Colon De Mejias v. Lamont, 963 F.3d 196

Connecticut’s 1998 electric restructuring act created two Energy Funds (C&LM Fund and Clean Energy Fund) funded by PURA-approved charges on investor-owned electric distribution company (EDC) customers; municipal utility customers do not pay these charges.
PURA-approved tariffs (incorporated into service agreements) authorize EDCs to collect specified charges; statutes govern the use of monies once deposited into the Energy Funds.
Public Act 17-2 (2017) and Public Act 18-81 (2018) redirected approximately $77.5 million annually (later reduced) from the Energy Funds to Connecticut’s General Fund for FY2018–FY2019; transfers were effected by directing EDCs and the Connecticut Green Bank to remit the funds to the State Treasurer.
Plaintiffs (EDC customers, businesses, and nonprofits) sued state officials claiming the transfers violated the Contract Clause (impairing tariff-incorporated contractual rights to dedicated fund uses) and the Equal Protection Clause (unequal taxation of EDC vs. municipal utility customers).
The district court granted summary judgment for defendants, holding (1) the tariffs and statutes did not create a contractual right to control Energy Fund expenditures and (2) plaintiffs lacked a property interest so the transfers were not a tax and taxpayer-standing barred the Equal Protection claim.

Issue	Plaintiffs' Argument	Defendants' Argument	Held
Contract Clause: Did the Act substantially impair contractual rights by diverting Energy Funds?	Tariffs (incorporating statutes/PURA explanations) created vested contractual rights to have charges spent only on conservation/clean-energy programs.	Tariffs only set rates for service; statutes governing fund use do not show legislative intent to contractually bind the State; Legislature may change policy.	No contractual right to control fund expenditures; statutes/tariffs do not form a protected contract; Contract Clause claim fails.
Equal Protection / Taxation: Did the transfer function as a tax that injures EDC customers (and thus permits taxpayer standing)?	The diversion effectively taxes EDC customers but not municipal customers, creating unequal treatment.	The transfers reallocated previously collected revenue; plaintiffs have no property interest in Energy Funds, so this is not a tax and taxpayer-standing is inapplicable.	Plaintiffs lack a property interest; transfer is not a tax for standing purposes; taxpayer-standing doctrine bars the Equal Protection claim.

U.S. Tr. Co. of N.Y. v. New Jersey, 431 U.S. 1 (States retain authority to safeguard public welfare despite Contract Clause)
Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398 (legislative police power can temper Contract Clause restrictions)
Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (Contract Clause not absolute; evaluate state interests)
Nat'l R.R. Passenger Corp. v. Atchison Topeka & Santa Fe Ry. Co., 470 U.S. 451 (legislative statutes generally do not create private contractual vested rights absent clear intent)
Gen. Motors Corp. v. Romein, 503 U.S. 181 (threshold inquiry: whether law substantially impairs a contractual relationship)
Indiana ex rel. Anderson v. Brand, 303 U.S. 94 (statutory language may indicate intent to create contractual obligations)
Dodge v. Bd. of Educ., 302 U.S. 74 (presumption that statutes establish public policy, not contracts)
Flast v. Cohen, 392 U.S. 83 (narrow taxpayer-standing exception for Establishment Clause challenges)
In re U.S. Catholic Conference, 885 F.2d 1020 (taxpayer-standing doctrine limits challenges to tax expenditures)
Bd. of Regents v. Roth, 408 U.S. 564 (property interest determined by state law)
Maislin Indus., U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116 (filed-rate doctrine protects approved rates)
Wegoland Ltd. v. NYNEX Corp., 27 F.3d 17 (ratepayers generally cannot challenge filed rates)