City of Lowell v. ENEL NORTH AMERICA, INC.
796 F. Supp. 2d 225
D. Mass.2011Background
- City of Lowell sues ENEL for breach of contract and declaratory relief over five-foot flashboards at Pawtucket Dam on the Merrimack River.
- Wang Agreement (1980) restricted flashboards to four feet Mar–Jun and five feet otherwise upstream from Wang property; City acquired Wang property in 1994.
- FERC license (1983) authorized a 5-foot flashboard dam; license later transferred to ENEL's Boott subsidiary; FERC began evaluating crest control options in 2008.
- Boott proposed a 4 + 1 design and sought temporary permission for four-foot boards in 2009, with top boards removable after July 1, 2009.
- FERC, in 2010, directed Boott to file a preferred solution within 15 days; Boott planned a pneumatic crest control gate system and license amendment.
- City moved to intervene in FERC proceedings (July 22, 2010) and was allowed to participate, seeking enforcement of the Wang Agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does FPA preempt the Wang Agreement? | Lowell argues Wang is not preempted and private contracts may survive FPA. | ENEL argues FPA preempts state-like contracts that conflict with FERC license. | Wang Agreement preempted by FPA/FERC license. |
| Does 16 U.S.C. § 821 create an exception to preemption? | City contends § 821 exempts municipal water use rights from preemption. | ENEL contends § 821 does not apply to this hydroelectric project under § 4(2). | § 821 exception does not apply; project is within exclusive FERC authority. |
| Do the Wang Agreement and FERC license conflict? | City maintains license does not mandate a five-foot height and allows four-foot boards with limits. | ENEL asserts license controls heights and supports Boott's actions. | There is a conflict; FERC permissions (temporary four-foot plus top boards) conflict with Wang, leading to preemption. |
| Is amendment of the complaint futile with respect to Boott and tort claims? | City seeks to add Boott and pursue contract and tort claims. | ENEL argues amendment would be futile given preemption and lack of viable state tort claims. | Amendment denied; Wang preemption bars new contract and tort theories against Boott. |
Key Cases Cited
- California v. FERC, 495 U.S. 490 (1990) (preemption where state rules hinder FPA license compliance)
- D.R. Wilder Mfg. Co. v. Corn Prods. Refining Co., 236 U.S. 165 (1915) (courts won't enforce illegal contracts)
- First Iowa Hydro-Electric Coop. v. FPC, 328 U.S. 152 (1946) (§ 821 refers to proprietary rights; FERC has exclusive authority)
- Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311 (1981) (preemption when federal regulation occupies field)
- Ark. La. Gas Co. v. Hall, 453 U.S. 571 (1981) (preemption of state law claims already addressed by federal agency)
- Palmer v. Liggett Grp., Inc., 825 F.2d 620 (1st Cir.1987) (dismissing state tort claims preempted by federal regulation)
- Skokomish Indian Tribe v. United States, 332 F.3d 551 (9th Cir.2003) (treating improper collateral attack on agency license)
- Edgarton v. H.P. Welch Co., 321 Mass. 603 (Mass. 1947) (Massachusetts recognizes limits on certain tort claims in such contexts)