County of Suffolk v. Long Island Lighting Co.

• Citation: 710 F. Supp. 1387
• Decision Date: 14 April 1989
• Docket Number: No. 87-CV-646 (JBW).,87-CV-646 (JBW).
• Parties: COUNTY OF SUFFOLK, a municipal corporation, Robert Alcorn, Christopher S. George, Fred Harrison, Peter Maniscalco, William P. Quinn, and Custom Extruders, Inc., Plaintiffs, v. LONG ISLAND LIGHTING COMPANY, Stone & Webster Engineering Company, Charles R. Pierce, Wilfred O. Uhl, Charles J. Davis, and Andrew W. Wofford, Defendants.
• Court: U.S. District Court — Eastern District of New York

710 F. Supp. 1387

COUNTY OF SUFFOLK, a municipal corporation, Robert Alcorn, Christopher S. George, Fred Harrison, Peter Maniscalco, William P. Quinn, and Custom Extruders, Inc., Plaintiffs, v. LONG ISLAND LIGHTING COMPANY, Stone & Webster Engineering Company, Charles R. Pierce, Wilfred O. Uhl, Charles J. Davis, and Andrew W. Wofford, Defendants.

No. 87-CV-646 (JBW).

United States District Court, E.D. New York.

February 11, 1989.

As Amended April 14, 1989.

Hill, Betts & Nash by Bernard Persky, Kenneth F. McCallion, Gregory W. O'Neill, James W. Johnson and Lawrence P. Kolker, New York City, E. Thomas Boyle, County Atty. of Suffolk County, Hauppauge, N.Y., and Kirkpatrick & Lockhart by Lawrence Coe Lanpher and Karla Letsche, Washington, D.C., for plaintiff Suffolk County.

Vladeck, Waldman, Elias & Engelhard by Judith P. Vladeck, Karen Honeycutt and Julian Birnbaum, New York City, for Individual Ratepayer plaintiffs.

Bower & Gardner by James D. Harmon, Jr. and Michael Eng, New York City, for U.S.

Farrell, Fritz, Caemmerer, Cleary, Barnosky & Armentano by George J. Farrell and Delores Freidrich, Uniondale, N.Y., and Edward T. O'Brien, County Atty. of Nassau County, Mineola, N.Y., for Proposed intervenor County of Nassau.

Peter L. Zimroth, Corp. Counsel of City of New York (Peter Lehner, of counsel), New York City, for Proposed intervenor City of New York.

Reilly, Like & Schneider by Irving Like, Babylon, N.Y., and Flower & Plotka, by Edward Flower, Bay Shore, N.Y., for plaintiff Custom Extruders, Inc. and Proposed intervenors Business Ratepayer plaintiffs.

Marilyn A. Marlek, Bethpage, N.Y., for Proposed intervenor Grumman Corp.

Leibowitz & Peterson by Ira Leibowitz, Garden City, N.Y., for Proposed intervenor Long Island Ass'n.

Lewis & Greer by Lou Lewis, Poughkeepsie, N.Y., for Proposed intervenor Shoreham-Wading River Cent. School Dist.

Shea & Gould by Michael Lesch, Ronald H. Alenstein and John G. Nicolich, New York City, for the Individual defendants.

Susan E. Silverman, Hicksville, N.Y., for defendant Long Island Lighting Co.

Mudge Rose Guthrie Alexander & Ferdon by Laurence V. Senn, Jr., New York City, for defendant Stone & Webster Engineering.

Robert Abrams, New York City, New York State Atty. General's Office, New York City.

AMENDED MEMORANDUM AND ORDER

APPLICATION OF RICO

WEINSTEIN, District Judge:

TABLE OF CONTENTS

I. PROCEDURAL BACKGROUND

II. EQUITABLE DEFENSE AND FIRST AMENDMENT

III. SUFFOLK COUNTY'S CLAIMS

A. Motions for Judgment Notwithstanding the Verdict and a New Trial

1. Sufficiency of the Evidence

2. Res Judicata

3. Primary Jurisdiction

B. Application of RICO

1. Primary Jurisdiction

2. Abstention

3. "Our Federalism"

4. Doctrine of Clear Statement

IV. CONCLUSION

I. PROCEDURAL BACKGROUND

Suffolk County alleges that the Long Island Lighting Company (LILCO) and its former managers have repeatedly lied to the New York Public Service Commission (PSC) in order to obtain the higher electric rates needed to build the Shoreham Nuclear Power Facility (Shoreham). It brings this suit under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq.

The uncertainties raised by this litigation have compounded the serious economic and energy problems facing millions of people in New York City, Nassau and Suffolk Counties. The welfare of Long Island residents is threatened by doubts about LILCO's continued capacity to supply necessary electric power at affordable rates.

Suffolk, with five individuals and one business corporation, originally brought this suit as a class action on behalf of itself and a class of over one million present and former LILCO ratepayers. Because of Suffolk's longstanding opposition to the opening of Shoreham and its entanglement with LILCO in various other pending litigations, Suffolk and its attorneys could not adequately represent the interests of the class. See 710 F.Supp. 1405 (E.D.N.Y. 1988). Suffolk's claims were severed from those of the class for the purposes of the impending trial.

After an extensive jury trial, Suffolk obtained a verdict in its favor on some of its RICO claims. It was awarded damages by the jury which, when trebled as is required under the RICO statute, totaled some 22.9 million dollars. Following the verdict, LILCO moved for trial of a previously severed equitable defense to Suffolk's claims. That defense is dismissed for the reasons described below in Part II.

LILCO has also moved for judgment notwithstanding the verdict or in the alternative a new trial. The motion for judgment notwithstanding the verdict is granted, and the new trial motion is conditionally denied, for the reasons stated below in Part III.

II. EQUITABLE DEFENSE AND FIRST AMENDMENT

LILCO claims that Suffolk's unremitting opposition to the opening of Shoreham has caused far more damage to LILCO than the jury found Suffolk had suffered because of LILCO's alleged fraud on the PSC. This equitable defense is triable without a jury. The court has now heard the witnesses and received documents bearing on this issue. It makes the following findings:

After many years of encouraging LILCO to build Shoreham to reduce Long Island's total dependence on foreign oil for its power and to take advantage of lower costs for nuclear fuel, Suffolk reversed its policy. Beginning in the early 1980's it became an implacable foe of Shoreham. At the local, state and national levels it has successfully fought to prevent Shoreham from producing the 800 megawatts the plant has been capable of generating. In addition to advocacy before the state legislature and state and federal administrative bodies, Suffolk's refusal to cooperate in providing emergency procedures for dealing with a possible nuclear accident has blocked LILCO from using Shoreham.

Suffolk's opposition to Shoreham was based on a bona fide concern for, and by, its residents over the safety of the plant. Similar good faith misgivings over the hazards of nuclear power on Long Island have motivated the Governor and various state departments and legislators to seek Shoreham's closing.

The evidence demonstrated that, had Suffolk and the state cooperated with LILCO, Shoreham would now be in operation and LILCO and its shareholders (and possibly its ratepayers) would be in a more favorable economic position. The cost to LILCO and others of Suffolk's and the state's change of views regarding Shoreham cannot be precisely measured. It can reasonably be estimated as at least in the hundreds of millions of dollars.

Nevertheless, the equitable defense must be dismissed. Suffolk had, and has, a constitutional right under the First Amendment to speak and act in opposition to Shoreham. Its view that Shoreham represents a danger to Suffolk residents may be expressed in exercising its power to petition any agency of government including the legislature, administrative agencies and the courts. It can, if it wishes, enact its own local legislation and exercise its own police powers when expressing its policy so long as its action is in conformity with state and federal limitations. No proof of a violation of any state or federal limits on Suffolk's power has been shown.

A municipal corporation, like any corporation, is protected under the First Amendment in the same manner as an individual. See First Nat'l Bank of Boston v. Bellotti, 435 U.S. 765, 776-84, 98 S.Ct. 1407, 1415-20, 55 L.Ed.2d 707 (1978). The right to petition administrative agencies is a basic First Amendment right. See, e.g., California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 510, 92 S.Ct. 609, 611, 30 L.Ed.2d 642 (1972); Franchise Realty Interstate Corp. v. San Francisco Local Joint Executive Bd. of Culinary Workers, 542 F.2d 1076 (9th Cir.1976), cert. denied, 430 U.S. 940, 97 S.Ct. 1571, 51 L.Ed.2d 787 (1977).

It follows that plaintiff's activities before the United States Nuclear Regulatory Commission (NRC) are privileged against claims by defendants that Suffolk improperly delayed the Shoreham licensing proceedings. See, e.g., Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); Gorman Towers, Inc. v. Bogoslavsky, 626 F.2d 607, 615 (8th Cir.1980). The Noerr-Pennington doctrine, protecting the right of a party to oppose its adversaries before administrative agencies, is applicable. See, e.g., Southern Pac. Communications Co. v. American Tel. and Tel. Co., 556 F.Supp. 825, 881 (D.D.C.1982), aff'd, 740 F.2d 980 (D.C.Cir.1984), cert. denied, 470 U.S. 1005, 105 S.Ct. 1359, 84 L.Ed.2d 380 (1985). No damages may be recovered that arise from Suffolk's exercise of its constitutional right to oppose Shoreham's operation.

Suffolk's right has already been recognized in related litigation involving Shoreham. In 1984 LILCO was granted leave to intervene as a plaintiff in a federal suit filed by a not-for-profit corporation, and five of its members, against Suffolk. Citizens For An Orderly Energy Policy, Inc. v. County of Suffolk, 604 F.Supp. 1084, 1087-88 (E.D.N.Y.1985), aff'd, 813 F.2d 570 (2d Cir.1987). LILCO alleged that Suffolk's lack of participation in emergency evacuation planning "may result in a denial of an operating license for Shoreham and spell financial doom and bankruptcy for the company." 604 F.Supp. at 1087. The district court dismissed LILCO's claim for damages, noting that

the NRC alone has the power to decide whether the license will be granted. Suffolk's actions in seeking to influence the NRC's decision are not in and of themselves an unlawful interference with the licensing process.

Id., 604 F.Supp. at 1096. The Second Circuit affirmed. 813 F.2d 570 (2d Cir.1987).

LILCO may possibly have a claim for breach of contract against Suffolk because of the latter's alleged failure to comply with an agreement to cooperate in evacuation procedures. That issue is being litigated in a pending state case. All pendent and related state claims were dismissed in...