On Wednesday, as my Reuters pal Nate Raymond ably reported, the 2nd Circuit Court of Appeals handed a big victory to the energy company Entergy and its lawyers at Quinn Emanuel Urquhart & Sullivan, upholding a Vermont federal court injunction that effectively bars the state from shutting down Entergy’s Vermont Yankee nuclear plant. A three-judge 2nd Circuit panel agreed with U.S. District Judge Garvan Murtha that Vermont state laws that would have had the effect of closing the plant are pre-empted by the federal Atomic Energy Act.
To reach that decision, the appeals court, like Murtha, looked beyond the plain language of the enacted laws to legislative history suggesting that the statutes were motivated by safety concerns about nuclear energy, which the U.S. Supreme Court has held to be the province of the federal government. Even though the laws on their face addressed economic and policy concerns that are within the state’s purview, the 2nd Circuit said the admittedly incomplete legislative record indicated that Vermont had engaged in statutory sleight of hand to hide its true intentions.
The appellate deep dive into the state legislative record should give pause to every state government within the 2nd Circuit. In fact, the panel’s ruling seems to confirm the worst fears of the National Conference of State Legislatures, as outlined in an amicus brief urging the appeals court to overturn Murtha. “Legislative record excerpts are neither an appropriate means of controlling legislative authority nor a reliable indicator of legislative motivation,” the brief said. “Left uncorrected, this type of misguided judicial inquiry will inevitably chill state legislatures’ willingness to debate policy issues robustly and to solicit a variety of viewpoints about proposed legislation openly. Accordingly, all state legislatures – and indeed all courts – should be concerned.”
The “historic freedom of legislative debate” is endangered by the 2nd Circuit’s decision, said William Sorrell, Vermont’s attorney general (and a defendant in Entergy’s original suit), in an interview with Nate Raymond on Wednesday. “You go to any issue with constitutional (overtones),” Sorrell said. “It would be unfortunate if state legislatures didn’t have open and free debate, if you take statements of a handful and the court says the legislature was (improperly) motivated…. The decision today is not great news for state legislative bodies.”
This issue of federal pre-emption and state legislative intent has some complicated wrinkles, but, as the amicus brief and the Vermont AG’s comments make clear, it’s important. The Supreme Court ruling at the heart of the debate is 1983′s Pacific Gas & Electric v. State Energy Resources Conservation and Development Commission. Like the 2nd Circuit’s Vermont case, PG&E addressed a state law, this one in California, that effectively restricted nuclear power plants. And like the Vermont laws, the California statute was challenged on the grounds that it was pre-empted by the federal Atomic Energy Act of 1954. The Supreme Court held that the Atomic Energy Act divides the authority to regulate nuclear power plants between state and federal governments. “As we view the issue,” the court said, “Congress, in passing the 1954 Act and in subsequently amending it, intended that the federal government should regulate the radiological safety aspects involved in the construction and operation of a nuclear plant, but that the States retain their traditional responsibility in the field of regulating electrical utilities for determining questions of need, reliability, cost and other related state concerns.” The court said its job was to decide whether the California law was based on an economic or safety rationale. If it was motivated by safety, it would be federally pre-empted. If not, it would survive Supreme Court scrutiny.