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Vote Solar, Montana Environmental Information Center v. The Montana Department of Public Service Regulation

Supreme Court of Montana

August 6, 2019



         Appellant North Western Corporation, d/b/a Northwestern Energy (Northwestern) has filed a M. R. App. P. 22(2)(a) motion for relief from the District Court's Order denying its motion to stay judgment pending this appeal. Northwestern seeks relief from the Order on the basis that the District Court did not correctly weigh the factors governing stays and failed to analyze whether a failure to grant a stay would cause Northwestern to suffer irreparable harm. Appellees Vote Solar, Montana Environmental Information Center (MEIC), and Windata, LLC, have responded in opposition to Northwestern's motion.

         We review a decision of a district court granting or denying a stay for abuse of discretion. Terms v. State Farm Fire & Cas. Co., 2011 MT 156, ¶ 17, 361 Mont. 129, 257 P.3d 352. The test for abuse of discretion is whether the trial court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice. Jarvenpaa v. Glacier Electric Co-op, 1998 MT 306, ¶ 13, 292 Mont. 118, 970 P.2d 84. In reviewing the decision, we are guided by a number of considerations. First, the Court will be guided by Rule 22(2)(a)(i), which requires that an appellant demonstrate good cause for the relief requested. The Court also looks to the general factors governing stays of civil judgments articulated in Hilton v. Braunskill, 481 U.S. 770, 107 S.Ct. 2113 (1987). Those factors are: (1) whether the stay applicant has made a strong showing that it is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.

         In its Order denying the stay, the District Court ruled:

1. [Northwestern] did not make a strong showing of likelihood of success on the appeal.
2. The only irreparable harm to [Northwestern], if the stay is not issued, is time and resources to complete the project they started years ago. [Northwestern] already [has] voluminous data and calculations, and the anticipated harm, in event of a remand is not great, when compared to the harm of the plaintiffs.
3. The harm to the Plaintiffs which would result from a stay is considerable. Plaintiffs' investments and potential loss of credits would significantly impact them, perhaps irreparably if the delay cause them to lose such investment opportunity or credits.
4. The public interest is not served by a stay. As pointed out by Plaintiffs, the method and decisions of Defendants, which were determined arbitrary and unreasonable, is the potentially affecting negotiations and contract decisions for other, ongoing projects, which the relevant law charges the parties and government with encouraging.

         The District Court offers no analysis for the first factor. The District Court's analysis of the second factor, as Northwestern points out, appears unrelated to the present case: Northwestern is not engaged in a "project," but rather a dispute over contracts and rates. Because of the treatment of these two factors, we cannot conclude that the District Court did not act arbitrarily as we cannot discern the District Court's reasoning. For that reason, we conclude Northwestern has demonstrated good cause for this Court to consider whether it is entitled to a stay.

         As to the first factor, our review of the briefing on this motion has not provided us with an impression as to the likelihood of Northwestern's success on appeal and we thus consider this a neutral factor.

         As to the second factor, North Western alleges it faces irreparable harm if it is compelled to enter into 25-year contracts with energy providers at both a higher rate and longer period of time than initially set by the Public Service Commission (PSC). Even if this Court affirms the District Court, in the interim, Northwestern will have entered into and been bound by these contracts.[1] Vote Solar and MEIC argue that Northwestern will not be harmed because the rate set by the District Court is just and reasonable. Windata acknowledges that Northwestern will suffer harm, but argues this Court should disregard such harm because, "Northwestern's shareholders may be deprived of a ten percent profit.. . but this deprivation of cash to Goldman Sachs and Wall Street is not the kind of irreparable harm that justifies staying an Order ...." This factor preponderates in favor of Northwestern's position since the respondents have not refuted NorthWestern's contention that it will suffer irreparable financial loss if a stay is not granted.

         As to the third factor, again as Northwestern points out to this Court, two of the Plaintiffs referred to here are two non-profit organizations, Vote Solar and MEIC, who do not have investments or the potential loss of credits. Of the remaining plaintiffs, Cypress Creek Renewables, LLC, has not opposed-North Western's motion for stay, and although Windata, LLC, has responded in opposition, it alleges no specific harm, but only argues generally that tax credits and landowner agreements may expire.[2]

         As to the fourth factor, Northwestern explains that if it is forced to enter into 25-year contracts at the higher rates set by the District Court, its customers will ultimately pay those rates. Although the respondents to this motion argue the public interest is best served by denying the stay because public policy encourages the development of alternative energy generation in Montana, § 15-32-401, MCA, this is best achieved by promptly moving forward with this litigation so that the rate issue is settled.

         In balancing the four factors, we conclude a stay is appropriate in this case. Although we have no opinion at this stage as to NorthWestern's likelihood of success on appeal, we conclude North Western has demonstrated it will suffer significant irreparable harm if a stay is not granted and the District Court's decision is overturned on appeal. The respondents have not demonstrated that they will suffer irreparable harm if the stay is granted, and the public interest will suffer greater harm if the stay is denied and Northwestern prevails on appeal.

         IT IS ORDERED that this matter is STAYED pending resolution of this appeal. The Clerk is directed to provide copies of ...

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