LAW.coLAW.co

WA LLC 214 v. PUBLIC UTILITY DISTRICT NO OF GRANT COUNTY WASHINGTON (2021)

United States Court of Appeals, Ninth Circuit.2021-03-11No. No. 20-35324

Summary

Holding. The court affirmed the district court's grant of summary judgment in favor of Public Utility District No. 2, rejecting all of Cytline's constitutional and statutory challenges to the RS-17 rate class.

Cytline challenged a new electricity rate class (RS-17) implemented by Grant County Public Utility District, arguing it violated the Dormant Commerce Clause, substantive due process, procedural due process, and the Federal Power Act. The district court granted the utility's motion for summary judgment, and Cytline appealed. The appellate court upheld the district court's decision on all grounds. RS-17 did not discriminate against out-of-state commerce because it applied only to operations physically located in Grant County and was enacted to manage increased cryptocurrency-related electricity requests. The rate also did not violate substantive due process because Cytline's interests in profitability and investments are not constitutionally protected, and the rule against confiscatory rates applies only to regulated utilities, not their customers. Although Cytline possessed a protected interest in non-arbitrary rates under Washington law, it received adequate procedural protections through notice, multiple public hearings, comment opportunities, and meetings with utility staff. Finally, Section 20 of the Federal Power Act creates no private right of action for customers to challenge rates because the statute focuses on FERC's enforcement authority and regulated entities rather than consumers.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether RS-17 discriminates against interstate commerce under the Dormant Commerce Clause
  • Whether RS-17 violates substantive due process rights to property and business opportunity
  • Whether the rate-setting process violated procedural due process
  • Whether Section 20 of the Federal Power Act creates a private right of action for rate challenges

Procedural posture

Cytline appealed the district court's grant of summary judgment in favor of Grant County Public Utility District on Cytline's challenge to the RS-17 electricity rate class.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

MEMORANDUM **

Appellants (collectively, Cytline) appeal the district courts grant of Public Utility District # 2s motion for summary judgment. Cytline challenges RS-17, a new electricity rate class implemented by the Grant County Public Utility District (Grant PUD). We have jurisdiction pursuant to 28 U.S.C. § 1291. We review a grant of summary judgment de novo. L.F. v. Lake Wash. Sch. Dist. # 414, 947 F.3d 621, 625 (9th Cir. 2020). We affirm.

1. RS-17 does not violate the Dormant Commerce Clause. A state law violates the Dormant Commerce Clause where it discriminates against out-of-state entities in purpose or actual effect or where it excessively burdens interstate commerce. See Rocky Mountain Farmers Union v. Corey, 730 F.3d 1070, 1087–88 (9th Cir. 2013). RS-17 does not demonstrate intent to discriminate against interstate commerce because it was enacted to address a sudden influx in cryptocurrency requests for electricity. The rate also does not have a discriminatory effect on interstate commerce because the electricity is only provided to operations physically located in Grant County. Cf. New England Power Co. v. New Hampshire, 455 U.S. 331, 339, 102 S.Ct. 1096, 71 L.Ed.2d 188 (1982). Finally, RS-17 does not unduly burden interstate commerce merely because it affects businesses that engage in interstate commerce or reduces profitability. See Great Atl. & Pac. Tea Co. v. Cottrell, 424 U.S. 366, 371, 96 S.Ct. 923, 47 L.Ed.2d 55 (1976); see also Exxon Corp. v. Maryland, 437 U.S. 117, 127, 98 S.Ct. 2207, 57 L.Ed.2d 91 (1978).

2. RS-17 does not violate substantive due process. Substantive due process protects only interests recognized by the Constitution. See Shanks v. Dressel, 540 F.3d 1082, 1087 (9th Cir. 2008). Cytlines claimed interests in its current profitability, investments in Grant county, a nonarbitrary rate, and money generally are not constitutionally protected interests. See Phillips v. Washington Legal Foundation, 524 U.S. 156, 164, 118 S.Ct. 1925, 141 L.Ed.2d 174 (1998) (finding only that Texas law recognized the principal in a client trust account as a property interest); Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 131, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978) (“[D]iminution in property value, standing alone,” does not establish a taking.). Nor has RS-17 infringed on Cytlines ability to use its property for a particular purpose or to engage in its chosen occupation. Moreover, the constitutional prohibition against non-confiscatory rates applies only to public utilities subject to regulation, not consumers. See Duquesne Light Co. v. Barasch, 488 U.S. 299, 307, 109 S.Ct. 609, 102 L.Ed.2d 646 (1989); In re Permian Basin Area Rate Cases, 390 U.S. 747, 769–70, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968).

3. Adoption of RS-17 did not violate procedural due process. Procedural due process is violated where a plaintiff has been (1) deprived of a protected property interest and (2) denied “adequate procedural protections.” Brewster v. Bd. of Educ. of Lynwood Unified Sch. Dist., 149 F.3d 971, 982 (9th Cir. 1998). Protected property interests may be created by state law. See Bd. of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). Cytline has established a property interest recognized by Washington law. Although Wash. Rev. Code § 54.24.080 does not create a property interest in non-arbitrary rates, see Snohomish Cnty. PUD No. 1 v. Broadview Television Co., 91 Wash.2d 3, 586 P.2d 851, 854 (1978) (en banc), the district court erred in finding that Cytline has no protected interest in a non-arbitrary rate. Customers of public utilities in Washington have a due process right to nonarbitrary rates, even though they do not have a right of participation in ratemaking proceedings, which are not subject to procedural due process. See Earle M. Jorgensen Co. v. City of Seattle, 99 Wash.2d 861, 665 P.2d 1328, 1332 (1983) (en banc); see also Prentis v. Atl. Coast Line Co., 211 U.S. 210, 226, 29 S.Ct. 67, 53 L.Ed. 150 (1908) (holding that ratemaking is a legislative act not subject to procedural due process). However, Cytline was afforded sufficient process here, including notice, eleven public hearings, opportunities to comment, and meetings with Grant PUD staff. Jorgensen, 665 P.2d at 1333 (Adequate “procedural safeguards may be provided by the administrative body.”).

1

4. Section 20 of the Federal Power Act does not create a private right of action for Cytline to challenge RS-17. Section 20, 16 U.S.C. § 813, requires that rates charged by federal licensees be “reasonable, nondiscriminatory, and just to the customer.” A statute implicitly creates a private right of action where it creates both a private right and a private remedy. Alexander v. Sandoval, 532 U.S. 275, 286, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001). Section 20 does not create a private right because it focuses on the enforcement jurisdiction of the Federal Energy Regulatory Commission (FERC) and regulated entities, not consumers. See UFCW Local 1500 Pension Fund v. Mayer, 895 F.3d 695, 699 (9th Cir. 2018). Section 20 also creates no private remedy because it is part of an express remedial scheme that includes a mechanism for consumers to trigger FERCs enforcement authority. 16 U.S.C. §§ 812–813; Mayer, 895 F.3d at 699. The only remedy created by Section 20 is for regulated entities, not consumers. 16 U.S.C. § 813.

2

AFFIRMED.

FOOTNOTES

1

.   Because Cytline only raised its argument that RS-17 is void for vagueness as a Washington state law claim over which the district court declined to exercise jurisdiction, we do not address it on appeal. See Dodd v. Hood River Cnty., 59 F.3d 852, 863–64 (9th Cir. 1995).

2

.   Nor does 28 U.S.C. § 1331 “independently grant[ ]” us jurisdiction. Cytline conflates a private right of action with subject matter jurisdiction. See Verizon Md., Inc. v. Pub. Serv. Commn of Md., 535 U.S. 635, 642–43, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002).