ENTERGY, ARKANSAS, INC.; ENTERGY GULF STATE, INC.; ENTERGY LOUISIANA, INC.; WOLF CREEK NUCLEAR OPERATING CORPORATION; OMAHA PUBLIC POWER DISTRICT; CENTRAL INTERSTATE LOW-LEVEL RADIOACTIVE WASTE COMPACT COMMISSION, PLAINTIFFS-APPELLEES,
US ECOLOGY, INC., INTERVENOR,
v.
STATE OF NEBRASKA; DEPARTMENT OF ENVIRONMENTAL QUALITY, NEBRASKA; RANDOLPH WOOD; JAY RINGENBERG; NEBRASKA DEPARTMENT OF HEALTH AND HUMAN SERVICES REGULATION & LICENSURE; DAVID P. SCHOR; CHERYL ROGERS, DEFENDANTS-APPELLANTS,
JOHN DOE; JANE DOE; AND DOE COMPANIES 1-20, DEFENDANTS.
No. 99-2376
UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
Submitted: January 10, 2000
Filed: April 12, 2000
Appeal from the United States District Court for the District of Nebraska.[Copyrighted Material Omitted][Copyrighted Material Omitted]
Before Wollman, Chief Judge, and Morris Sheppard Arnold and Murphy, Circuit Judges.
Murphy, Circuit Judge.
The Central Interstate Low-Level Radioactive Waste Commission (the Commission) and Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Wolf Creek Nuclear Operating Corporation, and the Omaha Public Power District (the Utilities) brought this action against the State of Nebraska, its Department of Environmental Quality (EQ) and its Department of Health and Human Services and Licensure (HHS),1 and several individually named state officers (collectively Nebraska). The plaintiffs alleged that Nebraska had breached obligations owed under the Central Interstate Low-Level Radioactive Waste Compact (the Compact), which Nebraska, Arkansas, Kansas, Louisiana, and Oklahoma had joined in 1986. In the Compact the states agreed to develop disposal facilities for low level nuclear waste generated within their borders, and in 1989 the Commission selected Nebraska as the host state for such a facility. The Commission and the Utilities allege that Nebraska has attempted to evade its obligations under the Compact since 1991, by delaying the decision on a license for the proposed facility and by then wrongfully denying a license. They seek injunctive relief, a declaratory judgment that Nebraska has violated its fiduciary and contractual obligations under the Compact, an accounting, compensatory and consequential damages, the removal of Nebraska from further supervision of the licensing process and appointment of a third party to exercise supervision, and attorney fees and costs. This appeal by Nebraska is from a preliminary injunction issued by the district court2 which enjoined the state parties from continuing with the administrative proceeding related to denial of the license for the disposal facility.3 We affirm.
I.
A.
Congress passed the Low-Level Radioactive Waste Policy Act of 1980 (the Act), 42 U.S.C. 2021b et seq. (1994) (amended 1986), "to promote the development of regional low-level radioactive waste disposal facilities." Concerned Citizens of Neb. v. U.S. Nuclear Regulatory Comm'n,
After the Commission selected Nebraska as the host state for a radioactive waste disposal facility in December 1987, it contracted with intervenor US Ecology to construct and maintain the facility. Nebraska established procedures and standards for licensing the facility. Under the state regulations, US Ecology was required to pay all costs associated with licensing, Neb. Rev. Stat. 81-1579(2) (1999 Reissue), but the Commission agreed to reimburse US Ecology for these costs. Through separate agreements the Commission passed these costs along to the Utilities. The licensing proceedings to date have cost more than $74 million.
US Ecology submitted its original license application for the construction of a low level radioactive waste disposal facility in Boyd County, Nebraska in 1990. The application was directed to the Low Level Radioactive Waste Program, operated by EQ and HHS. Nebraska proceeded to address some 700 questions and comments to US Ecology, all of which required a response. Entergy Ark., Inc. v. Nebraska,
US Ecology initiated an appeal from the denial of the facility license by opening a contested case proceeding under Nebraska law, but it later withdrew this appeal in favor of filing an amended license application. Entergy Ark., Inc.,
Following this announcement, the Commission met to impose a deadline for the completion of Nebraska's administrative review. It set January 14, 1997 as the deadline for action on US Ecology's license application. Nebraska then sued the Commission in federal court to contest its authority to set such a deadline. The district court's decision upholding the Commission's authority was affirmed by this court. See Nebraska v. Central Interstate Low-Level Radioactive Waste Comm'n,
Nebraska denied US Ecology's second license application in December 1998. The state asserted that the site provided insufficient depth to the water table which increased the likelihood of groundwater contamination, that engineered improvements to the site could not be considered under the applicable regulations, and that US Ecology had not demonstrated its financial ability to construct and maintain the disposal facility. Appellee's App. II, 463-77. US Ecology appealed the denial by again initiating a contested case proceeding under Nebraska law.4
While US Ecology's license applications were pending, a number of unsuccessful lawsuits were brought by Nebraska, two community groups (Concerned Citizens of Nebraska and the Boyd County Local Monitoring Committee), and Boyd County. See County of Boyd v. US Ecology, Inc.,
After US Ecology sought to appeal the denial of its amended application to construct the facility through a contested case proceeding, the Utilities filed this action and moved for a temporary restraining order and a preliminary injunction to enjoin the state proceeding. The Utilities alleged that Nebraska's actions to delay approval of a facility license violated their statutory and contractual rights under the Compact, as well as their constitutional rights. They sought preliminary and permanent injunctive relief to bar further state administrative proceedings, a declaratory judgment that Nebraska had violated its obligations under the Compact, money damages, and attorney fees.
The Utilities named the Commission as a defendant, but it moved to realign itself as a plaintiff and brought a cross-claim against Nebraska for impeding the licensing of the disposal facility in violation of the state's contractual and fiduciary obligations to the Commission. The relief the Commission sought included a declaratory judgment that Nebraska had violated its obligations under the Compact, an accounting of the funds received by Nebraska in prelicensing fees, damages, the removal of Nebraska from control over the licensing process, the appointment of a third party to complete the licensing process, and attorney fees. The district court granted the Commission's motion to realign itself as a plaintiff and issued a temporary restraining order and then a preliminary injunction. The current appeal by Nebraska is from the granting of the Commission's motion for preliminary injunctive relief.5
B.
After a lengthy evidentiary hearing, the district court applied the Dataphase factors to the evidence and found that the Commission had demonstrated that it had a substantial likelihood of success on the merits and that it would suffer irreparable harm without injunctive relief. Dataphase Sys., Inc. v. C.L. Sys., Inc.,
The district court found bad faith on the part of Nebraska and that state officials had continuously and substantially interfered with the licensing process in order to deny a license to US Ecology. Entergy Ark., Inc.,
The governor intervened in a 1992 dispute between EQ and HHS as to whether they could consider engineered improvements to the site in determining its suitability. EQ favored that position. HHS asserted, however, that the site had to be considered in its unimproved condition. The agencies sought an opinion on the issue from the Nebraska Attorney General. When Steve Moeller, an aide to the governor, discovered that the opinion would conclude that engineered improvements should be considered, he informed senior officials in the administration about the draft opinion and suggested that "marching orders" be given to the two agencies. Apparently believing that the draft conclusion would increase the likelihood of success for the license application, Governor Nelson met with officials from both agencies on January 11, 1993. US Ecology's initial application was denied by EQ and HHS eleven days later, and the opinion from the Attorney General was never issued. Id. at 991-992.
An opinion was also obtained from outside counsel before the denial of US Ecology's initial license application in January 1993. EQ Director Wood sought advice from Collier, Shannon & Scott6 on whether wetlands made the Boyd County site unsuitable for the disposal of low level radioactive waste under Nebraska regulations. In a lengthy legal opinion dated October 1, 1991, Collier advised that placement of the disposal facility at the Boyd County site would not violate the regulations. Nonetheless, the January 1993 Notice of Intent to deny the license listed the presence of wetlands on the proposed site as one of the reasons for the denial. Wood explained at the evidentiary hearing that he had rejected the legal opinion because he read the regulations differently. Hearing Tr., 369-71. The district court found this explanation not credible. See Entergy Ark., Inc.,
The district court also found bad faith in Nebraska's continuing refusal to set a budget or a timeline for the licensing process. The state auditor of Public Accounts had recommended in June 1992 that the state adopt a budget and timetable and amend its contract with the primary contractor, HDR Engineering, Inc., to control costs. These recommendations were not followed. Id. at 982. EQ and HHS represented in June 1995 that their review of US Ecology's second license application would take approximately one year to complete. Then in August 1996, they informed US Ecology that two critical review documents, the Draft Environmental Impact Assessment and Draft Safety Evaluation Report, would not be ready for public review until October 1997. Id. at 984.
The district court found further evidence of bad faith in Nebraska's 'change of heart' between the issuance of the draft reports and the denial of the second license application in August 1998. Nebraska had represented in draft reports that contamination of groundwater through contact with radioactive waste under US Ecology's plan was "not plausible."7 Nonetheless, EQ and HHS rejected the second license application on the ground that the site would not adequately prevent groundwater contamination.8 This assertion directly contradicted factual findings EQ and HHS had made in the draft reports.9 Id. at 985-86. The district court found the reasons proffered by EQ and HHS officials for this change in their position to be not credible. Randolph Wood testified at the hearing that the change resulted from new information provided by US Ecology,10 but the court found Wood's explanation insufficient to overcome the strong evidence that the reasons for the license denial were pretextual. Id. at 985-86. The court noted that much of the 'new' information had been known to EQ and HHS no later than 1993, that the information had been provided on the express representation that it would not be used for purposes of technical review, and that the agencies had "eyeballed" the data in making the new findings in denying the license application, instead of using the computer models employed for the draft reports. Id. at 986. The district court found the failure to follow a consistent methodology "problematic at best, and evidence of bad faith at worst." Id.
The district court made numerous other findings supporting the inference that political factors had tainted the licensing process. The court noted that HHS had continued to participate in the licensing process even after a Nebraska state court had ruled that the department did not have statutory authority to review the license application, id. at 981, that Nebraska had ordered its primary contractor to reduce license review activities following a dispute with the Commission over federal rebate funds in 1995, id. at 983, that Nebraska had engaged in continuous but unsuccessful litigation over the location of the facility in Nebraska since 1992, id. at 986-87, that Nebraska had sought to prevent any consideration of the question of political bias in the contested case proceeding, id. at 988-89, and that EQ and HHS did not appoint previously uninvolved individuals to make the final departmental decisions until after the temporary restraining order issued. Id. at 989-990.11
The district court found that the Commission had made a sufficient showing of irreparable harm to support a preliminary injunction for two reasons: 1) costs for the contested case proceeding and the associated litigation, projected to amount to some $7.5 million that would be collected from US Ecology and passed on to the Commission, would likely be unrecoverable because of the Eleventh Amendment; and 2) Nebraska would likely try to use the results from the contested case proceeding to preclude consideration of issues in federal court. Id. at 992-93. The district court also found that the balance of harms and the public interest favored issuance of the injunction.
The district court concluded that none of the legal defenses relied on by Nebraska barred the issuance of an injunction. See id. at 995-96. Nebraska had waived its sovereign immunity by entering into the Compact, exhaustion of administrative remedies was not required because the Commission's interest in immediate judicial review outweighed Nebraska's interest in administrative autonomy, abstention doctrines did not apply because the Commission had made a substantial showing of Nebraska's bad faith, and the Anti-Injunction Act, 28 U.S.C. 2283 (1994), did not bar an injunction because the enjoined state proceeding was administrative rather than judicial. Entergy Ark., Inc.,
II.
Nebraska argues on appeal that the district court lacked jurisdiction over it, that the Commission failed to make the necessary showing for a preliminary injunction, and that the injunction violated the Anti-Injunction Act, but it does not challenge any of the district court's factual findings. The Commission responds that Nebraska waived its sovereign immunity by entering into the Compact, that the district court had jurisdiction under Ex parte Young,
A.
Nebraska first argues that the claims asserted against it are barred by sovereign immunity and that it did not waive that immunity by entering into the Compact. Relying on cases such as Edelman v. Jordan,
The district court found that Nebraska had at least partially waived its Eleventh Amendment immunity. See Entergy Ark., Inc.,
The Commission shall . . . require all party states and other persons to perform their duties and obligations arising under this compact by an appropriate action in any forum designated in section e. of Article IV[.]
Article IV.e in turn provides a means by which the Commission may enforce the obligations of the parties:
The Commission may initiate any proceedings or appear as an intervenor or party in interest before any court of law, or any Federal, state or local agency, board or Commission that has jurisdiction over any matter arising under or relating to the terms of the provisions of this compact.
Since the Commission was seeking to enforce obligations under the Compact, specifically Nebraska's obligation of "good faith" under Article III.f,13 the district court concluded that the Eleventh Amendment did not bar the action. Id. The Commission continues to rely on Articles IV.m.8 and IV.e and argues that these provisions waive Nebraska's sovereign immunity in an action such as this.
Nebraska relies on two other provisions for the proposition that the exclusive enforcement remedy for the Commission under the Compact is to revoke a state's membership or suspend its privileges:
The Commission may, by two-thirds affirmative vote . . . revoke the membership of any party state which . . . shall be found to have arbitrarily or capriciously denied or delayed the issuance of a license or permit to any person authorized by the Commission to apply for such license or permit[,]
Art. V.g, and
Any party state which fails to comply with the terms of this compact or fulfill its obligations hereunder, may, after notice and hearing, have its privileges suspended or its membership in the compact revoked by the Commission.
Art.VII.e.
It has long been recognized that a state may waive its Eleventh Amendment immunity. See College Savings Bank v. Florida Prepaid Post-secondary Education Expense Bd.,
The nature of the Compact supports the Commission's argument, for the Compact is a Congressionally sanctioned agreement which authorizes, and indeed requires, the Commission to enforce the obligations it imposes upon party states. See College Savings Bank v. Fla. Prepaid Post-secondary Educ. Expense Bd.,
The Commission also argues that there is an alternate basis for jurisdiction under Ex parte Young,
While Nebraska is correct that violations of state law cannot be enjoined by a federal court under Ex Parte Young, see Pennhurst State School & Hospital v. Halderman,
Nebraska's argument that injunctive relief under Ex Parte Young cannot be premised on proof of past misconduct by the state is similarly without merit: such relief is "is available where a plaintiff alleges an ongoing violation of federal law, and where the relief sought is prospective rather than retrospective." Idaho v. Coeur D'Alene Tribe of Idaho,
The district court had jurisdiction to issue its injunction. By entering into the Compact, Nebraska waived a portion of its sovereign immunity. The district court also had jurisdiction to enjoin state officers under Ex parte Young because the relief was solely prospective and because the Commission made a sufficient showing of Nebraska's ongoing violation of federal law.
B.
The relevant factors on a motion for a preliminary injunction are: "(1) the probability of success on the merits; (2) the threat of irreparable harm to the movant; (3) the balance between this harm and the injury that granting the injunction will inflict on other interested parties; and (4) whether the issuance of an injunction is in the public interest." Sanborn Mfg. Co., Inc. v. Campbell Hausfield/Scott Fetzer Co.,
Nebraska argues that the district court erred in issuing the preliminary injunction because the Commission has shown neither that it is likely to succeed on the merits of its claim nor that it would suffer irreparable harm if an injunction were not granted The Commission responds that it is likely to succeed on the merits and that it will be irreparably harmed if the state administrative proceeding is not enjoined because it will not be able to recoup the costs of that proceeding and because it could be collaterally estopped by it.
The Commission asserts that it has made a sufficient showing of likelihood of success on the merits because it has shown both that Nebraska wrongfully delayed and denied US Ecology's license application in violation of its obligations under the Compact and that the district court has jurisdiction to grant the equitable relief it seeks. In response, Nebraska reiterates its jurisdictional arguments, asserting that the Eleventh Amendment bars any relief against the state of Nebraska or its officers and that the Compact only authorizes the Commission to seek relief by means of a hearing to revoke its membership.
We have already rejected Nebraska's Eleventh Amendment argument, and there is sufficient evidence in the record to support the district court's factual findings and its conclusion that the Commission has shown a likelihood of success on the merits. This includes evidence of interference in the licensing process by Nebraska's executive branch, delay and excessive expenditures fostered by the state, and the denial of the second license application on an apparent pretext.
Nebraska argues that the district court erred in finding irreparable harm. It asserts that litigation costs, even if unrecoverable, can not constitute irreparable injury and that any injury arising from issue or claim preclusion is speculative because it depends on the outcome of a proceeding that has yet to take place. The Commission responds that it is being taxed under the applicable state regulations not only with its own litigation costs, but also with those of Nebraska. This distinguishes its situation from the general American rule in which litigants are required to pay only their own costs.14 The Commission further argues that the assertion of issue preclusion by Nebraska is not speculative in light of the record.
Injunctive relief is appropriate when legal process is used not to provide an impartial forum for the resolution of legal disputes, but rather to impede the exercise of federal rights. See Dombrowski v. Pfister,
The Commission has met that standard here. The party states, the Commission, and US Ecology had the right under the Compact to fair and impartial consideration of US Ecology's license applications. The Commission has submitted substantial evidence which tends to show that Nebraska did not provide, or intend to provide, impartial consideration of those applications. Nebraska has instead used its administrative process wrongfully to delay and deny the license, at considerable expense to US Ecology, the Commission, and the Utilities. Under these circumstances, the deference generally due a state's administrative proceeding does not apply. The Commission has made a sufficient showing of Nebraska's abuse of the administrative process to demonstrate irreparable harm.
The importance of preliminary injunctive relief is heightened in this case by the likely unavailability of money damages should the Commission prevail on the merits of its claims. Relief in the form of money damages could well be barred by Nebraska's sovereign immunity. See Idaho v. Coeur D'Alene Tribe of Idaho,
The other Dataphase factors do not weigh against the preliminary injunction. The district court's finding that Nebraska would suffer no harm if the injunction were granted is not contested on appeal. The only harm posed to Nebraska seems to be the interruption in its licensing proceeding during the time between the issuance of the preliminary injunction and the resolution of the merits. Any such harm seems negligible considering the time that has already passed since US Ecology's initial license application. In a finding not challenged on appeal, the district court found that the public interest favors the issuance of the preliminary injunction, and we agree. This case affects not only Nebraska residents, but also residents of Kansas, Oklahoma, Arkansas, and Louisiana, who also have interests under the Compact.
After thorough consideration of the record and the relevant factors, we conclude that the district court did not abuse its discretion in issuing the preliminary injunction.
C.
Finally, Nebraska asserts that the district court order violated the Anti-Injunction Act. Nebraska argues that the preliminary injunction effectively operates against the Nebraska state courts because its administrative process allows for appeal to its courts under Neb. Rev. Stat. 84-917(2)(a) (1996 Reissue). The Commission responds that the federal statute applies by its own terms only to state court proceedings, not to state administrative proceedings. The question of whether the Anti-Injunction Act applies to administrative proceedings is an issue of first impression in this circuit.
The Anti-Injunction Act provides that "A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of jurisdiction, or to protect or effectuate its judgments." 28 U.S.C. 2283 (1994). Its plain language refers only to injunctions issued by federal courts "to stay proceedings in a State court." Id. While the Supreme Court has expressly declined to address whether the Anti-Injunction Act applies to state administrative proceedings, see Gibson v. Berryhill,
Nebraska argues that the agency administering the contested case proceeding is the equivalent of a "state court" for purposes of the Anti-Injunction Act because the proceeding is judicial in nature. This argument is without merit, as shown by decisions of the Nebraska Supreme Court. Although "the exercise of discretion to grant or deny a license . . . is a quasi-judicial function[,]" Stoneman v. United Neb. Bank,
IV.
After a thorough review of the record, we conclude that the district court had jurisdiction to issue injunctive relief, that it did not abuse its discretion in issuing the injunction, and that it did not violate the Anti-Injunction Act. Accordingly, we affirm the preliminary injunction issued by the district court.
Notes:
Notes
HHS was previously known as the Nebraska Department of Heath. For ease of reference, the department is referred to as HHS throughout this opinion.
The Honorable Richard G. Kopf, Chief Judge, United States District Court for the District of Nebraska.
Also pending in this court are appeals by Nebraska, docketed on December 17, 1999, from orders of the district court denying its motions to dismiss the claims against it. See Entergy Ark., Inc. v. Nebraska,
Under Nebraska law, the hearing officer who presides over the contested case proceeding is appointed by the agency head whose decision is being appealed. See Neb. Rev. Stat. 84-913 et seq. (1999 Reissue); Slack Nursing Home v. Dept. of Social Servs.,
The Utilities had agreed to withdraw their injunction motion if the Commission's were granted.
Collier, Shannon & Scott is now Collier, Shannon, Rill, and Scott. The firm represented Nebraska as outside regulatory counsel in the administrative proceedings and continues to represent Nebraska in this case.
Section 2.4 of the Draft Safety Evaluation Report (DSER) issued in October 1997 contains findings concerning the hydrological characteristics of the proposed site. One part of the report extensively analyzed the possibility of waste contaminating the site's groundwater and found that such contamination, even during periods of high groundwater, was "not plausible." DSER at 2-32 to 2-33.
The denial of the license application listed six negative findings which implicated numerous Nebraska regulations. Five of those six findings relate to the potential contact between waste and groundwater. The sixth relates to US Ecology's financial ability to construct and maintain the facility.
Findings in the second license denial directly contradict those in the DSER. Nebraska Administrative Code Title 194, Chapter 5, Section 001.01G states: "The disposal site shall provide sufficient depth to the water table that ground water intrusion, perennial or otherwise, into the waste will not occur. In no case will disposal be permitted in the zone of fluctuation of the water table." The 1997 Draft Safety Evaluation Report noted with respect to this regulation that "US Ecology concluded that, because all waste would be placed above grade, even a rising water table would not contact waste. The LLRW [Low Level Radioactive Waste] Program concurred with this position." DSER, at 2-32. In contrast, the 1998 denial of the license application stated "[t]he application does not provide an adequate zone between the waste and the water table to ensure that disposal will not occur in the zone of fluctuation of the water table." Appellee's App. II, 465.
Wood testified that groundwater level hydrographs provided by US Ecology in June 1998, for the years 1995, 1996, and 1997, documented groundwater near or at the surface of the site that could potentially contact waste. Hearing Tr. 409.
Under Nebraska law, agency heads generally make the final decision in a contested case proceeding after receiving a recommendation from the hearing officer. See n.4 supra. After the temporary restraining order issued, both EQ and HHS made new appointments to ensure that uninvolved individuals would make the final decisions arising from the contested case proceeding.
The Utilities have filed a brief in support of the Commission's arguments.
Article III.f provides that "Each party state has the right to rely on the good faith performance of each other party state."
See Neb. Rev. Stat. 81-1579(2) (1999 Reissue) (requiring potential licensee to pay all costs associated with licensing).