Rock Energy Coop. v. Vill. Of Rockton

• Decision Date: 10 August 2010
• Docket Number: No. 10-1106.,10-1106.
• Citation: 614 F.3d 745
• Parties: ROCK ENERGY COOPERATIVE, Plaintiff-Appellant, v. VILLAGE OF ROCKTON, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

614 F.3d 745

ROCK ENERGY COOPERATIVE, Plaintiff-Appellant,

v.VILLAGE OF ROCKTON, Defendant-Appellee.

No. 10-1106.

United States Court of Appeals,Seventh Circuit.

Argued May 25, 2010.

Decided Aug. 10, 2010.

Todd A. Gale(argued), Attorney, Dykema, Chicago, IL, for Plaintiff-Appellant.

Gregory E. Cox(argued), Attorney, Nicolosi & Associates PC, Rockford, IL, for Defendant-Appellee.

Before FLAUM, ROVNER, and WOOD, Circuit Judges.

WOOD, Circuit Judge.

The Village of Rockton, Illinois, and the Rock Energy Cooperative are fighting over who ultimately will own some assets used by the natural gas and electric utilities in the area.Originally the assets were the property of Alliant Energy, but Alliant wanted to sell them.They wound up in Rock Energy's hands, but in the meantime the Village passed a referendum authorizing it to acquire the assets.Although the Village has taken no direct steps in that direction (at least as of the time this case was argued in our court), Rock Energy is seeking a declaration to the effect that the Village does not have proper authority to purchase or condemn the assets.We conclude that this litigation is premature and thus affirm the district court's judgment dismissing the action.

I

Rock Energy is a consumer-owned utility that provides gas and electricity to its members on a cost-of-service, nonprofit basis.In 2004, Alliant announced that it would take bids for the sale of assets held by its subsidiary, South Beloit Water, Gas and Electric Company.(For simplicity, we will refer to them as the Alliant assets.)The announcement caught the attention of both Rock Energy and the Village.Rock Energy submitted a bid for the Alliant assets, and the Board of Trustees of Rockton passed an ordinance on January 18, 2005, authorizing the Village to acquire the assets by purchase or condemnation.

Unfortunately, according to Rock Energy (but vigorously disputed by the Village), there was a potential technical problem with the passage of the ordinance.The version of the ordinance published for the voters' review on March 17, 2005, in a local newspaper, stated that the Village was to be authorized to spend up to $35 million to acquire the Alliant assets.But there was a different version of the ordinance floating around, under which the Village would be authorized to spend up to $48 million for the Alliant assets.The two versions differed in other respects as well.The $35 million version referred to and included maps depicting the general location of the assets and had a lengthy, 28-page appendix with more details.On March 24, the paper printed a specimen ballot with the questions, but not the dollar amount, from the $48 million version.The referendum took place on April 5, 2005.The actual ballot asked the voters to approve the expenditure of up to $48 million for the assets, and they did so.It is Rock Energy's position that the discrepancy between the published version and the version passed by the voters resulted in a violation of 65 ILCS 5/11-117-3.

At the time the voters approved the ordinance, Rock Energy was still negotiating with Alliant for the purchase of the assets.A few months later, on June 30, 2005, the Village and Rock Energy entered into a Memorandum of Understanding (the “MOU”), in which they expressed their “mutual intent to explore the feasibility of Rockton['s] acquiring the local utility assets” from Rock Energy.In the MOU, Rock Energy agreed to sell the assets to the Village if certain conditions were satisfied, including the completion by the Village of a feasibility analysis addressing topics such as finance, safety, reliability, and operations; the parties also needed to come to an agreement on the price that the Village would pay.The next day, Rock Energy entered into a contract with Alliant to purchase the assets; for reasons that are not explained, it took another year and a half for that transaction to close.By February 2007, however, Rock Energy owned the Alliant assets.After that, the Village told Rock Energy on more than one occasion that it wanted to acquire the assets, as contemplated by the MOU.For example, Rock Energy alleges that the Village wrote to it on March 29, 2009, stating that “[t]he Village Board made the decision in 2005 that pursuing this purchase was in the best interests of the Village, this was confirmed by over 60% of the voters and has been consistently supported by the Village Board through multiple election cycles.”The Village has also threatened to condemn the assets, using its power of eminent domain.

The March 29 letter was apparently the last straw for Rock Energy.On May 11, 2009, it filed a complaint in the district court for the Northern District of Illinois seeking a declaratory judgment stating that “the Village of Rockton has not met the requirements of Illinois law to acquire electric and gas utility assets from Rock Energy Cooperative.”The complaint asserts that jurisdiction exists under 28 U.S.C. § 1332, because Rock Energy is a citizen of Wisconsin (incorporated in Wisconsin and headquartered there) and the Village is a citizen of Illinois, as it is a non-home-rule municipality of that state.The Village, in the meantime, filed a complaint in the Circuit Court of Winnebago County, Illinois, seeking declaratory relief and specific performance of Rock Energy's alleged commitment to sell under the MOU.

The district court dismissed Rock Energy's suit on the ground that it lacked standing to challenge the Village's compliance with Illinois law when it passed the ordinance.To the extent that Rock Energy was attempting to assert that the Village had failed to satisfy the preconditions outlined in the MOU, the court held that venue was improper under the forum selection clause in the agreement, which said that “any litigation relating to this MOU will take place exclusively in the Circuit Court of Winnebago County Illinois.”Turning to the litigation that the Village had initiated in that court, we learned through a supplemental filing that on April 29, 2010, Circuit Judge J. Edward Prochaska dismissed the Village's action for specific performance with prejudice.SeeVillage of Rockton v. Rock Energy Cooperative,Case No. 2009 MR 427(Ill.Cir.Ct., 17th Jud. Cir.).The state court held that the MOU was unenforceable as a matter of law, because the indefinite price term contemplated future negotiations.Without the essential price term (or even a formula for arriving at price), the court found that there was nothing definite enough to be the subject of an order for specific performance.

II

Before this court on appeal, Rock Energy challenges both bases of the district court's ruling.It insists that it has standing to seek a declaration that the Village lacks authority to acquire the Alliant assets, arguing that it faces an actual, imminent injury-in-fact that is concrete and particularized; that its injury is caused by the Village's actions; and that its injury is redressable through the court's declaration.See, e.g., Lujan v. Defenders of Wildlife,504 U.S. 555, 559-62, 112 S.Ct. 2130, 119 L.Ed.2d 351(1992).Rock Energy also urges us to disregard the choice-of-forum clause in the MOU because, it says, its case is about the Village's “fundamental” lack of authority to go forward with the acquisition and thus it is not constrained by the MOU.The Village's initial response is that diversity jurisdiction is lacking, because Rock Energy has failed to demonstrate that more than $75,000 is at stake.See28 U.S.C. § 1332(a).The record shows, however, that the parties are fighting over the transfer of approximately $10 million in utility assets, and so we are satisfied that our subject-matter jurisdiction is secure.That conclusion is not undermined by the possibility, or likelihood, that the Village will pay fair market value for whatever assets are transferred.Rock Energy wants the assets, not their equivalent in dollars, and its effort to keep those assets out of the Village's hands suffices to meet the amount-in-controversy requirement.SeeAmerica's MoneyLine, Inc. v. Coleman,360 F.3d 782, 786(7th Cir.2004)(endorsing the so-called “either viewpoint” rule).

The Village has also pursued some more promising avenues in support of the district court's judgment.There are only two ways in which Rock Energy could be forced into selling its assets to the Village: first, through the Village's exercise of its power of eminent domain, or second, through the MOU, if that document were construed to create a contractual obligation on Rock Energy's part to sell.We find that neither one of these possibilities is sufficiently concrete to support Rock Energy's suit.

Article III of the U.S. Constitution limits the authority of the federal courts to “cases or controversies.”From that requirement flow two closely related concepts: ripeness and standing.Smith v. Wis. Dep't of Agric., Trade and Consumer Prot.,23 F.3d 1134, 1141(7th Cir.1994).Both of these doctrines bar a plaintiff from asserting an injury that “depend[s] on so many future events that a judicial opinion would be advice about remote contingencies.”Meridian Sec. Ins. Co. v. Sadowski,441 F.3d 536, 538(7th Cir.2006).Focusing particularly on suits for declaratory relief, the Supreme Court has explained that courts must look at “whether the...