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South Carolina Electric & Gas Co. v. Whitfield

United States District Court, D. South Carolina, Columbia Division

July 18, 2018

South Carolina Electric & Gas Company, Plaintiff,
v.
Swain E. Whitfield, in his official capacity as Chairman of the South Carolina Public Service Commission; Comer H. Randall, in his official capacity as Commissioner of the South Carolina Public Service Commission; John E. Howard, in his official capacity as Commissioner of the South Carolina Public Service Commission; Elliott F. Elam, Jr., in his official capacity as Commissioner of the South Carolina Public Service Commission; Elizabeth B. Fleming, in her official capacity as Commissioner of the South Carolina Public Service Commission; Robert T. Bockman, in his official capacity as Commissioner of the South Carolina Public Service Commission; and G. O'Neal Hamilton, in his official capacity as Commissioner of the South Carolina Public Service Commission, Defendants.

          ORDER AND OPINION

         Before the court are South Carolina House of Representatives Speaker Jay Lucas's (“Speaker Lucas”) Motion to Intervene (ECF No. 7) and South Carolina Senate President Pro Tempore Hugh K. Leatherman, Sr.'s (“President Leatherman”) Motion to Intervene (ECF No. 8). For the reasons stated below, the court GRANTS these Motions to Intervene (ECF Nos. 7, 8.)

         I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

         South Carolina Electric and Gas Company (“SCE&G”) alleges that it partnered with Santee Cooper (“Santee”) to construct V.C. Summer Units 2 and 3 (the “Project”).[1] (ECF No. 1 at 13-14 ¶¶ 60- 62.) The Base Load Review Act, SC Code Ann. § 58-33-210 et seq. (2007) (“BLRA”), incentivizes companies to increase their base load capacity by building new plants to generate the increased base load. (Id. at 8 ¶¶ 30-31.) The BLRA provides opportunities for energy companies to “recover [their] capital costs related to the plant through revised rate filings or general rate proceedings [so long as the plant is constructed or being constructed].” (Id. at 11 ¶ 44 (quoting S.C. Code Ann. § 58-33-275(C) (2007).) Energy companies could file for a revised rate each year. See S.C. Code Ann. § 55-33-280(A) (2007) (“No earlier than one year after filing the application or combined application, and no more frequently than annually thereafter, the utility may file with the commission and serve on the Office of Regulatory Staff requests for the approval of revised rates subsequent to those approved in the base load review order.”).

         On August 1, 2017, SCE&G alleges that it filed a petition to abandon construction of the Project. (ECF No. 1 at 31 ¶ 157.) On August 15, 2017, SCE&G alleges that it voluntarily withdrew its Petition “in order to provide the opportunity for legislative review and a potential resolution of the issues attendant to the abandonment of the Project.” (Id. at 31 ¶¶ 157, 162.) On June 28, 2018, the South Carolina General Assembly passed 2018 South Carolina Laws Act 287 (H.B. 4375) (codified as amended in scattered sections of S.C. Code Ann. Title 58 Chapter 33) (“Act 287”)[2], and 2018 South Carolina Laws Resolution 285 (S. 0954) (“Resolution 285”), which became law upon the Governor's signature on July 2, 2018. (ECF No. 1 at 1-2); see also S. 0954, 2018 Leg., 122nd Sess. (S.C. 2018). Act 287 and Resolution 285 seek to eliminate all rate increases requested by SCE&G after 2010, and subsequently authorized by the Public Service Commission of South Carolina (“PSC”) pursuant to the BLRA. (ECF No. 1 at 2 ¶ 2); see also S.C. Code Ann. § 58-34-20 (2018).

         On June 29, 2018, SCE&G filed its Verified Complaint for Declaratory Judgment and Temporary, Preliminary, and Permanent Injunctive Relief against Defendants Swain E. Whitfield, Comer H. Randall, John E. Howard, Elliot F. Elam, Jr., Elizabeth B. Fleming, Robert T. Bockman, and G. O'Neal (collectively, “Defendants”), commissioners of the PSC. (Id.) SCE&G challenges the constitutionality of both Act 287 and Resolution 285, asserting that the elimination of the rate increases violates SCE&G's constitutional rights and “impermissibly interfere[s] with interstate commerce.” (Id. at 2 ¶ 2.) SCE&G's federal lawsuit does not challenge or seek review of any order by the PSC.[3] (Id. at 3.)

         On July 3, 2018, Speaker Lucas filed a Motion to Intervene. (ECF No. 7.) Speaker Lucas seeks to intervene in order to “defend the constitutionality of Act 287 and Resolution 285 either by right as a defendant under Rule 24(a) of the Federal Rules of Civil Procedure or, in the alternative, for permissive intervention under Rule 24(b).” (Id.) As required by Rule 24(c), Speaker Lucas also filed a proposed Answer. (ECF No. 7-1.) On July 3, 2018, President Leatherman filed a Motion to Intervene under Fed.R.Civ.P. 24(b), permissive intervention.[4](ECF No. 8.) President Leatherman seeks permissive intervention in order to defend the constitutionality of Act 287 and Resolution 285.[5] (Id. at 2.)

         On July 5, 2018, Alan Wilson, Attorney General of South Carolina (“Attorney General Wilson”), moved to file an Amicus Brief. (ECF No. 10.) In his Motion, Attorney General Wilson notified the court that Defendants consented to him filing an amicus brief. (ECF No. 10 at 4.) On July 11, 2018, SCE&G notified the court that it consented to Attorney General Wilson's Motion (ECF No. 25), and the court granted Attorney General Wilson's Motion on July 12, 2018. (ECF No. 27.)

         II. JURISDICTION

         SCE&G is a wholly owned subsidiary of SCANA Corporation, and is organized under South Carolina law and headquartered in Cayce, South Carolina. (ECF No. 1 at 5.) The PSC is a South Carolina state agency whose authority includes regulating electric utilities. S.C. Code Ann. § 58-3-140(A) (2015). Defendant Commissioners have offices in Columbia, South Carolina. (ECF No. 1 at 5.)

         The court has jurisdiction under 28 U.S.C. §§ 1331 and 1343(a)(3) because SCE&G is suing Defendants pursuant to 28 U.S.C. § 1983 for violations of its rights under the Due Process Clause of the Fourteenth Amendment to the United States Constitution; the Bill of Attainder Clause of Article 1, § 10 of the United States Constitution; and the Takings Clause of the Fifth and Fourteenth Amendments to the United States Constitution.[6] Venue in the District of South Carolina is appropriate under 28 U.S.C. § 1391(b).

         III. LEGAL STANDARD

         Pursuant to Rule 24(a)(2), “the court must permit [a party to intervene as a matter of right if the party has an] interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.” The court may also grant permissive intervention to anyone who “has a claim or defense that shares with the main action a common question of law or fact.” Fed.R.Civ.P. 24(b)(1)(B).

         A party seeking intervention as a matter of right must meet the following requirements “(1) the application to intervene must be timely; (2) the applicant must have an interest in the subject matter of the underlying action; (3) the denial of the motion to intervene would impair or impede the applicant's ability to protect its interest; and (4) the applicant's interest is not adequately represented by the existing parties to the litigation.” Houston Gen. Ins. Co. v. Moore, 193 F.3d 838, 839 (4th Cir. 1999). In Feller v. Brock, the United States Court of Appeals for the Fourth Circuit noted that “liberal intervention is desirable to dispose of as much of a controversy ‘involving as many apparently concerned persons as is compatible with efficiency and due process.'” 802 F.2d 722, 729 (4th Cir. 1986) (quoting Nuesse v. Camp, 385 F.2d 694, 700 (D.C. Cir. 1967)). “The party moving to intervene ‘bears the burden of demonstrating to the court a right to intervene.'” S.C. Coastal Conservation League v. Pruitt, No. 18-CV-330-DCN, 2018 WL 2184395, at *3 (D.S.C. May 11, 2018) (quoting Matter of Richman, 104 F.3d 654, 658 (4th Cir. 1997)). Failure to satisfy even one of these requirements is sufficient to warrant denial of a motion to intervene as a matter of right. See N.A.A.C.P. v. N.Y. 413 U.S. 345, 369 (1973).

         “Permissive intervention is left to the broad discretion of the Court and should be construed liberally in favor of intervention.” Savannah Riverkeeper v. U.S. Army Corps of Eng'rs, No. CV 9:12-610-RMG, 2012 WL 13008326, at *2 (D.S.C. Aug. 14, 2012). “Among the factors a Court should consider in passing upon a motion for permissive intervention includes (1) the timeliness of the motion; (2) the presence of a common question of law or fact; and (3) whether the intervention will unduly delay or prejudice the original parties.” Id. (citing Backus v. S.C., No. 3:11-cv-03120-HFF-MBS-PMD, 2012 WL 406860, at *2 (D.S.C. Feb. 8, 2012)); but see S.C. Coastal Conservation League v. Pruitt, No. 18-CV-330-DCN, 2018 WL 2184395, at *3 (D.S.C. May 11, 2018) (adding a fourth prong that “there must be an independent ground of subject matter jurisdiction.”) (citing Shanghai Meihao Elec., Inc. v. Leviton Mfg. Co., 223 F.R.D. 386, 387 (D. Md. 2004)).

         IV. ...


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