Drake v. Detroit Edison Co.

443 F. Supp. 833, 1978 U.S. Dist. LEXIS 20040
CourtDistrict Court, W.D. Michigan
DecidedJanuary 19, 1978
DocketG77-364 C.A.
StatusPublished
Cited by4 cases

This text of 443 F. Supp. 833 (Drake v. Detroit Edison Co.) is published on Counsel Stack Legal Research, covering District Court, W.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Drake v. Detroit Edison Co., 443 F. Supp. 833, 1978 U.S. Dist. LEXIS 20040 (W.D. Mich. 1978).

Opinion

*835 OPINION

FOX, Chief Judge.

Plaintiffs, eight individuals acting on their own behalf, brought this action to enjoin the sale of a 20 percent ownership interest in a nuclear power plant being constructed by the Detroit Edison Company to two electrical cooperatives of which they are members. It was alleged that the sale violated various sections of the Atomic Energy Act, 42 U.S.C. §§ 2011, et seq., and the regulations promulgated thereunder.

In 1969 Detroit Edison (“Edison”) filed with the United States Nuclear Regulatory Commission (NRC) an application for licensee as sole owner to construct and operate the Fermi 2 nuclear power plant. Following a review and public hearing the NRC issued a construction permit to Edison in 1972. Under the terms of the relevant statutory authority, the construction permit will be altered to an operating license when the facility is completed.

In February 1977 Edison entered into a Participation Agreement with Northern Michigan Electric Cooperative and Wolverine Electric Cooperative whereby Edison transferred a 20 percent ownership interest in the Fermi 2 plant to Northern and Wolverine. The Agreement provides that Edison will refund all payments made by the co-ops should required NRC approval of the sale not be obtained. In that event, it is also provided that the 20 percent interest will revert to Edison. Under the terms of the contract, Edison is to remain responsible for the engineering, design, construction, operation, and maintenance of the plant. An initial payment of $87.4 million was made, with subsequent payments so far totaling several million dollars more. The Participation Agreement requires the coops to pay for 20 percent of the total cost of construction of the plant. The co-ops have received loans and/or loan guarantees for the purchase from the National Rural Utilities Cooperative Finance Corporation and the Rural Electrification Administration.

In May 1977, Edison filed amendments to its construction permit reflecting the Participation Agreement. These amendments are currently pending before the NRC.

Plaintiffs contend that the sale amounts to an acquisition of a nuclear facility by the co-ops 1 without a license and an amendment to Edison’s construction permit prior to NRC approval, in violation of §§ 101 and 184 of the Atomic Energy Act, as amended, 42 U.S.C. §§ 2131, 2234, and regulations 2.101, 50.10, 50.80, 50.90, and 50.91, 10 CFR §§ 2.101, 50.10, 50.80, 50.90, 50.91, promulgated thereunder. The two sections that appear most relevant are sections 50.10 and 50.90. Section 50.10 reads in relevant part as follows:

§ 50.10 License required.
(a) Except as provided in § 50.11, no person within the United States shall transfer or receive in interstate commerce, manufacture, produce, transfer, acquire, possess, use, import, or export any production or utilization facility except as authorized by a license issued by the Commission.

This language is virtually identical to that of section 101 of the Act, 42 U.S.C. § 2131. Section 50.90 of the regulations provides that “[wjhenever a holder of a license or construction permit desires to amend the license or permit, application for an amendment shall be filed with the Commission, fully describing the changes desired, and following as far as applicable the form prescribed for original applications.” Such an amendment must be filed to receive NRC approval of any alterations or transfers of a previously-issued construction permit or license or an existing nuclear facility. Approval is required before any amendments can be effective.

Defendants moved to dismiss plaintiffs’ Complaint on two grounds. First, it was contended that plaintiffs failed to include in *836 their Complaint “a short and plain statement of the grounds upon which the Court’s jurisdiction depends,” as required by Rule 8 of the Federal Rules of Civil Procedure. Second, defendants contended that this court was an improper forum for consideration of plaintiffs’ claims since an amendment has been filed with the NRC by Edison to reflect the Participation Agreement, the NRC is now considering the amendment, and plaintiffs have therefore failed to exhaust their administrative remedies. Moreover, defendants say, judicial review can occur only after a final order of an agency, and the hearing must then take place in the Court of Appeals.

With respect to the first ground of defense, it is recognized that failure to comply with the jurisdictional requirement of Rule 8 “will result in dismissal of the complaint on defendants’ motion, unless the defect can be corrected by an amendment as of right or by leave of the court.” Wright & Miller, Federal Practice and Procedure: Civil § 1214, at 106 (emphasis added). Indeed, it has been held that the absence of a complete allegation of jurisdiction does not even require amendment when the court can readily recognize the existence of a federal question and the requisite amount in controversy. Littleton v. Berbling, 468 F.2d 389, 394 (7th Cir. 1972), vacated and remanded on other grounds sub nom. Spomer v. Littleton, 414 U.S. 514, 94 S.Ct. 685, 38 L.Ed.2d 694 (1974); Fawvor v. Texaco, Inc., 387 F.Supp. 626, 628 (E.D.Tex.1975). These conditions are met here. It is very evident from plaintiffs’ Complaint that the action arises under a federal statute and accompanying regulations. It is well established also that that statute, the Atomic Energy Act, was passed pursuant to Congress’ power to regulate commerce, see 1964 U.S.Code Cong. & Admin.News, p. 3111, thus making 28 U.S.C. § 1337 the applicable jurisdictional provision. Section 1337 states that “[t]he district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce . . . Since section 1337 has no jurisdictional amount provision, and the action presents a federal question, no amendment is necessary.

Defendants pressed the second ground for dismissal much more strongly. Their argument is not persuasive, however. Plaintiffs are not attempting to question an order of the NRC, prematurely or otherwise. As noted above, their allegations are concerned with violations of sections of the Act requiring a license to deal with nuclear facilities or the filing of an amendment for NRC approval of any alterations or transfers of a previously-issued construction permit or license.

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Related

Graham v. Niagara Mohawk Power Corp.
852 F. Supp. 150 (N.D. New York, 1994)
Honicker v. Hendrie
465 F. Supp. 414 (M.D. Tennessee, 1979)
Drake v. Detroit Edison Co.
453 F. Supp. 1123 (W.D. Michigan, 1978)

Cite This Page — Counsel Stack

Bluebook (online)
443 F. Supp. 833, 1978 U.S. Dist. LEXIS 20040, Counsel Stack Legal Research, https://law.counselstack.com/opinion/drake-v-detroit-edison-co-miwd-1978.