intervention in a federal action. In response to the decision, Vermont enacted into law Senate Bill No. 379, which expressly authorizes VDPS to represent the interests of the state and Vermont ratepayers in this action. S. Bill 379, 60th Leg., 2d Sess., 1989 Vt. Laws 42 ("Bill No. 379").

total of $6,200,733.71 due under the agreements. WEC's share of this amount was $924,208.71. It paid its share from revenues received from its customers.

DISCUSSION

I. VDPS's Capacity to Sue MMWEC for Monetary Damages

We disagree with the district court's determination that VDPS had no statutory authority to sue an out-of-state electrical wholesaler for money damages and, consequently, lacked the authority to intervene in this action.

VDPS has the statutory duty to supervise Vermont electric cooperatives. Vt.Stat.Ann. tit. 30, Sec. 2(a)(12). Municipal and investor-owned utilities also are subject to VDPS's supervision. Id. Secs. 201(a), 203. VDPS supervises the utilities by reviewing proposed changes in rate schedules and by representing the consuming public before the Vermont Public Service Board ("Board"). Id. Sec. 2(a)(6). VDPS may investigate and prosecute the complaints of ratepayers before the Board, id. Sec. 208, as well as bring proceedings to enjoin violations of state law by public service corporations. Id. Sec. 32. Although the Board is the final arbiter of the reasonableness of utility rates, id. Secs. 218(a), 226(a), (b), 227, VDPS, as advocate for the ratepayer, may challenge the actions and rates of the utilities. Id. Secs. 2(a)(6), 217. Finally, VDPS may exercise its jurisdiction over electrical cooperatives and other such public service corporations "so far as may be necessary to enable [it] to perform the duties and exercise the powers conferred upon [it] by law." Id. Sec. 203.

Under Vermont law, an administrative agency "has only such powers as are expressly conferred upon it by the legislature, together with such incidental powers expressly granted or necessarily implied as are necessary to the full exercise of those granted." Trybulski v. Bellows Falls Hydro-Elec. Corp., 112 Vt. 1, 7, 20 A.2d 117, 120 (1941). Because VDPS's purpose in the instant suit is to ensure that monies improperly paid to MMWEC are recovered and, if appropriate, distributed to the ratepayers, its interest arises from its role as advocate for the consuming public and supervisor of state electrical cooperatives. Cf. Vermont Dep't of Pub. Serv. v. Gallagher, No. S34-85LC (LaMoille Sup.Ct. Aug. 26, 1985) (VDPS has power to sue electric cooperative for money damages based on improper bonus payment to employee).

Furthermore, since the district court's finding of no capacity, the Vermont legislature has passed and signed into law Bill No. 379 "to clarify existing law to expressly authorize the department of public service to represent the ratepayers of this state in legal proceedings." Bill No. 379 provides Notwithstanding any other law to the contrary the department of public service is authorized to represent the interests of the state and Vermont ratepayers in a certain pending legal proceeding in the United States District Court for the District of Vermont entitled, Washington Electric Cooperative, Inc. v. Massachusetts Municipal Wholesale Electric Company, Civil Action No. 89-94, or in any other legal proceeding arising out of the Project No. 6 Sales Agreements.

S. Bill 379, 60th Leg., 2d Sess., 1989 Vt. Laws 42. At the very least, Bill No. 379 ratifies VDPS's interpretation of its own statutory powers, and, in any event, provides a clear legislative...