Lake v. Marshall-DeKalb Electric Cooperative

Filing 39

MEMORANDUM OPINION AND ORDER - Because the Court finds that it has jurisdiction over the plaintiffs claims, the Court denies the plaintiffs motions for reconsideration. Additionally, the Court denies the plaintiffs request for leave to file a permissive interlocutory appeal to the Eleventh Circuit. Signed by Judge Madeline Hughes Haikala on 3/11/2016. (KEK)

FILED
2016 Mar-11 PM 04:44
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
STEWART P. SPARKS, III, on behalf of )
himself and others similarly situated,
)
)
Plaintiff,
)
)
v.
)
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CULLMAN ELECTRIC
)
COOPERATIVE,
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)
Defendant.
)
TAMMY BATES on behalf of herself
and others similarly situated,

)
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)
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)

Plaintiff,
v.
JOE WHEELER ELECTRIC
MEMBERSHIP CORPORATION,
Defendant.
JOHN LAKE on behalf of himself and
others similarly situated,

)
)
)
)
)
)
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)
)
)
)

Plaintiff,
v.
MARSHALL-DEKALB ELECTRIC
COOPERATIVE,
Defendant.
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Case No. 5:15-cv-322-MHH

Case No. 5:15-cv-334-MHH

Case No. 4:15-cv-339-MHH

HERMAN KRITNER, JR., on behalf of
himself and others similarly situated,
Plaintiff,
v.
ARAB ELECTRIC COOPERATIVE,
Defendant.
THOMAS MALONE, on behalf of
himself and others similarly situated,

)
)
)
)
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)
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)
)
)
)
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)
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)
)
)

Plaintiff,
v.
FRANKLIN ELECTRIC
COOPERATIVE,
Defendant.
JOHN HOLLIS NEYMAN, on behalf of
himself and others similarly situated,
Plaintiff,
v.
CHEROKEE ELECTRIC
COOPERATIVE,
Defendant.

)
)
)
)
)
)
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)
)

Case No. 4:15-cv-341-MHH

Case No. 3:15-cv-387-MHH

Case No. 4:15-cv-586-MHH

MEMORANDUM OPINION AND ORDER
The plaintiffs in these consolidated putative class actions allege that the
defendant electric cooperatives have failed to reduce electric resale rates or
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distribute excess revenues as patronage capital in violation of Alabama Code § 376-20. After all of the defendant electric cooperatives removed their cases to
federal court, each plaintiff moved to remand, and the Court denied each plaintiff’s
motion to remand.1 The plaintiffs have now filed motions for reconsideration.
(See Doc. 42 in case 15-322; Docs. 48 & 49 in case 15-334; Doc. 36 in 15-339;
and Doc. 35 in case 15-341). Alternatively, the plaintiffs ask the Court to grant
them leave to file an interlocutory appeal to the Eleventh Circuit. (See id.). This
memorandum opinion addresses the plaintiffs’ motions for reconsideration and
alternative requests for an interlocutory appeal.2
I.

STANDARD FOR RECONSIDERATION
“In the interests of finality and conservation of scarce judicial resources,

reconsideration of an order is an extraordinary remedy and is employed sparingly.”
Rueter v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 440 F. Supp. 2d 1256, 1267
(N.D. Ala. 2006). “Indeed, as a general rule, ‘[a] motion to reconsider is only
available when a party presents the court with evidence of an intervening change in
1

Before the actions were consolidated for pretrial purposes, Judge Virginia Hopkins denied
motions to remand in the cases over which she originally presided. See Doc. 23 in Lake v.
Marshall-DeKalb Electric Cooperative, 15-cv-339; Doc. 22 in Kritner v. Arab Electric
Cooperative, 15-cv-341. In separate text orders, the undersigned denied the plaintiffs’ motions
to remand in Sparks v. Cullman Electric Cooperative, 15-cv-322 (see Doc. 25) and Bates v. Joe
Wheeler Electric Membership Corporation, 15-cv-334 (see Doc. 30). The Court then explained
in a separate opinion the reasons for denying the plaintiffs’ motions to remand in Sparks (see
Doc. 38) and Bates (see Doc. 43).
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The plaintiffs in all four cases filed identical motions for reconsideration. Thus, throughout the
remainder of this opinion, when referring to the plaintiffs’ motions for reconsideration, the Court
will cite only to the plaintiff’s motion in Sparks (Doc. 42), the lead case.
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controlling law, the availability of new evidence, or the need to correct clear error
or manifest injustice.’” Id. at 1268 (quoting Summit Medical Center of Alabama,
Inc. v. Riley, 284 F. Supp. 2d 1350, 1355 (M.D. Ala. 2003)); see also Moten v.
Maverick Transp., LLC, No. 1:14-CV-00786-KOB, 2015 WL 6593089, at *1
(N.D. Ala. Oct. 30, 2015) (“Court opinions ‘are not intended as mere first drafts,
subject to revision and reconsideration at a litigant’s pleasure,’ and motions for
reconsideration should not be an automatic response to an adverse ruling.”) (citing
Am. Ass’n of People with Disabilities v. Hood, 278 F. Supp. 2d 1337, 1339 (M.D.
Fla. 2003)). Still, the Court must consistently monitor subject matter jurisdiction
(see Fed. R. Civ. P. 12(h)), so the Court takes one more look at the plaintiffs’
arguments concerning remand.
II.

DISCUSSION
As laid out in the Court’s memorandum opinion on the plaintiffs’ motions to

remand, the electric cooperatives removed these actions to federal court via the
federal officer removal statute. 28 U.S.C. § 1442(a).3 The federal officer removal
statute authorizes removal of a civil or criminal action against or directed to “any
officer (or any person acting under that officer) of the United States or any agency
thereof[] . . . for or relating to any act under color of such office.” 28 U.S.C. §

3

For a detailed summary of the factual and procedural background in these cases, see the Court’s
memorandum opinion on the plaintiffs’ motions to remand in Sparks (Doc. 38) and Bates (Doc.
43).
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1442(a). Although courts generally construe removal statutes strictly and resolve
uncertainties in favor of remand, see, e.g., Burns v. Windsor Ins. Co., 31 F.3d
1092, 1095 (11th Cir. 1994), the federal officer removal statute is an exception to
the general rule. Courts must construe the federal officer removal statute liberally
“enough to cover all cases where federal officers can raise a colorable defense
arising out of their duty to enforce federal law.” Willingham v. Morgan, 395 U.S.
402, 406-07 (1969).
To remove a case under section 1442(a)(1), a defendant “must advance a
‘colorable defense arising out of his duty to enforce federal law.’” Magnin v.
Teledyne Continental Motors, 91 F.3d 1424, 1427 (11th Cir. 1996) (quoting Mesa
v. California, 489 U.S. 121, 133 (1989)).4 The defendant also “must establish that
there is a ‘causal connection between what the officer has done under asserted
official authority’ and the action against him.” Id. (quoting Maryland v. Soper,
270 U.S. 9, 33 (1926)).5

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The Court stresses that to be a colorable defense, the “defense need only be plausible; its
ultimate validity is not to be determined at the time of removal.” Id. (citing Mesa, 489 U.S. at
129). The Supreme Court has construed the colorable defense requirement broadly, “recognizing
that ‘one of the most important reasons for removal is to have the validity’ of the [federal
defense] tried in a federal court.” See Jefferson Cnty., Ala. v. Acker, 527 U.S. 423, 431 (1999).
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To establish a causal connection between what the cooperatives have done based on federal
authority and the conduct that gives rise to this action, the electric cooperatives must show that
the plaintiffs’ claims arise from the electric cooperatives’ performance of the cooperatives’
contracts with the TVA. See Marley v. Elliot Turbomachinery Co., Inc., 545 F. Supp. 2d 1266,
1274 (S.D. Fla. 2008) (citing Magnin, 91 F.3d at 1427-28); see also Isaacson, 517 F.3d 129, 137
(2d Cir. 2008) (“[N]on-governmental corporate defendants[] . . . must demonstrate that the acts
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A. Motion for Reconsideration
In its opinion denying the plaintiffs’ motion to remand, the Court found that
(1) the electric cooperatives presented a colorable federal defense to the plaintiffs’
claims (i.e., that the TVA Act preempts the plaintiffs’ state law claims), and (2)
there is a causal connection between the electric cooperatives’ actions and the
action against them. The plaintiffs make the following arguments in their motions
for reconsideration: (1) the defendant electric cooperatives have not made a prima
facie case of preemption because there is no federal statute or regulation that
contradicts Alabama Code § 37-6-20; (2) Alabama Code § 37-6-20 explicitly
prohibited the defendant electric cooperatives from entering into contracts that
were inconsistent with the statute’s terms, thereby making the TVA contracts void;
and (3) the TVA contracts do not have any terms that conflict with Alabama Code
§ 37-6-20, so preemption does not apply. (See Doc. 42, pp. 5-7). The Court finds
none of these arguments persuasive.
As to the plaintiffs’ first argument, the electric cooperatives established a
plausible case of preemption. “[P]reemption exists where it is impossible for a
private party to comply with both state and federal requirements or where state law
stands as an obstacle to the accomplishment and execution of the full purposes and
objectives of Congress.” Wiersum v. U.S. Bank, N.A., 785 F.3d 483, 486 (11th Cir.
for which they are being sued[] . . . occurred because of what they were asked to do by the
Government.”) (emphasis omitted).
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2015) (internal quotation marks and citation omitted). Both the TVA contracts and
Mr. Dwight Lanier’s declarations support the electric cooperatives’ contention that
they can neither reduce resale rates nor issue refunds as patronage capital without
first obtaining approval from the TVA. Furthermore, this limitation on the electric
cooperatives’ rate-related discretion falls squarely within the TVA’s wide range of
authority under the TVA Act.
The plaintiffs’ second argument—that Alabama Code § 37-6-20 explicitly
prohibited the defendant electric cooperatives from entering into contracts that
were inconsistent with the statute’s terms—contradicts the plaintiffs’ other
arguments by highlighting the conflict that exists between the applicable state and
federal law in these cases. The plaintiffs’ argument ignores the fact that under the
electric cooperatives’ theory of the case, federal law preempts the very law that the
plaintiffs argue invalidated the contracts.
Given that the electric cooperatives’ preemption argument rests on a conflict
among the TVA contracts, the TVA’s congressionally granted authority, and
Alabama Code § 37-6-20, the plaintiffs’ third argument is the functional equivalent
of their first argument.

As stated above, the electric cooperatives plausibly

established that they cannot comply with Ala. Code § 37-6-20 without running
afoul of their obligations to the TVA under the TVA Act. The Court finds that it

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has jurisdiction over the claims in these actions. Therefore, the Court will not
remand the actions to state court.
B. Request to File Permissive Interlocutory Appeal
Alternatively, the plaintiffs ask the Court to grant them leave under 28
U.S.C. § 1292(b) to file a permissive interlocutory appeal to the Eleventh Circuit.
(See Doc. 42, p. 7). Section 1292(b) provides:
When a district judge, in making in a civil action an order not
otherwise appealable under this section, shall be of the opinion that
such order involves a controlling question of law as to which there is
substantial ground for difference of opinion and that an immediate
appeal from the order may materially advance the ultimate
termination of the litigation, he shall so state in writing in such order.
28 U.S.C. § 1292(b). The plaintiffs argue that there are reasonable grounds for
difference of opinion on a controlling question of law and that an immediate appeal
would materially advance the termination of this litigation. The Court disagrees.
First, section 1292(b) requires substantial, not reasonable, grounds for
difference of opinion. The fact that the electric cooperatives only had to advance a
“colorable” or “plausible” federal defense leaves little room for difference of
opinion on this issue, let alone substantial difference. Second, if the plaintiffs were
to prevail on an interlocutory appeal, the forum in which the case is litigated would
change, but remand would not advance the ultimate termination of this litigation.
Therefore, the Court declines the invitation to certify its ruling on jurisdiction for
interlocutory appeal.
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III.

CONCLUSION
Because the Court finds that it has jurisdiction over the plaintiffs’ claims, the

Court denies the plaintiffs’ motions for reconsideration. Additionally, the Court
denies the plaintiffs’ request for leave to file a permissive interlocutory appeal to
the Eleventh Circuit. The Court asks the Clerk to please term Doc. 42 in case 15322, Docs. 48 & 49 in case 15-334, Doc. 36 in 15-339, and Doc. 35 in case 15-341.
DONE and ORDERED this March 11, 2016.

_________________________________
MADELINE HUGHES HAIKALA
UNITED STATES DISTRICT JUDGE

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