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People v. General Electric Co.

decided: July 13, 1982.


Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 81-C-0461, 80-C-6835 -- Frank J. McGarr, Judge.

Wood and Posner, Circuit Judges, and Foreman,*fn* Chief Judge.

Author: Posner

POSNER, Circuit Judge.

These consolidated appeals present questions of federal jurisdiction and constitutional law arising out of an attempt by the State of Illinois to prevent the shipment of spent nuclear fuel into the state for storage.

The fuel for nuclear electric-power reactors -- enriched uranium -- becomes depleted after a few years in the reactor and has to be replaced. Because the spent fuel is highly radioactive and its radioactivity very long-lived, the question what to do with it is a troublesome one. The spent fuel cannot just be thrown away, because wherever it is thrown will be contaminated. It used to be thought that the spent fuel would be reprocessed to make new fuel; but reprocessing of nuclear fuel has become intensely controversial and its prospects currently are uncertain. At the moment, then spent nuclear fuel has to be stored indefinitely. But there is as yet no acceptable method of permanent, safe storage; and meanwhile the spent fuel is being stored for the most part in "swimming pools" at the reactor sites. However, some reactors may run out of on-site storage space by the middle of this decade.

The only away-from-site facility in the United States that is accepting spent nuclear fuel for storage is General Electric's facility at Morris, Illinois, sixty miles southwest of Chicago. Spent fuel from reactors both within and outside Illinois is stored at the Morris facility. But in December 1980 Illinois enacted the Spent Fuel Act, Ill. Rev. Stat. ch. 111 1/2, § 230, which provides that "no person may dispose of, store, or accept any spent nuclear fuel which was used in any power generating facility located outside this State, or transport into this State for disposal or storage any spent nuclear fuel which was used in any power generating facility located outside this State. . . ." § 230.22. The Act makes an exception for imports of spent nuclear fuel from states that have a storage facility like Illinois' and have entered into a reciprocity agreement with Illinois, but it is a meaningless exception because, as mentioned, there is no other facility in the United States that is accepting spent nuclear fuel for storage away from the reactor site. The Act imposes a civil penalty of $10,000 per violation -- $1,000 per day for a continuing violation -- and also authorizes state officials to bring suits to enjoin violations. §§ 230.23, 230.24.

Three weeks after the passage of the Act, General Electric, joined by an out-of-state utility, Southern California Edison, which had shipped spent nuclear fuel to the Morris facility in the past and had a contract to ship additional amounts beginning early in 1981, brought suit in federal district court under 28 U.S.C. § 2201 (Declaratory Judgment Act) and 28 U.S.C. § 1331 (federal-question jurisdiction) against the state officials responsible for enforcing the Spent Fuel Act. The suit sought a declaration that the Act violates the supremacy and commerce clauses of the U.S. Constitution. Just a few hours after this suit (No. 81-2778 on our docket) was filed, the Attorney General of Illinois brought a suit (No. 81-2768) in state court under the Illinois Spent Fuel Act and other Illinois statutes and the common law to enjoin Southern California Edison from shipping spent nuclear fuel into Illinois and General Electric from receiving it. The defendants removed the state's suit to federal court, where it was consolidated with the federal suit, and moved for summary judgment in both suits. The motion was granted. The state has appealed, challenging the final judgment in both cases and also the district court's refusal to remand No. 81-2768 to the state court.

The district court erred in not remanding No. 81-2768. The removal of a state court action to federal court is authorized only if the cause of action arises under federal law, see 28 U.S.C. § 1441, and the cause of action in No. 81-2768 did not; it arose under Illinois law. The fact that Illinois law may be unconstitutional as applied to the defendants' activities is a matter of defense, not a ground for removal, even if the defendants show that the state laws sued on by the plaintiff are totally preempted by federal law. Illinois v. Kerr-McGee Chem. Corp., 677 F.2d 571 (7th Cir. 1982).

The state argues that there also is no federal jurisdiction over No. 81-2778. It says, first, that the companies failed to allege an actual controversy within the meaning of Article III of the Constitution and the Declaratory Judgment Act. See Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-74, 94 L. Ed. 1194, 70 S. Ct. 876 (1950). When the companies' suit was filed the state had not brought its suit, and it argues that until that happened no one could be certain that the Spent Fuel Act would actually affect the Morris facility.

It might appear to be a matter of indifference, or at most a technical defect readily curable by amending the complaint, whether there was an actual controversy when the federal suit was filed or not until a few hours later, when the state suit was filed. But it could make a difference, even a practical one. If there was no federal jurisdiction until the state suit was filed, the state's argument, discussed later in this opinion, that even if the federal court had jurisdiction it should have abstained from exercising it might be strengthened. More important, the mere fact that the state sought injunctive relief against a threatened violation of the Act by the companies would not necessarily establish an actual controversy in the Article III sense; not being bound by Article III a state might allow a suit to be maintained in its courts though there was no actual controversy in that sense. Finally, technicality though it may be, there is considerable doubt, to say the least, whether a federal court can acquire jurisdiction retroactively. Mansfield, Coldwater & Lake Michigan Ry. v. Swan, 111 U.S. 379, 381-82, 28 L. Ed. 462, 4 S. Ct. 510 (1884), holds that it cannot. If there was no jurisdiction when the complaint was filed the federal court had no power to act -- even, perhaps, to the extent of allowing the complaint to be amended when a basis for federal jurisdiction came into being.

But we need not pursue these byways further in this case, because there was, we think, federal jurisdiction at the moment the federal complaint was filed, even though the filing of the state complaint came later. To constitute an actual controversy "the disagreement must not be nebulous or contingent but must have taken on fixed and final shape so that a court can see what legal issues it is deciding, what effects its decision will have on the adversaries, and some useful purpose to be achieved in deciding them." Public Serv. Comm'n v. Wycoff Co., 344 U.S. 237, 244, 97 L. Ed. 291, 73 S. Ct. 236 (1952). The disagreement between the state and the companies was not "nebulous or contingent" when the federal complaint was filed. The complaint alleged that Southern California Edison was about to ship spent nuclear fuel from California to the Morris facility. That shipment, and General Electric's receipt of it, would have been in patent violation of the statute and would have made the companies liable to pay heavy civil penalties. Of course the companies could have gone ahead and violated the law and then have set up its alleged unconstitutionality as a defense in any civil penalty or other enforcement action brought by the state -- in No. 81-2768, for example. But that is true with any statute alleged to be unconstitutional: you can violate it and then defend your conduct in state court on constitutional grounds. If it followed that there was no actual controversy until a violation occurred, the federal courts would never have jurisdiction to enjoin the threatened enforcement of state legislation alleged to violate the Constitution (except possibly at the behest of someone who had violated the statute but not yet been prosecuted for the violation) -- a proposition that cannot be maintained in the face of Ex parte Young, 209 U.S. 123, 52 L. Ed. 714, 28 S. Ct. 441 (1908), and innumerable cases following it. See, e.g., Lake Carriers Ass'n v. McMullan, 406 U.S. 498, 506-08, 32 L. Ed. 2d 257, 92 S. Ct. 1749 (1972); Steffel v. Thompson, 415 U.S. 452, 459, 39 L. Ed. 2d 505, 94 S. Ct. 1209 (1974); Supreme Court of Va. v. Consumers Union of the U.S., 446 U.S. 719, 737, 64 L. Ed. 2d 641, 100 S. Ct. 1967 (1980).

It is true that where as in this case enforcement is merely threatened, a dispute may in fact lack sufficient concreteness and inevitability to be deemed an actual and not merely hypothetical controversy; it may be "unripe." In limiting the jurisdiction of the federal courts to "cases or controversies" Article III has been understood to express a policy, one that makes especially good sense in regard to constitutional adjudication, against rendering judgments that are either unnecessary to resolve a real dispute or unlikely to be made in a competent fashion. When a suit is brought against a state before the state has actually done anything to the plaintiff, not only may the suit not be necessary to protect the plaintiff's interests -- because the state may never in fact do anything to him -- but the lack of an immediate conflict may deprive the court of the facts it needs to make an informed decision; it may also -- a related point -- reduce the parties' incentives to make a real contest of the case. See, e.g., Regional Rail Reorganization Cases, 419 U.S. 102, 143-45, 42 L. Ed. 2d 320, 95 S. Ct. 335 (1974). So if it were uncertain whether the Spent Fuel Act really was applicable to the Morris facility, or to Southern California Edison's shipment of spent nuclear fuel to the facility, or whether Southern California Edison was really planning to ship spent nuclear fuel to Morris in the near future, or whether the state would actually enforce the statute, we might well conclude that there was no actual controversy between the state and the companies when they brought the suit.

The case would then be like Wycoff, supra, see 344 U.S. at 244, or our circuit's recent decision in Nuclear Engineering Co. v. Scott, 660 F.2d 241, 252-53 (7th Cir. 1981). The Attorney General of Illinois had announced at a press conference that he intended to bring lawsuits against violators of Illinois' environmental protection laws and one of those violators, he said, was Nuclear Engineering Company, which operated a facility for storing hazardous wastes. A few days after the press conference the company sued the state in federal court, alleging that the Illinois laws in question could not constitutionally be applied to its facility. This court held that the threat of enforcement did not create an actual controversy between the state and the company. Nuclear Engineering was not challenging the validity of the state laws that the Attorney General was seeking to enforce against it. On the contrary, it claimed to be in full compliance with them, and if so it had nothing to fear from the carrying out of the Attorney General's threat -- it was not a present or prospective violator. If the threat itself had had an adverse impact on Nuclear Engineering's business this might have created an actual controversy between it and the state, but the court's "careful examination of the record . . . reveal[ed] not a shred of evidence in support of NEC's allegation of immediate business injury." Id. at 252. The company was asking the federal court for an advisory opinion that if the Illinois laws were construed -- incorrectly in the company's view -- in such a way as to force it to close its hazardous waste facility, the state would be violating the Constitution.

The present case is different. Not only is it certain that General Electric and Southern California Edison would be violating the Spent Fuel Act if Southern California Edison shipped spent nuclear fuel to Morris, as it intended (but for the state law) to do; but as the Act has only one conceivable target -- the Morris facility -- it is extremely unlikely that the state would overlook the violation. Adverse legal action was a distinct possibility when Nuclear Engineering filed its suit but it was a virtual certainty when General Electric and Southern California Edison filed theirs. While the difference is one of degree rather than of kind, it is enough we ...

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