Consolidated Edison Co. of New York, Inc. v. United States, Department of Energy

234 F.3d 642

• Court: Court of Appeals for the Federal Circuit
• Decided: December 5, 2000
• Docket: No. 99-1464
• Status: Published

Opinions

Opinion for the court filed by Circuit Judge RADER. Dissenting opinion filed by Circuit Judge GAJARSA.

RADER, Circuit Judge.

Consolidated Edison Company of New York and twenty-one other nuclear utilities (collectively, Con Ed) sued the United States, the Department of Energy, and the Energy Research and Development Administration (collectively, the Government) in the United States District Court for the Southern District of New York seeking declaratory judgments and injunctive relief. Consolidated Edison Co. v. United States, 45 F.Supp.2d 331 (S.D.N.Y.1999). Con Ed’s suit challenged the constitutionality of the Energy Policy Act of 1992 (EPACT), 42 U.S.C. § 2297(g) (1994), on due process and takings grounds. The district court denied the Government’s motion to transfer the case to the United States Court of Federal Claims, or alternatively to dismiss. Because the district court correctly denied the Government’s motion, this court affirms.

I.

Con Ed sued the Government, challenging the constitutionality of EPACT. Before enactment of EPACT, Con Ed contracted with the Government for uranium enrichment services under a series of fixed-price agreements. After enactment of EPACT in 1992, the Government began decontaminating and decommissioning several of its uranium processing facilities. EPACT stipulated that the Government would pay sixty-eight percent of the decontamination and decommissioning costs and that annual assessments on domestic nuclear utilities would supply the remaining thirty-two percent. EPACT made the Department of Energy responsible for computing each utility’s share of the assessment in proportion to that utility’s use of Government enrichment services in the past. See 42 U.S.C. § 2297g-l(c).

After making initial payments under EPACT, Con Ed, and other nuclear utilities not parties to this suit, sued the Government in the Court of Federal Claims seeking refunds of those payments. The Court of Federal Claims lawsuits asserted many of the same constitutional grounds as this lawsuit. In one such case, this court reversed the Court of Federal Claims’ grant of summary judgment in favor of a nuclear utility, concluding that collection of the assessments under EPACT was not unconstitutional as applied. Yankee Atomic Elec. Co. v. United States, 112 F.3d 1569, 1571 (Fed.Cir.1997), cert. denied, 524 U.S. 951, 118 S.Ct. 2365, 141 L.Ed.2d 735 (1998).

After several subsequent nuclear utility losses in the Court of Federal Claims, Con Ed filed this suit in the district court. Instead of seeking refunds of assessments paid, however, Con Ed sought declaratory judgment that EPACT is unconstitutional on several grounds and an injunction on enforcement of the EPACT assessments. By taking this procedural posture, Con Ed sought a hearing in another forum. To achieve this objective, Con Ed carefully drew its complaint to avoid prayers for relief actionable in the Court of Federal Claims, such as claims against the United States for money damages. See 5 U.S.C. § 702 (1994).

The Government moved the district court to transfer this case to the Court of Federal Claims, where other nuclear utility cases await disposition. The district court denied that motion. The district court noted that the United States Court of Appeals for the Second Circuit and the United States Supreme Court have confirmed that the Administrative Procedure Act (APA) waives the sovereign immunity of the United States for suits that properly invoke equitable relief from agency action. Bowen v. Mass., 487 U.S. 879, 904, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988); In re Chateaugay Corp., 53 F.3d 478, 493 (2d Cir.1995). After denying the Government’s motion, the district court certified the jurisdictional question for interlocutory review.

II.

The sole question in this case is whether the APA waives sovereign immunity for an action in a district court on the merits of Con Ed’s claim because its complaint seeks equitable relief outside the Court of Federal Claims’ statutory grant of authority. This court reviews legal questions, such as jurisdiction and authority of the Court of Federal Claims and the district court, without deference. Terran v. Sec’y of Health & Human Servs., 195 F.3d 1302, 1309 (Fed.Cir.1999).

The Government contends that Con Ed’s suit in the district court under the APA amounts to impermissible forum shopping. The APA, according to the Government, does not waive sovereign immunity for this suit in the district court because Con Ed can obtain full legal relief, if successful, in the Court of Federal Claims. Specifically, the Government notes that the Court of Federal Claims has, on occasion, asserted power under the Tucker Act to order a full refund of illegally exacted funds. See 28 U.S.C. § 1491(a)(1) (1994); New York Life Ins. Co. v. United States, 118 F.3d 1553, 1554 (Fed.Cir.1997). Thus, if Con Ed can show illegal exaction of EPACT assessments, the Government maintains, the Court of Federal Claims may have authority to order a refund. Indeed, the Government explains that such suits are already pending in the Court of Federal Claims.

Predicting and attempting to preempt Con Ed’s response, the Government discounts the Court of Federal Claim’s lack of power to order injunctive or other prospective relief. If the EPACT assessments in fact violate constitutional guarantees, the Government asserts, injunctive relief would not be necessary. Rather, res judicata would implicitly bar the Government from assessing Con Ed under EPACT in the future in the face of a Court of Federal Claims illegal exaction judgment. Alternatively, the Government makes a “trust me” argument, explaining that it “would not be so unwise as to require” Con Ed to assert res judicata by making future assessments after a loss in the Court of Federal Claims.

This district court case does warrant the Government’s “forum shopping” characterization. However, while forum shopping is generally disfavored, see Hanna v. Plumer, 380 U.S. 460, 468, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965), jurisdictional anomalies may permit forum shopping, see In re Air Crash Disaster Near New Orleans, La., 821 F.2d 1147, 1157 (5th Cir.1987) (vacated on other grounds) (“After all, the purpose of diversity jurisdiction is to allow a certain kind of forum-shopping”). This case presents such an instance, where the federal code tolerates a variety of forum shopping. Although the operative facts of Con Ed’s case in the Court of Federal Claims are nearly the same as in its case in the district court, the Supreme Court has explained that a litigant may invoke the APA as a waiver of sovereign immunity for prospective equitable relief because such relief is not within the jurisdiction of the Court of Federal Claims. Bowen, 487 U.S. at 904, 108 S.Ct. 2722. Thus, depending on the relief sought — a refund of illegal exactions under the Tucker Act or an injunction under the APA — jurisdiction may lie either in the Court of Federal Claims, see Transohio Sav. Bank v. Director, OTS, 967 F.2d 598, 606 (D.C.Cir.1992), or in the district courts, see Bowen, 487 U.S. at 904, 108 S.Ct. 2722.

III.

The APA waives sovereign immunity for actions challenging agency actions in district court. Section 702 provides:

A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party.... Nothing herein ... confers authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.

5 U.S.C. § 702. In Bowen, the Supreme Court explains that section 702 “elimi-nat[es] the defense of sovereign immunity in cases covered by [§ 702].” Bowen, 487 U.S. at 892, 108 S.Ct. 2722. The Court further notes: “It is common ground that if review is proper under the APA, the District Court had jurisdiction under 28 U.S.C. § 1331 [the federal question statute].” Id. at 892 n. 16, 108 S.Ct. 2722. Indeed, in this case, Con Ed properly cites 28 U.S.C. §§ 1331 (federal question statute), 1361 (the mandamus statute), and 2201-02 (1994) (the declaratory judgment statute) to show subject matter jurisdiction for its claim for equitable relief.

Thus, the question in this case narrows to whether § 702 of the APA waives sovereign immunity for a suit in a district court for the relief requested. Stated in other terms, does the APA waive immunity for the relief sought by Con Ed in this case? Relevant to that question, section 702 of the APA does not waive sovereign immunity for money damages claims or for claims that seek remedies “expressly or impliedly” precluded by other statutes. 5 U.S.C. § 702; Transohio, 967 F.2d at 607. Section 704 of the APA further excludes from the APA’s sovereign immunity waiver those claims for which adequate remedies are elsewhere available. 5 U.S.C. § 704 (1994); Transohio, 967 F.2d at 607. Section 704 states:

Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review.

5 U.S.C. § 704. Read together, sections 702 and 704 limit the APA’s waiver of sovereign immunity. In sum, the APA authorizes suits against the Government, other than for money damages, to redress final agency actions not otherwise addressable under federal statutes. Bowen, 487 U.S. at 903, 108 S.Ct. 2722 (“When Congress enacted the APA to provide a general authorization for review of agency action in the district courts, it did not intend that general grant of jurisdiction to duplicate the previously established special statutory procedures relating to specific agencies.”).

The Supreme Court’s Bowen decision exemplifies the operation of these APA provisions in a setting similar' to this case. In Bowen, the Commonwealth of Massachusetts sought review of a final order of the Secretary of Health and Human Services refusing to reimburse a category of Medicaid expenses. Bowen, 487 U.S. at 882, 108 S.Ct. 2722. The Supreme Court gave two reasons why § 702’s exclusion for money damages claims did not foreclose judicial review: First, Massachusetts’ complaints “sought declaratory and injunctive relief ... not ... money damages.” Id. at 893, 108 S.Ct. 2722. Second, “[njeither a disallowance decision, nor the reversal of a disallowance decision, is properly characterized as an award of ‘damages.’ ” Id. Thus, in Bowen, Massachusetts did not seek relief in the form of monetary damages, which would have placed its claim outside the terms of the waiver in § 702.

In this case, Con Ed, like the Commonwealth of Massachusetts in Bowen, seeks declaratory and prospective injunctive relief from allegedly unconstitutional EPACT assessments, not money damages. This prayer for relief satisfies the first issue in the Bowen reasoning because Con Ed does not seek the recovery of funds at all, but only an injunction on future EPACT assessments. Likewise, Con Ed’s suit also falls within Bowen’s second reason for evading the money damages obstacle to an APA waiver because Con Ed’s prayer for an injunction on future EPACT assessments cannot be properly characterized as a request for an award of damages. Even assuming that Con Ed sought return of its paid assessments in the district court, its claims would not register as “money damages.” In the words of the Supreme Court:

Our cases have long recognized the distinction between an action at law for damages — which are intended to provide a victim with monetary compensation for an injury to his person, property or reputation — and an equitable action for specific relief — which may include ... “the recovery of specific property or monies, ejectment from land, or injunction either directing or restraining the defendant officer’s actions.”

Bowen, 487 U.S. at 893, 108 S.Ct. 2722 (italics in original). Thus Con Ed’s prayer for relief might even hypothetically have sought return of money without falling within the excluded category of “money damages.” However, Con Ed does not seek money at all. Con Ed’s prayer for specific relief from the EPACT assessments in this case does not fall within the Supreme Court’s definition of money damages.

Having evaded the money damages exclusion within § 702, Con Ed still must show that § 704 does not withdraw the waiver of sovereign immunity granted by § 702. Section 704 codifies a requirement ensuring that the general grant of review in the APA does not “duplicate existing procedures for review of agency action.” Bowen, 487 U.S. at 903, 108 S.Ct. 2722. In effect, § 704 withdraws the limited waiver of immunity in § 702 if an adequate judicial remedy is already available elsewhere. 5 U.S.C. § 704. In this case, this court must examine whether the Court of Federal Claims supplies an “adequate remedy” to prevent the constitutional wrongs alleged by Con Ed. If the Court of Federal Claims supplies an “adequate remedy,” then Con Ed’s cause of action would fall within an exception to the APA’s waiver of sovereign immunity.

The Supreme Court confronted this issue in Boiuen. The Court determined that the Court of Federal Claims cannot supply an “adequate remedy” in a case seeking injunctive relief:

The [Government] argues that § 704 should be construed to bar review of the agency action in the District Court because monetary relief against the United States is available in the Claims Court under the Tucker Act. This restrictive— and unprecedented — interpretation of § 704 should be rejected because the remedy available to the [plaintiff] in the Claims Court is plainly not the kind of “special and adequate review procedure” that will oust a district court of its normal jurisdiction under the APA.

Bowen, 487 U.S. at 904, 108 S.Ct. 2722. For the reasons stated in Boiuen, the Court of Federal Claims cannot supply an adequate remedy for Con Ed’s suit either. As this passage from Bowen indicates, district court action under the APA is the normal default rule, negated only by special and adequate alternative review procedures. More to the point, however, Con Ed seeks prospective injunctive relief. Indeed, the Supreme Court — noting that the Bowen plaintiff might have chosen to bring suit in the Court of Federal Claims — explained:

The Claims Court does not have the general equitable powers of a district court to grant prospective relief.... We are not willing to assume, categorically, that a naked money judgment against the United States will always be an adequate substitute for prospective relief fashioned in the light of the rather complex ongoing relationship between the parties.

Bowen, 487 U.S. at 905, 108 S.Ct. 2722. In this case, as in Boiuen, the Court of Federal Claims has no jurisdiction beyond award of a “naked money judgment.” This case also features a complex ongoing relationship to decontaminate and decommission nuclear facilities. EPACT itself involves computations based on past use of Government enrichment services and ongoing obligations to share decommissioning expenses. In this complex ongoing relationship, this court, like the Supreme Court in Boiuen, cannot be sure that a money judgment will adequately substitute for prospective relief. Prospective relief, such as sought in this case, lies beyond the powers of the Court of Federal Claims. In direct terms, claims for money damages before the Court of Federal Claims do not supply an “adequate remedy” for a claim for equitable relief in this complex case.

It is important to keep in mind that the question before us is not whether plaintiffs are entitled to the remedy they seek, but only whether the district court is empowered to give them a hearing. The dissent recognizes that the answer to that question lies in how we understand the Supreme Court’s Bowen decision. Though the dissent attempts to distinguish Bowen on its facts, the facts are that, like Bowen, this case involves not a one-shot contract to be performed or not, but an ongoing legal and contractual relationship between the plaintiffs and the federal government with a complex of duties and responsibilities, one of which is challenged by the Government’s insistence that payments are due on a basis different from that understood by the plaintiffs.

The dissent appreciates that the case turns on Bowen’s holding that a suit in the Court of Federal Claims for money damages to recover past payments is not necessarily an “adequate remedy” under APA § 704 when a plaintiff seeks declaratory and injunctive relief against future assessments. The dissent makes its case for the opposite rule by quoting at length from Justice Scalia’s dissent in Bowen, and asserting that “the logic promulgated by the dissent in Bowen is persuasive” (op. at 654) — thus candidly acknowledging that the position the dissent here calls for is indeed one of dissent.

There are good arguments for the rule the dissenters prefer. Among others, it would reduce the potential for this kind of litigation over where to litigate, a consequence of our system of federal courts with divided and sometimes overlapping jurisdiction. Indeed, in the fullness of time it may well be that the rule announced by the Supreme Court in Bowen will prove so unworkable that the Court will choose to change it.¹ If so, we will have one less area of indeterminate jurisdictional line-drawing, and plaintiffs will be precluded from doing the kind of forum shopping they did here.

However, this court does not possess any special authority over the law governing this case, as it has- in the intellectual property field, see Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 40, 117 S.Ct. 1040, 137 L.Ed.2d 146 (1997). We have been given no brief that entitles us to unilaterally declare the Supreme Court misinformed about its view of federal jurisdiction. Accordingly, this court is bound to follow, as best it can, the guidance given it by the majority in Bowen and not that of the dissent, and to recognize the difference.

CONCLUSION

Because neither § 702’s exclusion for money damages nor § 704’s exception for alternative adequate remedies foreclose the APA’s waiver of immunity in this case, the district court correctly determined that it was authorized to proceed under the APA. The district court correctly denied the Government’s motion to transfer to the Court of Federal Claims; the matter is returned to the trial court for continued proceedings.

COSTS

Each party shall bear its own costs.

AFFIRMED.

1 . Two other Justices, Chief Justice Rehnquist and Justice Kennedy, joined Justice Scalia’s dissent. Whether the change in the makeup of the Court since Bowen will, in the future, convert the dissent into a majority is a matter beyond speculation by lower court judges.