Opinion
No. 20-35324
03-11-2021
CYTLINE, LLC, a Delaware limited liability company; et al., Plaintiffs-Appellants, and CORSAIR INVESTMENTS WA, LLC, a Washington limited liabiity company; TELCO 214 WHOLESALE SOFTWARE, INC., a Washington corporation, Plaintiffs, v. PUBLIC UTILITY DISTRICT NO. 2 OF GRANT COUNTY, WASHINGTON, a Washington municipal corporation; et al., Defendants-Appellees.
NOT FOR PUBLICATION
D.C. No. 2:18-cv-00390-RMP MEMORANDUM Appeal from the United States District Court for the Eastern District of Washington
Rosanna Malouf Peterson, District Judge, Presiding Argued and Submitted March 3, 2021 Seattle, Washington Before: RAWLINSON and BYBEE, Circuit Judges, and ENGLAND, District Judge.
This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.
The Honorable Morrison C. England, Jr., Senior United States District Judge for the Eastern District of California, sitting by designation.
Appellants (collectively, Cytline) appeal the district court's grant of Public Utility District # 2's 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 (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 (1976); see also Exxon Corp. v. Maryland, 437 U.S. 117, 127 (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). Cytline's 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 (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 (1978) ("[D]iminution in property value, standing alone," does not establish a taking.). Nor has RS-17 infringed on Cytline's 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 (1989); In re Permian Basin Area Rate Cases, 390 U.S. 747, 769-70 (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 (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., 586 P.2d 851, 854 (Wash. 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 non-arbitrary 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, 665 P.2d 1328, 1332 (Wash. 1983) (en banc); see also Prentis v. Atl. Coast Line Co., 211 U.S. 210, 226 (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, 655 P.2d at 1333 (Adequate "procedural safeguards may be provided by the administrative body.").
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).
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 (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 FERC's 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.
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. Comm'n of Md., 535 U.S. 635, 642-43 (2002).
AFFIRMED.