Winding Creek Solar LLC v. California Public Utilities Commission

Filing 199

ORDER RE REQUEST FOR STAY. Signed by Judge James Donato on 4/23/2018. (jdlc2S, COURT STAFF) (Filed on 4/23/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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WINDING CREEK SOLAR LLC,
Plaintiff,

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Case No. 13-cv-04934-JD
ORDER RE REQUEST FOR STAY

v.

Re: Dkt. No. 165
MICHAEL PEEVEY, et al.,
Defendants.

United States District Court
Northern District of California

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Defendants Commissioners of the California Public Utilities Commission (“CPUC”) have

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asked that the Court stay the order and judgment entered in favor of plaintiff Winding Creek Solar

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LLC, pending the CPUC’s appeal to the United States Court of Appeals for the Ninth Circuit.

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Dkt. No. 165. The request is denied.

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BACKGROUND

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After holding a one-day bench trial with a number of live witnesses, the Court issued

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findings of fact and conclusions of law, and granted summary judgment for Winding Creek. Dkt.

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No. 161. The question at issue in the trial and summary judgment motion was whether the

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CPUC’s contracting practices for the procurement of renewable energy under a program called

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“Re-MAT” (short for “Renewable Market-Adjusting Tariff”) conflicted with federal law and

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consequently were pre-empted under the Supremacy Clause of the United States Constitution.

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Based on the evidence admitted at trial, the Court concluded that the Re-MAT program was not

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compliant with the Public Utility Regulatory Policies Act (“PURPA”), even with the concurrent

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availability of the CPUC’s Standard Contract for Qualifying Facilities of 20MW or less

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(“Standard Contract”). Id. The key trial evidence and the Court’s reasoning are set out in detail in

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the prior order and will not be repeated here. That order, and the consequent judgment, are what

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the CPUC seeks to stay pending appeal.

DISCUSSION

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Defendants acknowledge that the Court’s analysis of their request for a stay is controlled

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by Nken v. Holder, 556 U.S. 418 (2009), and Leiva-Perez v. Holder, 640 F.3d 962 (9th Cir. 2011).

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Dkt. No. 165 at 4. In Nken, the Supreme Court held that four factors determine the propriety of a

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stay: “(1) whether the stay applicant has made a strong showing that he is likely to succeed on the

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merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of

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the stay will substantially injure the other parties interested in the proceeding; and (4) where the

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public interest lies.” 556 U.S. at 434 (quotations omitted). In Leiva-Perez, our circuit found that

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Nken “raised the minimum permissible showing of irreparable harm necessary to justify a stay,”
and underscored “the bedrock requirement that stays must be denied to all petitioners who did not

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United States District Court
Northern District of California

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meet the applicable irreparable harm threshold, regardless of their showing on the other stay

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factors.” 640 F.3d at 965. Leiva-Perez also made clear that “even certainty of irreparable harm

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has never entitled one to a stay,” and so “a proper showing regarding irreparable harm was, and

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remains, a necessary but not sufficient condition for the exercise of judicial discretion to issue a

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stay.” Id. (emphasis in original).

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The CPUC’s main effort to show irreparable harm suffers from a critical flaw: the

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Standard Contract is a perfectly sound alternative to Re-MAT for the procurement of renewable

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energy. The CPUC’s stay request fails to recognize this dispositive fact. It says that the order

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“nullifie[d] the only two standard offer PURPA programs available to small stand-alone renewable

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generators: the Re-MAT program and the QF Settlement Standard Contract for QFs 20MW or

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Less,” and that “there is presently no immediate and efficient means of securing new small

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renewable generators under contract [sic] in California, absent a stay of the Court’s Order and

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Judgment.” Dkt. No. 165 at 14-15. But those statements are not true. As the Court made

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abundantly clear at the stay hearing, it did not strike down or enjoin in any way the Standard

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Contract, and that contract remains a readily available means of enlisting new renewable energy

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suppliers. Dkt. No. 196 (motion hearing transcript) at 5:10-24 & 11:12-14; Dkt. No. 161 at 20

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(order granting “only the declaratory and injunctive relief requested by plaintiff” in its complaint,

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Dkt. No. 61 at 24, Prayer for Relief, subsections (a)-(d), and “go[ing] no further”). The Standard
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Contract exists in full force as an avenue for qualifying small generators to sell energy. This

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defeats any possibility that the CPUC has satisfied the necessary element of irreparable harm. Cf.

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Nken, 556 U.S. at 434-35 (for aliens’ requests to stay removal orders, burden of removal cannot

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alone “constitute the requisite irreparable injury,” as it is “not categorically irreparable”).

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In addition to ignoring or misunderstanding the facts in the record, the CPUC’s injury

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arguments highlight that this is a bed largely of its own making. The CPUC has made clear that it

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is not seriously trying to revise or amend Re-MAT to make it compliant with PURPA. See Dkt.

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No. 196 at 11:5-8 (Q: “Is the CPUC doing anything all to bring Re-MAT into compliance, as

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stated in my order? Is the answer yes or no?” A: “Not the Commission, formally. No.”). It ill
suits the CPUC to cry “irreparable” harm over an illegal Re-MAT contract that it refuses to

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United States District Court
Northern District of California

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address in a substantive way. This conclusion is not changed by the declarations from a handful

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of third-party energy providers who believe that an immediate suspension of the Re-MAT

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program might be damaging to them. The Court invited the CPUC and plaintiff to jointly propose

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a carve-out from the order and judgment to accommodate those providers, but the parties were

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unable to come to terms. Dkt. No. 184. To be clear, the Court made the invitation simply to tie up

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any loose ends while the CPUC took its next steps, and not on the grounds of possible harm to any

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entity or concerns about the merits of the order.

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Defendants’ failure to make the requisite showing of irreparable harm necessitates the

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denial of their stay request. Leiva-Perez, 640 F.3d at 965 (citing Nken, 556 U.S. at 432-34). The

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Court also notes that defendants’ merits arguments are only slightly rewarmed versions of the

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arguments made for the bench trial and summary judgment motion. They are no more persuasive

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the second time around.

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IT IS SO ORDERED.
Dated: April 23, 2018

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JAMES DONATO
United States District Judge

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