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‘Clocks cleaned’

Judge’s ruling didn’t fully close the door on regulating Vermont Yankee, say Vermont Law School professors

VERNON—Less than a week old, Judge J. Garvan Murtha’s Jan. 19 ruling on the Entergy v. Vermont case has officials and observers alike asking: Where next?

Murtha’s ruling upheld Entergy’s claim of preemption — the concept that the federal government’s jurisdiction over atomic safety issues supersedes any state statutes.

In his ruling, Murtha also said the state had not completely proved that Entergy couldn’t sue the state despite promises the company made in a 2002 memorandum of understanding (MOU) in its purchase of Vermont Yankee.

Murtha’s ruling also agreed with Entergy’s arguments that Vermont’s actions had gone against the Commerce Clause, the provision in the U.S. Constitution that assigns regulations of interstate business transactions to the federal government.

Attorney General William Sorrell said his office will do its “due diligence” before deciding whether to appeal Murtha’s ruling to the second circuit federal court.

“Whether we appeal or not, this fight is far from over,” he said.

Sorrell said that his office needs to understand all the ramifications this ruling can have, not only on the Entergy case but also on other cases going forward.

According to Sorrell, the decision to appeal will require that he and his colleagues weigh factors like the chances of success on different aspects of Murtha’s ruling and cost.

The state has 30 days to file an appeal.

‘Ripe for appeal’

Sorrell said Murtha’s consideration of the legislative record is ripe for appeal.

Both Entergy and the state cited the precedent-setting U.S. Supreme Court case Pacific Gas & Electric v. California (PG&E) in their respective arguments before the judge in U.S. District Court in the September trial.

In Sorrell’s opinion, the PG&E precedent says states can regulate power plants within their borders, providing they stay away from the preempted area of radiological safety.

When considering the state’s motivations, said Sorrell, PG&E rings clear in its edict that a judge should consider the final product — the state’s statute — and not the sausage-making-like process — the history and the discussion that led to the legislation.

Sorrell is pleased, however, that Murtha’s ruling didn’t give Entergy everything it asked for.

In addition to knocking out the Legislature’s authority to regulate VY, Entergy’s original claim also sought to strip the state Public Service Board (PSB) of any regulatory authority over the plant under Act 248.

That act requires nuclear plants — of which VY is the only one in Vermont — to acquire a state-issued Certificate of Public Good (CPG) from the PSB.

Murtha’s ruling has placed some restrictions on the PSB regarding considering favorable power rates in deliberating on matters of whether the license renewal for the plant is in Vermonters’ economic best interests.

But the ruling preserves the fundamental authority of the board to conduct hearings and make decisions based on the general best interests of Vermonters, Sorrell said.

Appeals of PSB decisions go to the Vermont Supreme Court, not federal court.

Sorrell said that some of the organizations that filed amici, or friend-of-the-court, briefs during the trial — like the New England Coalition and Conservation Law Foundation of Vermont — have reached out to his office. He anticipates as Murtha’s decision circulates, state regulators and legislators will look at the ruling’s use of the legislative history.

“I will not be surprised if interested states and regulators and others will be upset with the decision,” Sorrell said, adding he expected more amici briefs on appeal.

Reopening the Public Service Board docket?

Sorrell also anticipates that as a result of the overturning of the law that essentially closed Entergy’s CPG renewal request, the PSB will reopen docket 7440.

But Department of Public Service Deputy Commissioner Sarah Hofmann is not so sure.

When a new and big court order emerges, it takes time to absorb the new information and see if the PSB has to operate in new territory, Hofmann said.

The PSB will have to explore all avenues before deciding if its current process holds or if the board will need to change its modus operandi.

When asked if the PSB had any plans to open docket 7440 or what its plans are in general, Hofmann said, “No – it’s just too soon.”

Instead, she wanted to keep her comments brief, saying, “I don’t want to get people thinking we’re going one direction or another because we want to evaluate all [options].”

Watching the case

Lawyers from the Vermont Law School have been watching the case closely, from its filing last spring to the trial in U.S. District Court in the fall, to anticipating Murtha’s ruling into the winter months, to the release of the document this week.

“It was a bad loss for the state,” said Cheryl Hanna, professor of law and an expert in constitutional law.

In Hanna’s opinion, the state has two options: appeal the case or reopen the PSB’s docket 7440.

By buying Entergy’s lead attorney Kathleen Sullivan’s argument “hook, line, and sinker” that the state acted out of safety concerns, however, Murtha hasn’t left the PSB much room, said Hanna.

If the state appeals, it makes reopening Entergy’s CPG case moot, she said.

But, the appeal case can prove difficult, Hanna said. Murtha, as the trial judge, established the facts available for consideration by the appellate courts, and his ruling effectively established that safety concerns motivated Act 160.

Atomic safety concerns preempt federal laws and are therefore unconditional, said Hanna.

Hanna thinks the state will appeal, but she is skeptical about whether the second circuit will find any errors in Murtha’s ruling.

She also differs on a popular interpretation of Murtha’s ruling regarding how he defined the Legislature’s discussions of radiological safety.

Hanna doesn’t think that Murtha favored Entergy’s argument that because the Legislature talked about safety, the laws that emerged from those discussions are preempted.

Instead, Hanna interprets Murtha’s ruling as saying that the statutes are preempted because the Legislature talked about safety and also had no other actions or discussions on the record to prove the state took action for any other reason except radiological safety.

For example, in the trial, the state never talked about water quality or whether Vermont considers water a public good.

“I’ve heard a lot of bashing of Murtha,” said Hanna, who admits she’s the first to take issue with judges’ rulings. But she feels the “anti-Murtha” characterizations of him as being conservative or pro-industry are unfair.

During the trial, Hanna said she felt that Murtha struggled to find a way for Vermont to have the win. If the Legislature had been better advised and had a stronger record, the state might have won the case.

“But now they’re stuck with the record they’ve got,” said Hanna.

Hanna added that the common discussion that VY will be operating illegally after March 21, 2012 when its current CPG expires is inaccurate.

Murtha permanently enjoined the state from taking action to shut down the plant, she said. Even without the CPG, at this point, VY can continue operating.

Hanna said that the public can feel frustrated with the ruling but that the real source of frustration should rest with federal law.

If Vermonters want to do anything to change the state’s power to shut down VY, said Hanna, they should focus efforts to lobby Congress to change the Atomic Energy Act.

The 1954 federal law might say that states can shut down nuclear plants within their borders, she said, but at a practical level, it’s difficult for states to close a plant.

Hanna said observing the Entergy trial has taught her to appreciate the difficulty that states face when they regulate nuclear plants without considering safety concerns.

“It’s just hard for states to act proactively,” she said.

To Hanna, the Entergy case strikes a chord deeper than VY.

The issue, she said, “goes to a fundamental precedence about the state’s role in regulating major industries.”

In her opinion, Murtha’s ruling might speak to a broader trend of courts and Congress not wanting states to have this regulatory authority.

Considering the legislative process ‘questionable’

“We got our clocks cleaned,” said Patrick Parenteau, senior counsel to the Environmental and Natural Resources Law Clinic and professor of law at the Vermont Law School.

“We were out-lawyered,” he added.

Parenteau said finds Murtha’s view of preemption “troubling.”

While he said he wants to do more research to solidify and clarify his theory on Murtha’s preemption ruling, he thinks the judge has attributed to Congress an “unreasonable scope of preemption.”

Saying that a legislature can’t consider safety as one factor when considering whether a power plant (any type of power plant) serves the public good is a “radical view of preemption,” Parenteau said.

Parenteau wonders if Murtha’s ruling on preemption is consistent with the respect the federal government shows states that are carrying out their responsibilities.

In general, federal judges tend not to second-guess a state’s authority, said Parenteau.

Did Murtha decide that Vermont was in the wrong and worked cases like PG&E to fit his belief? Parenteau asks, wondering whether the label of “activist judge” fits the federal judge.

“It’s a slippery slope we’re on,” Parenteau said.

He also thinks the key points of Murtha’s ruling exist in what the judge didn’t say — like what’s next.

Parenteau believes that although Murtha ruled that the state can’t rely on Acts 160 or 74, he didn’t explicitly rule that the state has no authority over the nuclear plant. This aspect of Murtha’s ruling still allows the PSB to hear Entergy’s CPG case.

Parenteau said, however, he is “disappointed in Murtha” for letting Entergy wiggle out of the promises it made to Vermont in 2002.

Murtha’s analysis that Entergy didn’t waive its right to sue doesn’t wash with Parenteau, who pointed out that allowing Entergy to walk away from its promises sends a bad message to other companies.

According to Parenteau, the PSBs of the world have only a company’s word.

And thus, he said, Murtha has sent the signal that companies get to walk away from promises that were considered legally binding.

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Originally published in The Commons issue #136 (Wednesday, January 25, 2012).

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