Ames Mun. Elec. Sys. v. Iowa Utilities Bd.
| Decision Date | 22 December 2020 |
| Docket Number | Case No. 4:20-cv-00073-SMR-SBJ |
| Parties | AMES MUNICIPAL ELECTRIC SYSTEM, Petitioner, v. IOWA UTILITIES BOARD, Respondent, United States Department of Agriculture, Respondent. |
| Court | U.S. District Court — Southern District of Iowa |
David Jay Lynch, Brown Winick Law Firm, Des Moines, IA, for Petitioner.
Jon C. Tack, Matthew T. Oetker, Iowa Utilities Board, Des Moines, IA, for Respondent Iowa Utilities Board.
David L.D. Faith, Kristin Elaine Olson, William C. Purdy, United States Attorney's Office, Des Moines, IA, for Respondent United States Department of Agriculture.
ORDER ON MOTION FOR REMAND
In this civil action, originally filed in the Iowa District Court for Story County, Ames Municipal Electric System ("Ames") petitions for judicial review of the Iowa Utilities Board's ("IUB") January 23, 2020 decision modifying the exclusive utility service territory boundaries of property owned by the United States Department of Agriculture ("USDA"). USDA intervened and promptly removed the case to federal court under the auspices of 28 U.S.C. § 1442(a). [ECF No. 11]. Ames, joined by Intervenors Iowa Association of Municipal Utilities ("IAMU") and Office of Consumer Advocate ("OCA"), move to remand the case. [ECF Nos. 14; 15; 17]. IUB joined in Ames’ motion and moved to remand on additional grounds. [ECF No. 16]. Because the Court concludes Ames's petition for judicial review does not presently contain a basis for removal, the motions to remand are GRANTED.
USDA is a federal agency that operates the National Centers for Animal Health (the "Center"), a large research facility, in Story County, Iowa, where it conducts "critical animal research, including research using dangerous pathogens." [ECF No. 11-2 at 3] (IUB Decision). Research laboratories operate at various containment levels on a scale from Biosafety Level 1 ("BSL-1") (low) to Biosafety Level 4 ("BSL-4") (high). [ECF No. 11-4 at 29]. Although most of the Center's work is done in laboratories operating at Biosafety Level 2 ("BSL-2"), handling pathogens and agents posing a moderate risk to human health, it also contains laboratories operating at Biosafety Level 3 ("BSL-3"), which handles dangerous pathogens such as tuberculosis
, brucellosis, anthrax, tularemia, and the plague. Id. ; see also [ECF No. 11-4 at 27, 29]. Because of the dangers these facilities pose to public health, they require multiple redundant and reliable power systems to service their containment protocols. Id. at 4.
The Center was developed on the original sites of several former USDA laboratories, leading to the current electric service territory bisecting the Center's contiguous parcel and leaving it with two electric service providers. Id. at 2–3. Historically, Ames serviced the southern portion of the Center, and IPL serviced the northern portion. Id. at 3. The Center's Building 21, the key building in this dispute, was constructed as part of a larger USDA modernization project; though designed to be a stand-alone facility, USDA planned to integrate the building into its combined facilities once Congress approved further appropriations for the project. Located at the northern edge of Ames’ exclusive service territory, Building 21 contains both BSL-2 and BSL-3 laboratories.
In 2011, USDA moved forward with its modernization project to move all BSL laboratories to a centralized power grid. The federal agency cited an inadequately reliable power supply to Building 21 and unacceptable risk of power outages, compromising the Center's containment protocols and inhibiting the USDA's ability to safely carry out its federal mission. USDA awarded a contract to connect Building 21 to the Center's power grid, supplied by IPL, and disconnecting it from Ames’ infrastructure. Id. at 5. The project has been completed up to the point of disconnecting Building 21 from Ames’ infrastructure. Id.
On September 11, 2018, USDA filed a customer complaint with IUB asking the state regulatory body to "evaluate Ames’ ability ‘to meet the Center's highly specialized electrical needs’ " and "modify the service territory boundary" running through the federal land. Id. at 1. In essence, USDA sought a modification that would allow it to remove Building 21 from Ames's exclusive service territory so it could connect to IPL's utility infrastructure. The parties—USDA, Ames, and IPL—jointly submitted three issues for IUB's consideration: (1) whether, at USDA's request, IUB may alter existing boundaries of an electric utility exclusive service area under Iowa Code § 476.25(1) and, if so, whether the record evidence justified moving that boundary for the Center's Building 21 to fall within the exclusive service area of IPL; (2) whether, if modified, Ames was entitled to compensation; and (3) whether, in the event IUB declined to alter the existing utilities boundaries, USDA was entitled to, on its own initiative, disconnect Building 21 from Ames’ infrastructure and connect it to USDA's own self-managed power grid, which is partially served by IPL and partially served by USDA's own electric turbine. [ECF No. 11-5 at 1–2].
After holding a contested hearing and receiving evidence, testimony, and briefs from USDA, Ames, and IPL, IUB issued its written decision on January 23, 2020.1 UIB noted Iowa law did not permit USDA to initiate proceedings to alter electric service territories by customer complaint, but the administrative body determined it was not prevented from investigating allegations of inadequate utility service on its own initiative to address the public health and safety concerns that had been brought to its attention. [ECF No. 11-2 at 7]. After balancing the public interest, preservation of existing service areas, prevention of unnecessary duplication of facilities, and natural and physical barriers, IUB determined a modification was appropriate and altered the utility service boundaries servicing the Center by consolidating all of USDA's property within the exclusive service territory of IPL. See generally id. at 6–12. Because IUB modified the exclusive service territories of Ames and IPL concerning the location of Building 21, IUB did not reach the third issue concerning whether USDA could engage in self-help. Id. at 11.
Ames petitioned for judicial review under Iowa Code § 17A.19 in the Iowa District Court for Story County, seeking to overturn IUB's decision and reverse the reapportionment of the utility service boundaries servicing USDA's land. See [ECF No. 11-1 at 3–5]. After the state court granted USDA's request to intervene and be named a respondent in the case, [ECF No. 11-3 at 1] (citing Iowa Code § 17A.19(2) ; Iowa R. Civ. P. 1.407 ), USDA removed the action to this Court pursuant to 28 U.S.C. § 1442(a), asserting Ames’ petition is "against or direct to" an agency of the United States of America, [ECF No. 11].
Ames, IUB, IAMU, and OCA seek to remand this case back to state court. [ECF Nos. 14; 15; 16; 17]; see 28 U.S.C. § 1447(c) (). The parties challenge the propriety of removal under § 1442(a) and contend the Court lacks subject matter jurisdiction over the appeal of IUB's administrative decision. IUB separately argues federal courts cannot exercise jurisdiction over actions initiated in state court under chapter 17A of the Iowa Code and that Eleventh Amendment immunity prevents the case from proceeding in a federal forum. USDA, as the removing party invoking federal jurisdiction, bears the burden of demonstrating that removal was proper. Wilson v. Republic Iron & Steel , 257 U.S. 92, 97, 42 S.Ct. 35, 66 L.Ed. 144 (1921) ; Winters v. Diamond Shamrock Chem. Co. , 149 F.3d 387, 397 (5th Cir. 1998).
Title 28, section 1442 of the United States Code permits the removal to federal court any "civil action ... that is commenced in a State court and that is against or directed to ... [t]he United States or any agency thereof." 28 U.S.C. § 1442(a)(1).2 The statute's history reflects that its " ‘basic’ purpose is to protect the Federal Government from the interference with its ‘operations’ " because local prejudice from state governments "may impede enforcement of federal law" or "deprive federal officials of a federal forum in which to assert federal immunity defenses." Watson v. Philip Morris Cos., Inc. , 551 U.S. 142, 150–51, 127 S.Ct. 2301, 168 L.Ed.2d 42 (2007) (citations omitted). In addition to permitting removal, the statute "establishes an independent basis for federal jurisdiction." United States v. Todd , 245 F.3d 691, 693 (8th Cir. 2001) ; see Mesa v. California , 489 U.S. 121, 137, 109 S.Ct. 959, 103 L.Ed.2d 99 (1989) (). Indeed, "[f]ederal jurisdiction rests on a ‘federal interest in the matter,’ " and "the right of removal under [§] 1442(a)(1) is made absolute whenever a suit in a state court is for any act ‘under color’ of federal office." Willingham v. Morgan , 395 U.S. 402, 406, 89 S.Ct. 1813, 23 L.Ed.2d 396 (1969) (citation omitted). The removal statute "is not ‘narrow’ or ‘limited,’ " and the Supreme Court has cautioned that the statute's policy "should not be frustrated by a narrow, grudging interpretation of § 1442(a)(1)." Id. at 407, 89 S.Ct. 1813.
"Historically, removal under § 1442(a)(1) and its predecessor statutes was meant to ensure a federal forum in any case where a federal [actor] is entitled to raise a defense arising out of [its] official duties." Arizona v. Manypenny , 451 U.S. 232, 241, 101 S.Ct. 1657, 68 L.Ed.2d 58 (1981). Indeed, prior versions of the federal removal statute only permitted officers or agents of the federal government to remove disputes to federal court, not agencies themselves. See Int'l Primate Prot. League v. Admin'rs of Tulane Educ. Fund , 500 U.S. 72, 79–80, 111 S.Ct. 1700, 114...
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