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Conservation Law Foundation, Inc. v. Clear River Energy, LLC

Superior Court of Rhode Island, Providence

April 23, 2019

CONSERVATION LAW FOUNDATION, INC., Plaintiff,
v.
CLEAR RIVER ENERGY, LLC, TOWN OF JOHNSTON, PROVIDENCE WATER SUPPLY BOARD, CITY OF PROVIDENCE, TOWN OF SCITUATE, CITY OF CRANSTON, KENT COUNTY WATER AUTHORITY, TOWN OF NORTH PROVIDENCE, TOWN OF SMITHFIELD, BRISTOL COUNTY WATER AUTHORITY, CITY OF EAST PROVIDENCE, TOWN OF LINCOLN, PASCOAG UTILITY DISTRICT, HARRISVILLE FIRE DISTRICT, NASONVILLE WATER DISTRICT, CITY OF WARWICK, EAST SMITHFIELD WATER DISTRICT, GREENVILLE WATER DISTRICT, LINCOLN WATER COMMISSION, TOWN OF BRISTOL, TOWN OF WARREN, TOWN OF BARRINGTON, TOWN OF EAST GREENWICH, TOWN OF WEST WARWICK, TOWN OF NORTH KINGSTOWN, TOWN OF COVENTRY, and TOWN OF WEST GREENWICH, Defendants. TOWN OF BURRILLVILLE, Plaintiff,
v.
CLEAR RIVER ENERGY, LLC, TOWN OF JOHNSTON, PROVIDENCE WATER SUPPLY BOARD, CITY OF PROVIDENCE, TOWN OF SCITUATE, CITY OF CRANSTON, KENT COUNTY WATER AUTHORITY, TOWN OF NORTH PROVIDENCE, TOWN OF SMITHFIELD, BRISTOL COUNTY WATER AUTHORITY, CITY OF EAST PROVIDENCE, TOWN OF LINCOLN, PASCOAG UTILITY DISTRICT, HARRISVILLE FIRE DISTRICT, NASONVILLE WATER DISTRICT, CITY OF WARWICK, EAST SMITHFIELD WATER DISTRICT, GREENVILLE WATER DISTRICT, LINCOLN WATER COMMISSION, TOWN OF BRISTOL, TOWN OF WARREN, TOWN OF BARRINGTON, TOWN OF EAST GREENWICH, TOWN OF WEST WARWICK, TOWN OF NORTH KINGSTOWN, TOWN OF COVENTRY, and TOWN OF WEST GREENWICH, Defendants.

          For Plaintiff: John M. Greeene, Esq.; Jerry H. Elmer, Esq.

          For Defendant: Conservation Law Foundation, Inc. John M. Greene, Esq. Jerry H. Elmer, Esq., Clear River Energy, LLC Elizabeth McDonough Noonan, Esq., William M. Russo, Esq., Town of Johnston William J. Conley, Jr., Esq., Providence Water Supply Board Patrick J. McBurney, Esq., William E. O'Gara, Esq., City of Providence Etie-Lee Z. Schaub, Esq., Michael A. Calise, Esq., Town of Scituate Peter D. Ruggiero, Esq., City of Cranston George M. Cappello, Esq., Kent County Water Authority Patrick J. Sullivan, Esq., Town of North Providence Anthony M. Gallone, Jr., Esq., Stephen H. Burke, Esq., Town of Smithfield Anthony M. Gallone, Jr., Esq., Bristol County Water Authority Joseph A. Keough, Jr., Esq., City of East Providence Michael J. Marcello, Esq., Town of Lincoln Anthony DeSisto, Esq., Pascoag Utility District William L. Bernstein, Esq., Harrisville Fire District Giovanni LaTerra Bellina, Esq., Nasonville Water District No listed counsel, City of Warwick Peter A. Clarkin, Esq., East Smithfield Water District No listed counsel, Greenville Water District Joseph A. Keough, Jr., Esq., Lincoln Water Commission Anthony DeSisto, Esq., Town of Bristol Michael A. Ursillo, Esq., Town of Warren Anthony DeSisto, Esq., Town of Barrington Michael A. Ursillo, Esq., Town of East Greenwich No listed counsel, Town of West Warwick Timothy A. Williamson, Esq., Town of North Kingstown No listed counsel, Town of Coventry No listed counsel, Town of West Greenwich Michael A. Ursillo, Esq., Town of Burrillville William C. Dimitri, Esq., Clear River Energy, LLC Elizabeth McDonough Noonan, Esq., William M. Russo, Esq., Town of Johnston William J. Conley, Jr., Esq., Providence Water Supply Board Patrick J. McBurney, Esq., William E. O'Gara, Esq., City of Providence Etie-Lee Z. Schaub, Esq., Michael A. Calise, Esq., Town of Scituate City of Cranston George M. Cappello, Esq., Peter D. Ruggiero, Esq., Kent County Water Authority Patrick J. Sullivan, Esq., Town of North Providence Anthony M. Gallone, Jr., Esq., Stephen H. Burke, Esq., Town of Smithfield Anthony M. Gallone, Jr., Esq., Bristol County Water Authority Joseph A. Keough, Jr., Esq., City of East Providence Michael J. Marcello, Esq., Town of Lincoln Anthony DeSisto, Esq., Pascoag Utility District William L. Bernstein, Esq., Harrisville Fire District Giovanni LaTerra Bellina, Esq., Nasonville Water District No listed counsel, City of Warwick Peter A. Clarkin, Esq., East Smithfield Water District No listed counsel, Greenville Water District Joseph A. Keough, Jr., Esq., Lincoln Water Commission Anthony DeSisto, Esq., Town of Bristol Michael A. Ursillo, Esq., Town of Warren Anthony DeSisto, Esq., Town of Barrington Michael A. Ursillo, Esq., Town of East Greenwich No listed counsel, Town of West Warwick Timothy A. Williamson, Esq., Town of North Kingstown No listed counsel, Town of Coventry No listed counsel, Town of West Greenwich Michael A. Ursillo, Esq.

          DECISION

          Silverstein, J.

         Before the Court in these consolidated matters are Defendants'-Clear River Energy, LLC (CRE) and Town of Johnston (Johnston) (collectively Defendants)- Motions for Summary Judgement as to the Second Amended Complaints brought by Plaintiffs Conservation Law Foundation, Inc., (CLF) and the Town of Burrillville (Burrillville) (collectively Plaintiffs). At issue is whether the Water Supply and Economic Development Agreement (the Water Supply Agreement) between CRE and Johnston is valid under P.L. 1915, ch. 1278, § 18 as amended from time to time (the 1915 Act), and specifically whether performance under it will constitute an "ordinary municipal water supply purpose." Defendants argue that the Water Supply Agreement is valid under the 1915 Act, and that Summary Judgment is proper in their favor. Plaintiffs object to Defendants' motions. Jurisdiction is pursuant to G.L. 1956 §§ 9-30-1, et seq. and Super. R. Civ. P. 56.

         I

         Facts and Travel

         On October 29, 2015, CRE filed an application with the Rhode Island Energy Facility Sitting Board (EFSB) seeking its approval to construct an energy generation facility (Clear River Energy Center or the Power Plant) in Burrillville, Rhode Island. The permitting process is governed by the Energy Facilities Sitting Act, which requires, inter alia, an analysis of the support facilities for proposed power plants including water supply. EFSB Rule 1.6(b)(11). In order to obtain a sufficient water supply for the Power Plant, CRE and Johnston entered into the Water Supply Agreement, by the terms of which Johnston agreed to supply the Clear River Energy Center with water. The Water Supply Agreement proposes that CRE purchase or lease a parcel of real property in Johnston and construct a Water Transport Facility on that land, which will become Johnston and CRE's designated point of delivery. Johnston will deliver the water to the Water Transport Facility, then CRE will transport the water by truck to the Power Plant. See Compl. Ex. A, Mar. 6, 2017. Johnston purchases its water from the Providence Water Supply Board (PWSB) at wholesale prices.

         On March 6, 2017, CLF and Burrillville filed nearly identical Complaints against Defendants seeking declaratory judgments to invalidate the Water Supply Agreement, asserting that it is invalid under Rhode Island law. Specifically, Plaintiffs argued that under P.L. 1915, ch. 1278, § 18, which allows certain municipalities "to take and receive water from [PWSB] for use for . . . ordinary municipal water supply purposes," the sale of water to a power plant located in another municipality does not qualify.

         On March 23, 2017, Plaintiffs filed Amended Complaints. Plaintiffs sought (1) a declaration that Johnston has no legal authority to sell water initially purchased from PWSB to the Clear River Energy Center under the 1915 Act, (2) a declaration that Johnston has no legal authority to sell the Power Plant water initially purchased from PWSB under any provision of Rhode Island law, and (3) injunctive relief preventing Johnston from receiving water from the PWSB and reselling it for use in the proposed Power Plant.

         On April 3, 2017, Defendants moved to dismiss both actions against them. CRE argued that Plaintiffs lacked standing to seek declaratory judgment or injunctive relief, that Plaintiffs failed to exhaust their administrative remedies, that EFSB has primary jurisdiction over Plaintiffs' actions, and that Plaintiffs failed to join numerous indispensable parties. CRE argued that CLF's claim for injunctive relief must be dismissed because injunctive relief is a remedy rather than a separate cause of action and CLF's claim for injunctive relief failed to meet the necessary threshold requirements. CRE further asserted that Burrillville's Amended Complaint alleging potential impact on PWSB's system is within EFSB's exclusive jurisdiction. Alternatively, CRE moved to stay the case. Johnston argued, inter alia, that the 1915 Act was within the jurisdiction of the PUC and that PWSB and PUC tariffs contain no restriction upon Johnston's resale of water.

         On April 10, 2017, this Court entered a Consent Order consolidating CLF's (PC-2017-1037) and Burrillville's (PC-2017-1039) actions against CRE and Johnston. On June 20, 2017, this Court issued a Decision on Defendants' motions to dismiss. On the issue of standing, the Court concluded that Burrillville and CLF lacked the requisite injuries in fact, but that they qualified to bring this action under the "substantial public interest" exception to the usual standing requirement. The Court rejected Defendants' argument that the consolidated cases should be dismissed for failure to exhaust administrative remedies. The Court found in favor of Defendants with respect to their argument that Plaintiffs failed to join indispensable parties under Super. R. Civ. P. 12(b)(7), but allowed Plaintiffs twenty days to join those parties.[1] The Court denied Defendants' motions with respect to (1) dismissal of Plaintiffs' claims for injunctive relief and (2) staying the case. Finally, the Court sua sponte ordered Plaintiffs to file a more definite statement.

         On July 14, 2017, CLF and Burrillville moved for a ruling that these consolidated cases present pure questions of law, and that no evidence is relevant or admissible making discovery unnecessary. In response, Johnston asserted that a limited scope of discovery was required for the Court to properly adjudicate the matter. CRE likewise objected to Plaintiffs' motions and argued that the Court should permit Defendants to conduct discovery. On July 26, 2017, Plaintiffs each filed a Second Amended Complaint.

         On October 4, 2017, this Court issued a Decision on Plaintiffs' Motion. The Court found that the pertinent language of the 1915 Act, specifically "ordinary municipal water supply purposes," is ambiguous. Accordingly, the Court ruled that limited discovery was necessary in these consolidated actions and denied Plaintiffs' motion for a ruling that the consolidated cases present pure questions of law that do not require discovery.

         On July 5, 2018, CRE and Johnston moved for summary judgment, arguing that the Water Supply Agreement is proper under the 1915 Act, entitling them to summary judgment as a matter of law. Burrillville and CLF objected, arguing that the Water Supply Agreement is impermissible under Rhode Island law, and that public policy supports this Court's denial of Defendants' motions. On August 3, 2018, Rhode Island Attorney General Peter F. Kilmartin submitted a brief as amicus curiae in support of Plaintiffs' objections to Defendants' motions for summary judgment, also arguing that the Water Supply Agreement is outside the 1915 Act and pertains to uses that are neither domestic nor ordinary, and that a finding otherwise would be contrary to public policy. This Court heard argument on August 20, 2018.

         II

         Standard of Review

         It is well-settled that "[s]ummary judgment is 'a drastic remedy,' and a motion for summary judgment should be dealt with cautiously." Estate of Giuliano v. Giuliano, 949 A.2d 386, 390-91 (R.I. 2008) (citing Ardente v. Horan, 117 R.I. 254, 256-57, 366 A.2d 162, 164 (1976)). "[S]ummary judgment is appropriate when, viewing the facts and all reasonable inferences therefrom in the light most favorable to the nonmoving party, the [C]ourt determines that there are no issues of material fact in dispute, and the moving party is entitled to judgment as a matter of law." Quest Diagnostics, LLC v. Pinnacle Consortium of Higher Educ., 93 A.3d 949, 951 (R.I. 2014) (internal quotation marks omitted).

         '"[T]he moving party bears the initial burden of establishing the absence of a genuine issue of fact."' McGovern v. Bank of Am., N.A., 91 A.3d 853, 858 (R.I. 2014) (quoting Robert B. Kent et al., Rhode Island Civil Procedure § 56:5, VII-28 (West 2006)). Once this burden is met, the burden shifts to the nonmoving party to prove by competent evidence the existence of a genuine issue of fact. Id. The nonmoving party may not rely on '"mere allegations or denials in the pleadings, mere conclusions or mere legal opinions'" to satisfy its burden. D'Allesandro v. ...


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