Driftless Area Land Conservancy v. Pub. Serv. Comm'n, 19-cv-1007-wmc

• Court: United States District Courts. 7th Circuit. Western District of Wisconsin
• Writing for the Court: WILLIAM M. CONLEY District Judge
• Decision Date: 20 November 2020
• Docket Number: 19-cv-1007-wmc
• Parties: DRIFTLESS AREA LAND CONSERVANCY, WISCONSIN WILDLIFEE FOUNDATION, Plaintiffs, v. PUBLIC SERVICE COMMISSION OF WISCONSIN, MICHAEL HUEBSCH, REBECCA VALCQ, & ELLEN NOWAK, Defendants, and AMERICAN TRANSMISSION COMPANY LLC, BY ITS CORPORATE MANAGER, ATC MANAGEMENT, INC, DAIRYLAND POWER COOPERATIVE, and ITC MIDWEST LLC, Intervenor-Defendants.

DRIFTLESS AREA LAND CONSERVANCY, WISCONSIN WILDLIFEE FOUNDATION, Plaintiffs,
v.
PUBLIC SERVICE COMMISSION OF WISCONSIN, MICHAEL HUEBSCH,
REBECCA VALCQ, & ELLEN NOWAK, Defendants,
and AMERICAN TRANSMISSION COMPANY LLC, BY ITS CORPORATE MANAGER,
ATC MANAGEMENT, INC, DAIRYLAND POWER COOPERATIVE,
and ITC MIDWEST LLC, Intervenor-Defendants.

19-cv-1007-wmc

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WISCONSIN

November 20, 2020

OPINION AND ORDER

Plaintiffs are two Wisconsin conservation organizations who seek to challenge a final decision by the Public Service Commission of Wisconsin ("PSC"), which granted three private transmission companies the right to exercise eminent domain in constructing a high-voltage transmission line running more than 100 miles through Wisconsin's Driftless Area.¹ The defendants named in this case are the PSC and its three Commissioners, Michael Huebsch, Rebecca Valcq, and Ellen Nowak. The three

Page 2

transmission companies -- American Transmission Company, ITC Midwest LLC, and Dairyland Power Cooperative -- have joined the suit as intervening defendants.

In this suit, plaintiffs assert violations of their federal constitutional rights, claiming that: (1) the PSC's final decision approving the transmission line amounted to an unconstitutional taking of land for a private purpose; and (2) the PSC Commissioners also acted with bias in violation of procedural due process. Before the court are defendants' and intervening-defendants' motions to dismiss, as well as their respective motions to stay. (Dkts. #6, 16, 101, 129.) Having fully considered the arguments made by the parties in their briefing, as well as during oral argument held on November 9, 2020, the court will grant in part and deny in part their respective motions to dismiss. Specifically, for the reasons explained below, the court will (1) dismiss the PSC itself as a party in suit, (2) dismiss plaintiffs' takings claim, (3) dismiss Commissioner Ellen Nowak from plaintiffs' remaining due process claim, and otherwise deny these motions.

ALLEGATIONS OF FACT

Plaintiffs Driftless Area Land Conservancy ("DALC") and Wisconsin Wildlife Federation ("WWF") are both Wisconsin conversation and membership organizations. DALC and its members "work to protect ecologically sensitive lands, historic properties, and natural resources in southwest Wisconsin's Driftless Area." (Compl. (dkt. #1) ¶ 25.) Similarly, WWF and its members are "dedicated to protecting wildlife habitat and natural resources throughout the State of Wisconsin." (Id. ¶ 38.) While originally naming the PSC and its three Commissioners as defendants, plaintiffs now concede that the PSC should be dismissed. (Pls.' Opp'n (dkt. #55) 2 n.1; Pls.' Opp'n (dkt. #77) 2.).

Page 3

Accordingly, the PSC will be dismissed as a defendant from this suit.²

On April 20, 2018, three private transmission companies -- the American Transmission Company, ITC Midwest LLC, and Dairyland Power Cooperative (the "Transmission Companies" or "intervening defendants") -- applied for a Certificate of Public Convenience and Necessity ("CPCN") with the PSC to construct a high-voltage transmission line ("the Transmission Line" or "the Line") running from Dubuque County, Iowa, through Grant and Iowa Counties in Wisconsin, and ultimately ending in Dane County, Wisconsin.³ The application triggered an adjudicatory proceeding under Wisconsin law, in which plaintiffs DALC and WWF intervened.

After a public comment period and a week-long evidentiary hearing, the Commissioners took a preliminary vote on August 20, 2019, approving the proposed Line application. One month after this preliminary vote, DALC and WWF moved to recuse Commissioners Valcq and Huebsch from further proceedings involving this application. The PSC not only denied recusal motion, but in the same decision, approved the Transmission Companies' CPCN application, granting them eminent domain powers to condemn private property in order to construct the Transmission Line.

Plaintiffs allege that the Line will reduce the economic and ecological value of their

Page 4

and their members' land. (Id. ¶¶ 30-36, 39-44.) DALC itself holds a conservation easement through which the Line's right-of-way will overlap. Further, plaintiffs have identified a number of DALC and WWF members who own land that will be affected by the Line. For example, DALC member Lisa Schlimgen owns a 280-acre farm through which the Line will run. Under the current plan, two or three transmission towers will be built on her land. (See also id. ¶¶ 34-35, 42-43 (identifying various other DALC and WWF members whose land or other property interests will be affected by the Line).)

According to plaintiffs, the final decision from the PSC approving the Line amounts to an unconstitutional taking of private property for private use. (Id. ¶ 1.) Plaintiffs generally allege that during the adjudicatory proceeding before the PSC, "[e]vidence was presented that the proposed ATC Line would principally benefit private parties for private uses and would not serve the public's interests." (Id. ¶ 136.) More specifically, plaintiffs note that they and other intervenors contended that the proposed Line was not needed to meet anticipated electricity demand and sales in Wisconsin. At the same time, the Line will charge Midwest utility ratepayers more than $2.2 billion over 40 years and the Transmission Companies will be provided an annual rate of return of between 10 and 11.2 percent of their capital investment in the Line. (Id. ¶¶ 6, 135-37.) Plaintiffs and others also presented expert testimony and other evidence at the hearing that, according to "most economic 'model runs,'" the cost of the proposed Line would exceed the benefits for consumers, and that there were "better, less costly, more flexible, more environmentally sound, and cleaner energy alternatives." (Id. ¶¶ 12, 13.) The evidence also allegedly showed that the Line would "reduce the economic, ecological, and scenic value of private

Page 5

property located near, on, or along the proposed ATC Line route." (Id. ¶ 138.)

Plaintiffs further allege that the PSC decision-making process was "imbued with at least an appearance of bias and a lack of impartiality, if not actual bias and a lack of impartiality, and conflicts of interest." (Id. ¶¶ 2, 17.) in particular, plaintiffs allege that Commissioners Valcq and Huebsch had conflicts of interest and received ex parte information concerning the case. (Id. ¶ 17.) Plaintiffs did not include any specific allegations of bias as to Commissioner Nowak.

Following the PSC's final vote and approval of the Line, plaintiffs filed petitions for judicial review of the PSC decision in Wisconsin courts, seeking relief under Wisconsin state law.⁴ Plaintiffs also filed this federal lawsuit, bringing procedural due process and takings claims under the U.S. Constitution and "seek[ing] a declaratory judgment that Defendants have deprived Plaintiffs of their rights under the Fifth and Fourteenth Amendments to the United States Constitution and an injunction vacating Defendants' Final Decision and requiring that any new decision-making process meet constitutional requirements." (Id. ¶ 20.)⁵

Page 6

OPINION

Defendants⁶ advance a number of jurisdictional arguments, including that: (1) state sovereign immunity bars plaintiffs' suit; (2) judicial immunity bars plaintiffs' suit; (3) the court should decline to exercise jurisdiction under the Younger⁷ and Colorado River⁸ abstention doctrines; (4) plaintiffs lack standing; and (5) the claims are not ripe. Defendants also contend that plaintiffs have failed to state a claim on which relief may be granted. In response, plaintiffs maintain that their suit is excepted from state sovereign immunity under Ex parte Young, 209 U.S. 123 (1908), is not barred by judicial immunity, does not qualify for abstention, is justiciable, and properly states a claim on which relief may be granted. The court will address each argument in turn.

I. Jurisdictional Arguments

A. Sovereign Immunity

Defendants first argue that state sovereign immunity bars plaintiffs' suit. (Defs.' Br. (dkt. #7) 8-12; Int. Defs.' Br. (dkt. #17) 13.) The Eleventh Amendment bars suits by citizens against unconsenting states in federal court. Seminole Tribe of Fla. v. Fla., 517 U.S. 44, 54 (1996). This amendment also protects arms of the state, such as state agencies or state employees acting in their official capacity. See Barnes v. Bd. of Trustees of Univ. of

Page 7

Illinois, 946 F.3d 384, 391 (7th Cir. 2020); Indiana Prot. & Advocacy Servs. v. Indiana Family & Soc. Servs. Admin., 603 F.3d 365, 370 (7th Cir. 2010).

Of course, there exist certain exceptions to state sovereign immunity, including the Ex parte Young doctrine, which permits federal jurisdiction over claims seeking prospective injunctive relief to remedy an ongoing violation of federal law. See Seminole Tribe of Fla., 517 U.S. at 73. If a suit seeks to remedy only a past legal violation that has no "ongoing" effects, it does not fall under the Ex parte Young exception to sovereign immunity. MCI Telecommunications Corp. v. Illinois Bell Tel. Co., 222 F.3d 323, 345 (7th Cir. 2000) ("The plaintiff must allege that the officers are acting in violation of federal law, and must seek prospective relief to address an ongoing violation, not compensation or other retrospective relief for violations past.") (quoting Idaho v. Coeur d'Alene Tribe, 521 U.S. 261, 298-99 (1997) (Souter, J., dissenting)).

There appears no dispute that the Commissioners were sued in their official capacity. (Defs.' Br. (dkt. #7) 8 n.4; Pls.' Opp'n (dkt. #55) 2 n.1, 14; Defs.' Reply (dkt. #58) 10; Int. Defs.' Br. (dkt. #17) 13 n.9.) While thus considered "arms of the state" for purposes of state sovereign immunity, plaintiffs argue that the Commissioners do not enjoy immunity because the Ex parte Young exception applies. Defendants dispute this, contending that plaintiffs challenge only a past action...