Exelon Generation Co. v. Grumbles
380 F. Supp. 3d 1
D.C. Cir.
2019

Background

  • Exelon owns and Conowingo Dam, a hydroelectric project on the Susquehanna River near the Chesapeake Bay; the dam historically trapped upstream nutrient-laden sediment but its capacity is declining.
  • Exelon applied to FERC for a 50-year license renewal; under CWA §401 Maryland must certify state water-quality compliance before FERC may issue the license.
  • Maryland's Department of the Environment (MDE) issued a §401 Certification imposing large nutrient-reduction obligations (or in-lieu payments) on Exelon and submitted that Certification to FERC in D.C.
  • Exelon contends the Certification effectively forces it to remediate pollution generated mostly upstream in other states or pay roughly $172 million annually, and that the Certification interferes with federal programs (EPA’s Chesapeake Bay TMDL, FERC authority, and DOI settlement obligations).
  • Exelon sued Maryland officials in federal district court in D.C., alleging federal-law and constitutional claims and seeking relief to prevent FERC from incorporating the Certification into a new license; Maryland moved to dismiss for improper venue (and argued state forums control §401 review).
  • The district court held that (1) Exelon’s claims present federal issues and (2) venue in D.C. is proper because a substantial part of the operative events (FERC’s role, submission to FERC, and prospective incorporation/enforcement of the Certification) occurred in the District.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the suit raises federal questions sufficient for federal court jurisdiction Exelon: Certification conflicts with federal statutes/programs and raises constitutional claims, so federal jurisdiction under §1331 exists Maryland: §401 certification is governed by state law and traditionally reviewed in state court Held: Federal claims are plausible; federal jurisdiction exists and Maryland's motion to dismiss for lack of federal question is denied
Whether venue is proper in D.C. under 28 U.S.C. §1391(b)(2) Exelon: FERC (D.C.) requested and received the Certification; FERC will include and enforce it in D.C.; operative events occur in D.C. Maryland: Certification process occurred in Maryland; D.C. contacts are procedural only; Leroy controls Held: Venue proper in D.C.; a substantial part of operative events occurred in the District, so dismissal for improper venue is denied in part
Whether Leroy mandates dismissal when state action primarily occurred elsewhere Exelon: Leroy is inapplicable under the amended §1391; multiple districts can have substantial events Maryland: Leroy shows the claim's locus is Maryland so D.C. improper Held: Leroy is distinguishable; the 1990 amendments to §1391 allow venue where a substantial part of events occurred even if other districts also have contacts
Whether the Certification is legally operative absent FERC action Exelon: Certification will become binding only when FERC incorporates it into a federal license in D.C., so D.C. involvement is essential Maryland: Inclusion in a federal license is a future procedural matter; substantive acts occurred in Maryland Held: The Certification’s legal effect depends on FERC action in D.C.; that connection gives D.C. operative significance for venue

Key Cases Cited

  • Hoopa Valley Tribe v. FERC, 913 F.3d 1099 (D.C. Cir. 2019) (discussing states’ use of §401 in relicensing and federal review limits)
  • Keating v. FERC, 927 F.2d 616 (D.C. Cir. 1991) (noting §401 certification disputes often turn on state environmental law)
  • PUD No. 1 of Jefferson County v. Wash. Dep't of Ecology, 511 U.S. 700 (1994) (FERC may not review §401 conditions imposed by states)
  • S.D. Warren Co. v. Maine Bd. of Envtl. Prot., 547 U.S. 370 (2006) (FERC lacks authority to alter state §401 conditions)
  • Alcoa Power Generating, Inc. v. FERC, 643 F.3d 963 (D.C. Cir. 2011) (state §401 decisions generally reviewable only in state court when they implicate state law)
  • Lake Carriers' Ass'n v. EPA, 652 F.3d 1 (D.C. Cir. 2011) (constitutional challenges to §401 certification may be raised in federal court)
  • Del. Riverkeeper Network v. Sec'y Pa. Dep't of Envtl. Prot., 833 F.3d 360 (3d Cir. 2016) (§401 certification is integral to the federal CWA scheme and not purely state law)
  • U.S. Steel Corp. v. Train, 556 F.2d 822 (7th Cir. 1977) (state §401 regulations may be challenged on federal constitutional grounds in federal court)
  • Verizon Md., Inc. v. Pub. Serv. Comm'n of Md., 535 U.S. 635 (2002) (test for federal-question jurisdiction under §1331)
  • Leroy v. Great W. United Corp., 443 U.S. 173 (1979) (venue analysis pre-amendment; locus of claim where statutory action occurred)
  • Lamont v. Haig, 590 F.2d 1124 (D.C. Cir. 1978) (commonsense appraisal of events having operative significance for venue)
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