29 F.4th 232
5th Cir.2022Background
- Mississippi Power obtained Commission approval for rate increases in 2013–2014 to fund the Kemper County plant; Mississippi Supreme Court invalidated those rates in 2015 and ordered refunds with interest under Mississippi law (8% per annum, actuarial method).
- Mississippi Power submitted a refund plan (filed July 21, 2015; approved Aug. 6, 2015), issued refund checks Nov.–Dec. 2015, and completed a refund audit May 27, 2016.
- An economist (Mark Cohen) advised ratepayers in Aug. 2016 that the refund interest payments were undercalculated by millions of dollars; plaintiffs filed a putative class action on Nov. 21, 2018 bringing state-law claims and § 1983 Due Process and Takings claims against Mississippi Power and the three PSC commissioners (official capacities).
- The district court dismissed the claims against the commissioners on sovereign-immunity grounds, held the Johnson Act did not foreclose federal jurisdiction over Mississippi Power, but dismissed the federal claims against Mississippi Power as time-barred and declined supplemental jurisdiction over state-law claims.
- On appeal, the Fifth Circuit affirmed dismissal of the commissioners (no ongoing violation under Ex parte Young), held the Johnson Act did not bar federal jurisdiction because the 2015 refund order lacked "reasonable" prior notice to nonparty customers, and vacated the statute-of-limitations dismissal as to Mississippi Power, remanding to determine the correct accrual date.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sovereign immunity / Ex parte Young jurisdiction over PSC commissioners | Commissioners violated federal Due Process and Takings rights and Young permits suit for prospective relief | Sovereign immunity bars suit because injurious conduct was completed in the past (no ongoing violation) | Dismissed commissioners: no Young jurisdiction because the alleged violations occurred in a concluded administrative process |
| Whether the Johnson Act (28 U.S.C. § 1342) bars federal jurisdiction | Ratepayers sought federal forum; argued Johnson Act inapplicable because refund order lacked reasonable notice/hearing | Mississippi Power argued Johnson Act requires state-court exclusivity because order affected rates and state courts provide a remedy | Johnson Act does not bar federal jurisdiction: the 2015 refund order lacked reasonable notice to nonparty customers, so federal court may hear constitutional claims |
| Accrual date for § 1983 claims (limitations) | Accrual occurred when plaintiffs received (or should have known they received) underpaid refunds; later dates based on expert report/FAQ | Mississippi Power argued accrual when Commission approved refund plan (Aug 6, 2015), rendering suit time-barred | Vacated dismissal on limitations: accrual did not occur on Aug. 6, 2015; multiple plausible accrual dates exist (FAQ, receipt of checks, expert discovery), so remand for district court factfinding |
Key Cases Cited
- Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89 (federalism/Eleventh Amendment sovereign-immunity principles)
- Ex parte Young, 209 U.S. 123 (state officers may be sued for prospective injunctive relief to stop ongoing federal-rights violations)
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (notice and opportunity to be heard are fundamentals of due process)
- Wallace v. Kato, 549 U.S. 384 (§1983 accrual rules; claim accrues when plaintiff knows or should know of injury and its cause)
- Piotrowski v. City of Houston, 51 F.3d 512 (circumstances that would lead a reasonable person to investigate further trigger accrual)
- Spec's Fam. Partners, Ltd. v. Nettles, 972 F.3d 671 (no continuing illegality where underlying administrative process concluded)
- Nucor Corp. v. Neb. Pub. Power Dist., 891 F.2d 1343 (Johnson Act process requirement tied to due-process minimums)
- Brooks v. Sulphur Springs Valley Elec. Co-op, 951 F.2d 1050 (one circuit treating state-law notice as satisfying the Johnson Act)
- Miss. Power Co. v. Miss. Pub. Serv. Comm'n, 168 So. 3d 905 (Mississippi Supreme Court decision invalidating the Kemper-related rates and ordering refunds)