Solar v. City of Farmington

• Decision Date: 11 February 2020
• Docket Number: Civ. No. 19-753 JAP/CG
• Parties: VOTE SOLAR, et al., Plaintiffs, v. CITY OF FARMINGTON, d/b/a FARMINGTON ELECTRIC UTILITY SYSTEM, Defendant.
• Court: U.S. District Court — District of New Mexico

VOTE SOLAR, et al., Plaintiffs, v. CITY OF FARMINGTON, d/b/a FARMINGTON ELECTRIC UTILITY SYSTEM, Defendant.

Civ. No. 19-753 JAP/CG

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

February 11, 2020

MEMORANDUM OPINION AND ORDER

On August 16, 2019, Plaintiffs Vote Solar and individual solar users in Farmington, New Mexico ("Plaintiffs") sued Defendant City of Farmington under the Public Utility Regulatory Policies Act of 1978 ("PURPA"), 16 U.S.C § 824a-3(h)(2)(B). See COMPLAINT FOR DECLARATORY AND EQUITABLE RELIEF (Doc. No. 1) ("Complaint"). On September 11, 2019, Defendant moved to dismiss under Federal Rule of Civil Procedure ("Rule") 12(b)(1) for lack of subject matter jurisdiction on the basis that several Plaintiffs lack standing to bring this lawsuit. See DEFENDANT CITY OF FARMINGTON'S NOTICE OF PARTIAL MOTION AND PARTIAL MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION ("Motion") (Doc. No. 11); see also Doc. 11-1 at 3.

On October 30, 2019, at the Court's request, the parties submitted supplemental briefing regarding the type of PURPA claim at issue in this case—specifically, whether Plaintiffs have properly brought a claim under Section 210(h) of PURPA,¹ as they explicitly assert in theircomplaint, or a claim under Section 210(g) of PURPA,² as Defendant has suggested. After careful consideration of the parties' submissions, the Court concludes that Plaintiffs do not allege sufficient facts to constitute a claim under Section 210(h). Instead, the Court construes the Complaint as a claim under Section 210(g). Consequently, the Court lacks subject matter jurisdiction over this case in its entirety. The Court acknowledges that this is a more drastic outcome than either party likely anticipated. The Court therefore believes that Plaintiffs should have the opportunity to either refile the Complaint to allege facts consistent with the Court's interpretation of PURPA Section 210(h) as outlined in this opinion, or to file their claims as presented in New Mexico state court. The Court will grant Defendant's Motion and dismiss this case without prejudice.

Factual and Procedural Background

Plaintiff Vote Solar is a California-based "non-profit organization whose mission is to make solar a mainstream energy resource across the United States." Compl. at ¶ 7. Individual Plaintiffs Michael Eisenfeld, James Neidhart, Jeffrey Neidhart, Steven Bair, Neil Tribbett, Jerry Knutson, Vickie Slikkerveer, The Coliseum, Inc. (d/b/a The Colosseum Gym), David Fosdeck, Stephen Ellison, and Erin Hourihan are all Farmington residential electric customers of Defendant with current or anticipated solar generation capacity. Id. at ¶¶ 8-18. The individual Plaintiffs are also members of Vote Solar. Id. at ¶ 7.

Defendant owns and operates a municipal utility provider, Farmington Electric Utility System, in northern New Mexico. Compl. at ¶¶ 18-19. The Farmington City Council determines the prices and terms of electric service for the utility. Id. at ¶ 19. On January 24, 2017, the Farmington City Council passed Resolution No. 2017-1616, a set of "Standby Service Riders"for residential, small, medium, and large service generators. Id. at ¶¶ 20-21. The Standby Service Riders went into effect March 1, 2017. Id. at ¶ 20.

On August 16, 2019, Plaintiffs commenced this lawsuit, raising four primary allegations against Defendant.³ Specifically, Plaintiffs allege: (1) that the Standby Service Riders "impose higher and additional charges for customers who self-supply some of their electricity needs with their own solar generation[;]" (2) "Defendant lacks the requisite data showing a difference in loads and costs by solar compared to non-solar customers[;]" (3) "Defendant [] failed to base the level of charges in the Standby Service Riders on accurate data and consistent systemwide costing principles[;]" and (4) "Defendant's Standby Service Riders contain unreasonable and discriminatory charges." Id. at ¶¶ 38-41. Plaintiffs claim that the Standby Service Riders violate FERC's rate-setting rules set forth in 18 C.F.R. § 292.305(a).⁴ See id. at ¶ 42. Plaintiffs argue that because the Standby Service Riders effectively discriminate against solar users, Defendant fails to properly implement FERC's requirements. Id. at ¶ 43. Plaintiffs request that the Court "enjoin Defendant's imposition and collection of charges under the Standby Service Riders[,]" order Defendant's compliance with PURPA in rate-setting, disgorge and return profits made from the Standby Service Riders, and order payment of Plaintiffs' attorney's fees. Id. at ¶ 43.

On September 11, 2019, Defendant filed its Motion, asserting primarily that Plaintiff Vote Solar lacks statutory standing to challenge the Standby Service Riders under PURPA, andlacks associational standing to bring this lawsuit on behalf of its members. See Mot. at 3-8. Defendant also argues that individual Plaintiffs Erin Hourihan, Michael Eisenfeld, David Fosdeck, and Stephen Ellison lack the requisite injury-in-fact to have Article III standing. See Mot. at 7-8. In response, Plaintiffs argue that Vote Solar has associational standing on behalf of its members, and that the individual Plaintiffs named in the Motion will suffer imminent harm under the Standby Service Riders. See PLAINTIFFS' RESPONSE IN OPPOSTITION TO DEFENDANT'S PARTIAL MOTION TO DISMISS (Doc. No. 20). In reply, Defendant counters that associational standing does not apply when a plaintiff seeks damages and that Vote Solar lacks standing to bring an implementation challenge under Section 210(h) of PURPA. See DEFENDANT CITY OF FARMINGTON'S REPLY TO VOTE SOLAR'S RESPONSE AND IN SUPPORT OF PARTIAL MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION (Doc. No. 21).

Defendant's reply also suggests that Plaintiffs may be asserting an "as-applied" challenge under PURPA in the guise of an "implementation" claim. See Doc. No. 21 at 3-4 (arguing that Vote Solar "improperly attempts to bring an enforcement action against [Defendant] under PURPA, 16 U.S.C. § 824a-3(h)(2)(B), for allegedly implementing discriminatory rates . . . [on] solar customers" and that federal district courts do not have jurisdiction over as-applied PURPA claims that concern "a specific rate plan as it is applied to a customer or class of customers.") Because no party squarely addressed this jurisdictional issue, which could be dispositive of the entire case, the Court requested supplemental briefing on October 25, 2019. In a letter to counsel, the Court asked the parties "to submit additional briefing on the issue of statutory subject matter jurisdiction." Specifically, the Court directed the parties to "address whether Plaintiffs' claim is an 'implementation challenge' under 16 U.S.C. § 824a-3(h)(2)(B) or an 'as-applied' challengeunder 16 U.S.C. § 824a-3(g)." The Court gave the parties until October 30, 2019, to submit the briefing.

In their supplemental brief, Plaintiffs argue that the Complaint is an "implementation" challenge under 16 U.S.C. § 824a-3(h), over which federal courts may exercise jurisdiction. See PLAINTIFFS' SUPPLEMENTAL BRIEFING ("Pls. Supp. Br.") (Doc. No. 31) at 2. Plaintiffs assert that because they "challenge the practice of applying the tariffs, generally, not the specific application to any individual petitioner[,]" as described in Exelon Wind 1, L.L.C. v. Nelson, 766 F.3d 380, 388 (5th Cir. 2014) ("Exelon II"), this case belongs in federal court, not state court. Id. at 5.⁵ Defendant responds that, although it has so far "accepted the Complaint's assertion that it is raising an implementation challenge against it at face value[,]" the Plaintiffs' arguments "share characteristics with 'as-applied' challenges under PURPA . . . [and therefore] Plaintiffs' Complaint is attempting to assert an 'as-applied' challenge that ought not to be brought in District Court." DEFENDANT CITY OF FARMINGTON'S ADDITIONAL BRIEFING IN SUPPORT OF DEFENDANT'S PARTIAL MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION ("Def. Supp. Br.") (Doc. No. 32) at 3.

Standard of Review

Rule 12(b)(1) motions to dismiss for lack of subject matter jurisdiction generally take the form of either facial or factual attacks. See Holt v. United States, 46 F.3d 1000, 1002-03 (10th Cir. 1995). Facial attacks question "the sufficiency of the complaint[,]" and a district court reviewing facial attacks must accept the allegations in the complaint as true. Id. (citing Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990)). Factual attacks "gobeyond allegations contained in the complaint and challenge the facts upon which subject matter jurisdiction depends." Holt, 46 F.3d at 1003. "When reviewing a factual attack on subject matter jurisdiction, a district court may not presume the truthfulness of the complaint's factual allegations." Id. Defendant does not challenge any underlying facts supporting jurisdiction, so the Court will construe the Motion as a facial challenge.

District courts are "required to convert a Rule 12(b)(1) motion to dismiss into a Rule 12(b)(6) motion or a Rule 56 summary judgment motion when resolution of the jurisdictional question is intertwined with the merits of the case." Id. "When subject matter jurisdiction is dependent upon the same statute which provides the substantive claim in the case, [a court considers] the jurisdictional claim and the merits . . . to be intertwined." Wheeler v. Hurdman, 825 F.2d 257, 259 (10th Cir. 1987) (citing Clark v. Tarrant County, 798 F.2d 736, 742 (5th Cir. 1986)). Conversion to summary judgment is appropriate when parties submit, and a court considers, additional evidence beyond the pleadings such as affidavits. See Wheeler, 825 F.2d at 259. In this case, whether there is subject matter jurisdiction turns on an analysis of the same statutory provisions in PURPA that form the basis of Plaintiffs' claim. Because the merits of the Complaint and the jurisdictional issue are intertwined, the Court will convert the...