United States District Court, D. Montana, Helena Division
OPINION & ORDER
CHARLES C. LOVELL SENIOR UNITED STATES DISTRICT JUDGE
the Court is Plaintiffs' Motion for Summary Judgment.
(Doc. No. 35) and Defendants' Cross-Motion for Summary
Judgment (Doc. No. 60). The motions were argued on October
16, 2018. Jennifer Selendy of Selendy & Gay PLLC argued
for Plaintiffs. She was accompanied by Steve Levitas of
Plaintiff Cypress Creek Renewables Development, by Daniel P.
Mach of Quinn Emmanuel Urquhart & Sullivan, LLP, and by
Brianne C. McClafferty of Holland & Hart LLP. Phillip J.
Roselli of Wilkinson Barker Knauer LLP argued for Defendants.
He was accompanied by Justin Kraske, Chief Legal Counsel for
the Montana Public Service Commission and Defendant
Commissioner Roger Koopman.
filed their Complaint against the Montana Public Service
Commission and Commissioners Bob Lake, Travis Kavulla, Brad
Johnson, Roger Koopman, and Tony O'Donnell in their
official capacity (collectively MPSC or Montana Commission)
on January 12, 2018. Plaintiffs claim that the Montana
Commission has violated Section 210 of the Public Utility
Regulatory Policies Act (PURPA), 16 U.S.C. § 824a-3 and
regulations enacted by the Federal Energy Regulatory
Commission (FERC or the Commission).
March 13, 2018, the MPSC filed a motion to stay the
proceeding pending their ongoing rulemaking and to dismiss
Plaintiffs' "as-applied" challenge for lack of
subject matter jurisdiction and failure to state a claim.
(Doc. 29). On April 19, 2018, Plaintiffs filed their motion
for summary judgment. (Doc. 35). Rather than responding to
the motion for summary judgment, the Montana Commission filed
a motion to hold the summary judgment motion in abeyance
until the Court ruled on the MPSC's motion to stay and
motion to partially dismiss Plaintiffs' complaint. The
Court set a hearing on the MPSC's motions for June 4,
5, 2018, the Court issued its order denying Defendants'
partial motion to dismiss and motion to stay. The Court held
that Plaintiffs' complaint pled an implementation claim
pursuant to PURPA sufficient to give the Court subject matter
jurisdiction. The Court denied the MPSC's motion to stay
the proceedings while the MPSC completed a new rulemaking
process, noting that the MPSC could have begun its amendment
process as early as January of 2017, after the Federal Energy
Regulatory Commission issued its declaratory order on
December 15, 2016. The Court also denied the MPSC's
Motion to Hold in Abeyance Plaintiffs' Motion for Summary
Judgment and set a briefing schedule requiring the MPSC to
file its answer, response to Plaintiffs' summary judgment
motion, and any cross-motion for summary judgment on or
before June 27, 2018. The MPSC's reply brief on its
cross-motion for summary judgment was filed on August 1,
2018. The Court has reviewed the parties' briefs and
received argument and is prepared to rule.
56(a) permits a party to seek summary judgment
"identifying each claim or defense-or the part of each
claim or defense-on which summary judgment is sought."
Summary judgment or adjudication is appropriate when the
movant shows "there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(a); Matsushita Elec.
Indus, v. Zenith Radio Corp., 475 U.S. 574, 587 (1986);
T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors
Assn., 809 F.2d 626, 630 (9th Cir.1987). The purpose of
summary judgment is to "pierce the pleadings and assess
the proof in order to see whether there is a genuine need for
trial." Matsushita, 47'5 U.S. at 586, n.
summary judgment, a court must decide whether there is a
"genuine issue as to any material fact," not weigh
the evidence or determine the truth of contested matters.
Fed.R.Civ.P. 56(a), (c); see also, Adickes v. S.H. Kress
& Co., 398 U.S. 144, 157 (1970). "Credibility
determinations, the weighing of the evidence, and the drawing
of legitimate inferences from the facts are jury functions,
not those of a judge, whether he is ruling on a motion for
summary judgment or for a directed verdict."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986). The evidence of the party opposing summary judgment
is to be believed and all reasonable inferences from the
facts must be drawn in favor of the opposing party.
Anderson, 477 U.S. at 255.
moving party, in supporting its burden of production,
"must either produce evidence negating an essential
element of the nonmoving party's claim or defense or show
that the nonmoving party does not have enough evidence of an
essential element to carry its ultimate burden of persuasion
at trial." Nissan Fire & Marine Ins. Co. v.
Fritz Companies, Inc., 210 F.3d 1099, 1102 (9th
Cir.2000). A "complete failure of proof concerning an
essential element of the nonmoving party's case
necessarily renders all other facts immaterial" to
entitle the moving party to summary judgment. Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). "[T]o
carry its ultimate burden of persuasion on the motion, the
moving party must persuade the court that there is no genuine
issue of material fact." Nissan Fire, 210 F.3d
at 1102. "As to materiality, the substantive law will
identify which facts are material. Only disputes over facts
that might affect the outcome of the suit under the governing
law will properly preclude the entry of summary
judgment." Anderson, 477 U.S. at 248.
the moving party has met its initial burden, the burden
shifts to the non-moving party to establish the existence of
a general issue of material fact. Matsushita, 475
U.S. at 586 - 87. The non-moving party may not rely on the
allegations or denials of its pleadings but must cite to
facts in the record. Fed, R.Civ. P. 56(c)(1);
Matsushita, 475 U.S. at 586, n. 11. When a party
fails to properly address another party's assertion of
fact by citing to the record, as the MPSC did in this case by
citing to its own answer, the Court may consider the fact
undisputed for purposes of the moving party's motion for
summary judgment. Fed.R.Civ.P. 56(e)(2).
1. Plaintiffs Bear Gulch Solar, LLC, Canyon Creek Solar, LLC,
Couch Solar, LLC, Fox Farm Solar, LLC, Glass Solar, LLC, Malt
Solar, LLC, Martin Solar, LLC, Middle Solar, LLC, River
Solar, LLC, Sage Creek Solar, LLC, Sypes Canyon Solar, LLC,
Valley View Solar, LLC, and Ulm Solar, LLC (collectively, QF
Plaintiffs) are each a "qualifying facility" under
PURPA and Federal Energy Regulatory Commission (FERC)
regulations. (Doc. 65 at ¶ 1).
2. Plaintiff Cypress Creek Renewables Development, LLC
(Cypress Creek) is an affiliate of each QF Plaintiff and is
the successor-in-interest to FLS Energy, which formerly
operated QF Plaintiffs. (Doc. 65 at ¶ 5).
3. Defendant Montana Public Service Commission is an agency
of the state of Montana that regulates matters of electrical
generation, distribution, and sales within the state and is
charged with implementing FERC regulations under PURPA. (Doc
65 at ¶¶ 7 - 8).
4. Defendants Brad Johnson, Travis Kavulla, Tony
O'Donnell, Roger Koopman, and Bob Lake are MPSC
Commissioners. (Doc. 65 at ¶ 9).
5. Northwestern Energy is an electric utility regulated by
the MPSC. (Doc. 68 at ¶ 3).
6. Each QF Plaintiff is developing a solar photovoltaic
project within the service area of Northwestern Energy in
Montana with a nameplate capacity greater than 100 kilowatts
and less than 3 megawatts. (Doc. 65 at ¶ 2).
7. As a solar generator with a capacity of 3 megawatts or
less, each QF Plaintiff is eligible for Option 1(a) of the
Schedule QF-1 Tariff offered by Northwestern and approved, as
revised from time to time, by the MPSC. (Doc. 65 at ¶
8. From October 2015 until June 16, 2016, the avoided-cost
rate at which Montana's QFs were entitled to sell power
to Northwestern Energy under Option 1(a) of the Schedule QF-1
Tariff was $92.73 per megawatt-hour in peak hours and $53.14
per megawatt-hour in off-peak hours (the Prior QF-1 Tariff).
The Option 1(a) blended rate under the Prior QF-1 Tariff was
roughly $66 per megawatt-hour. (Doc. 68 at ¶ 4).
9. In reliance on the Prior QF-1 Tariff, FLS Energy expended
approximately $750, 000 to develop new solar QFs throughout
Montana. (Doc. 65 at ¶ 12).
10. In the first half of 2016, FLS Energy began negotiating
with Northwestern Energy to execute power purchase agreements
pursuant to which each QF would sell power to Northwestern
Energy at prices set by Option 1(a) of the Prior QF-1 Tariff.
(Doc. 65 at ¶13).
11. By early May of 2016, FLS Energy and North West Energy
had nearly completed their negotiation concerning the power
purchase agreements. (Doc. 32-1, May Decl., at ¶ 10).
12. On May 13, 2016, the MPSC issued a "Notice of
Application and Intervention Deadline" in Docket No.
(Dkt.) D2016.5.39 in response to Northwestern Energy's
May 3, 2016, filing of an "Application for Approval of
Avoided Cost Tariff Schedule QF-1." (MPSC docket
information for Dkt. D2016.5.39 is available on the
13. Northwestern Energy confirmed with FLS Energy that the
new rates proposed in its May 3, 2016, application would not
take effect for several months even on an interim basis and
continued to assure FLS Energy of its intention to execute
PPAs with the other QF Plaintiffs at the Prior QF-1 Tariff
rates. (Doc. 32-1, May Decl, at ¶ 10).
14. On May 17, 2016, Northwestern Energy filed a "Motion
for Emergency Suspension of the QF-1 Tariff for New Solar
Qualifying Facilities with Nameplate Capacities Greater than
100 KW" in MPSC Dkt. D2016.5.39. (Doc. 38, Selendy Decl.
at ¶ 4; Doc. 38-3).
15. In its May 24, 2016, Notice of North Western Energy's
emergency motion, the MPSC indicated that a hearing on the
motion was tentatively scheduled for June 9, 2016. (Doc.
16. Shortly after June 2, 2016, FLS Energy and Northwestern
Energy finalized their agreement as to the terms of the power
purchase agreement to be signed by the ...