Jackson Purchase Energy Corp. v. Marshall Cnty., CIVIL ACTION NO. 5:19-CV-00125-TBR

• Court: United States District Courts. 6th Circuit. United States District Court of Western District of Kentucky
• Writing for the Court: Thomas B. Russell, Senior Judge United States District Court
• Parties: JACKSON PURCHASE ENERGY CORP., et al. PLAINTIFFS v. MARSHALL COUNTY, KENTUCKY, et al. DEFENDANTS
• Decision Date: 19 April 2021
• Docket Number: CIVIL ACTION NO. 5:19-CV-00125-TBR

JACKSON PURCHASE ENERGY CORP., et al. PLAINTIFFS
v.
MARSHALL COUNTY, KENTUCKY, et al. DEFENDANTS

CIVIL ACTION NO. 5:19-CV-00125-TBR

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY PADUCAH DIVISION

April 19, 2021

MEMORANDUM OPINION & ORDER

Before the Court is Plaintiffs' Motion for Summary Judgment on the Phase One Claims. [DN 19]. Defendants responded, [DN 20], and plaintiffs replied, [DN 21]. This matter is ripe for adjudication. For the reasons stated below, the motion is DENIED.

I. Background

Jackson Purchase Energy Corporation ("JPE") and West Kentucky Rural Electric Cooperative Corporation ("WKRECC") brought this action against Marshall County, Kentucky, the Marshall County Fiscal Court, the Marshall County Judge Executive, Kevin Neal, and three Marshall County Commissioners—Justin Lamb, Kevin Spraggs, and Monti Collins—complaining of Defendants' attempt to "force [Plaintiffs] to collect a local 911 emergency system fee on Defendants' behalf." [DN 10 at 1; DN 19 at 1]. Specifically, Plaintiffs challenge an ordinance passed by the Marshall County Fiscal Court that would require the plaintiffs to collect a fee from their electric customers and remit the fee to the Marshall County local government for use in funding the county's 911 emergency services. [DN 10]. The Court bifurcated the litigation on the grounds that some of plaintiffs' claims—Counts 6, 7, 8, 10, 11, and 12 of the Amended Complaint (the "Phase One Claims")—may potentially be decided as a matter of law without discovery. [DN 15]. Plaintiffs argue in the Phase One Claims that the ordinance at issue should be invalidated

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pursuant to multiple Kentucky statutes and that the ordinance is vague and uncertain. After the Court bifurcated the litigation, the Plaintiffs filed the instant motion, a Motion for Summary Judgment on the Phase One Claims. [DN 19].

II. Standards

"Summary judgment is appropriate where the movant demonstrates that there is 'no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'" Clabo v. Johnson & Johnson Health Care Sys., Inc., 982 F.3d 989, 992 (6th Cir. 2020) (citing Fed. R. Civ. P. 56(a)). In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matshushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The facts material to Plaintiffs' motion here are not disputed; the parties only dispute construction or application of the law.

III. Discussion

Plaintiffs in this action challenge a Marshall County Fiscal Court ordinance requiring the county's electricity providers to collect fees from their customers in Marshall County. The fees would go toward funding Marshall County's 911 emergency services. Plaintiffs, electricity providers in Marshall County, allege that the ordinance "violates the United States Constitution, the Kentucky Constitution, is unenforceable due to being vague and uncertain, is ultra vires, and impermissibly infringes upon the regulatory authority of the Tennessee Valley Authority and the Kentucky Public Service Commission." [DN 10 at 1-2]. Plaintiffs move for summary judgment on the Phase One Claims—Counts 6, 7, 8, 10, 11, and 12 of the Amended Complaint. [DN 19 at 1].

In the Phase One Claims, Plaintiffs contend that the ordinance violates several Kentucky statutes and that the ordinance is vague and uncertain. [DN 10 at 28-36]. In their motion for summary judgment, Plaintiffs argue for constructions of the relevant Kentucky statutes that would

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invalidate the ordinance. [DN 19]. Plaintiffs also argue for summary judgment on the claim that the ordinance is vague and uncertain. Id. at 31-33. In response, Defendants argue that the Court should abstain from considering Plaintiffs' claims pursuant to Burford v. Sun Oil Co., 319 U.S. 315 (1943) and Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 500 (1941). [DN 20 at 9-11]. Alternatively, Defendants argue for applications of the Kentucky statutes that would sustain the ordinance. Id. at 11-26. Defendants also argue that the ordinance is not vague and uncertain. Id. First, the Court will address Defendants' abstention argument.

a. Abstention

i. Arguments

In response to Plaintiffs' motion for summary judgment, Defendants argue: "The questions involved are better left to the state courts to resolve, and this Court should therefore abstain from entertaining the Utilities' claims and dismiss the Amended Complaint." [DN 20 at 9-10]. Defendants first argue for abstention under Burford v. Sun Oil Co., 319 U.S. 315 (1943). [DN 20 at 9-10]. Defendants cite the Supreme Court's explanation of the Burford doctrine in New Orleans Public Service Inc. v. Council of City of New Orleans ("NOPSI"), 491 U.S. 350, 361 (1989):

Where timely and adequate state-court review is available, a federal court sitting in equity must decline to interfere with the proceedings or orders of state administrative agencies: (1) when there are "difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar"; or (2) where the "exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern."

Id. (citing NOPSI, 491 U.S. at 361). Defendants argue that funding 911 services is a policy problem of substantial public import, and "the validity of a particular means of funding 911 services transcends the parties to this case, indeed affecting every locality and person in the Commonwealth." Id. at 10. Further, defendants state, "recent [state court] judicial proceedings

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evaluating different counties' approaches demonstrates the sufficiency of state court review of ordinances attempting to address the issue." Id.

Defendants next argue that abstention is warranted under Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 500 (1941). Id. at 10-11. Defendants state, "[t]he Phase One claims presently before the Court pose only questions of state law, turning largely on the interpretation and application of KRS 65.760 and KRS 67.083." Id. at 11. Therefore, Defendants argue, the Supreme Court's holding in Pullman that "federal courts should abstain from decision when difficult and unsettled questions of state law must be resolved before a substantial federal constitutional question can be decided" applies, and Plaintiffs' complaint should be dismissed. Id. at 10-11 (quoting Haw. Housing Auth. v. Midkiff, 467 U.S. 229, 236 (1984)).

In their reply, Plaintiffs argue that abstention is inappropriate. [DN 21 at 5-7]. Id. First, Plaintiffs argue that granting Defendants' request for abstention "would only serve to further delay a resolution of the parties' dispute, which is not in the best interest of Marshall County's citizens, most of whom are member-owners of the Plaintiff electric cooperatives." Id. at 5. Plaintiffs further contend that the Defendants agreed to the bifurcated schedule so that the Court could more promptly consider the Phase One Claims. Id. Asserting an abstention argument at this juncture, Plaintiffs argue, contravenes the parties' agreement to the bifurcated schedule because if the Court abstains, a state action will likely need to be filed, further delaying resolution of the dispute. Id.

Moreover, Plaintiffs submit that the Defendants are wrong on the merits of their abstention arguments. As to Burford abstention, Plaintiffs argue that Burford only applies when a federal court's consideration of a state law issue would interfere with a state administrative agency, and here, no Kentucky administrative agency is involved. Id. at 6. As to Pullman abstention, Plaintiffs argue that Pullman only applies when a federal court must consider an ambiguous state statute to

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resolve federal constitutional claims, and here, "Plaintiffs' federal constitutional claims are completely independent of and do not require interpretation of a Kentucky statute." Id. at 7.

ii. Standards

This Court has previously stated that Burford abstention is appropriate if "there are difficult questions of state law, issues of great public importance to the state, or [there is an issue on which] the state has special expertise." Alexander v. Morgan, 353 F.Supp.3d 622, 626 (W.D. Ky. 2018) (citing Louisiana Power & Light Co. v. Thibodaux, 360 U.S. 25, 79 (1959); Burford v. Sun Oil Co., 319 U.S. 315 (1943)). The Sixth Circuit has stated:

Burford abstention is appropriate "where timely and adequate state-court review is available and (1) a case presents difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the results in the case at bar, or (2) the exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern."

Stein v. Thomas, 672 F. App'x 565, 571 (6th Cir. 2016) (quoting Caudill v. Eubanks Farms, Inc., 301 F.3d 658, 660 (6th Cir. 2002)). Further, "Burford instructs federal courts to avoid hearing cases where doing so would interfere with a state's regulatory efforts." Ky. Waterways All. v. Ky. Utils. Co., 905 F.3d 925, 939 (6th Cir. 2018) (citing NOPSI, 491 U.S. at 361). However, Burford abstention should not be invoked merely because a federal court is presented with a difficult question of state law. Gray v. Bush, 628 F.3d 779, 786 (6th Cir. 2010) (citing Cleveland Hous. Renewal Project v. Deutsche Bank Trust Co., 621 F.3d 554, 565 (6th Cir. 2010)). Instead, "[t]here must be an unanswered question of state law 'whose importance transcends . . . the case then at bar.'" Id. (quoting NOPSI, 491 U.S. at 361). "While Burford is concerned with protecting complex state administrative processes from undue federal...