County of Suffolk v. Stone & Webster Engineering Corp.
| Decision Date | 11 February 1997 |
| Docket Number | D,No. 112,112 |
| Citation | 106 F.3d 1112 |
| Parties | COUNTY OF SUFFOLK, a municipal corporation, Plaintiff, Robert Alcorn, Christopher S. George, Fred Harrison, Peter Maniscalco, William P. Quinn, Robert Hoffman, Susan Chase, Yolanda Owens, James Roth, Myra Berzoff, and Sandra Rosenberg, on behalf of themselves and others similarly situated, Plaintiffs-Appellees, v. STONE & WEBSTER ENGINEERING CORP., Charles R. Pierce, Wilfred O. Uhl, Charles J. Davis, and Andrew W. Wofford, Defendants, Long Island Lighting Company, Defendant-Appellant. ocket 96-7127. |
| Court | U.S. Court of Appeals — Second Circuit |
Michael Lesch, New York City (John G. Nicolich, LeBoeuf, Lamb, Greene & MacRae, New York City; Leonard P. Novello, Cynthia R. Clark, Hicksville, NY, on the brief), for Defendant-Appellant.
Karen Honeycutt, New York City (Judith P. Vladeck, James D. Esseks, Vladeck, Waldman, Elias & Engelhard, P.C., New York City, on the brief), for Plaintiffs-Appellees.
Before: MESKILL, KEARSE, and MAHONEY *, Circuit Judges.
Defendant Long Island Lighting Company ("LILCO") appeals from an order of the United States District Court for the Eastern District of New York, Jack B. Weinstein, Judge, amending a 1989 consent judgment by extending the life of, and continuing funding for, a Citizens Advisory Panel ("CAP") established pursuant to the judgment. On appeal, LILCO contends principally that the order impermissibly modifies its 1989 settlement agreement without its consent. For the reasons below, we affirm the order of the district court.
The background of this litigation has been described previously in County of Suffolk v. Long Island Lighting Co., 710 F.Supp. 1428, 1451 (E.D.N.Y.1989) ("LILCO I "), aff'd in part, reversed and remanded in part, 907 F.2d 1295 (2d Cir.1990) ("LILCO II "), in LILCO II, 907 F.2d at 1299, and in opinions cited in both, see id. n. 1; LILCO I, 710 F.Supp. at 1432, familiarity with which is assumed. Briefly, LILCO, a regulated utility serving Long Island, New York, announced in 1969 its plan to construct at Shoreham, Long Island, an 820-megawatt nuclear power plant ("Shoreham"), to be completed by 1975 at an estimated cost of $217 million. In 1989, after costs had exceeded $5 billion, without completion of the project, LILCO reached an agreement with New York State to cancel Shoreham.
In the meantime, beginning in 1974, LILCO had sought and gained customer rate increases based, in part, on Shoreham's construction costs, notwithstanding a state regulatory principle that customers are generally to be charged only for plants that are in operation. The present ratepayer litigation eventually ensued, and a class was certified in February 1989 comprising the County of Suffolk (the "County") and all persons who had been LILCO ratepayers at any time since January 1, 1974, who were LILCO ratepayers in 1989, or who would be LILCO ratepayers in the future.
Shortly thereafter, LILCO and the class representatives entered into a tentative Stipulation of Partial Settlement dated February 27, 1989 ("Stipulation" or "settlement agreement"), that included a requirement that LILCO refund to the class a total of $390 million over an 11-year period. In addition, a fund of up to $10 million was to be created for legal and related costs (the "legal fee fund"), and CAP was to be created to represent ratepayers' interests in the implementation of the settlement. The settlement agreement stated that "[t]he period of the Citizen Advisory Panel's existence shall be five years, subject to extension by party agreement." Stipulation p 10, Exhibit 1 to LILCO I, 710 F.Supp. at 1459. The agreement authorized the district court to resolve "any dispute or disagreement with respect to the meaning, effect, or interpretation of the Stipulation." Id. p 32, 710 F.Supp. at 1465.
After holding fairness hearings, the district court approved the proposed settlement. See LILCO I, 710 F.Supp. at 1451. In assessing fairness, the court noted that the settlement consisted of "five main elements," including
1) a schedule of payments [totaling $390 million] to the class over an eleven year period, with limited power of the court to defer or accelerate payments upon application Id. at 1433 (emphasis added). The court further stated that
by a party; 2) a fund of up to ten million dollars for legal and related costs; [and] 3) organization of a Citizens Advisory Panel to assist the class and LILCO over the next five years, which is interpreted by the court to permit extension until all payments are made (with availability of portions of the $10 million legal fee fund for aid of the panel as permitted by the court).
[t]he [legal fee] fund will also be used to pay legal and expert fees and related costs of the Citizens Advisory Panel provided for by the settlement agreement. This Panel should be of considerable assistance over its guaranteed life of five years to both LILCO and ratepayers. Upon application to the court the life of this body can be extended until the agreement is fully complied with. Both the recommendation for extending the life of the panel and for using the legal fund to pay legal, expert and other costs of attorneys and others to protect the class were made at the fairness hearings.
Id. at 1447. Final judgment was entered stating that "[t]he settlement agreement dated February 27, 1989, is approved as interpreted by this court's [opinion in LILCO I]." Final Judgment p 2, reported at 710 F.Supp. 1487. The Judgment also provided that "[t]he court retains equitable jurisdiction to supervise the operation of this decree." Id. p 9.
There followed various appeals and cross-appeals which, except for the County's contention that it should have been awarded attorney's fees, were unsuccessful. LILCO challenged some of the district court's interpretations of the settlement agreement. See LILCO II, 907 F.2d at 1325. We rejected LILCO's challenges, noting the settlement agreement's "express[ ] authoriz[ation] for the district court to resolve 'any dispute ... with respect to the meaning' of the agreement," id. at 1326 (quoting Stipulation p 32), and ruling that since the district court's interpretations were "not clearly contradicted by the settlement language or any other record evidence," those interpretations, in the absence of clear error, were entitled to deference, id. The district court's interpretation of the settlement agreement's provisions with respect to the life of CAP, as permitting the court to extend CAP's existence until all payments were made, was not challenged by LILCO on that appeal.
On remand from LILCO II, following a hearing, the district court issued an Order Amending Stipulation of Partial Settlement With Respect to Certain Dates and Providing for Payment of Attorneys' Fees, Disbursement and Costs, dated November 15, 1990 ("LILCO III "), awarding the County $7.7 million in attorneys' fees. Combined with the $1,955,636 in administrative expenses and other fees, this award left only $344,364 in the account from which class counsel fees and the expenses of CAP were to be paid. LILCO III at 4. The court ordered that the $344,364 be transferred to a new fund (the "Administration Fund"); and to supplement that amount, the court ordered LILCO to add $503,000 to the Administration Fund. The latter sum consisted of interest resulting from a six-month delay in implementing both the first annual ratepayer rate reduction plan and the former-ratepayer escrow fund, which were mandated by the settlement. Id. at 5. LILCO did not appeal the modifications ordered in LILCO III, and hence did not challenge the district court's order requiring it to transfer moneys from the former-ratepayer fund to the new fund for the financing of CAP.
In November 1995, CAP wrote to the district court, noting that CAP's initial five-year term was about to expire and urging that its existence be extended. CAP pointed out that in LILCO I the court had stated (a) that one of the main elements of the settlement was the "organization of [CAP] to assist the class and LILCO over the next five years, which is interpreted by the court to permit extension until all payments are made," and (b) that "[u]pon application to the court the life of this body can be extended until the agreement is fully complied with." (CAP letter to court dated November 13, 1995, at 1, 2 (quoting LILCO I, 710 F.Supp. at 1433, 1447) (emphases in letter).) LILCO opposed, arguing that the settlement agreement In a Memorandum and Order dated December 19, 1995 ("LILCO IV "), following a hearing, the district court granted CAP's motion in part, extending its life for at least two years, with leave to apply for further extensions. The factors informing the court's decision included the facts that only $150 million of the $390 settlement amount had been credited to LILCO ratepayers, and $230 million more were to be paid over the next six years (the remaining $10 million, discussed below, had been earmarked for former ratepayers); that CAP had acquired a great deal of expertise in its initial five-year term and had performed capably in reducing LILCO rates through conservation; and that the extension of CAP's existence was strongly supported by government officials and public interest organizations. In addition, the court indicated its concern for the prospects of ratepayers entitled to refunds if CAP's life were not extended, noting that there had been intense official and public discussion of the potential breakup of LILCO, possibly without provision for payment of the agreed settlement amounts to ratepayers.
stated that CAP's term of existence was only "subject to extension by party agreement" and hence could not be extended by the court without LILCO's consent.
The court stated that it had the power to grant CAP's motion because, inter alia, in approving the settlement, the court had expressly reserved that power:
The court has the power to...
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