Wyoming v. Oklahoma

by the Supreme Court of the United States

United States Supreme Court

502 U.S. 437

Wyoming  v.  Oklahoma

No. 112, Orig  Argued: Nov. 4, 1991. --- Decided: Jan 22, 1992

Syllabus

Wyoming, a major coal-producing State, does not sell coal, but does impose a severance tax on those who extract it. From 1981 to 1986, Wyoming provided virtually 100% of the coal purchased by four Oklahoma electric utilities, including the Grand River Dam Authority (GRDA), a state agency. However, after the Oklahoma Legislature passed an Act requiring coal-fired electric utilities to burn a mixture containing at least 10% Oklahoma-mined coal, the utilities reduced their purchases of Wyoming coal in favor of Oklahoma coal, and Wyoming's severance tax revenues declined. Wyoming sought leave to file a complaint under this Court's original jurisdiction, seeking a declaration that the Act violates the Commerce Clause and an injunction permanently enjoining the Act's enforcement. The motion was granted over Oklahoma's objections that Wyoming lacked standing to bring the action and should otherwise not be permitted to invoke original jurisdiction. Oklahoma's subsequently filed motion to dismiss, which raised the same issues, also was denied. After a Special Master was appointed, the States filed cross-motions for summary judgment, with Oklahoma once again asserting the standing and appropriateness issues. The Special Master filed a Report recommending that this Court hold that Wyoming has standing to sue, that this case is appropriate to original jurisdiction, and that the Act violates the Commerce Clause. It also recommended that the Court either dismiss the suit as it relates to the GRDA without prejudice to Wyoming to assert its claim in an appropriate forum, or, alternatively, find the Act severable to the extent that it may constitutionally be applied to the GRDA. Both States have filed exceptions.

Held:

1. Wyoming has standing. The prior rulings on standing in this case "should be subject to the general principles of finality and repose, absent changed circumstances or unforeseen issues not previously litigated." Arizona v. California, 460 U.S. 605, 619, 103 S.Ct. 1382, 1391, 75 L.Ed.2d 318. Oklahoma has never suggested any change of circumstances, but has recited the same facts, cited the same cases, and constructed the same arguments in each of its briefs. Moreover, Wyoming's submission satisfies the test for standing, since the State's loss of severance tax revenues fairly can be traced to the Act. See Maryland v. Louisiana, 451 U.S. 725, 736, 101 S.Ct. 2114, 2123, 68 L.Ed.2d 576. Cases where standing has been denied to States claiming general declines in tax revenues due to federal agency actions, see, e.g., Pennsylvania v. Kleppe, 533 F.2d 668, do not involve a direct injury in the form of a loss of specific tax revenues and thus are not analogous to this case. And the type of direct injury suffered by Wyoming is cognizable in a Commerce Clause action, since Wyoming's severance tax revenues are directly linked to its coal's extraction and sale and have been demonstrably affected by the Act. See Hunt v. Washington Apple Advertising Comm'n, 432 U.S. 333, 345, 97 S.Ct. 2434, 2442, 53 L.Ed.2d 383. Oklahoma v. A., T., & S.F.R. Co., 220 U.S. 277, 287-289, 31 S.Ct. 434, 436-437, 55 L.Ed. 465; Louisiana v. Texas, 176 U.S. 1, 16-22, 20 S.Ct. 251, 256-258, 44 L.Ed. 347 distinguished. Pp. 446-450.

2. This is an appropriate case for the exercise of this Court's original jurisdiction. Wyoming's Commerce Clause challenge "implicates serious and important concerns of federalism" in accord with the purpose and reach of original jurisdiction. Maryland v. Louisiana, supra, at 744, 101 S.Ct., at 2127. In addition, there is no other forum in which Wyoming's interests will find appropriate hearing and full relief. There is no pending action to which adjudication could be deferred on this issue, since the mining companies themselves have not brought suit. Even if such an action were proceeding, Wyoming's interests would not be directly represented. See Maryland v. Louisiana, supra, at 743, 101 S.Ct., at 2127. Oklahoma's suggestion that Wyoming's interest is de minimis because the loss in severance tax revenues attributable to the Act is less than 1% of total taxes collected is rejected. Wyoming coal is a natural resource of great value primarily carried into other States for use, and Wyoming derives significant revenue from this interstate movement. The Act's practical effect must be evaluated not only by considering the consequences of the Act itself, but also by considering what effect would arise if many States or every State adopted similar legislation. Healy v. Beer Inst., Inc., 491 U.S. 324, 336, 109 S.Ct. 2491, 2499, 105 L.Ed.2d 275. Pp. 450-454.

3. The Act is invalid under the Commerce Clause because it discriminates against interstate commerce and Oklahoma has advanced no purposes to justify such discrimination. The Act purports to exclude coal mined from other States based solely on its origin and, thus, discriminates both on its face and in practical effect. The small volume of commerce affected by the Act measures only the extent of the discrimination but is not relevant in determining whether there has been discrimination. Additionally, Oklahoma has not justified the discrimination in terms of the Act's local benefits and the unavailability of nondiscriminatory alternatives adequate to preserve those interests. Its argument that sustaining the Oklahoma coal-mining industry lessens the State's reliance on a single source of coal delivered over a single rail line is foreclosed by the reasoning in Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 55 S.Ct. 497, 79 L.Ed. 1032, and H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 69 S.Ct. 657, 93 L.Ed. 865. Also rejected is its contention that restricting the purchase of Wyoming's cleaner coal now conserves that coal for future use, since Wyoming will have coal for several hundred years at current extraction rates, and since the argument, raised for the first time in Oklahoma's brief on the merits, is not supported by the record. Nor does the Federal Power Act's saving clause-which reserves to the States the regulation of local retail electric rates-exempt the Act from scrutiny under the Commerce Clause. There is nothing in the Federal Act or legislative history evincing a congressional intent to approve the violation of the Clause that Oklahoma seeks to justify, and this Court's decisions have uniformly subjected Commerce Clause cases implicating the Federal Power Act to scrutiny on the merits. See, e.g., New England Power Co. v. New Hampshire, 455 U.S. 331, 102 S.Ct. 1096, 71 L.Ed.2d 188. Pp. 454-459.

4. No portion of the Act is severable as to any entity touched by its mandate. This Court is the proper forum to decide issues necessary to afford Wyoming complete relief, cf. Dorchy v. Kansas, 264 U.S. 286, 291, 44 S.Ct. 323, 325, 68 L.Ed. 686, and therefore the Special Master erred in recommending that the action against the GRDA be dismissed on the ground that the determination of severability is one of state law. The Special Master also erred in finding, in the alternative, the Act severable as to the GRDA. There are no parts or separate provisions in the invalid section of the Act, which applies to "all entities" providing electric power. Thus, nothing remains to be saved once that provision is stricken, and the Act must stand or fall as a whole. Nor does the evidence support Oklahoma's argument that its legislature intended the term "all entities" to include only "the GRDA" or "state-owned" utilities. Pp. 459-461.

5. Jurisdiction over this case is retained in the event that further proceedings are required to implement the judgment. P.461.

Recommendations of Special Master adopted in part; exceptions of Wyoming sustained and exceptions of Oklahoma rejected; motion of Wyoming for summary judgment granted and motion of Oklahoma for summary judgment denied.

WHITE, J., delivered the opinion of the Court, in which BLACKMUN, STEVENS, O'CONNOR, KENNEDY, and SOUTER, JJ., joined. SCALIA, J., filed a dissenting opinion, in which REHNQUIST, C.J., and THOMAS, J., joined. THOMAS, J., filed a dissenting opinion, in which REHNQUIST, C.J., and SCALIA, J., joined.

Neal Leader, Oklahoma City, Okl., for defendant.

Mary B. Guthrie, Cheyenne, Wyo., for plaintiff.

Justice WHITE delivered the opinion of the Court.

Notes