Opinion
98 CIV. 4155 (DLC), 00 CIV. 1424 (DLC), 00 CIV. 1425 (DLC), 00 CIV. 1426 (DLC).
March 26, 2001.
For Plaintiffs Con Ed, et al., Daniel R. Murdock, Lori Van Auken, Winston Strawn, New York, NY.
For Defendants United States of America, et al., Shiela M. Gowan, Assistant United States Attorney, New York, NY.
OPINION AND ORDER
In this action, filed June 12, 1998, Consolidated Edison Company of New York and twenty-seven other nuclear utilities (collectively, "Con Ed"), have sued the United States, the Department of Energy, and the Energy Research and Development Administration ("the Government"), asserting that the Energy Policy Act of 1992, 42 U.S.C. § 2297(g) ("EPACT"), violates the Takings and Due Process Clauses of the Fifth Amendment to the United States Constitution. Con Ed seeks declaratory and injunctive relief. On December 11, 1998, the Government moved to transfer this action to the United States Court of Federal Claims ("CFC"), at which point it was statutorily stayed pursuant to 28 U.S.C. § 1292(d)(4)(B) ("Section 1292(d)(4)(B)"). Judge Knapp denied the Government's motion to transfer on April 12, 1999, and the Government appealed to the Federal Circuit, which, on December 5, 2000, affirmed. The Government moved, on January 18, 2001, for rehearing and suggested rehearing en banc. At the Federal Circuit's request, plaintiffs responded to defendants' rehearing petition on February 9, 2001.
At a conference on December 19, 2000, this Court requested that the parties brief two issues: (1) whether this litigation is statutorily stayed; and (2) whether the parties can proceed, as Con Ed requests, with discovery at this time. Also outstanding is a motion by Con Ed to amend their complaint in order to add an additional plaintiff. For the reasons that follow, this Court concludes that this litigation is statutorily stayed, and Con Ed can neither proceed with discovery nor amend its complaint until the statutory stay is lifted.
This case was transferred to this Court's docket on May 8, 2000.
BACKGROUND
The facts of this case have been laid out extensively in several opinions issued by Judge Knapp and the December 5, 2000 Opinion by the Court of Federal Claims. Facts will, therefore, be repeated only as necessary to address the issues currently before the Court.
Plaintiffs are domestic utilities that own and/or operate (or previously owned and/or operated) nuclear reactors for the purpose of generating electricity. Prior to the enactment of EPACT, plaintiffs contracted with the Government for uranium enrichment services in a series of fixed-price agreements. After the enactment of EPACT, 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 annual assessments on domestic nuclear utilities would supply the remaining thirty-two percent, totaling $2.25 billion. Each utility was charged a pro rata share of these costs, determined by its past use of Government uranium enrichment services. After making initial payments pursuant to EPACT, plaintiffs and other nuclear utility companies unrelated to the plaintiffs brought several separate actions against the Government in the Court of Federal Claims ("CFC"), seeking refunds of those payments (collectively, "CFC cases"). The CFC cases are in various stages of litigation: several are pending before the Federal Circuit, some have been dismissed by the CFC, some are stayed pending decision in a consolidated appeal currently before the Federal Circuit, and some are stayed pending a decision in this case.
On June 12, 1998, Con Ed filed this suit, seeking a declaratory judgment that EPACT is unconstitutional and an injunction preventing further enforcement of EPACT assessments. Plaintiffs submitted discovery requests on June 16, 1998, and filed a first amended complaint on August 14, 1998. The Government did not respond to plaintiffs' discovery requests but, instead, moved the district court, on August 17, 1998, to stay this case pending resolution of the CFC cases. On November 25, 1998, Judge Knapp denied the Government's motion for a stay, but certified the question for interlocutory appeal. Con Ed v. United States, 30 F. Supp.2d 385 (S.D.N.Y. 1998). The Government did not appeal Judge Knapp's order but, instead, on December 11, 1998, brought a motion to dismiss for lack of subject matter jurisdiction and, in the alternative, moved to transfer the action to the CFC. The Government's motion to transfer to the CFC effected a statutory stay of the proceedings pursuant to 28 U.S.C. § 1292(d)(4)(B). On December 22, 1998, plaintiffs moved for an order to show cause why the Court should not strike the Government's motion and declare that the action was not statutorily stayed or, in the alternative, allow discovery to proceed even if the action was statutorily stayed. At a hearing on December 23, 1998, Judge Knapp denied plaintiffs' motion.
Judge Knapp indicated on the record at the Order to Show Cause hearing and later stated in his July 6, 1999 Opinion, that plaintiffs' motion by order to show cause was denied on December 23, 1998. This ruling is reflected in a Memorandum Opinion filed by this Court. Con Ed v. United States, 98 Civ. 4155 (DLC), 2000 WL 1364418 (Sept. 20, 2000).
On April 12, 1999, Judge Knapp denied the Government's motion to dismiss or transfer. Con Ed v. United States, 45 F. Supp.2d 331, 334 (S.D.N.Y. 1999). Judge Knapp certified the question for interlocutory appeal. On June 10, 1999, the Government filed its notice of interlocutory appeal to the Federal Circuit.
At a conference on April 22, 1999, Con Ed again asked the Court to lift the statutory stay and allow discovery to proceed and filed a motion to that effect on May 19, 1999. On July 6, 1999, the Court held that, even though discovery might not prejudice the Government, the pending appeal before the Federal Circuit statutorily stayed the action pursuant to Section 1292(d)(4)(B) and thereby prevented discovery from proceeding. Con Ed v. United States, 54 F. Supp.2d 364, 366 (S.D.N.Y. 1999).
Con Ed sought certification of Judge Knapp's July 6, 1999 Opinion for interlocutory appeal. On September 2, 1999, before Judge Knapp ruled on Con Ed's request for certification, Con Ed appealed the July 7, 1999 Opinion as a "final decision" under 28 U.S.C. § 1291. Judge Knapp denied plaintiffs' motion for certification for interlocutory appeal on September 9, 2000, and the Second Circuit dismissed plaintiffs' Section 1291 appeal on May 11, 2000. Con Ed v. United States, 2000 WL 713417 (2d Cir. May 11, 2000).
On August 4, 1999, while defendants' appeal of Judge Knapp's denial of the Government's motion to transfer was pending before the Federal Circuit, plaintiffs sought leave to amend their complaint. Judge Knapp granted plaintiffs' leave to amend on December 1, 1999. In his Opinion, Judge Knapp reasoned that, although the Government opposed plaintiffs' motion to amend on the ground that the action was statutorily stayed, and although his July 6, 1999 Opinion "contains language that supports the Government's position," since the Government conceded at oral argument that the amendment would not prejudice the Government, Congress' purpose in enacting Section 1292(d)(4)(B) — "so that resources are not wasted by litigating the merits in the wrong forum" — would not be frustrated by allowing the amendment. Con Ed. v. United States, No. 98 Civ. 4155 (WK), 1999 WL 1084250, at *1 (S.D.N.Y. Dec. 1, 1999). Con Ed's second amended complaint was filed on December 16, 1999.
On November 20, 2000, while the appeal before the Federal Circuit was still pending, Con Ed moved for leave to amend its complaint a third time in order to add an additional plaintiff. It is this second motion to amend that is currently before this Court.
On December 5, 2000, the Federal Circuit affirmed Judge Knapp's April 12, 1999 Opinion denying the Government's motion to transfer this case to the CFC. Con Ed v. United States, 234 F.3d 642 (Fed. Cir. 2000). On January 18, 2001, the Government moved for a panel rehearing and a rehearing en banc of the Federal Circuit's Opinion. On January 26, 2001, the Federal Circuit invited plaintiffs to respond to the rehearing petition and, on February 9, 2001, Con Ed filed a response. The motion remains sub judice.
DISCUSSION
A. This Action is Statutorily Stayed.
The Federal Circuit has exclusive jurisdiction over interlocutory appeals of district court orders denying or granting motions to transfer to the Court of Federal Claims. 28 U.S.C. § 1292(d)(4)(A). Section 1292(d)(4)(B) provides that
When a motion to transfer an action to the Court of Federal Claims is filed in a district court, no further proceedings shall be taken in the district court until 60 days after the court has ruled upon the motion. If an appeal is taken from the district court's grant or denial of the motion, proceedings shall be further stayed until the appeal has been decided by the Court of Appeals for the Federal Circuit. The stay of proceedings in the district court shall not bar the granting of preliminary or injunctive relief, where appropriate and where expedition is reasonably necessary.28 U.S.C. § 1292(d)(4)(B) (emphasis supplied).
The Government asserts that this action is statutorily stayed pending the Federal Circuit's decision on the Government's motion for rehearing because an appeal "has been decided" under Section 1292(d)(4)(B) only after a mandate has issued, and the Government's petition for rehearing stayed the issuance of the mandate. Con Ed argues that the appeal on the Government's motion to transfer "has been decided" since December 5, 2000, when the Federal Circuit issued its Opinion, that Section 1292(d)(4)(B) does not predicate the lifting of the stay on the issuance of a mandate, and that, even if it did, this Court should, in the interests of judicial economy and efficiency, lift the stay before a mandate is issued.
The statutory language at issue here — providing for a stay until an appeal "has been decided" by the Federal Circuit — is discussed by the House Report accompanying the bill that enacted Section 1292(d)(4)(B) ("House Report"). The House Report describes Section 1292(d)(4)(B) as providing that
proceedings in the district court shall be stayed until sixty days after the district court has ruled on the motion to transfer. . . . Should an appeal be taken to the Federal Circuit pursuant to this new provision, the stay is extended until the Federal Circuit has disposed of the jurisdictional appeal.
H.R. Rep. 100-889 (1988), reprinted in 1988 U.S.C.C.A.N. 5982, 6012 (emphasis supplied). The Federal Circuit has not yet "disposed of the jurisdictional appeal," as the petition for rehearing of the jurisdictional appeal is pending before the Federal Circuit.
Enforcing a stay until the mandate issues is also consistent with the purposes Section 1292(d)(4)(B) was intended to serve. The House Report states that Section 1292(d)(4)(B) was enacted "[i]n the interests of resolving jurisdictional questions at the outset of litigation, and thereby avoiding wasteful and duplicative litigation on the merits in the wrong trial court." Id. This Court would risk engaging in "wasteful and duplicative litigation" were it to lift the stay and proceed to the merits of this litigation only to have the Federal Circuit grant the Government's motion to transfer this case to the Court of Federal Claims. Indeed, the Federal Circuit has exclusive jurisdiction over appeals of district court rulings on motions to transfer to the CFC in order to "ensure uniform adjudication of Tucker Act issues in a single forum." Id. By lifting the stay, this Court would rule, by implication, on the CFC's jurisdiction over this case while that same question is squarely before the Federal Circuit.
Requiring the issuance of the mandate is also consistent with the rules governing the Federal Circuit which provide that, following entry of judgment, "[t]he timely filing of a petition for panel rehearing, [or] petition for rehearing en banc . . . stays the mandate until disposition of the petition or motion." Fed.R.App.P. 41(d)(1). As a general matter, a district court is divested of jurisdiction from the time a notice of appeal is filed until a mandate has been issued. United States v. Rodgers, 101 F.3d 247, 251 (2d Cir. 1996). Although this is not a "per se rule," and instead is "guided by concerns of efficiency," id., there is no compelling reason here not to follow the general rule. In this case, efficiency militates in favor of abiding by the statutory stay, particularly in light of conflicting views in the Federal Circuit regarding the scope of the Court of Federal Claims' jurisdiction, compare Con Ed, 234 F.3d 642 with id. at 648-54 (Gajarsa, J., dissenting), as well as conflicting views within the Court of Federal Claims regarding the scope of its own jurisdiction, compare New York Power Authority v. United States, 42 Fed. Cl. 795, 800 (Fed.Cl. 1999) with Commonwealth Edison Co. v. United States, 46 Fed. Cl. 29, 34 (Fed.Cl. 2000) (disagreement over whether the CFC has jurisdiction over Due Process claims).
Accordingly, this action is statutorily stayed until a mandate has issued. It is unnecessary, therefore, to address the parties' arguments regarding whether this action should be stayed after the statutory stay is lifted, and whether and to what extent Con Ed's claims in this action are precluded by judgments in the CFC cases.
Whether this action would be further stayed pending petition for writ of certiorari to the Supreme Court need not be addressed at this time.
B. Discovery Cannot Proceed and Con Ed's Complaint Cannot Be Amended While This Action is Statutorily Stayed.
The parties additionally dispute whether discovery can proceed and whether plaintiffs can amend their complaint while the action is statutorily stayed. Although interlocutory appeals generally "shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order," 28 U.S.C. § 1292(b), when a district court's decision on a motion to transfer to the Court of Federal Claims is appealed to the Federal Circuit, Section 1292(d)(4)(B) requires that "proceedings shall be further stayed" until the appeal has been decided, the only exception being for "the granting of preliminary or injunctive relief, where appropriate and where expedition is reasonably necessary." 28 U.S.C. § 1292 (d)(4)(B) (emphasis supplied). As Judge Knapp concluded in his July 6, 1999 Opinion, plaintiffs' discovery requests do not constitute preliminary or injunctive relief that would fall under this exception, nor has Con Ed made any showing that expedition of their discovery requests is "reasonably necessary." Con Ed's motion to compel discovery is, therefore, denied until the statutory stay is lifted.
The same reasoning applies to plaintiffs' motion to amend. Although Judge Knapp allowed Con Ed to amend its complaint once during the statutory stay, this Court concludes that the statutory stay should not be lifted in this case a second time, other than for the limited exceptions in Section 1292(d)(4)(B). It is particularly inappropriate to decide Con Ed's pending motion to amend because the Federal Circuit's resolution of the Government's motion to transfer will determine whether this Court has jurisdiction over this case. The motion to amend should be resolved by the court that will exercise jurisdiction over the remainder of this action. Cf. V.W. Broad v. DKP Corp., No. 97 Civ. 2029 (LAP), 1998 WL 516113, at *4 (S.D.N.Y. Aug. 19, 1998) (if court is without jurisdiction over a case, it cannot decide motion to amend). The limited stays customarily in effect when there is an interlocutory appeal do not, therefore, apply here. Cf. Webb v. GAF Corp., 78 F.3d 53, 55 (2d Cir. 1996); New York State Nat'l Org. for Women v. Terry, 886 F.2d 1339, 1350 (2d Cir. 1989).
CONCLUSION
The statutory stay remains in effect. Discovery is stayed until the statutory stay is lifted. Plaintiffs' motion to amend is denied without prejudice.
SO ORDERED: