Nat'l Fuel Gas Distribution Corp. v. N.Y.S. Energy Research & Dev. Auth.
| Decision Date | 22 August 2017 |
| Docket Number | 1:17–CV–00554 EAW |
| Parties | NATIONAL FUEL GAS DISTRIBUTION CORPORATION, Plaintiff, v. The NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY, The United States Department of Energy, Rick Perry, as Secretary of the United States Department of Energy, and CH2M Hill BWXT West Valley, LLC, Defendants. |
| Court | U.S. District Court — Western District of New York |
Kenneth W. Africano, Lauren Renee Mendolera, Harter, Secrest and Emery LLP, Buffalo, NY, for Plaintiff.
Timothy Hoffman, New York State Attorney General, Michael S. Cerrone, U.S. Attorney's Office, Michael A. Brady, Daniel J. Brady, Hagerty & Brady, Buffalo, NY, for Defendants.
DECISION AND ORDER
This lawsuit centers around the provision of natural gas to the Western New York Nuclear Service Center at West Valley in Cattaraugus, New York—the former site of a commercial nuclear fuel reprocessing center (the first, and only site in the nation to commercially reprocess spent nuclear fuel). The approximately 3,300–acre site is owned by defendant New York State Energy Research and Development Authority ("NYSERDA"). The United States Department of Energy ("DOE") has been charged by Congress to, in essence, clean up and dispose of the radioactive waste at the site.1 Those efforts have been going on for decades. Currently, the DOE contracts with defendant CH2M Hill BWXT West Valley, LLC ("West Valley"), as the prime contractor for the DOE at the site.
Plaintiff National Fuel Gas Distribution Corporation ("NFG" or "Plaintiff"), a natural gas distributor which has been providing natural gas to the site for decades, has brought this lawsuit against NYSERDA, the DOE, the Secretary of Energy, Rick Perry, and West Valley (collectively, "Defendants"), seeking injunctive relief that, in essence, would allow NFG to cease supplying gas to the site and relieve NFG of any responsibility with respect to the site.
Initially Plaintiff filed its claims in New York State Supreme Court, Erie County, on May 5, 2017, at which time Plaintiff also sought preliminary injunctive relief. See Nat'l Fuel Gas Distribution Co. v. The N.Y. Energy Research & Dev. Auth., et al., 1:17–cv–00447, Dkt. 1 ( . On May 22, 2017, the DOE removed that state court litigation to this Court, see id., and then filed a motion to dismiss on various jurisdictional grounds. Id. at Dkt. 6 (May 23, 2017). Ultimately, NFG agreed to voluntarily discontinue that lawsuit, see id. at Dkt. 31 (June 19, 2017), and it commenced the present litigation, asserting constitutional and state law claims. (Dkt. 1). NFG seeks a preliminary injunction allowing it to engage in a controlled shutdown of the natural gas service and cease gas service to the site, and allowing it to essentially abandon the pipeline and related facilities. (Dkt. 2).
Defendants not only oppose Plaintiff's motion for a preliminary injunction, but they have also moved to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. 16; Dkt. 18; Dkt. 21). Alternatively, DOE and the Secretary of Energy move for summary judgment under Federal Rule of Civil Procedure 56. (Dkt. 16).
As expressed by the Court during the oral argument of this matter on August 3, 2017, there appears to be a legitimate basis for Plaintiff's concerns about the integrity of the pipeline infrastructure and the potential future dangers that it poses. In fact, all parties appear to agree that the pipeline should be replaced—but they cannot agree on who should pay for that cost. However, this Court is not the appropriate forum—at least at this time—for a resolution of the parties' disputes. As a result, for the reasons stated below, the motions to dismiss are granted.
The factual allegations in the complaint are as follows: Plaintiff is a gas corporation which owns property in New York for the transmission and distribution of natural gas. (Dkt. 1 at ¶¶ 1–2). Plaintiff supplies gas through approximately 10,300 feet of pipe to the Western New York Nuclear Service Center at West Valley in Cattaraugus, New York ("the Property") (See id. at ¶ 24). The Property contains radioactive soil and groundwater from the processing of spent nuclear fuel on site between 1966 and 1972. (Id. at ¶¶ 15–16). Defendants are currently carrying out "a high-level radioactive waste management demonstration project" on the Property, through DOE's contractor West Valley. (See id. at ¶¶ 20–21). West Valley is Plaintiff's customer. (Id. at ¶¶ 6–7).
In the 54 years since the installation of the pipeline, Plaintiff "has conducted regular leakage surveys and performed repairs and maintenance in the areas of the Property where it could." (Id. at ¶ 30). In June 2016, Plaintiff found a "Type I leak" in the pipeline on the Property in an area containing radioactive contamination. (Id. at ¶ 31). After Plaintiff refused to repair the pipe due to the radioactivity, "Defendants hired a qualified third-party contractor ... to repair the Type I leak." (Id. at ¶¶ 33–34). The contractor installed a temporary fix. (Id. at ¶ 34). Plaintiff asserts that there are other leaks in the pipeline "that cannot be accessed for repair...." (Id. at ¶ 35).
Plaintiff claims that as the pipeline ages, it could "fail" and "suffer a major breach" that would require an immediate shutdown of gas service. (Id. at ¶ 38). Such a shutdown "could" allow ground water to flow into the pipeline, "and the pipe could act as a conduit for the distribution of radioactive contaminants." (Id. at ¶ 39). Plaintiff also asserts "[u]pon information and belief" that a sudden shutdown could drain areas of the property that NYSERDA classifies as "wetlands," and could prevent Defendants from maintaining proper storage temperatures of the radioactive waste at the facility. (Id. at ¶¶ 40–41). Plaintiff seeks a "controlled and stable cessation of gas service...," which requires Defendants' cooperation. (Id. at ¶ 42).
Plaintiff brings four causes of action: (1) breach of contract against all Defendants; (2) a takings claim against NYSERDA, DOE, and the DOE Secretary; (3) a due process claim against NYSERDA, DOE, and the DOE Secretary; and (4) a request for declaratory judgment against all Defendants. (Id. at ¶¶ 51–87).
Defendants raise a series of arguments supporting dismissal of the complaint. The Court first addresses whether Plaintiff's constitutional claims are ripe for review.
"Failure of subject matter jurisdiction ... is not waivable and may be raised at any time by a party or by the court sua sponte. " Oscar Gruss & Son, Inc. v. Hollander, 337 F.3d 186, 193 (2d Cir. 2003) (citing Lyndonville Sav. Bank & Trust Co. v. Lussier, 211 F.3d 697, 700 (2d Cir. 2000) ). "A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). "When considering a motion to dismiss for lack of subject matter jurisdiction ..., a court must accept as true all material factual allegations in the complaint." Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998). However, "jurisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it." Morrison v. Nat'l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008) (citation omitted). "Indeed, a challenge to the jurisdictional elements of a plaintiff's claim allows the [c]ourt ‘to weigh the evidence and satisfy itself as to the existence of its power to hear the case.’ "
Celestine v. Mt. Vernon Neighborhood Health Ctr., 289 F.Supp.2d 392, 399 (S.D.N.Y. 2003) (citation omitted), aff'd, 403 F.3d 76 (2d Cir. 2005). "The court may consider affidavits and other materials beyond the pleadings but cannot ‘rely on conclusory or hearsay statements contained in the affidavits.’ " Young v. United States, No. 12-CV-2342 (ARR)(SG), 2014 WL 1153911, at *6 (E.D.N.Y. Mar. 20, 2014) (quoting J.S. ex rel. N.S. v. Attica Cent. Sch., 386 F.3d 107, 110 (2d Cir. 2004) ); see, e.g., Luckett v. Bure, 290 F.3d 493, 497 (2d Cir. 2002) ().
Plaintiff contends that its constitutional rights have been violated because its property rights were taken without just compensation. (Dkt. 1 at ¶¶ 60–79). Defendants argue that Plaintiff's takings claim is not ripe for adjudication because Plaintiff has not availed itself of the required prerequisites for bringing a Takings Clause claim in this Court. (Dkt. 16–1 at 20–22; Dkt. 25 at 8–13). The Court agrees with Defendants that Plaintiff's takings claim is not ripe for adjudication.
The Fifth Amendment's Takings Clause provides that no private property "shall... be taken for public use, without just compensation." U.S. Const. art. V. "The Fifth Amendment does not proscribe the taking of property; it proscribes taking without just compensation." Williamson Cty. Reg'l Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 194, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985). The protection "is designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Penn Cent. Transp. Co. v. City of N.Y., 438 U.S. 104, 123, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978) (quoting Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 4 L.Ed.2d 1554 (1960) ). "[W]here the government's activities have already worked a taking of all use of property, no subsequent action by the government can relieve it of the duty to provide...
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