July 19, 2011, Don Kreis: Entergy Wins by Losing on Temporary Injunction

Don KreisMonday’s much anticipated decision by U.S. District Judge J. Garvan Murtha, denying Entergy’s request for a temporary injunction to keep Vermont Yankee open, contains something for everyone and is, thus, capable of many interpretations. One worth considering is the possibility that Entergy, by losing the preliminary injunction fight, is about to win the war.

Just as the irritating repetition of the phrase “safety, safety, safety” by Entergy’s lawyer (to reflect Entergy’s claim that safety is the real and unconstitutional purpose of Vermont’s regulation) became a dominant theme of the two-day hearing last month, Judge Murtha’s decisional mantra this week is that “trial on the merits has been accelerated.” What he might just be telegraphing to Entergy is that it doesn’t need a temporary injunction now because it stands a good chance of winning after the trial in mid-September. And that, Judge Murtha implies, will be soon enough.

Those skeptical of this theory about Judge Murtha’s decision will correctly point out that he explicitly declined to rule on Entergy’s likelihood of success on the merits. To grant a temporary injunction, he would have had to determine that Entergy is, in fact, more likely than not to prevail in the litigation overall. Though the parties briefed and then argued the merits of the case in great detail, the judge pointedly brushed over all that.

But he also wrote this: “Entergy has raised serious questions regarding its Atomic Energy Act preemption claim, warranting further briefing and a prompt full-dress trial on the merits.” (Emphasis added.) Why make such an observation? In a more conventional case, it would be an effort to nudge the parties toward settlement. But that’s an impossibility here; Vermont cannot agree only to kinda sorta force Vermont Yankee to cease operations after March 21. There is no room for compromise. So, it becomes distinctly possible that the purpose of this language in Judge Murtha’s opinion is to reassure Entergy that it is on the right track – so much so that it really ought to incur the business risk of moving forward with the fuel-rod purchases next week that will facilitate the planned refueling outage in October.

Thus, in my view, it should be cold comfort to the State of Vermont, and the assistant attorneys general making Vermont’s case, that Judge Murtha verily scoffed at Entergy’s claim of irreparable harm absent the entry of a temporary injunction. Entergy executive John Herron politely threatened, but did not promise, to forego buying new fuel rods and even shut Vermont Yankee down permanently if the Court did not grant temporary, emergency relief. Judge Murtha just as politely told Herron and his colleagues to get lost, correctly pointing out that Herron unquestionably stopped short of promising that Entergy would pull the plug without a favorable injunction decision.

Judge Murtha did not reject the notion that there is harm here in the form of uncertainty Entergy confronts about whether Vermont Yankee will stay in business. He agreed that the decision on whether to order the new fuel rods is pressing and expensive. But, he ruled, “[t]his appears to be a business decision made very difficult by the uncertainties of litigation.” In other words, neither this problem, nor employee attrition, nor the difficulties Vermont Yankee has in entering into long-term sales contracts, are harms that are both irreparable and redressable by a temporary injunction.

Two footnotes – numbers two and three, for those with the time and inclination to read the decision – offer an intriguing glimpse into how Judge Murtha views the Vermont statutes that Entergy regards as preempted by the Atomic Energy Act and the regulatory monopoly it confers on the Nuclear Regulatory Commission with respect to radiological safety. Footnote two seems to reflect some exasperation with a complicated series of state enactments that either orders the plant shut down outright as of the passage of the 2006 statute (the State’s view) or amounts to a one-house veto, exercised by the Senate in 2010, of continued operation. The judge explicitly wondered how such a scheme could be compatible with safe decommissioning, given that Vermont law does not require a final determination that it is okay to shut down the plant.

Footnote three is even more troubling from the state’s perspective inasmuch. Judge Murtha explicitly acknowledges that the record contains at least some evidence from which the Court could conclude that Entergy’s mantra is right – that, here, Vermont is indeed regulating “safety, safety, safety.”

Vermont might just win its legal battle with Entergy. But there is very little evidence of such an outcome in this week’s decision denying any temporary emergency relief. The trial starts on September 12. Forget nuclear winter and brace yourself for a nuclear fall.

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One Response to July 19, 2011, Don Kreis: Entergy Wins by Losing on Temporary Injunction

  1. John Greenberg says:

    It will surprise no one that I’ve reached precisely the opposite decision from reading Murtha’s decision.

    While Murtha didn’t consider all of the arguments raised in the case by any means, here’s the scorecard: merits = a very explicit decision not to decide: (“Because the Court finds a preliminary injunction is not warranted between now and a decision on the merits in the fall, it need not, and expressly declines to, issue a holding regarding Entergy’s likelihood of success on the merits.” (p.3) ); on irreparable harm:, 4 issues = 4 wins for State, 4 losses for Entergy.

    Even on the merits, Murtha is clearly rejecting the VAST BULK of the arguments Entergy presented to him. By the first day of the hearing, he had already thrown out all the stuff that was based on press statements rather than actual legislative history (which was QUITE a bit). While he’s left the door somewhat open in terms of legislative history, on which Entergy spent HOURS of trial time, he’s actually closed it on 90% of the stuff they actually brought up, which he characterizes as “responsible recognition that Vermont cannot regulate radiological health and safety.” (He said something quite similar at the hearing). But he does leave the door open a crack by saying that there are numerous references to safety “some of which may be problematic.” (Or not!)

    Similarly, he’s effectively ruled out broad brush attempts to just say everything MUST be safety related, which is really virtually EVERYTHING ELSE Energy has presented so far. Instead, he states clearly that he wants to look at “WORDS that may or may not permit consideration of preempted grounds” (emphasis added) That means, as I have argued consistently from the beginning of all this, that he wants to START with legislative text.

    If I look at that as Entergy’s lawyer, my reaction is that I have to redo my whole case from the beginning up. What’s worse is this: as soon as you try to do this, you’re out of luck, because the facts simply aren’t there. Entergy has already admitted, in the argument that Murtha has brushed aside, that the legislators were well briefed on preemption law and thus did NOT put explicit language in any of the bills which would cause preemption problems to arise.

    Remember the “dog that didn’t bark” argument? Well, if the legislators were showing “responsible recognition” of preemption issues as Murtha suggests, then the dog didn’t bark because there was nothing to bark about. In other words, THAT argument is now down the tubes.

    Unlike professors Kreis and Hanna, I read the Murtha decision as a subtle, but significant assault on Entergy’s whole case to date. What Murtha’s really said, I think, is that the issue of preemption is serious enough to warrant creating a full, detailed judicial record by having a hearing in September, but that, so far at least, virtually nothing Entergy has said has actually impressed him.

    The one exception, which has been noted in these columns previously by Kreis and by me, concerns the word “reliability” and the issue of whether “reliability oversight pursuant to that enactment is still ongoing.” First, I don’t believe it IS ongoing; second, even if it were, declaring it unconstitutional would not change the fundamental decision in this case, nor would it have ANY impact on Acts 74 and Act 160 which were passed before the word came up.

    Put differently: the issue of preemption is serious and the record is sufficiently vast (a number of laws and hundreds of hours of legislative history) that there MAY be something problematic, so rather than toss the case out now, go ahead and bring it on in September. I see this NOT as a rejection of ANY argument put forward by the State (indeed, it’s significant that he does NOT raise the issue of “public health” any longer), but rather as a willingness, in what may well be an excess of caution, to comb ALL of the evidence in a much larger record for possibly preempted issues.

    Were I Entergy, I would take little solace from any of this.

    Finally, I should note that I agree to some extent with Kreis’s reading of footnote #2. It’s the one aspect of the State’s case that Murtha clearly rejects: namely, that the 2010 Senate vote is not an enactment and therefore not really before the court. Murtha’s skepticism was clear during the hearing, and it is even clearer here. As I’ve written here before, it’s a rather bizarre argument to start with, and so far at least, I haven’t found ANYONE who agrees with it (myself included).

    Having said that, however, I would not agree with Don Kreis that Murtha is reflecting “some exasperation with a complicated series of state enactments that either orders the plant shut down outright as of the passage of the 2006 statute (the State’s view) or amounts to a one-house veto, exercised by the Senate in 2010, of continued operation.” Instead, I think he’s signaling the obvious: the Senate’s vote in 2010 may not be an “enactment,” (that’s the State’s argument), but surely it DOES have a central role in the issues before the court.

    P.S. I’m pretty certain the judge misunderstood Entergy’s witness on the issue of refueling. Murtha characterizes one of the options as shutting down BEFORE THE TRIAL in September, but in fact, as I understood the testimony, the option presented by the witness was to shut down before the current operating license expires. Shutting down before the trial would mean leaving some of the fuel currently in the reactor unused, which would be a loss both of revenue AND of fuel cost to Entergy. The only reason to do that would be that anticipated revenues were SO poor as to make it unprofitable to milk even the last few months of profit from this Fukushima clone.

    But shutting down before next March makes perfect business sense (and is, in fact, the option that Herron (and following him, Entergy’s lawyer Sullivan, declared “most likely”). If they decide now not to buy fuel, they save $65 million in fuel costs AND $35 in outage costs. Murtha notes that they can delay the outage until next Feb., which means that they can run until that point (or for as long as it’s profitable to do so) without ANY additional spending and can also produce additional, unplanned revenues which would have been lost during the outage.

    It’s quite possible that Murtha’s skepticism about this part of Mr. Herron’s testimony (which he had already signaled during the hearing) were based on this difference.