Court Opinion

ID: 6325353
Source: CourtListenerOpinion
Date Created: 2022-03-22 00:00:24.186541+00
Date Added: 2024-06-11T09:20:18.974253
License: Public Domain

Case: 21-60130    Document: 00516246998         Page: 1     Date Filed: 03/21/2022

           United States Court of Appeals
                for the Fifth Circuit                                  United States Court of Appeals
                                                                                Fifth Circuit

                                                                              FILED
                                                                        March 21, 2022
                                 No. 21-60130                            Lyle W. Cayce
                                                                              Clerk

   Ray C. Turnage, on behalf of themselves and all others similarly situated;
   Reverend D. Franklin Browne, on behalf of themselves and all
   others similarly situated; Dennis D. Henderson, on behalf of themselves
   and all others similarly situated; Carlos Wilson, on behalf of themselves
   and all others similarly situated; Fred Burns, on behalf of themselves and
   all others similarly situated; Charles Bartley, on behalf of themselves
   and all others similarly situated; Clarence Magee, on behalf of themselves
   and all others similarly situated; Linda Patrick-Crafton, on behalf of
   themselves and all others similarly situated; Barbara Young, on behalf of
   themselves and all others similarly situated; Juanita J. Griggs, on behalf
   of themselves and all others similarly situated; Chernise Seaphus, on
   behalf of themselves and all others similarly situated; Mount Carmel
   Baptist Church; Pinebelt Community Services,
   Incorporated; Hall-Fairley Mortuary; Deborah
   Delgado,

                                                          Plaintiffs—Appellants,

                                     versus

   Sam Britton, Mississippi Public Service Commissioner; Cecil Brown,
   Mississippi Public Service Commissioner; Brandon Presley, Mississippi
   Public Service Commissioner; Mississippi Power Company,

                                                      Defendants—Appellees.

                 Appeal from the United States District Court
                   for the Southern District of Mississippi
                           USDC No. 3-18-CV-818
Case: 21-60130      Document: 00516246998           Page: 2   Date Filed: 03/21/2022

                                     No. 21-60130

   Before Dennis, Higginson, and Costa, Circuit Judges.
   Gregg Costa, Circuit Judge:
          In 2015, the Supreme Court of Mississippi ordered an electric utility
   to refund the money it had collected from customers under a faulty rate
   order. In this federal sequel to that state-court lawsuit, ratepayers contend
   that an erroneous calculation of the interest on their refunds shorted them
   millions of dollars in the aggregate.
          This appeal raises two jurisdictional questions and one merits
   question. We agree with the district court that sovereign immunity bars the
   ratepayers’ claims against the Mississippi Public Service Commissioners.
   We also agree that the Johnson Act does not preclude federal jurisdiction
   over the claims against the utility. On the merits, however, we disagree with
   the accrual date the district court used in dismissing the case on limitations
   grounds.
                                           I.
          This dispute traces back to a rate increase the Mississippi Public
   Service Commission approved almost a decade ago. To allow Mississippi
   Power Company 1 to raise more than $330 million to construct a power plant
   in Kemper County, the Commission authorized the utility to increase its
   rates by 15% in 2013 and an additional 3% in 2014.
          The Supreme Court of Mississippi invalidated the rate increase. In
   addition to finding that the Commission exceeded its authority in blessing the
   rate hike, it concluded that the Commission and Mississippi Power violated
   ratepayers’ due process rights. Miss. Power Co., Inc. v. Miss. Pub. Serv.

          1
             Mississippi Power provides electricity to roughly 188,000 customers in
   southeastern Mississippi.

                                           2
Case: 21-60130      Document: 00516246998           Page: 3    Date Filed: 03/21/2022

                                     No. 21-60130

   Comm’n, 168 So. 3d 905, 912, 916 (Miss. 2015). The supreme court ordered
   Mississippi Power to refund the unauthorized charges. Id. at 916.
          Under state law, the utility was required to refund the excess to
   customers “in full, including interest at the lawful rate.” Miss. Code
   Ann. § 77-3-39(12). Mississippi’s lawful interest rate is “eight percent (8%)
   per annum, calculated according to the actuarial method.” Id. § 75-17-1(1).
          Mississippi Power submitted a proposed refund plan to the
   Commission on July 21, 2015, which the Commission approved on August
   6th.
          Mississippi Power began issuing refund checks on November 6, 2015
   and mailed out the final batch of checks on December 4, 2015. Ratepayers
   who did not elect to receive a refund check received a credit on their utility
   bill instead. The refund program formally ended on May 27, 2016, when an
   independent auditor confirmed that all refunds had been distributed or were
   otherwise accounted for.
          At some point before the checks issued, some ratepayers
   commissioned economist Mark A. Cohen to compare the interest they would
   receive under the refund plan to the interest guaranteed by statute. On
   August 13, 2016, Cohen informed them that he believed that Mississippi
   Power had shorted them more than ten million dollars. Although the plan
   purports to use an interest rate higher than the statutory 8%, Cohen contends
   that the plaintiffs received less than they were owed using either rate. This
   discrepancy may be due to how the refund plan compounded interest.
          On November 21, 2018, more than two years after receiving Cohen’s
   report, individual and institutional electricity customers filed a putative class
   action against Mississippi Power and the three Mississippi Public Service
   Commissioners in their official capacities. The ratepayers brought claims

                                          3
Case: 21-60130      Document: 00516246998           Page: 4    Date Filed: 03/21/2022

                                     No. 21-60130

   under state law, as well as section 1983 claims under the Due Process Clause
   and the Takings Clause.
          The district court dismissed the claims against the Commissioners
   and Mississippi Power in separate orders.           It first held that sovereign
   immunity barred the ratepayers’ claims against the Commissioners. In a
   second order, the district court determined that the Johnson Act, 28
   U.S.C. § 1342, did not deprive it of subject matter jurisdiction over the
   remaining federal claims but then dismissed the federal claims against
   Mississippi Power as time-barred. Finally, the court declined to exercise
   supplemental jurisdiction over the remaining state law claims based on the
   Class Action Fairness Act’s home state exception and dismissed them
   without prejudice. The ratepayers timely appeal all of these rulings except
   the without-prejudice dismissal of the state law claims.
                                         II.
          As we must, we first address the jurisdictional issues. Ramming v.
   United States, 281 F.3d 158, 161 (5th Cir. 2001).
                                         A.
          Recognizing “the problems of federalism inherent in making one
   sovereign appear against its will in the courts of the other,” the Eleventh
   Amendment and general principles of sovereign immunity prohibit federal
   courts from hearing certain lawsuits against the states. Pennhurst State Sch.
   & Hosp. v. Halderman, 465 U.S. 89, 100 (1984) (quoting Emps. v. Miss. Pub.
   Health & Welfare Dep’t, 411 U.S. 279, 294 (1973) (Marshall, J., concurring));
   see also Allen v. Cooper, 140 S. Ct. 994, 1000 (2020) (recognizing that although
   the text of Eleventh Amendment “applies only if the plaintiff is not a citizen
   of the defendant State,” the amendment reflects a broader immunity
   principle inherent in the federal system). Commissioners Bailey, Maxwell,
   and Presley invoke this sovereign immunity.

                                          4
Case: 21-60130       Document: 00516246998          Page: 5     Date Filed: 03/21/2022

                                     No. 21-60130

          Although sovereign immunity bars most suits against states and their
   agencies in federal court, it is not absolute. City of Austin v. Paxton, 943 F.3d
   993, 997 (5th Cir. 2019). It does not apply when the state consents to suit or
   when Congress abrogates the state’s immunity. Id. Additionally, under Ex
   parte Young, 209 U.S. 123 (1908), sovereign immunity does not bar suits
   against state officers for prospective declaratory or injunctive relief because
   officers act as private persons “stripped of [their] official clothing” when
   they violate federal law. K.P. v. LeBlanc, 627 F.3d 115, 124 (5th Cir. 2010).
   Congress has not abrogated the states’ immunity from section 1983 claims
   and Mississippi has not consented to suit, so federal jurisdiction over the
   Commissioners turns on Young.
          The Young exception to state sovereign immunity applies when the
   party invoking it establishes three criteria. First, the complaint “must name
   individual state officials as defendants in their official capacities.” Raj v. La.
   State Univ., 714 F.3d 322, 328 (5th Cir. 2013). Second, the complaint must
   allege an ongoing violation of federal law. Verizon Md., Inc. v. Pub. Serv.
   Comm’n of Md., 535 U.S. 635, 645 (2002). And finally, the complaint must
   seek prospective relief. Id.
          The complaint easily satisfies Young’s first requirement. The Public
   Service Commissioners are state officials ordinarily shielded by sovereign
   immunity. Gulf Park Water Co., Inc. v. Miss. Dep’t of Env’tl Quality, 59 F.3d
   1241, 1241, 1995 WL 413105 (5th Cir. 1995) (unpublished). And they are sued
   in their official capacities.
          The ratepayers stumble at Young’s second requirement. Young does
   not apply when the injurious conduct occurred “at one time or over a period
   of time in the past.” Corn v. Miss. Dep’t of Pub. Safety, 954 F.3d 268, 275 (5th
   Cir. 2020) (citing Papasan v. Allain, 478 U.S. 265, 278 (1986)). When there
   is no ongoing violation of federal law, Young jurisdiction is not needed to

                                           5
Case: 21-60130        Document: 00516246998              Page: 6       Date Filed: 03/21/2022

                                          No. 21-60130

   prevent state officials from “employ[ing] the Eleventh Amendment as a
   means of avoiding compliance with federal law.” P.R. Aqueduct & Sewer
   Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 146 (1993).
           The conduct that the ratepayers complain of is not ongoing. They
   argue that “enforcement of the Kemper Refund Plan and its improper
   [interest calculation method]” deprives them of their rights under the
   Takings and Due Process Clauses. But as the district court correctly pointed
   out, neither the Commission nor Mississippi Power have taken any action to
   administer or enforce the refund plan in years. Mississippi Power issued the
   final batch of refund checks to customers in December 2015 and the refund
   program formally ended after the May 2016 audit. Just last year, we found
   no continuing illegality when the investigation and administrative
   proceedings “forming the basis of the allegations . . . [we]re completed.”
   Spec’s Fam. Partners, Ltd. v. Nettles, 972 F.3d 671, 681 (5th Cir. 2020).
   Likewise here, the relief sought “focuses on past behavior”—the conduct of
   government officials during a now-concluded adjudicatory process. Id.
           Young requires the ratepayers to “allege that the defendant is violating
   federal law, not simply that the defendant has done so.” NiGen Biotech,
   L.L.C. v. Paxton, 804 F.3d 389, 394 (5th Cir. 2015). Because the ratepayers
   failed to identify an ongoing violation of federal law, the district court
   properly dismissed the claims against the Commissioners for lack of
   jurisdiction. 2

           2
               The district court also held that any relief would be retrospective, contrary to
   Young’s third requirement. We do not need to reach this issue because Young jurisdiction
   fails for lack of an ongoing violation of federal law.

                                                6
Case: 21-60130      Document: 00516246998           Page: 7    Date Filed: 03/21/2022

                                     No. 21-60130

                                          B.
          Mississippi Power also challenges federal jurisdiction. The utility
   contends that the Johnson Act, 28 U.S.C. § 1342, makes state court the only
   proper forum for this suit.
                                          1.
          The Johnson Act divests federal courts of subject matter jurisdiction
   over certain disputes involving state rate orders. It states that district courts
   may not “enjoin, suspend or restrain . . . any order affecting rates chargeable
   by a public utility” when four criteria are met:
       (1) Jurisdiction is based solely on diversity of citizenship or
       repugnance of the order to the Federal Constitution; and,
       (2) The order does not interfere with interstate commerce; and,
       (3) The order has been made after reasonable notice and hearing;
       and,
       (4) A plain, speedy and efficient remedy may be had in the courts of
       such State.
   28 U.S.C. § 1342.
          The Johnson Act resulted from early twentieth century tension over
   federal court intervention in state rate regulation. Supreme Court decisions
   like Ex parte Young, 209 U.S. 123 (1908), and Home Telephone & Telegraph Co.
   v. City of Los Angeles, 227 U.S. 278 (1913), had expanded the ability of federal
   courts to intervene in the work of state agencies. Clinton A. Vince & John S.
   Moot, Energy Federalism, 42 Admin. L. Rev. 323, 358 (1990). Regulated
   industries used this new-found federal jurisdiction to challenge state
   regulatory actions in federal court. Id. Some utilities so desired federal
   jurisdiction to challenge state ratemaking that they changed their state of
   incorporation to manufacture diversity jurisdiction. 78 Cong. Rec. 2031
   (1934) (statement of Sen. Norris) (describing how a Nebraska utility

                                          7
Case: 21-60130       Document: 00516246998          Page: 8     Date Filed: 03/21/2022

                                     No. 21-60130

   reincorporated in Maine, where it did not have any business, to create
   diversity jurisdiction to sue Nebraska regulators).
          A backlash ensued against federal courts’ issuance of rate injunctions.
   See Edward A. Purcell, Jr., Brandeis and the Progressive
   Constitution 23–26 (2000).               Progressives believed that “federal
   jurisdiction enabled companies to delay and often defeat administrative
   orders regardless of the merits involved.” Id. at 24 (quoting New York
   Mayor Fiorello LaGuardia’s comments that these lawsuits were a “flagrant
   misuse of the Federal courts” and “used for the purpose of legalizing the
   exploitation of these greedy corporations”); 78 Cong. Rec. 8335 (1934)
   (statement of Sen. Johnson) (worrying that public utilities sued in federal
   court not in search of a neutral forum for legitimate claims, but instead “to
   delay, hinder, and impede the states in their regulatory actions”). States-
   rights advocates lamented federal intrusion into the states’ traditional
   ratemaking prerogative. Purcell, supra, at 24–26; 78 Cong. Rec. at 8324
   (statement of Rep. Mapes) (states should be able to “perform their proper
   functions in the supervision and fixing of rates, without interference of
   Federal law.”).
          Progressives and advocates for states’ rights united in 1934 to pass the
   Johnson Act, see Purcell, supra, at 26, which took the extraordinary step of
   restricting federal jurisdiction, see Burford v. Sun Oil, 319 U.S. 315, 337 (1943)
   (Frankfurter, J., dissenting) (“Aside from the Johnson Act . . . the many
   powerful and persistent legislative efforts to abolish or restrict diversity
   jurisdiction have ever since the Civil War been rejected by Congress.”). The
   Act aimed to “channel normal rate litigation into the state courts.” Gulf
   Water Benefaction Co. v. Pub. Util. Comm’n, 674 F.2d 462, 468 (5th Cir.
   1982); see also Tennyson v. Gas Serv. Co., 506 F.2d 1135, 1138 (10th Cir. 1974)
   (explaining that the Act “was intended to keep constitutional challenges to
   orders affecting rates out of the federal courts ‘lock, stock, and barrel.’”).

                                           8
Case: 21-60130         Document: 00516246998               Page: 9      Date Filed: 03/21/2022

                                          No. 21-60130

           Congress largely succeeded. Today, courts routinely deny federal
   jurisdiction over utilities’ constitutional challenges to state and local
   regulators’ rejection of rate hikes. See, e.g., People’s Nat’l Util. Co. v. City of
   Houston, 837 F.2d 1366, 1367–68 (5th Cir. 1988) (applying the Johnson Act
   to utility’s claim that city’s failure to approve its request for a rate increase
   constituted an uncompensated taking); U.S. West, Inc. v. Tristani, 182 F.3d
   1202, 1206, 1211 (10th Cir. 1999) (applying the Johnson Act to utility’s claim
   that state’s consideration of subsidiary’s advertising revenue in rate
   calculation violated the utility’s freedom of expression and constituted an
   uncompensated taking). 3 With this foundation in mind, we address whether
   the Johnson Act bars federal jurisdiction over this class action.
                                                2.
           This case comes to us in a posture that the Johnson Act’s supporters
   may not have foreseen. Instead of the utility seeking a federal forum, it is the
   ratepayers who prefer to have this suit in federal court. Despite this oddity,
   we proceed to apply the Act as written.
           The Johnson Act deprives a federal court of jurisdiction over
   challenges to “order[s] affecting rates” only when all four of its conditions
   are met. 4 28 U.S.C. § 1342. As the party arguing that the Act displaces

           3
              Preemption claims are the exception. In the 1980s, several courts held the
   Johnson Act inapplicable to preemption cases because preemption is not “solely” based on
   claims of unconstitutionality but on a combination of the Supremacy Clause and federal
   statutory law. Vince & Moot, supra, at 359–60. New Orleans Pub. Serv., Inc. v. City of New
   Orleans is typical. 782 F.2d 1236, 1242 (5th Cir. 1986), withdrawn in part, 798 F.2d 858 (5th
   Cir. 1986).
           4
              As a threshold matter, ratepayers briefly argue that the Johnson Act is
   inapplicable before even reaching the four factors because their suit does not involve an
   “order affecting rates.” The 2015 refund order impacts rates because the amount
   ratepayers ultimately paid for service in 2013 and 2014 “would necessarily be less as a result
   of the order.” Hill v. Kan. Gas Serv. Co., 323 F.3d 858, 864 (10th Cir. 2003).

                                                 9
Case: 21-60130      Document: 00516246998            Page: 10    Date Filed: 03/21/2022

                                      No. 21-60130

   federal question jurisdiction that otherwise exists, Mississippi Power bears
   the burden of proving the Act’s elements. Williams v. Pro. Transp., Inc., 294
   F.3d 607, 612 (4th Cir. 2002). The ratepayers concede that three are
   satisfied: jurisdiction is based solely on federal constitutional questions (due
   process and takings claims); the challenged order affects only Mississippi;
   and Mississippi courts provide a remedy for “[a]ny party aggrieved by any
   final finding, order or judgment of the commission in any utility rate
   proceedings,” Miss. Code Ann. § 77-3-72(1).
          So federal jurisdiction depends on the Johnson Act’s third criteria:
   whether the Commission’s 2015 order approving the refund plan was made
   “after reasonable notice and hearing.”            28 U.S.C. § 1342(3).       This
   requirement recognizes a greater justification for federal review of
   ratemaking when state agency procedures lack the basic hallmarks of due
   process. See Nucor Corp. v. Neb. Pub. Power Dist., 891 F.2d 1343, 1348 (8th
   Cir. 1989) (recognizing that the Act’s process requirement “had been
   interpreted as requiring that the minimum standards of due process be
   met.”).
          Notice is reasonable “if it is transmitted in a manner which, at a
   minimum, has a reasonable certainty of resulting in actual notice.” Id. This
   is a fact-specific standard with little caselaw providing on-point help. The
   notice factor is a close call, but we ultimately agree with the district court that
   the 2015 refund order was not issued after “reasonable” process.
          Mississippi Power and the Commission did not notify ratepayers of
   the 2015 refund proceedings. The Commission only notified the six parties
   who intervened in the 2013 rate increase proceeding before it approved the
   utility’s 2015 refund proposal. In re Notice of Intent of Miss. Power Co. for a
   Change in Rates Related to the Kemper Cnty. IGCC Project, 2015 WL 4880634,
   at *1 (Miss. P.S.C. Aug. 6, 2015). It gave those parties a week to respond or

                                           10
Case: 21-60130       Document: 00516246998              Page: 11       Date Filed: 03/21/2022

                                         No. 21-60130

   object. Id. The utility and the Commission did not provide similar notice to
   nonparty customers like the plaintiffs.
           It does not matter that the ratepayers could have sought leave to
   intervene in the refund proceedings. The Johnson Act imposes no such
   requirement on customers; it places the burden of notice on the utility. The
   utility further points to its “extensive public notice campaign” publicizing
   the details of the refund plan. This is also irrelevant because the Johnson Act
   requires prior notice—after all, only that enables a timely objection—and the
   public education campaign occurred after the Commission issued the refund
   order. See 28 U.S.C. § 1342(3).
           Given the absence of process specific to the 2015 refund order,
   Mississippi Power relies on the process it provided in the initial 2013
   ratemaking.      The utility maintains that its 2013 notice met state law
   requirements for all the subsequent hearings and that its compliance should
   be per se reasonable. Before it raised its rates in 2013, Mississippi Power
   mailed notice of the proposed rate increase to affected customers, published
   a notice in the Clarion Ledger, and notified all parties of record in the last
   proceeding in which the company sought a major rate change, In re Notice of
   Intent of Miss. Power Co. for a Change in Rates Related to the Kemper Cnty.
   IGCC Project, 2013 WL 871246, at *2 (Miss. P.S.C. Mar. 5, 2013). The
   Commission then held a public hearing on the rate increase, at which it
   allowed six intervenors to participate by submitting prewritten testimony,
   presenting their own evidence, and cross-examining all witnesses. Id. at *2–
   3. 5 State law did not require the utility to provide any additional notice to

           5
             The district court concluded that the 2013 process was not reasonable, finding
   that the state supreme court’s prior determination to that effect was preclusive. This was
   an error because the supreme court’s holding did not relate to the 2013 order approving the
   rate increase but to a prior proceeding approving construction of the new plant. See Miss.

                                               11
Case: 21-60130        Document: 00516246998              Page: 12       Date Filed: 03/21/2022

                                          No. 21-60130

   ratepayers before the refund proceeding two years later because it was
   considered part of the same matter. See Miss. Code Ann. § 77-3-39
   (contemplating refunds following judicial invalidation of rate orders but
   requiring notice and hearing only upon utility’s initial filing of notice of intent
   to change rates).
           In the context of a refund hearing to remedy an illegal rate, Mississippi
   Power’s compliance with state law was not enough to satisfy the Johnson
   Act’s reasonable process requirement. One court of appeals has held that
   giving notice in the form required by state law satisfies the Johnson Act.
   Brooks v. Sulphur Springs Valley Elec. Co-op, 951 F.2d 1050, 1054 (9th Cir.
   1991). But see Nucor Corp., 891 F.2d at 1348 (rejecting idea that compliance
   with state law is a safe harbor). But no federal court has held that state law
   controls when Johnson Act notice is due in the first place. And we have
   explained that it is the court’s duty to define reasonable process. City of
   Meridian v. Miss. Valley Gas. Co., 214 F.2d 525, 526 (5th Cir. 1954) (finding it
   “plain” that the court, not the ratemaking body, defines reasonableness
   under the Johnson Act).
           Understanding that the Johnson Act’s procedural requirements
   reflect due process principles, Nucor Corp., 891 F.2d at 1348, we do not see
   how notice of the 2013 rate hearing gave ratepayers meaningful notice of the
   refund hearing two years later. The Johnson Act’s requirement of both
   “notice and hearing,” seemingly ties one component of process to the other.
   After all, the right to be heard “has little reality or worth unless one is
   informed that the matter is pending.” Mullane v. Cent. Hanover Bank & Tr.
   Co., 339 U.S. 306, 314 (1950). And requiring notice for both a rate hike

   Power Co., 168 So. 3d at 914–15. The state court opinion recognizes that the ratepayers did
   receive notice of the rate increase in 2013. Id. at 914 (“Ratepayers first received notice of
   MPC’s intent to increase rates after entry of the April 24, 2012, Order . . .”).

                                                12
Case: 21-60130        Document: 00516246998              Page: 13       Date Filed: 03/21/2022

                                          No. 21-60130

   hearing and a refund hearing held years later is consistent with due process
   law in other areas. Cf. Cleveland Bd. of Ed. v. Loudermill, 470 U.S. 532, 546–
   47 (1985) (requiring notice of both pre- and post-deprivation hearings in
   challenge to termination of public employment).
           To be sure, a hypervigilant customer could have followed the full
   history of the rate increase as it wound its way through the state agency and
   state courts only to end up back in a 2015 agency hearing to determine the
   amount of the refund. But it is not reasonable to expect that level of diligence
   from a utility customer not following administrative and court dockets as a
   lawyer might. As reasonableness is the touchstone of the Johnson Act’s
   notice requirement, independent notice had to be provided for the 2015
   refund hearing in order to insulate it from federal court scrutiny. 6 Because
   such notice was not provided, this case is properly in federal court.
                                               III.
           With the jurisdictional questions decided, we turn to Mississippi
   Power’s substantive dismissal motion. Mississippi Power contends that the
   ratepayers’ federal claims are time-barred. Failure to file within the statute
   of limitations justifies dismissal under Rule of Civil Procedure 12(b)(6) when
   “it is evident from the plaintiff’s pleadings that the action is barred and the
   pleadings fail to raise some basis for tolling or the like.” Jones v. Alcoa, Inc.,
   339 F.3d 359, 366 (5th Cir. 2003). But the timeliness of a claim can depend
   on evidence obtained in discovery or even require a factfinder to resolve
   disputed issues. See Margolies v. Deason, 464 F.3d 547, 554–55 (5th Cir.

           6
             We do not hold that every separate rate hearing requires separate notice to satisfy
   the third Johnson Act element. But here the hearings occurred two years apart and
   addressed substantially different questions. A ratepayer who received notice in 2013 of a
   possible rate hike might not have desired to comment on that common occurrence but
   might have been quite interested in commenting on the refund for an illegal rate.

                                                13
Case: 21-60130        Document: 00516246998         Page: 14   Date Filed: 03/21/2022

                                     No. 21-60130

   2006). We review dismissal for failure to state a claim de novo. Raj, 714 F.3d
   at 329–30.
          In Mississippi, the limitations period for section 1983 claims is three
   years. Cuvillier v. Taylor, 503 F.3d 397, 401–02 (5th Cir. 2007) (incorporating
   Miss. Code Ann. § 15-1-49, Mississippi’s general personal injury
   limitations period). The ratepayers filed this action on November 21, 2018,
   so their federal claims are timely if they accrued on or after that date in 2015.
          Although state law provides the limitations period for a section 1983
   claim, federal law determines when the claim accrues. Wallace v. Kato, 549
   U.S. 384, 388 (2007). A claim accrues when the would-be plaintiff “knows
   or has reason to know . . . that he has been hurt and who has inflicted the
   injury.” Gartrell v. Gaylor, 981 F.2d 254, 257 (5th Cir. 1993) (per curiam)
   (quotation omitted). Plaintiffs have reason to know of their cause of action
   when they have “notice of facts which, in the exercise of due diligence, would
   have led to actual knowledge” of injury and causation. Roe v. United States,
   839 F. App’x 836, 843 (5th Cir. 2020) (quotation omitted). If plaintiffs have
   access to facts that they do not understand themselves, due diligence can
   require them to “seek professional advice” about their potential claims.
   Harrison v. United States, 708 F.2d 1023, 1027 (5th Cir. 1983). In short, the
   limitations period begins when “the circumstances would lead a reasonable
   person to investigate further.” Piotrowski v. City of Houston, 51 F.3d 512, 516
   (5th Cir. 1995).
          Recall that the ratepayers’ claims challenge the interest calculation
   used in determining their refunds. The district court concluded these claims
   accrued on August 6, 2015, when the Commission approved the refund plan
   proposed by Mississippi Power. The plan’s main text does not mention
   interest or explain how interest would be calculated on the refunds, but a
   footnote—at the end of a sentence detailing the amount the utility collected

                                          14
Case: 21-60130        Document: 00516246998              Page: 15       Date Filed: 03/21/2022

                                          No. 21-60130

   unlawfully—clarifies that “carrying costs . . . will be calculated using the 2015
   cost of capital filed in the Company’s 2015 ECO filing, adjusted for income
   taxes, with annual compounding of interest.” From this, the district court
   concluded, a reasonable person would have sought professional advice to
   confirm that the plan provided for lawful interest.
           Even assuming that the ratepayers had access to the refund plan on
   the day the Commission approved it, the plan’s language did not put them
   on notice of facts that would cause a reasonable person to further investigate
   the interest issue. The footnoted sentence is not about interest; it merely
   catalogues the total amount of money that Mississippi Power collected under
   the faulty rate order. 7 The footnote is not obviously about interest either; it
   explains how the utility intended to calculate “carrying costs,” or the costs a
   business incurs to hold stock inventory. See Will Kenton, Carrying Costs,
   INVESTOPEDIA (2020), https://www.investopedia.com/terms/c/carrying-
   costs.asp (defining carrying costs). Nowhere does the plan say what the
   interest rate is or the method of calculating it. And, of course, the plan does
   not tell ratepayers the amount of individual refunds. It is asking a lot of a
   reasonable person to recognize from the plan’s obtuse and technical
   references that it uses a method to calculate interest different from the one
   required by law. The ratepayers’ claims did not accrue on August 6, 2015. 8

           7
            In full, the above-the-line sentence preceding the footnote reads: “As of June 30,
   2015, [Mississippi Power] had collected approximately $331 million pursuant to the Mirror
   CWIP Order and accrued an additional $22 million of carrying costs.”
           8
              The district court also noted that the ratepayers actually did retain an expert to
   advise them on the interest calculation issue sometime before November 2015. When a
   plaintiff has actual knowledge of causation and injury, it is unnecessary to consider what a
   “reasonable person” would know. See Smith v. Reg’l Transit Auth., 827 F.3d 412, 421 (5th
   Cir. 2016). But the record does not reflect who hired Cohen or when. And while those
   who retained Cohen developed actual knowledge of their injury at some point, we do not
   know when Cohen first realized they were underpaid.

                                                15
Case: 21-60130       Document: 00516246998             Page: 16      Date Filed: 03/21/2022

                                        No. 21-60130

          Nor did their claims accrue on August 16, 2016, when Cohen issued
   his report finding that Mississippi Power miscalculated interest on the
   refunds. Using this late date is at odds with the accrual standard. Our cases
   ask when a would-be plaintiff should seek professional advice, not when they
   actually receive it. See Harrison, 708 F.2d at 1027. To hold otherwise would
   allow litigants to evade the statute of limitations by delaying expert opinions
   for months or even years.
           Other possible accrual dates remain. One possibility is that the claims
   accrued when Mississippi Power explained on the FAQ page of its website
   that it would pay interest at its “after tax WACC (weighted average cost of
   capital) rate of 9.5% . . . over the entire refund period (March 2013 – July
   2015) and up to Nov. 7 when we begin issuing the refunds.” 9 The interest
   described in the FAQ differs from the interest guaranteed by statute in
   several aspects. For one, the FAQ promises 9.5% interest rather than the 8%
   guaranteed by law. See Miss. Code Ann. § 75-17-1. Additionally, the
   FAQ indicates that Mississippi Power intended to calculate interest “over
   the entire refund period” rather than “per annum” and “according to the
   actuarial method,” as the statute requires. See id. These discrepancies,
   combined with the fact that the FAQ (unlike the refund plan footnote)
   explicitly mentions interest, may have led a reasonable person to “investigate
   further.” Piotrowski, 51 F.3d at 516.
          It could be, however, that the ratepayers could not have ascertained
   their injury from the FAQ, because it was not clear at that time that they
   would be underpaid.          Cohen calculated that, compounded annually,
   Mississippi Power would have owed customers $40.7 million in interest at

          9
             We do not know the exact date that Mississippi Power published the FAQ. It was
   certainly posted by November 1, 2015, when Cohen accessed it online.

                                             16
Case: 21-60130        Document: 00516246998               Page: 17        Date Filed: 03/21/2022

                                           No. 21-60130

   the statutory rate and $48.2 million in interest at the 9.5% WACC rate. Either
   method would result in a payout higher than the $30 million that Mississippi
   Power’s FAQ anticipated the company would pay in total interest. Further
   complicating the calculation, it is not clear whether Mississippi Power would
   compound interest annually, as alluded to in the plan footnote, or “over the
   entire refund period,” as stated in the FAQ, a distinction that could be the
   difference between overpayment and underpayment.
           Another possibility is that the ratepayers’ claims accrued upon the
   receipt of their refunds. Citing cases from the tax refund context, the
   ratepayers contend that an underpayment-based injury cannot occur until the
   injured party receives their deficient check, because before that point, the
   government could alter the amount to be refunded. See, e.g., United States v.
   Wurts, 303 U.S. 414, 417 (1938) (concluding that IRS’s wrongful refund
   claim accrued when a taxpayer received the erroneous refund, not when the
   IRS Commissioner approved it). On this theory, only some of the ratepayers
   would be barred from suing. Mississippi Power issued refund checks in seven
   batches between November 6 and December 4, 2015. Only those ratepayers
   who received their checks after November 21st could continue this action. It
   is unclear from the record if any of the named plaintiffs fall into the latter
   category. 10
           The ratepayers’ claims did not accrue on August 6, 2015, when the
   Commission approved the refund plan, or on August 16, 2016, when Cohen
   concluded that Mississippi Power shorted them. Given the uncertainties in
   the record that we have noted, and the possible benefit of limited discovery
   on the limitations issue, we remand for the district court to decide in the first

           10
              Some ratepayers received their refunds as a credit on their utility bills instead of
   a check. We do not know if any named plaintiffs chose the credit option, and if so, when
   that credit was posted to their accounts.

                                                 17
Case: 21-60130        Document: 00516246998               Page: 18       Date Filed: 03/21/2022

                                          No. 21-60130

   instance which of the remaining options outlined above is the correct accrual
   date. 11
                                               ***
              We AFFIRM the dismissal of the claims against the Commissioners
   but VACATE the district court’s dismissal of the claims against Mississippi
   Power on limitations grounds. We REMAND for further proceedings
   consistent with this opinion.

              11
              It may be, however, that the district court need not reach the limitations issue.
   Mississippi Power raised two additional arguments for dismissal: first, that it is not a state
   actor subject to suit under section 1983, and second, that the ratepayers do not have a
   property interest in the refund protected by the Due Process Clause. Mississippi Power
   asks us to affirm on those alternative grounds, but the district court should consider those
   issues in the first instance. We do not intimate what decisions it should reach on those
   questions.

                                                18