City of New Martinsville, West Virginia v. Public Service Commission of West Virginia

Filing 42

MEMORANDUM OPINION AND ORDER granting plaintiff City of New Martinsville's 33 MOTION to amend its complaint; the Clerk is directed to file New Martinsville's proposed amended complaint; New Martinsville is to direct service on the inco ming commissioners forthwith by 6/4/2013; the court treats the existing motions to dismiss and for judgment on the pleadings, filed 1/25/2013, as effective against the amended complaint; any existing defendant wishing to supplement or renew its motion is directed to do so by 6/4/2013; the individual commissioners may file motions to dismiss by 6/28/2013. Signed by Judge John T. Copenhaver, Jr. on 5/21/2013. (cc: attys) (taq)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
CITY OF NEW MARTINSVILLE,
WEST VIRGINIA,
Plaintiff,
v.

Civil Action No. 2:12-cv-1809

THE PUBLIC SERVICE COMMISSION
OF WEST VIRGINIA and
MONONGAHELA POWER COMPANY and
THE POTOMAC EDISON COMPANY,
Defendants.

MEMORANDUM OPINION AND ORDER
Pending is the motion by plaintiff, City of New
Martinsville (“New Martinsville”), for leave to amend its
complaint and joinder, filed February 8, 2013.

The Public Service

Commission of West Virginia (“the Commission”) responded in
opposition on February 25, 2013.
response.

No other defendant filed a

For reasons explained herein, the court grants the

motion.

I. Background
New Martinsville filed this action on June 1, 2012,
alleging two counts against the Commission based on violations of

the Public Utility Regulatory Policies Act (“PURPA”) and federal
preemption.

On July 31, 2012, the Commission answered, asserting,

among other defenses, that the suit was barred by the Eleventh
Amendment to the U.S. Constitution.

The court entered a

scheduling order on September 11, 2012, setting an October 31,
2012 deadline for amendment of pleadings and joinder.

On December

21, 2012, the court granted a motion permitting Monongahela Power
Company and The Potomac Edison Company (“Mon Power” and “Potomac
Edison”) to intervene as defendants.
On January 10, 2013, the court entered an order
coordinating the case with the related case of Morgantown Energy
Associates v. Public Service Commission of West Virginia, Civil
Action No. 2:12-cv-6327 (“the Morgantown Energy case”).

The order

set forth a revised schedule for briefing and suspended “[a]ll
further requirements of the scheduling order” pending the court’s
ruling on Rule 12 motions.

On January 25, 2013, the Commission

filed its motion to dismiss the complaint, alleging, among other
grounds, that the Commission is immune from suit in federal court
under the Eleventh Amendment.

Also on January 25, 2013, Mon Power

and Potomac Edison filed a motion for judgment on the pleadings.
New Martinsville filed its pending motion for leave to
amend approximately two weeks later, on February 8, 2013.

It

seeks to join three individual defendants in their official

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capacities: Michael A. Albert, the Commission’s chairman, and John
W. McKinney and Ryan B. Palmer, individual commissioners.

The

proposed amended complaint alters the language of the original
complaint such that allegations are against “the PSC and its
Commissioners” rather than only “the PSC.”

It includes

developments in related actions before the West Virginia Supreme
Court of Appeals and the Federal Energy Regulatory Commission that
occurred after the filing of the original complaint.

II. The Governing Standard
Rule 15(a)(1) provides that “[a] party may amend its
pleading once as a matter of course within:
(A) 21 days after serving it, or
(B) if the pleading is one to which a responsive pleading is
required, 21 days after the service of a responsive pleading
or 21 days after service of a motion under Rule 12(b), (e),
or (f), whichever is earlier.”
Fed. R. Civ. P. 15(a)(1).
A party that can no longer amend a pleading as of right
may still amend its pleadings by obtaining “the opposing party’s
written consent or the court’s leave.”

Id. 15(a)(2).

should freely give leave when justice so requires.”

“The court
Id.

“The law

is well settled ‘that leave to amend a pleading [under Rule
15(a)(2)] should be denied only when the amendment would be
prejudicial to the opposing party, there has been bad faith on the
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part of the moving party, or the amendment would be futile.’”
Edwards v. City of Goldsboro, 178 F.3d 231, 242 (4th Cir. 1999)
(quoting Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir.
1986)).
The existence of prejudice to an opponent “is reason
sufficient to deny amendment,” and the “absence of prejudice,
though not alone determinative, will normally warrant granting
leave to amend.”

Davis v. Piper Aircraft Corp., 615 F.2d 606, 613

(4th Cir. 1980).

There is no prejudice where a defendant “was

from the outset made fully aware of the events giving rise to the
action.”

Id.

Amendment is futile if “the proposed amended

complaint fails to satisfy the requirements of the federal rules,”
such as Rule 12(b)(6).

United States ex rel. Wilson v. Kellogg

Brown & Root, Inc., 525 F.3d 370, 376 (4th Cir. 2008) (quoting
United States ex rel. Fowler v. Caremark RX, LLC, 496 F.3d 730,
740 (7th Cir. 2007)).
The flexibility of the “freely give leave” standard is
diminished somewhat when the amendment is sought after expiration
of the deadline, if any, for amended pleadings set by a Rule 16(b)
scheduling order.

Rule 16(b) provides that “a schedule shall not

be modified except upon a showing of good cause and by leave of
the district judge.”

Fed. R. Civ. P. 16(b)(4).

Thus, “after the

deadlines provided by a scheduling order have passed, the good

4

cause standard must be satisfied to justify leave to amend the
pleadings.”

Nourison Rug Corp. v. Parvizian, 535 F.3d 295, 298

(4th Cir. 2008) (leave to amend sought to add a defense); Sosa v.
Airprint Sys., Inc., 133 F.3d 1417, 1419 (11th Cir. 1998) (“If we
considered only Rule 15(a) without regard to Rule 16(b), we would
render scheduling orders meaningless and effectively would read
16(b) and its good cause requirement out of the Federal Rules of
Civil Procedure.”).
“Good cause” under Rule 16(b) is measured by the
movant’s diligence in attempting to meet the scheduling order’s
requirements.

Sherman v. Winco Fireworks, Inc., 532 F.3d 709, 716

(8th Cir. 2008); Kassner v. 2nd Ave. Delicatessen Inc., 496 F.3d
229, 243 (2d Cir. 2007); Johnson v. Mammoth Recreations, Inc., 975
F.2d 604, 607–08 (9th Cir. 1992).1

“Another important

consideration for a district court deciding whether Rule 16’s
‘good cause’ standard is met is whether the opposing party will
suffer prejudice by virtue of the amendment.”
349 F.3d 888, 906 (6th Cir. 2003).

Leary v. Daeschner,

Nevertheless, “[a]lthough the

existence or degree of prejudice to the party opposing the
modification might supply additional reasons to deny a motion, the

1

As the Fourth Circuit has stated, albeit in an unpublished
decision, “Rule 16(b)’s good cause standard focuses on the
timeliness of the amendment and the reasons for its tardy
submission; the primary consideration is the diligence of the
moving party.” Montgomery v. Anne Arundel Cnty., Md., 182 Fed.
App’x 156, 162 (4th Cir. 2006) (per curiam).
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focus of the inquiry is upon the moving party’s reasons for
seeking modification.”

Johnson, 975 F.2d at 609 (citations

omitted).

III. Discussion
New Martinsville asserts that it is entitled to amend as
of right because it filed the pending motion on February 8, 2013,
within 21 days of the Commission’s January 25, 2013 Rule 12(b)
motion to dismiss.

This argument ignores that Rule 15(a)(1)(B)

begins the 21 days upon the filing of a Rule 12(b) motion or a
responsive pleading, “whichever is earlier.”

The Commission filed

its answer on July 31, 2012, far earlier than it filed the Rule
12(b) motion, and it is that date from which the court must time
the 21 days.

As the motion for leave to amend was filed over six

months after the Commission served its answer, amendment as of
right is unavailable.

New Martinsville must instead amend with

leave of the court through satisfaction of Rule 15’s “freely give
leave” standard.

In addition, because the pending motion to amend

was filed subsequent to the October 31, 2012 scheduling order
deadline for amendment and joinder, New Martinsville must satisfy
Rule 16’s more demanding “good cause” standard.2

2

New Martinsville argues that the court’s January 10, 2013 order
mooted the deadline for amendment and joinder by suspending “[a]ll
further requirements of the scheduling order.” The deadline,
however, having passed over two months before the court stayed the
scheduling order, was not a “further” requirement.
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New Martinsville argues that relief from the scheduling
order and leave to amend are merited on the following grounds.

It

states that “the purpose of [its] amendment is to avoid litigation
about whether its action is barred by the Eleventh Amendment.”
Mot. Amend 2.

It believes joinder of the individual defendants

will bring this action within the rule of Ex Parte Young, which
“allows federal courts to award prospective relief against state
officials for violation of federal law.”

Va. Office for Prot. &

Advocacy v. Stewart, 131 S.Ct. 1632, 1637 (2011).

While New

Martinsville contends that it is unclear whether a municipality
such as itself is even subject to the Eleventh Amendment, it
believes that this amendment would avoid the “difficult threshold
issue” of sovereign immunity and thereby conserve the resources of
the court and the parties.

Mot. Amend 2-3.

Indeed, New

Martinsville notes that the complaint in the Morgantown Energy
case named the same individual commissioners as defendants, and in
that case the Commission did not assert an Eleventh Amendment or
sovereign immunity defense in its answer.
In response, the Commission argues that New Martinsville
cannot show good cause for the amendment.

It states that the

amendment is futile in that it would not rectify the Eleventh
Amendment issue and, regardless, would not prevent dismissal
merited on the other grounds asserted in the January 25, 2013

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motion to dismiss.3

The Commission argues that its July 31, 2012

answer gave notice of an Eleventh Amendment defense and that New
Martinsville has offered no reason “other than a lack of
diligence, for waiting more than half a year, and allowing this
matter to progress through several rounds of briefing, before
moving to amend its complaint in response to Eleventh Amendment
concerns.”

Opp’n 5.

The Commission asserts that amendment at

this stage will cause undue and prejudicial delay.

It argues that

its “entitlement to Eleventh Amendment sovereign immunity is a
matter of black-letter law,” and amendment will delay resolution
and expose the Commission to “substantial additional expenses.”
Id. at 6.

It further argues that amendment will render moot the

pending motion to dismiss, reset the schedule for briefing, and
require the Commission to reassess grounds for dismissal.
New Martinsville replies that no prejudice will exist
because the same commissioners are already named in the Morgantown
Energy case, which presents many of the same legal issues.

It

states that the case is still in the “earliest stage of
adjudication” in that no discovery has been conducted and the case
is not on the brink of trial.

Reply 4.

New Martinsville argues

that it “has not been dilatory or less than assiduous” because it
3

The Commission’s motion to dismiss argues that New
Martinsville’s claims also fail due to “(1) res
judicata/collateral estoppel; (2) the Rooker-Feldman doctrine; (3)
lack of jurisdiction under PURPA; and (4) Burford, Princess Lida,
Colorado, and Younger abstention.” Opp’n 4.
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did not “need to” amend until the Commission filed its motion to
dismiss that included an Eleventh Amendment bar.

Id. at 6-7.

Finally, New Martinsville states that its case and the Morgantown
Energy case “both raise important issues of Federal energy law
that should be resolved on the merits rather than being disposed
of on the basis of technicalities.”

Id. at 7.

While New Martinsville’s justification for its delay in
requesting an amendment is at best dubious, the court finds
sufficient good cause to merit modification of the schedule in
this case in order to add the three individual commissioners as
defendants.

Though the Commission objects, its codefendants, Mon

Power and Potomac Edison, do not.

The proposed amendment raises

no new claims as to the existing defendants, and the parties have
not conducted discovery.
minimal.

Prejudice to the Commission is thus

By adding the individual commissioners to this action,

the prospect of a separate action by New Martinsville against them
is avoided.
With the addition of the three commissioners, the
Commission is in no different position than in the comparable
Morgantown Energy case.

Moreover, it would be an anomalous result

indeed if these two substantially analogous cases were to have
radically different outcomes as to the availability of relief.
The court concludes that the interests of justice and the absence

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of prejudice overshadow any concerns regarding diligence and
establish good cause for the proposed amendment.

IV.
It is, accordingly, ORDERED that New Martinsville’s
motion to amend its complaint be, and it hereby is, granted.

The

Clerk is directed to file New Martinsville’s proposed amended
complaint, which accompanies the motion.

New Martinsville is

ORDERED to direct service on the incoming commissioners forthwith
and in no event later than June 4, 2013.
The court treats the existing motions to dismiss and for
judgment on the pleadings, filed January 25, 2013, as effective
against the amended complaint.4

Any existing defendant wishing to

supplement or renew its motion is directed to do so on or before
June 4, 2013.

The individual commissioners may file motions to

dismiss on or before June 28, 2013.
The Clerk is directed to forward copies of this written
opinion and order to all counsel of record.
ENTER:

May 21, 2013

John T. Copenhaver, Jr.
United States District Judge

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Consequently, it will be unnecessary for the Commission to go to
the expense of further briefing, unless it chooses otherwise.
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