Gov. Peter Shumlin. VTD/Josh Larkin
The Shumlin administration wants Entergy Corp. to pay for any legal expenses the state may incur as it defends itself against a lawsuit Entergy initiated against the state last week.
That counterintuitive payment approach is called a “billback,” according to a Department of Public Service official, who assured the Senate Finance Committee on Friday, such legal maneuvers are “an age-old tradition.”
If the state, for example, was bringing a case in front of the Nuclear Regulatory Commission, it could charge Entergy for the cost of hiring experts and lawyers, according to Sarah Hofmann, deputy commissioner of the Department of Public Service. The “causer,” or the entity that caused the need for a legal suit, is liable for the cost, she said.
The “bill backs” would be effective immediately if the Legislature adopts the new statutory language as part of H.56, the omnibus energy bill, which was unanimously voted out of committee on Friday. The bill will go to the floor of the Senate early next week.
The change in statute would make Entergy Corp. liable for the state’s legal expenses, including responses to public records requests and the preparation of litigation in the case, which the corporation lodged against the state in U.S District Court in Burlington.
Entergy alleges that the state went back on its word when the Legislature passed a law in 2006 requiring Entergy to obtain permission from lawmakers on a license extension for Vermont Yankee, which is, under a 2002 memorandum of understanding, set to shut down March 21, 2012. The Louisiana-based nuclear power company’s case is based on the question of pre-emption. Entergy argues in its complaint that the Nuclear Regulatory Commission, which approved a new license for the company in March, has pre-emptive authority over state law.
Attorney General Bill Sorrell has said the suit could be protracted and potentially costly if it goes all the way to the U.S. Supreme Court. CORRECTED Just this week, Sorrell’s office may have lost a data mining case heard by the Supreme Court Justices. Cheryl Hanna, a legal expert and professor
with Vermont Law School, wrote in an opinion piece last week that she
anticipates if Vermont loses the case, in which it defended a new law regulating access to physician records, it will likely cost the state about $1 million.
A court would rule on who would pay the damages in the Entergy lawsuit, Hofmann said. And the state, if it loses, could be responsible for not only its own legal costs, but also those of the plaintiff.
Sen. Randy Brock, R-Grand Isle-Franklin, asked Hofmann: “Is it common that if someone sues us that they charge us legal fees for representing us in that lawsuit?”
He put it another way: “If a state vehicle runs me over and I sue the state, the state requires me to pay for experts hired by the state to testify against me.”
Hofmann replied that “It’s not unusual to see a bill back for the cost to the causer.” At the end of the litigation, the federal judge decides who gets awards for attorneys’ fees and costs.
The Vermont Attorney General’s office and Shumlin’s legal counsel Beth Robinson support the change in statute.
“We stand firmly behind the language,” Robinson said. “We think it’s the right thing to do.”
Permalink |
Let’s hope this Shumlin provision fails in the Legislature. Randy Brock’s analogy is perfect. Any reasonable judge should require that each party pay its own legal expenses, particularly in the Entergy lawsuit.
Since Vermont has a dismal record at the Supreme Court defending unconstitutional Vermont laws, the state needs an incentive to enact constitutional legislation.
Permalink |
Good for Shumlin, keeping on the offensive is the way to go.
The American Rule expects the parties to bear their own legal expenses, except under certain circumstances.
Such as frivolous lawsuits to escape contractual obligations, or contractual clauses that shift the cost to the loser.
Permalink |
I hope the Gov. is successful and that Entergy sees that it is going to loose.
Whet ever happened to States rights over Federal intervention? Republicans always say they want smaller government and the State to have rights to go against the federal. (Except when it benefits them )
Permalink |
States rights over Federal intervention? … Interesting!
I wonder just how a state whose current administration appears to believe they can rule by saying “the law is what we say it is” will play out in a federal court room …
Permalink |
If Entergy is going to break Vermont law and then cost us court costs we should be paid lawyers fees and court costs. This is a frivolous law suit and Entergy should bare the cost!
Permalink |
As readers are presumably aware, the language in question was indeed in the bill that the Legislature approved for Gov. Shumlin’s signature.
If I might stick up for the DPS a bit here: Deputy Commissioner Sarah Hofmann has it exactly right. It is an established practice in utility law for the regulator to bill the regulated utility for the costs of regulation. So the concept, though admittedly counter-intuitive, is certainly not without precedent.
On the other hand, as far as I am aware, this principle is typically applied in circumstances where the regulated utility can ultimately recover the relevant costs from ratepayers. As far as I know, Entergy (i.e., Vermont Yankee) lacks such an opportunity here.
I would think (although I confess I haven’t done the relevant legal research) that the U.S. District Court will reserve for itself the right to decide whether anyone should pay another party’s costs in the Entergy v. Shumlin litigation. In that sense, perhaps the provision in question is best regarded as an in-your-face from the Legislature and the Governor to Entergy? Not sure.
Permalink |
Ever since Entergy purchased the Vermont Yankee nuclear plant in 2002, the company has been the target of ever more ingenious extortion schemes devised by the anti-nukies in the legislature.
In 2006 the legislature changed the rules that Entergy had agreed to, by requiring legislative approval before the Public Service Board could rule on Entergy’s petition to continue operation after March 2012. Then the legislature willfully refused to obey its own new rules by failing to vote on the legislative approval question.
So, denied even a vote on whether the PSB could issue a final order on its application, Entergy went to Federal court to seek preemption by Federal law of Vermont’s refusal to allow the plant to continue operation, with a recently issued twenty year federal license extension, beyond next March.
The head anti-nukie – Gov. Shumlin – quickly struck back. He caused a provision to be inserted in the current energy bill that will charge the state’s cost of defending against Entergy’s lawsuit, win or lose, to Entergy.
It’s one thing to bill back to a Public Service Board applicant the costs of issuing a final order on its application. But it’s quite another to bill back the state’s legal costs of defending against a litigant whose application the politicians have forbidden the PSB even to rule upon.
Gov. Shumlin’s ethically challenged billback scheme is one more deplorable disgrace to the once honorable state of Vermont.
From: The Entergy Billback Scheme
http://www.vermonttiger.com/content/2011/05/the-entergy-billback-scheme.html
Permalink |
Why no story on this new law suit from Entergy?