FEDERAL ENERGY REGULATORY COMMISSION v. SILKMAN et al

Filing 66

Judge Douglas P. Woodlock: MEMORANDUM AND ORDER entered directing transfer of this case to the District of Maine. (Woodlock, Douglas) (Main Document 66 replaced on 4/12/2016) (Colman, Claire). (Main Document 66 replaced on 4/12/2016) (Colman, Claire). [Transferred from Massachusetts on 4/13/2016.]

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

FEDERAL ENERGY REGULATORY
COMMISSION,
Petitioner,
v.
RICHARD SILKMAN, and
COMPETITIVE ENERGY SERVICES, LLC,
Respondents.

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CIVIL ACTION NO.
13-13054-DPW

and related matter
FEDERAL ENERGY REGULATORY
COMMISSION,
Petitioner,
v.
LINCOLN PAPER AND TISSUE, LLC,
Respondent.

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CIVIL ACTION NO.
13-13056-DPW

MEMORANDUM AND ORDER REGARDING TRANSFER
April 11, 2016
I have kept the motions to dismiss in these two cases
arising out of federal agency enforcement actions against
entities in Maine under advisement pending a decision by the
Supreme Court this term regarding the authority of the
petitioner Federal Energy Regulatory Commission to prosecute
such actions.

In the interim, the respondent in Civil Action

No. 13-13056, Lincoln Paper and Tissue, LLC, filed for relief in

the Bankruptcy Court for the District of Maine.

In re: Lincoln

Paper and Tissue, LLC, No. 15-10715 (Bankr. D. Me, Sept. 28,
2016).

Last week Judge Cary ruled in the bankruptcy case that

this District Court Enforcement Case is not stayed under the
Bankruptcy Code. Id. (Dkt. No, 495) (Bankr. D. Me. Apr. 5,
2016).
As reflected in the Memorandum and Order Regarding Motions
to Dismiss issued today in this matter, after consideration of
the Supreme Court's decision in Federal Energy Regulatory Comm.
v. Electric Power Supply Ass'n, No. 14-840, 2016 WL 280888 (U.S.
Jan. 25, 2016), I have denied the respondents’ motions.

The

defendants' motions to dismiss having been denied and, with the
cloud of a possible complete bankruptcy stay lifted regarding
Civil Action No. 13-13056, the two cases are now both in a
posture to resume their travel.

I have concluded that the

travel of the cases should continue in the District of Maine and
consequently will order transfer to that District for further
proceedings.
With the issuance of the Memorandum and Order Regarding
Motions to Dismiss today, I have provided all the return I can
offer on the investment of judicial resources the parties and I
have made to date in the District of Massachusetts.

The cases

are now fully framed by that Memorandum and Order and passing
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the cases on to a new judicial officer will be seamless at this
point.
When motion to dismiss practice began before me, I denied a
motion to transfer to the District of Maine filed by the
defendant in Civil Action No. 13-13054 (at a point when the
defendant in Civil Action No. 13-13056 had indicated an intent
also to file its own motion to transfer) "without prejudice . .
. until I decide what the character of the case is going to be
here."

Dkt No. 24 (Apr. 3, 2014 Tr. at 14).

While I then

indicated I would await motions to transfer being renewed and a
fuller idea of what form the litigation of the cases would
ultimately take, e.g. record review or trial, it is now clear to
me that the District of Maine is the best venue for the
litigation to continue in whatever form it may take.
As is apparent from the Memorandum and Order Regarding
Motions to Dismiss, the center of gravity for these cases is
business activity in the District of Maine.

Maine is where the

defendants are located and is as convenient to the plaintiff
federal agency as the District of Massachusetts, whether in the
Eastern (Boston) or Western (Springfield) Divisions.

The weight

of the evidence, both documentary and witnesses, is found in
Maine.

The Bankruptcy Court for the District of Maine is an

adjunct of the United States District Court for the District of
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Maine which has generally referred bankruptcy cases to the
Bankruptcy Court. D. Me. Local Rule 83.6.

To the degree that

further proceedings occur regarding matters in the Bankruptcy
Court, the District of Maine is ultimately in a position to
coordinate matters — including, if necessary and appropriate —
by revoking aspects of the reference in the Lincoln Paper and
Tissue Chapter 11 matter to take on disputed issues directly.1

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In his oral opinion from the bench in the bankruptcy action,
Judge Cary offered alternative grounds for treating the
automatic bankruptcy stay as inapplicable to this case. First,
he concluded the stay was inapplicable because the police
regulatory power exceptions to an automatic stay provide
statutory relief. Second, he concluded that he could grant
judicial relief to “allow FERC to continue forward in the
Massachusetts District Court enforcement actions.” In re
Lincoln Paper and Tissue, LLC, No. 15-1075 (Bankr. D. Me. Apr.
5, 2016) (Tr. At 7).
Judge Cary, however, also emphasized his decision is not an
unlimited ticket for FERC to pursue the debtor.
FERC is permitted to prosecute the Massachusetts
District Court enforcement action pursuant to 31(d) of
the Federal Power Act which is set forth at 16 U.S.C. §
823b(d)(3)(B).
FERC is not entitled to pursue any
property of the estate or any property held by Lincoln
by virtue of this order today.
If FERC seeks such
further relief; for example if it wishes to pursue an
action pursuant to section 823b(d)(5), it must, as it
conceded at the hearing last week, seek further relief
from stay.
Id. at 8.
I note further that the transcript of the hearing before Judge
Cary also reflects that the parties have meanwhile made
considerable progress toward settlement. Id. Tr. at 3-4. Such
a settlement would be subject to judicial approval in the
District of Maine.
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Accordingly, finding at this stage of the proceedings it to
be in the interests of justice and the convenience of
parties and witnesses, I hereby direct that these cases be
transferred to the District of Maine pursuant to 28 U.S.C. §
1404(a).

/s/ Douglas P. Woodlock______
DOUGLAS P. WOODLOCK
UNITED STATES DISTRICT JUDGE

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