Court Opinion

ID: 9554611
Source: CourtListenerOpinion
Date Created: 2023-08-09 16:00:58.128604+00
Date Added: 2024-06-11T15:35:49.018524
License: Public Domain

United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 23-1228
                        ___________________________

                             Entergy Arkansas, LLC

                                       Plaintiff - Appellee

                                         v.

Ted J. Thomas, in his official capacity as Chairman of the Arkansas Public Service
Commission; Justin Tate, in his official capacity as Commissioner of the Arkansas
  Public Service Commission; Kimberly A. O’Guinn, in her official capacity as
           Commissioner of the Arkansas Public Service Commission

                                            Defendants

                    Arkansas Electric Energy Consumers, Inc.

                                     Intervenor - Appellant

                            ------------------------------

                      Arkansas Public Service Commission

                               Amicus on Behalf of Appellant(s)
                                 ____________

                    Appeal from United States District Court
                  for the Eastern District of Arkansas - Central
                                 ____________

                            Submitted: June 15, 2023
                             Filed: August 9, 2023
                                 ____________
Before GRUENDER, KELLY, and GRASZ, Circuit Judges.
                          ____________

GRUENDER, Circuit Judge.

      Arkansas Electric Energy Consumers, Inc., (“AEEC”) appeals the denial of
its motion to intervene. We affirm.

                                         I.

      Entergy Arkansas, LLC, sells electricity to Arkansans. The Arkansas Public
Service Commission sets the retail rates that Entergy can charge. AEEC is a trade
association comprised of large industrial and agricultural Entergy customers.

        In May 2019, Entergy asked the Commission for permission to raise its retail
rates. 1 An administrative proceeding followed. AEEC intervened, urging the
Commission to deny Entergy’s request. The Commission ultimately did so. Entergy
then sued the Commission in September 2020, alleging that the denial violated
federal and state law. The Commission promptly moved to dismiss, but the district
court2 denied its motion. In June 2022, Entergy moved for summary judgment. A
week later—about twenty-two months after the suit commenced—AEEC moved to
intervene as of right, see Fed. R. Civ. P. 24(a)(2), or, alternatively, to intervene
permissively, see Fed. R. Civ. P. 24(b)(1)(B).

      1
      For background, see Entergy Arkansas, LLC v. Thomas, No. 4:20-cv-01088-
KGB, 2022 WL 990278, at *2-3 (E.D. Ark. Mar. 31, 2022).
      2
        The Honorable Kristine G. Baker, United States District Judge for the Eastern
District of Arkansas.

                                         -2-
       AEEC’s motion sat unaddressed for seven months. Then, in a January 2023
order, the district court3 denied it along with several other pending motions. The
court’s sole explanation was that the case had been assigned to a new judge “a few
hours ago” and “needs to be resolved expeditiously because it has been pending
since September 2020.”

       AEEC appealed a few days later. It then moved to stay the district-court
proceedings pending the outcome of its appeal. In denying that request, the district
court explained that, though a bench trial would proceed in February as scheduled,
it will wait to make findings of fact and conclusions of law until the appeal is
resolved. The district court also made clear that if the appeal succeeds, it will reopen
the record to allow AEEC to submit additional evidence.

      We denied AEEC’s emergency request for a stay, and the district court held a
bench trial as planned. Entergy presented five witnesses. The Commission
presented none, maintaining that the lawfulness of its denial must be assessed based
on the administrative record alone.

                                           II.

       AEEC appeals only the denial of its motion for intervention of right under
Rule 24(a)(2). The Commission, as amicus curiae in support of AEEC, agrees that
the district court’s denial was erroneous. Our review is de novo, accepting as true
all of AEEC’s allegations and resolving in its favor all doubts as to whether Rule
24(a)(2) is satisfied. See Swinton v. SquareTrade, Inc., 960 F.3d 1001, 1003-04 (8th
Cir. 2020).

       A third party is entitled to intervention of right if (1) its motion is timely, (2)
it has an interest in the subject matter of the litigation, (3) disposition of the case

      3
        The Honorable Brian S. Miller, United States District Judge for the Eastern
District of Arkansas.

                                           -3-
may impair that interest, and (4) existing parties do not adequately protect that
interest. Fed. R. Civ. P. 24(a)(2). AEEC fails to meet the fourth requirement.

       Where a proposed intervenor’s asserted interest is one that a governmental
entity who is a party to the case is charged with protecting, we presume that the
government’s representation is adequate. Chiglo v. City of Preston, 104 F.3d 185,
187-88 (8th Cir. 1997). The would-be intervenor may avoid this presumption by
showing that it “stands to gain or lose from the litigation in a way different from the
public at large,” id., or that its interest is “narrower and more parochial” than the
government’s, Mille Lacs Band of Chippewa Indians v. Minnesota, 989 F.2d 994,
1001 (8th Cir. 1993). But if it cannot do so and the presumption therefore applies,
the proposed intervenor can rebut it only with a “strong showing” of inadequacy,
such as by demonstrating that the governmental entity “has committed misfeasance
or nonfeasance in protecting the public.” North Dakota ex rel. Stenehjem v. United
States, 787 F.3d 918, 922 (8th Cir. 2015).

       In determining whether the presumption applies, “it is important to focus on
what the case is about.” Id. at 921. Here, Entergy seeks a declaration that the
Commission’s denial of its rate-increase request was unlawful and an injunction
requiring that the Commission grant the request. The Commission, which is charged
with ensuring that all Arkansans have access to affordable electricity, see Ark. Code
Ann. § 23-2-304(a)(9), wants its denial upheld. AEEC opposes an increase in its
members’ retail electricity rates, and so it too wishes to defend the Commission’s
denial. Accordingly, AEEC’s interest in this litigation aligns squarely with the
interest of Arkansas ratepayers at large. See Chiglo, 104 F.3d at 187-88.

      AEEC nonetheless contends that the presumption of adequate representation
does not apply. It makes two arguments. First, it says that its members’ substantial
consumption of electricity means that they stand to lose from an Entergy victory in
a different way from Arkansas ratepayers at large. Second, it says that the
Commission’s duty is not to represent the interest of Arkansas ratepayers like

                                         -4-
AEEC’s members but rather to “balance” this interest with the interest of utilities
like Entergy. See Ark. Code Ann. § 23-2-304. Neither persuades us.

       First, if Entergy wins, the injury that AEEC’s members will suffer is the exact
type of injury that all Arkansas ratepayers will suffer: higher retail electricity rates.
True, AEEC’s members may generally run a higher electric bill than the average
Arkansas ratepayer. But the costs that they will incur if the Commission’s denial is
invalidated are not different in kind from what Arkansas ratepayers at large will face.
See Standard Heating & Air Conditioning Co. v. City of Minneapolis, 137 F.3d 567,
572 (8th Cir. 1998) (affirming a denial of intervention of right where the costs that
would-be intervenors stood to incur were the same “type of costs” that the
government aimed to reduce by defending its regulation); cf. Mille Lacs Band, 989
F.2d at 1000-01 (reversing a denial of intervention of right in a suit to secure tribal
hunting rights because the intervenor’s interest in the value of the affected property
was distinct from the state’s asserted interest in protecting wildlife on the property).

       Second, any duty of the Commission to balance the public interest with the
interest of a utility like Entergy would apply before it rules on a rate-increase request,
not after the ruling is challenged in court. Once the Commission denied Entergy’s
request for higher rates, it was no longer engaged in interest balancing. Its concern
became defending its denial against Entergy’s suit. And that concern coincides
exactly with AEEC’s interest in preventing the higher rates that Entergy seeks. We
therefore presume that the Commission adequately protects AEEC’s interest.

       The final question, then, is whether AEEC has rebutted this presumption with
a “strong showing” of the Commission’s inadequacy. See Stenehjem, 787 F.3d at
922. It has not.

      According to AEEC, the Commission’s failure at trial to counter Entergy’s
witnesses with witnesses of its own demonstrates that its representation is
inadequate. The Commission agrees. It says that its representation was indeed

                                           -5-
inadequate and that AEEC’s absence at trial resulted in a “slanted” and “one-sided”
presentation in favor of Entergy.

       It is not the ordinary intervention case where the government asserts that it
does not adequately represent the public interest. Even so, we decline to accept the
Commission’s concession at face value. See Pub. Serv. Co. of N.H. v. Patch, 136
F.3d 197, 208 (1st Cir. 1998) (“[N]either the [government’s] support of and consent
to [intervention], nor [its] insinuations that [it], alone, [is] not up to the task of
defending [its action], can strip a federal court of the right and power—indeed, the
duty—to make an independent determination as to whether Rule 24(a)(2)’s
prerequisites are met.”).

       In our view, the Commission’s trial presentation does not evince the sort of
“misfeasance or nonfeasance in protecting the public” necessary to overcome the
presumption of adequacy. See Stenehjem, 787 F.3d at 922. The Commission has
maintained throughout this litigation that the lawfulness of its denial must be
evaluated solely on the basis of the evidence presented in the administrative
proceeding (in which AEEC participated) and that additional evidence before the
district court is therefore unnecessary. Whether that legal position ultimately
prevails is not our concern at present. What matters now is whether the
Commission’s principled decision not to call witnesses at trial amounts to “a clear
dereliction of duty.” See id. And we conclude that it does not. See Little Rock Sch.
Dist. v. N. Little Rock Sch. Dist., 378 F.3d 774, 780 (8th Cir. 2004) (“It is not
sufficient that the party seeking intervention merely disagrees with the litigation
strategy or objectives of the party representing its interests.”); see also Victim Rights
Law Center v. Rosenfelt, 988 F.3d 556, 562 (1st Cir. 2021) (holding that the
presumption of adequacy was not rebutted where the putative intervenor’s proposed
arguments were consistent with the government’s defenses and did not require
additional evidentiary development). AEEC therefore has not shown that the

                                          -6-
Commission inadequately represents its interest in this litigation, as required by Rule
24(a)(2). 4

                                         III.

       For the foregoing reasons, we affirm the denial of AEEC’s motion to
intervene.
                      ______________________________

      4
     Accordingly, we need not address Entergy’s alternative argument that
AEEC’s motion to intervene was untimely.

                                         -7-