Smalley v. Duke Energy Florida, Inc.
154 So. 3d 439
Fla. Dist. Ct. App.2014Background
- In 2006 Florida enacted section 366.93 and amended section 403.519 to encourage utility investment in new nuclear plants by allowing recovery of preconstruction and carrying costs before commercial operation.
- The PSC authorized Duke Energy Florida and Florida Power & Light (the Utilities) to undertake nuclear construction and capacity upgrades; the statutes permit cost recovery even if a project is later not completed.
- Appellants (customers) sued, alleging the statutes are facially unconstitutional under U.S. Const. art. I, § 10 (impairment of contracts) because utilities can elect not to build yet retain preconstruction costs plus a return.
- The trial court dismissed the second amended complaint with prejudice; appellants appealed the dismissal.
- The Second District reviewed the facial constitutional challenge de novo and focused on whether the statutes are invalid in all possible applications.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether sections 366.93 and 403.519 are facially unconstitutional as an impairment of contract rights | Statutes permit utilities to charge customers preconstruction costs and a return even when the utility "elects" not to build, defeating any public purpose and thus impairing contracts | Statutes have plainly legitimate applications (e.g., shifting risk to encourage investment; recovery when projects are precluded for reasons beyond utility control); facial challenge fails | Affirmed dismissal: plaintiffs failed to show the statutes are unconstitutional in all applications; a facial challenge fails when any valid circumstance exists |
Key Cases Cited
- S. Alliance For Clean Energy v. Graham, 113 So. 3d 742 (Fla. 2013) (discusses legislative policy of shifting risk to encourage utility investment in nuclear projects)
- Fla. Dep't of Revenue v. City of Gainesville, 918 So. 2d 250 (Fla. 2005) (standard: constitutionality reviewed de novo)
- Abdool v. Bondi, 141 So. 3d 529 (Fla. 2014) (facial challenge considers only statutory text, not particular application)
- United States v. Salerno, 481 U.S. 739 (U.S. 1987) (facial invalidation requires no set of circumstances under which statute would be valid)
- State v. Bales, 343 So. 2d 9 (Fla. 1977) (if any facts justify a law, courts must uphold it)
- Wash. State Grange v. Wash. State Republican Party, 552 U.S. 442 (U.S. 2008) (facial challenge fails when statute has a "plainly legitimate sweep")