Town of Springfield, Vt. v. STATE, ETC., Civ. A. No. 81-62.

• Decision Date: 21 August 1981
• Docket Number: Civ. A. No. 81-62.
• Parties: TOWN OF SPRINGFIELD, VERMONT and Vermont Public Power Supply Authority v. STATE OF VERMONT ENVIRONMENTAL BOARD, Concerned Citizens of the Black River Valley and Town of Cavendish, Defendants Intervenors.
• Court: U.S. District Court — District of Vermont

521 F. Supp. 243

TOWN OF SPRINGFIELD, VERMONT and Vermont Public Power Supply Authority v. STATE OF VERMONT ENVIRONMENTAL BOARD, Concerned Citizens of the Black River Valley and Town of Cavendish, Defendants Intervenors.

Civ. A. No. 81-62.

United States District Court, D. Vermont.

August 21, 1981.

COPYRIGHT MATERIAL OMITTED

John Parker, Parker, Lamb & Ankuda, Springfield, Vt., Richmond F. Allan, Duncan, Weinberg & Miller, Washington, D. C. and John D. Paterson, Paterson, Gibson, Noble & Goodrich, Montpelier, Vt., for plaintiffs.

Merideth Wright, Asst. Atty. Gen., Montpelier, Vt., for defendant.

Stephen A. Reynes, Niles & Gibbs, Woodstock, Vt., for defendant intervenor Concerned Citizens of the Black River Valley.

Sarah E. Vail, Chester, Vt., for defendant intervenor Town of Cavendish.

COFFRIN, District Judge.

This is an action brought under 28 U.S.C. § 1331 for declaratory and injunctive relief against the State of Vermont Environmental Board (Board). The Board entered an order on January 19, 1981 barring the Town of Springfield (Town) from proceeding with certain portions of a hydroelectric project until a state land use permit is obtained. The Town and the Vermont Public Power Supply Authority, which is participating with the Town in the project, now seek a declaration that the order is illegal and void on the ground that exclusive jurisdiction over the permit and license process for hydroelectric projects rests in the Federal Energy Regulatory Commission (FERC) under the Federal Power Act.¹

Presently before the court is plaintiffs' motion for summary judgment. Also pending is defendant's motion to dismiss the complaint. Defendant asserts that plaintiffs are barred by res judicata or collateral estoppel from relitigating the question of whether the Board has jurisdiction over this matter. Additionally, defendant argues that we should abstain from hearing this case until the Vermont Supreme Court rules on the extent to which the requirements of Act 250 apply to a project falling within FERC jurisdiction. The Town of Cavendish, Vermont and the Concerned Citizens for the Black River Valley (CCBRV) have been permitted to intervene to oppose plaintiffs' motion for summary judgment and to urge dismissal of plaintiffs' complaint. In addition to the arguments for dismissal advanced by defendant, the Town of Cavendish moves to dismiss the complaint on the grounds that the matter does not present a justiciable controversy and that the court lacks jurisdiction under 28 U.S.C. § 1331. CCBRV also moves for declaratory judgment in favor of defendant intervenors.

For the reasons set forth below, we deny the various motions to dismiss plaintiffs' complaint and CCBRV's motion for declaratory judgment. We grant plaintiffs' motion for summary judgment.

FACTUAL BACKGROUND

Plaintiffs have applied to FERC for a license to construct and operate a series of six hydroelectric generating facilities on the Black River in the Springfield area. FERC exercised its jurisdiction over the project and is now considering the application. In addition to those aspects directly related to the generation of electricity, the Black River project encompasses the relocation of approximately 5.5 miles of state highway adjacent to the river which will be inundated when the project is completed and the development of recreation areas in the project vicinity, including two boat launches, a roadside park, and a trail system around the project area perimeter. The road relocation and recreational improvements will involve more than ten acres of land.

Pursuant to Vermont's "Act 250," Vt. Stat.Ann. tit. 10, chap. 151, a developer must secure a land use permit from the Board or a district environmental commission for commercial or industrial development on any tract of land greater than ten acres. Following a request to the Board for a declaratory ruling on the applicability of the Act 250 requirements to the Black River project, the Board held that the Town must obtain a land use permit before proceeding with the relocation of the highway and the development of the recreational areas.² As a concomitant to this ruling, the Board concluded that its jurisdiction was concurrent with FERC jurisdiction with respect to "corollary improvements that are not `used or useful' in connection with the generation of electricity by the hydroelectric facility." Although the Town participated in the Board proceedings and briefed the issue of the Board's jurisdiction in that forum, the Town did not appeal the Board's ruling to the Vermont Supreme Court as it arguably might have pursuant to the judicial review provision of the Vermont Administrative Procedure Act, Vt.Stat.Ann. tit. 3, § 815.

DISCUSSION

I. Motions to Dismiss

The doctrines of res judicata and collateral estoppel, requiring that a party be given only one day in court serve to further the public policies of finality of judgments and repose to litigants. The general rule of finality is no different when the claim is made that the original forum did not have jurisdiction over the subject matter of the controversy. Durfee v. Duke, 375 U.S. 106, 84 S.Ct. 242, 11 L.Ed.2d 186 (1963). Where the policies underlying application of the doctrines are outweighed by more significant considerations, however, the courts have not adhered to the finality that would otherwise be given to a prior decree. See id. at 114, 84 S.Ct. at 246; Hooper v. United States, 326 F.2d 982, 985 (Ct.Cl.1964), cert. denied 377 U.S. 977, 84 S.Ct. 1882, 12 L.Ed.2d 746 (1964). The finality rules are further relaxed for agency rulings. As the Fourth Circuit noted in Grose v. Cohen, 406 F.2d 823, 824-25 (1969):

Res judicata of administrative decisions is not encrusted with the rigid finality that characterizes the precept in judicial proceedings .... Application of the doctrine often serves a useful purpose in preventing relitigation of issues administratively determined, ... but practical reasons may exist for refusing to apply it, citations omitted.

We are convinced that res judicata or collateral estoppel should not attach here to the Board's ruling. The Supreme Court has recognized that the general rule of finality of jurisdictional determinations may yield to overriding considerations such as federal preemption. Durfee, 375 U.S. at 114, 84 S.Ct. at 246, citing Kalb v. Feuerstein, 308 U.S. 433, 60 S.Ct. 343, 84 L.Ed. 370 (1940). In Kalb, the Court held that a state court decree foreclosing a farm mortgage was void and subject to collateral attack in view of federal legislation which gave the federal bankruptcy courts exclusive jurisdiction over farmer-debtors and their property and withdrew from all other courts the power to maintain and enforce foreclosure proceedings against them. Other courts have reached the result suggested in Durfee. See United States v. State of Ohio, 487 F.2d 936 (Em.App.1973), aff'd sub. nom. Fry v. United States, 421 U.S. 542, 95 S.Ct. 1792, 44 L.Ed.2d 363 (1975), cert. denied, 421 U.S. 1014, 95 S.Ct. 2422, 44 L.Ed.2d 683 (1975) (national scope of the Economic Stabilization Act, its underlying policy, and the doctrine of federal preemption negates giving any res judicata effect to a state court judgment which intrudes upon the exclusive jurisdiction given to the federal courts by the act); Monongahela Connecting R. Co. v. Pennsylvania Public Utilities Commission, 373 F.2d 142 (3d Cir. 1967), rev'g 253 F.Supp. 50 (W.D.Pa.1966) (railroad company, faced with an order by the Pennsylvania Public Utilities Commission requiring the company to install air brakes on its cars, was entitled to have the issues of federal occupation and preemption by the Federal Safety Appliance Act determined in the federal courts irrespective of whether these issues were passed upon by the P.U.C. or the Pennsylvania courts). The common thread of these decisions is present here. The issue of whether the Board's ruling intrudes upon the exclusive jurisdiction given to FERC under the Federal Power Act is an important federal question which plaintiffs are entitled to litigate in federal court notwithstanding the Board's own determination that its jurisdiction is concurrent with FERC jurisdiction.

The gravity of the federal preemption issue also compels us to reject defendant's contention that we should stay our hand, under the abstention doctrine, until plaintiffs have exhausted their state appellate remedies. Under this doctrine, the federal court, in its discretion and in the interests of comity and federalism, may refuse to decide the merits of a complaint raising a federal question until after the complainant has exhausted his appeals at the state level. Although the Town here apparently never perfected an appeal from the Board's ruling, defendant correctly points out that if the Town had the option to appeal in state court at the time it filed this action, it may not avoid the strictures of the exhaustion requirement by simply failing to comply with the procedures for perfecting its appeal. See Huffman v. Pursue, Ltd., 420 U.S. 592, 611 n.22, 95 S.Ct. 1200, 1211 n.22, 43 L.Ed.2d 482 (1975); Stivers v. State of Minnesota, 575 F.2d 200, 204 (8th Cir. 1978), cert. denied, 439 U.S. 1127, 99 S.Ct. 1043, 59 L.Ed.2d 88 (1979); Lamb Enterprises, Inc. v. Kiroff, 549 F.2d 1052, 1058 n.5 (6th Cir. 1977), cert. denied, 431 U.S. 968, 97 S.Ct. 2927, 53 L.Ed.2d 1064 (1977). It is not altogether clear, however, whether the Town could have appealed the Board's ruling immediately or whether the Town would have to await the outcome of an application for an Act 250 permit before it could appeal. See Vt.Stat.Ann. tit. 3, § 815(a), requiring that appeal be had only from a final agency decision. In any event, the Supreme Court has not insisted upon exhaustion of the state judicial remedy in the face of a challenge to the jurisdiction of a state agency on the ground of repugnancy to a federal regulatory scheme. See Public Utilities Commission of Ohio v....