North Carolina ex rel. v. Tennessee Valley Auth.

• Citation: 515 F.3d 344
• Decision Date: 31 January 2008
• Docket Number: No. 06-2131.,06-2131.
• Parties: State of NORTH CAROLINA ex rel. Roy COOPER, Attorney General, Plaintiff-Appellee, v. TENNESSEE VALLEY AUTHORITY, Defendant-Appellant. New York; Maryland; South Carolina; California; Colorado; Connecticut; Delaware; Illinois; Iowa; Maine; Massachusetts; Mississippi; New Hampshire; New Jersey; Ohio; Oklahoma; Rhode Island; Vermont; Wisconsin; Washington, D.C.; American Lung Association; American Thoracic Society, Amici Supporting Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

515 F.3d 344

State of NORTH CAROLINA ex rel. Roy COOPER, Attorney General, Plaintiff-Appellee, v. TENNESSEE VALLEY AUTHORITY, Defendant-Appellant.

New York; Maryland; South Carolina; California; Colorado; Connecticut; Delaware; Illinois; Iowa; Maine; Massachusetts; Mississippi; New Hampshire; New Jersey; Ohio; Oklahoma; Rhode Island; Vermont; Wisconsin; Washington, D.C.; American Lung Association; American Thoracic Society, Amici Supporting Appellee.

No. 06-2131.

United States Court of Appeals, Fourth Circuit.

Argued: October 31, 2007.

Decided: January 31, 2008.

ARGUED: Edwin W. Small, Assistant General, Office of the General, Tennessee Valley Authority, Knoxville, Tennessee, for Appellant. Christopher G. Browning, Jr., Solicitor General, North Carolina Department

of Justice, Raleigh, North Carolina, for Appellee. ON BRIEF: Maureen H. Dunn, General, Harriet A. Cooper, Assistant General Counsel, Frank H. Lancaster, Senior Attorney, Maria V. Gillen, Attorney, Office of the General, Tennessee Valley Authority, Knoxville, Tennessee, for Appellant. Michael D. Goodstein, Stacey Myers, Resolution Law Group, P.C., Washington, D.C.; Richard E. Ayres, Ayres Law Group, Washington, D.C.; Roy Cooper, Attorney General, James C. Gulick, Senior Deputy Attorney General, Marc. Bernstein, Special Deputy Attorney General, North Carolina Department of Justice, Raleigh, North Carolina, for Appellee. Andrew Cuomo, Attorney General of the State of New York, Barbara D. Underwood, Solicitor General, Daniel Smirlock, Deputy Solicitor General, Michelle Aronowitz, Assistant Solicitor General, Robert Rosenthal, Assistant Attorney General, J. Jared Snyder, Assistant Attorney General, New York, New York; Douglas F. Gansler, Attorney General of the State of Maryland, Susan F. Martielli, Assistant Attorney General, Kathy M. Kinsey, Assistant Attorney General, Baltimore, Maryland; Henry McMaster, Attorney General of the State of South Carolina, Columbia, South Carolina; Edmund G. Brown, Jr., Attorney General of the State of California, Sacramento, California; John W. Suthers, Attorney General of the State of Colorado, Denver, Colorado; Richard Blumenthal, Attorney General of the State of Connecticut, Hartford, Connecticut; Joseph R. Biden, III, Attorney General, of the State of Delaware, Wilmington, Delaware; Lisa Madigan, Attorney General of the State of Illinois, Chicago, Illinois; Thomas J. Miller, Attorney General of the State of Iowa, Des Moines, Iowa; G. Steven Rowe, Attorney General of the State of Maine, Augusta, Maine; Martha Coakley, Attorney General of the State of Massachusetts, Boston, Massachusetts; Jim Hood, Attorney General of the State of Mississippi, Jackson, Mississippi; Kelly A. Ayotte, Attorney General of the State of. New Hampshire, Concord, New Hampshire; Stuart Rabner, Attorney General of the State of New Jersey, Trenton, New Jersey; Marc Dann, Attorney General of the State of Ohio, Columbus, Ohio; W.A. Drew Edmondson, Attorney General of the State of Oklahoma, Oklahoma City, Oklahoma; Patrick C. Lynch, Attorney General of the State of Rhode Island, Providence, Rhode Island; William H. Sorrell, Attorney General of the State of Vermont, Montpelier, Vermont; J.B. Van Hollen, Attorney General of the State of Wisconsin, Madison, Wisconsin; Linda Singer, Acting Attorney General for the District of Columbia, Washington, D.C., for Amici States of New York, Maryland, South Carolina, California, Colorado, Connecticut, Delaware, Illinois, Iowa, Maine, Massachusetts, Mississippi, New Hampshire, New Jersey, Ohio, Oklahoma, Rhode Island, Vermont, Wisconsin, and Washington, D.C., Supporting Appellee. Hope M. Babcock, Senior Attorney/Director, Emma E. Garrison, Staff Attorney, Institute for Public Representation, Georgetown University Law Center, Washington, D.C., for Amici American Lung Association and American Thoracic Society, Supporting Appellee.

Before WILLIAMS, Chief Judge, and NIEMEYER and SHEDD, Circuit Judges.

Affirmed by published opinion. Judge SHEDD wrote the opinion, in which Chief Judge WILLIAMS joined. Judge NIEMEYER wrote an opinion concurring in part and dissenting in part.

OPINION

SHEDD, Circuit Judge:

In 1933, Congress created the Tennessee Valley Authority ("the TVA") "in the interest of the national defense [,] for agricultural and industrial development, . . . to improve navigation in the Tennessee River[,] and to control the destructive flood waters in the Tennessee River and Mississippi River Basins." 16 U.S.C. § 831. As part of its mission, the TVA operates coal-fired power plants in Tennessee, Alabama, and Kentucky. The State of North Carolina brought this common-law nuisance action against the TVA, contending that these plants emit various pollutants which travel through the atmosphere into North Carolina, adversely impacting human health and environmental quality. North Carolina seeks an injunction prohibiting the TVA from operating its plants in a harmful manner and requiring it to abate the alleged nuisance.

The TVA moved to dismiss North Carolina's suit, arguing that it is barred by (1) the discretionary function doctrine, (2) the Supremacy Clause, and (3) the holding of Ferris v. Wilbur, 27 F.2d 262 (4th Cir. 1928). The district court rejected each of these arguments and denied the motion to dismiss. The district court then certified its decision for immediate appeal pursuant to 28 U.S.C. § 1292(b), and we accepted the appeal. The TVA now reasserts the same arguments it raised in the district court.¹ For the reasons set forth below, we affirm.

I

The TVA first argues that this suit is barred by the discretionary function doctrine. The discretionary function doctrine precludes a suit in tort against the United States, its agencies, or its officers where (1) "the challenged conduct involves an element of judgment or choice," and (2) "that judgment is of the kind that the discretionary function exception was designed to shield, i.e., . . . the challenged action is based on considerations of public policy." Suter v. United States, 441 F.3d 306, 310-11 (4th Cir.2006) (internal citations omitted). This exception from suit for discretionary acts generally arises in the context of the Federal Tort Claims Act ("FTCA"), where Congress provided that the United States' waiver of sovereign immunity does not extend to "[a]ny claim . . . based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused." 28 U.S.C. § 2680(a). The TVA, however, recognizes that it does not benefit from the discretionary function exception embodied in the FTCA because its sovereign immunity is not waived by the FTCA but by its own organic act. That is, Congress waived the sovereign immunity that the TVA would otherwise have possessed by specifically providing that the TVA may "sue and be sued in its corporate name." 16 U.S.C. § 831c(b). While both parties agree that this "sue-and-be-sued" clause waives the TVA's sovereign immunity to some degree, they dispute the scope of this" waiver.

Congress has waived the sovereign immunity of certain federal entities "by including in the enabling legislation provisions that they may sue and be sued." Loeffler v. Frank, 486 U.S. 549, 554, 108 S.Ct. 1965, 100 L.Ed.2d 549 (1988). In contrast with other waivers of sovereign immunity, "sue-and-be-sued" waivers "should be liberally construed." Id. Thus, "when Congress establishes such an agency, authorizes it to engage in commercial and business transactions with the public, and permits it to `sue and be sued,' it cannot be lightly assumed that restrictions on that authority are to be implied." Id. Instead, for an exception to the "sue-and-be-sued" authorization to exist, "it must be clearly shown that certain types of suits are not consistent with the statutory or constitutional scheme, that an implied restriction of the general authority is necessary to avoid grave interference with the performance of a governmental function, or that for other reasons it was plainly the purpose of Congress to use the `sue and be sued' clause in a narrow sense." FHA v. Burr, 309 U.S. 242, 245, 60 S.Ct. 488, 84 L.Ed. 724 (1940) (footnote omitted); see also Loeffler, 486 U.S. at 554, 108 S.Ct. 1965; Fed. Deposit Ins. Corp. v. Meyer, 510 U.S. 471, 480, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994). "Absent such a showing, agencies authorized to `sue and be sued' are presumed to have fully waived immunity." Meyer; 510 U.S. at 481, 114 S.Ct. 996 (emphasis added). In other words, "it must be presumed that when Congress launched a governmental agency into the commercial world and endowed it with authority to `sue or be sued,' that agency is not less amenable to judicial process than a private enterprise under like circumstances would be." Loeffler, 486 U.S. at 554-55, 108 S.Ct. 1965.

Under these principles, the TVA's "sue-and-be-sued" clause stands as a broad waiver of sovereign immunity which, absent a showing to the contrary, would encompass North Carolina's claims. The TVA, however, asserts that a discretionary function exception grounded in the constitutional concept of separation of powers renders this lawsuit inconsistent with the constitutional scheme. To support this position, the TVA looks to our holding in McMellon v. United States, 387 F.3d 329 (4th Cir.2004) (en banc).

In McMellon, we examined the question of whether a discretionary function exception bars a lawsuit filed against the United States under the Suits in Admiralty Act ("SIAA"). After noting that the SIAA does not contain a statutory exception from suit for discretionary functions, we concluded that such an exception nonetheless exists by virtue of the constitutional doctrine of separation of powers. We based our conclusion on the fact that the Constitution does not allow judicial regulation which might "prevent the Executive Branch from...