Municipal Light Co. of Ashburnham v. Com.

• Decision Date: 27 April 1993
• Docket Number: No. 91-P-910,91-P-910
• Citation: 34 Mass.App.Ct. 162,608 N.E.2d 743
• Parties: MUNICIPAL LIGHT COMPANY OF ASHBURNHAM & others 1 v. COMMONWEALTH & others. 2
• Court: Appeals Court of Massachusetts

Page 743

608 N.E.2d 743

34 Mass.App.Ct. 162

MUNICIPAL LIGHT COMPANY OF ASHBURNHAM & others ¹ v. COMMONWEALTH & others. ²

No. 91-P-910.

Appeals Court of Massachusetts,

Suffolk.

Argued Nov. 12, 1992.

Decided Feb. 25, 1993.

Further Appellate Review Denied April 27, 1993.

Thomas J. Heiden, Michigan (Meg Hackett Carrier of Michigan, & Jonathan W. Blodgett, with him), for plaintiffs.

Peter Sacks, Asst. Atty. Gen., for Com. & others.

Before BROWN, KASS and IRELAND, JJ.

KASS, Justice.

In their brief, the plaintiffs, who are municipal light companies or departments, state a prodigious twenty-six issues on appeal but these rather quickly boil down to three. All are based on actions taken by the Commonwealth to delay the operation of Seabrook Nuclear Power Plant Unit 1 ("Seabrook") in Seabrook, New Hampshire. Seabrook, since the plan for its construction surfaced in 1968, has generated seemingly countless reactions of super-heated litigation and civil disobedience. As a consequence of the Commonwealth's delaying actions, the plaintiffs (which we shall sometimes refer to as the light companies) claim financial losses attributable to Seabrook having come on line several years later than would have been the case, but for the Commonwealth's machinations. The three issues to which the many urged can be reduced are: (1) whether the Commonwealth ³ is liable for damages to the light companies on theories of estoppel or implied contract; (2) whether the Commonwealth made a de facto taking of property without just compensation; and (3) whether the Commonwealth unconstitutionally impaired contractual obligations of which the light companies had the benefit.

A judge of the Superior Court, acting on a motion to dismiss under Mass.R.Civ.P. 12(b), 365 Mass. 755 (1974), dismissed the complaint for failure to state a claim for which relief can be granted. We affirm.

We summarize facts alleged in the complaint which, for purposes of reviewing dismissal of a complaint under Mass.R.Civ.P. 12(b)(6), we accept as true. Nader v. Citron, 372 Mass. 96, 98, 360 N.E.2d 870 (1977). We do not purport to make any determination whether the facts alleged and which we recite are accurate.

During the early to mid-1970's, in response to a felt need for capacity to generate more electric power, the Legislature, by the enactment of St.1973, c. 571, ⁴ created the New England Power Pool and, by St.1975, c. 775, created the Massachusetts Municipal Wholesale Electric Company ("MMWEC"). ⁵ Those statutes enabled, and thereby encouraged, electric utility companies in Massachusetts to participate in jointly owned power plants in or out of the Commonwealth. In 1975, Seabrook was the only jointly owned power plant planned in New England available to outside participants, and the immediate purpose of the MMWEC legislation was to facilitate and encourage participation in Seabrook.

Also in 1975, the Department of Public Utilities (DPU) determined that the Seabrook plant was necessary to meet the future power needs of the Commonwealth. The following year, 1976, the Energy Facilities Siting Council approved MMWEC's participation in the Seabrook project. From mid-1976 to late 1979, the DPU approved four bond issues (presumably the issuer of the bonds was MMWEC--the complaint does not say) which enabled MMWEC to acquire its interest (11.59340%) in Seabrook. Relying on those authorizations and approvals, the light companies acquired a substantial interest in Seabrook through the medium of membership in MMWEC, memberships which involved entry by the light companies into power sales agreements ("PSAs") with MMWEC. Under the PSAs, the light companies were obligated to buy a stated percentage of the generating capacity of Seabrook. ⁶ The PSAs contain what the parties call a "take or pay" provision, whereby the light companies pay their pro rata share of MMWEC's costs applicable to the shared facility, irrespective of whether the light companies buy electricity and, indeed, irrespective of whether the facility has electricity to sell. ⁷

Contrary to its encouragement of Seabrook through the various authorizations and approvals (so the complaint continues), the Commonwealth, acting through its director of civil defense, its Governor, and its Attorney General, impeded the licensure of Seabrook by the United States Nuclear Regulatory Commission (NRC). The Massachusetts authorities delayed licensure by persistently raising questions about the safety of Seabrook, notably the means to evacuate population from the environs of Seabrook in the event of a radiological emergency. Apart from objecting that inadequate safety precautions were being taken, the Commonwealth declined to formulate an emergency response plan. On March 27, 1986, the Governor stated publicly that he would oppose final licensure of Seabrook unless fallout shelters were provided on nearby beaches.

On October 8, 1986, the Seabrook plant was complete and stood ready for commercial operation. All conditions for operation had been satisfied except for the Massachusetts portion of the radiological emergency response plan. Successive attorneys general ⁸ continued to oppose the grant of an operating license by the NRC. On February 3, 1988, the Attorney General wrote a letter to the light companies which restated his and the Governor's view that the Seabrook plant should and would not operate and urged the light companies to withdraw from the project, even if that were a default of their obligations under the PSAs. Approximately two years later, on March 15, 1990, the NRC issued a full power operating license to Seabrook.

As a consequence of the delays engineered by the Commonwealth through its officers, the plaintiffs suffered damage because they had to pay their share of the carrying costs (e.g., bond interest) and suffered further damage on account of the electric power they did not obtain from Seabrook and had to buy elsewhere.

It is familiar doctrine that a complaint can be dismissed for failure to state a claim for which relief can be granted only if a reading of the complaint establishes beyond doubt that the facts alleged, accepting them as true and drawing all inferences in the plaintiff's favor, do not add up to a cause of action which the law recognizes. The plaintiff has to plead itself out of court. Nader v. Citron, 372 Mass. at 98, 360 N.E.2d 870. Connerty v. Metropolitan Dist. Commn., 398 Mass. 140, 143, 495 N.E.2d 840 (1986). New England Insulation Co. v. General Dynamics Co., 26 Mass.App.Ct. 28, 29-30, 522 N.E.2d 997 (1988). A complaint should not be dismissed because it asserts a novel or extreme theory of liability or improbable facts. Coolidge Bank & Trust Co. v. First Ipswich Co., 9 Mass.App.Ct. 369, 370, 401 N.E.2d 165 (1980). Jenkins v. Jenkins, 15 Mass.App.Ct. 934, 444 N.E.2d 1301 (1983).

1. Liability based on implied contract and estoppel. Through establishment of the New England Power Pool and MMWEC, approval of the Seabrook site by the Energy Facilities Siting Council, and approval (through the DPU) of MMWEC's bonding authority, the plaintiffs say that the Commonwealth encouraged their investment in Seabrook. On that encouragement the plaintiffs claim to have reasonably relied and spent a great deal of money. ⁹ They say that the Commonwealth is estopped to deny an implied contractual obligation to support the Seabrook project and to refrain from acting so as to impede it.

We turn first to the question of estoppel. Generally, the principles of estoppel are not applicable against the government in connection with its exercise of public duties, particularly when the government is acting in the public interest and safety, as its duly constituted officials see that interest. Phipps Products Corp. v. Massachusetts Bay Transp. Authy., 387 Mass. 687, 693, 443 N.E.2d 115 (1982), and cases cited. Fitchburg Gas & Elec. Light Co. v. Department of Pub. Utilities, 395 Mass. 836, 857, 483 N.E.2d 76 (1985) (also a case arising out of the Seabrook project). Risk Management Foundation of Harvard Med. Insts. v. Commissioner of Insurance, 407 Mass. 498, 509-510, 554 N.E.2d 843 (1990). Gamache v. Mayor of No. Adams, 17 Mass.App.Ct. 291, 294, 458 N.E.2d 334 (1983).

Here, the Commonwealth, acting through two of its highest officials, the Governor and the Attorney General, and through the director of its civil defense agency, consistently opposed licensure of Seabrook on the public policy ground that operation of the plant posed a significant health and safety risk to the public. Governmental officials need to be free to act in accordance with their constitutional and statutory authority in such manner as they think is in the public interest without encumbrance from earlier collateral decisions which may have suggested a different tendency so far as the public issue is concerned. See, as an illustration, Hood Industries, Inc. v. City Council of Leominster, 23 Mass.App.Ct. 646, 646 n. 1, 505 N.E.2d 189 (1987), in which the mayor and the regional chamber of commerce encouraged the plaintiff to buy land for a manufacturing plant but the city council could lawfully deny a permit to store inflammable liquids. To the degree that it has not become the subject of an express and authorized contract, a public policy is necessarily subject to changes of view and changes of administration. See Phipps Prod. Corp. v. Massachusetts Bay Transp. Authy., 387 Mass. at 689, 693-694, 443 N.E.2d 115.

The light companies do not buttress their case by alleging that the Governor and Attorney General were acting to advance their personal political agendas. Opposing Seabrook was within the scope of the general duty of those officials to protect the public interest; it is their actions that matter, not their states of mind.

Related to the theory of estoppel is the implied contract claim. The administrative actions on which the plaintiffs rely, i.e., the siting approval and bonding authority, cannot reasonably be...