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Brazos Electric Power Cooperative Inc. v. United States

May 19, 1998

BRAZOS ELECTRIC POWER COOPERATIVE, INC., PLAINTIFF-APPELLANT,
v.
UNITED STATES, DEPARTMENT OF AGRICULTURE AND RURAL UTILITIES SERVICE, DEFENDANTS-APPELLEES, AND TEXAS UTILITIES ELECTRIC COMPANY, DEFENDANT.



Before Newman, Michel, and Clevenger, Circuit Judges.

The opinion of the court was delivered by: Michel, Circuit Judge.

Appealed from: United States District Court for the Western District of Texas

Judge Walter S. Smith, Jr.

97-1590

Brazos Electric Power Cooperative, Inc. ("Brazos") appeals the decision of the United States District Court for the Western District of Texas ordering the transfer of its case to the United States Court of Federal Claims. See Brazos Elec. Power Coop. v. United States, Civ. No. W-95-CA-318 (W.D. Tex. Aug. 28, 1997). This case was submitted for our decision following oral argument on April 2, 1998. Because the district court properly characterized Brazos's claim as meeting the jurisdictional requirements for exclusive Court of Federal Claims jurisdiction under the Tucker Act, 28 U.S.C. § 1491 (1994) and because there is an adequate remedy for Brazos in the Court of Federal Claims under the Tucker Act, we affirm the transfer order.

BACKGROUND

Brazos is a Texas "generation and transmission cooperative" formed pursuant to the Rural Electrification Act, 7 U.S.C. §§ 901-950aa (1994), and the Texas Electric Cooperative Corporation Act, Tex. Rev. Civ. Stat. Ann. art. 1528b (West 1997), to supply wholesale electric power to its member rural electric cooperatives which then sell retail electricity to their members. In 1979, Brazos bought a 3.8% interest in Comanche Peak, a nuclear power plant, from Texas Utilities Electric Company ("Texas Utilities"). To fund this purchase, Brazos borrowed money from the United States Treasury's Federal Financing Bank (the "FFB"). The Rural Utilities Service (the "RUS"), a federal agency within the Department of Agriculture, as the successor agency to the Rural Electrification Administration, guaranteed this debt (the "Brazos-FFB Debt"). The debt instrument between Brazos and the FFB (the "Brazos-FFB Note") provided that if the "Borrower" (defined in the Brazos-FFB Note as Brazos) elected, with the consent of the RUS, to prepay any or all of the principal, then it would also be subject to a prepayment penalty (the "Prepayment Penalty"). The amount of the Prepayment Penalty was set forth in the Brazos-FFB Note and apparently accorded with the requirements of 7 U.S.C. § 936c.

Texas Utilities's construction of Comanche Peak was substantially delayed and in excess of its original estimated cost. In addition, Texas Utilities was held not to have complied with certain Nuclear Regulatory Commission licensing requirements. In settlement of a dispute arising out of these matters, Texas Utilities agreed to repurchase Brazos's interest in Comanche Peak. To pay for this repurchase, Texas Utilities issued Brazos a promissory note dated December 22, 1988 (the "Texas Utilities-Brazos Note"). Brazos assigned the Texas Utilities-Brazos Note to the RUS to pay a portion of the Brazos-FFB Debt.

In 1995, Texas Utilities announced its intention to pay the principal balance of approximately $179 million on the Texas Utilities- Brazos Note. The RUS, as assignee, agreed to this prepayment. Brazos objected on the ground that the prepayment would trigger the Prepayment Penalty of approximately $16.5 million on the Brazos-FFB Note. On October 6, 1995, Brazos filed suit in federal district court against the United States, the Department of Agriculture, the RUS, and Texas Utilities seeking declaratory and injunctive relief to prevent Texas Utilities's prepayment of the Texas Utilities-Brazos Note and to prevent the RUS from applying any money it received to the Prepayment Penalty arising from the Brazos-FFB Note. In particular, Brazos argued that the Prepayment Penalty was improperly assessed because it was levied in contravention of certain provisions of the Rural Electrification Act, 7 U.S.C. §§ 936a, 936c, which refer only to "the borrower" as being able to choose to prepay and being subject to prepayment penalties. The court denied Brazos's request for injunctive relief by order dated October 26, 1995.

On October 30, 1995, Texas Utilities prepaid the Texas Utilities- Brazos Note which Brazos had assigned to the RUS. Consequently, the RUS has received, under protest from Brazos, approximately $16.5 million of payments which it has applied to the Prepayment Penalty arising from the Brazos-FFB Debt.

On November 22, 1995, the United States, the Department of Agriculture, and the RUS moved to dismiss Brazos's complaint for lack of subject matter jurisdiction and failure to state a claim. The district court granted the motion on the first ground in its order dated August 28, 1997, transferring the case to the Court of Federal Claims. The district court held that it lacked subject matter jurisdiction over Brazos's claim because, under the Tucker Act, jurisdiction was vested in the Court of Federal Claims. This Tucker Act jurisdiction was founded upon Brazos's claim being one against the United States government, based on a federal statute or government contract, and seeking the return of money exceeding $10,000 paid by Brazos to the United States government. Because the Court of Federal Claims offered Brazos an adequate remedy, the district court held it had no jurisdiction to hear Brazos's claim under the Administrative Procedure Act (the "APA").

On appeal, Brazos contends that the transfer order was improper because its claim was for the equitable relief of a declaration of rights and an injunction against the RUS and not for money damages. Indeed, as Brazos characterizes its claim, all it "is seeking is the correct bookkeeping entry on the Government's books, not the payment of money." Pl.-Appellant's Br., at 13. This court has exclusive jurisdiction to hear this appeal under 28 U.S.C. § 1292(d)(4)(A).

Discussion

Under 28 U.S.C. § 1631 (1994), a federal court that "finds there is a want of jurisdiction" may transfer an action to a court where the action may properly be brought. In the instant case, Brazos sought jurisdiction in the district court pursuant to the APA. However, the APA imposes two potential obstacles to a claim against the federal government of the type brought by Brazos. First, the sovereign immunity of the federal government is waived only for "[a]n action in a court of the United States seeking relief other than monetary damages." 5 U.S.C. § 702 (1994). Second, non-statutory review of agency action is available only when "there is no other adequate remedy in a court." 5 U.S.C. § 704 (1994). Because, as discussed below, the Court of Federal Claims provides an "adequate ...


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