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ROBBINS RESOURCE RECOVERY PARTNERS, L.P. v. EDGAR

November 1, 1996

Robbins Resource Recovery Partners, L.P.; Foster Wheeler Robbins, Inc.; Foster Wheeler Illinois, Inc.; Foster Wheeler Corporation; and The Village of Robbins, Plaintiffs,
v.
James Edgar, in his official capacity as the Governor of the State of Illinois; The Illinois Commerce Commission; William Dickson, Richard Kolhauser, Ruth Kretschmer, Karl McDermott, and Dan Miller, in their official capacities as Commissioners of the Illinois Commerce Commission; and the State of Illinois, Defendants.



The opinion of the court was delivered by: ZAGEL

Memorandum Opinion and Order

 Facts

 In 1987, the Illinois legislature passed the Retail Rate Statute which created a scheme to promote the development of alternate energy production facilities and conserve energy. 220 ILCS 5/8-403.1. This statute required Illinois utility companies to enter into twenty-year contracts to purchase electricity from qualified solid-waste-to-energy facilities ("QSWEF") at retail rate instead of at the federally set regulatory rate. Then, the State would grant tax credits to the utility companies for an amount equal to the difference between the retail rate paid and the federal rate normally paid by utility companies when the former exceeded the latter. The statute also required QSWEFs entering into such contracts to reimburse the State for the tax credits after retirement of the debt issued to finance the facilities.

 Plaintiffs, Robbins Resource Recovery, L.P. ("Robbins"), Foster Wheeler Robbins, Inc. ("FWR"), and Foster Wheeler Illinois, Inc. ("FWI") formed a partnership to develop and operate a municipal recycling-and-solid waste-to-energy facility ("Waste Facility"). Plaintiff, Foster Wheeler Corporation ("FWC"), owns FWR and FWI as subsidiaries. For ease, these parties shall be referred to as "the Partnership." The Partnership entered into an agreement with the Village of Robbins ("the Village"), a municipality located in Cook County, Illinois and a plaintiff in this case, to construct and operate a Waste Facility there. The Partnership planned to use this facility to process and recycle municipal solid waste and to create electricity by combusting refuse-derived fuel.

 On February 20, 1992, and again on August 17, 1994, the Illinois Commerce Commission ("ICC") issued orders declaring that the Partnership's facility qualified as a QSWEF. In 1994, the Partnership received federal and state approvals to develop this site and began constructing a Waste Facility in the Village. On or about September 16, 1994, the Partnership entered into the type of contract described in the Retail Rate Statute with Commonwealth Edison ("ComEd"), a utility company. Under this contract, ComEd agreed to purchase electricity from the Partnership at retail rate so long as QSWEF status was maintained and ComEd was able to receive state tax credits. The Facility was scheduled to begin full commercial operation in the beginning of 1997.

 On March 16, 1996, the Illinois legislature amended the Retail Rate Statute. It thereby revised the definition of QSWEFs to cover only facilities that convert methane gas into electricity. The Partnership's Waste Facility does not qualify as a QSWEF under the amended definition because its facility does not use methane gas.

 Plaintiffs filed a five-count complaint against the State of Illinois, the Illinois Commerce Commission, the Governor of Illinois in his official capacity, and the five Commissioners of the ICC in their official capacities. Plaintiffs alleged federal claims of: (1) unconstitutional impairment of contract; (2) unconstitutional taking in violation of the Fifth and Fourteenth Amendments; (3) violation of the Equal Protection clause; (4) violation of the Fourteenth Amendment Due Process clause; and (5) violation of 42 U.S.C. ยง 1983. Defendants move to dismiss for lack of subject-matter jurisdiction and alternatively urge the court to abstain from deciding this matter until the Illinois state court issues a final judgment in a similar pending case.

 ANALYSIS

 On a motion to dismiss, the court tests the sufficiency of the complaint, not the merits of the lawsuit. Triad Assocs., Inc. v. Chicago Hous. Auth., 892 F.2d 583, 586 (7th Cir. 1989). The court must accept all well-pleaded factual allegations in the complaint as true and draw all reasonable inferences in favor of the non-moving party. Dimmig v. Wahl, 983 F.2d 86, 87 (7th Cir. 1993). A court will only grant a motion to dismiss if it is clear that the plaintiff cannot prove any set of facts that would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957).

 The State of Illinois and the ICC say they are immune from suit in federal court under the Eleventh Amendment. The Eleventh Amendment to the United States Constitution states:

 
The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

 Pursuant to this amendment, private parties may not sue an unconsenting state in federal court unless Congress abrogates state immunity. MSA Realty Corp. v. State of Illinois, 990 F.2d 288, 291 (7th Cir. 1993) (citing Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 100, 79 L. Ed. 2d 67, 104 S. Ct. 900 (1984)). The Eleventh Amendment applies to state agencies the same way that it applies to states. Kroll v. Board of Trustees of Univ. of Illinois, 934 F.2d 904, 906 (7th Cir. 1991); see also Alabama v. Pugh, 438 U.S. 781, 781-82, 57 L. Ed. 2d 1114, 98 S. Ct. 3057 (1978) (per curiam). In this case, the State of Illinois and its agency, the Illinois Commerce Commission ("ICC") assert their constitutional immunity to bar this suit, and Congress has not abrogated immunity as to any of the federal claims made. Notably, plaintiffs conceded in their answer brief that the claims against the State of Illinois and the ICC are barred by the Eleventh Amendment. *fn1" Consequently, I dismiss the State of Illinois and the ICC from this litigation.

 The Governor of Illinois and the members of the ICC seek dismissal in their official capacities because, they maintain, plaintiffs claims are actually for monetary relief even though couched in terms of equitable relief. Plaintiffs reply that their demands for injunctive and declaratory remedies against these state officials should not be dismissed because they are proper Ex parte Young proceedings attempting to prevent the Governor and the ICC officials from violating federal law. See Ex parte Young, 209 U.S. 123, 52 L. Ed. 714, 28 S. Ct. 441 (1908).

 Deciding whether claims against state officials are barred by the Eleventh Amendment is sometimes complicated. Lawsuits against state officials in their personal capacities raise no immunity issues; they are liable just as private citizens are for their own actions. See Kroll, 934 F.2d at 907 (citing Kentucky v. Graham, 473 U.S. 159, 165-67, 87 L. Ed. 2d 114, 105 S. Ct. 3099 (1985)). Plaintiffs in these types of lawsuits may seek relief only from the individual official, not from the state. By contrast, suits against state officials in their official capacity should be treated as suits against the state because the real party in interest is the entity for which the official works. Hafer v. Melo, 502 U.S. 21, 25, 116 L. Ed. 2d 301, 112 S. Ct. 358 (1991) (citing Kentucky v. Graham, 473 U.S. 159, 166, 87 L. Ed. 2d 114, 105 S. Ct. 3099 (1985)). *fn2" Accordingly, official-capacity suits seeking retroactive relief, i.e. money damages from the state treasury, are barred by the Eleventh Amendment because the real party in interest is the State, whether or not it consents. Kroll, 934 F.2d at 907. A private party may, of course, assert an official-capacity suit against a state official to seek prospective relief to prevent violations of federal law. Ex parte Young, 209 U.S. at 452. A state officer who will violate federal law is not entitled to sovereign immunity because ...


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