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City of Lowell v. Enel North America, Inc.

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United States District Court District of Massachusetts ________________________________ ) CITY OF LOWELL, ) Plaintiff, ) ) v. ) Civil Action No. ) 10-10359-NMG ENEL NORTH AMERICA, INC., ) Defendant. ) ________________________________ ) MEMORANDUM & ORDER GORTON, J. The City of Lowell ("the City") brings suit against ENEL North America, Inc. ("ENEL") for breach of contract and a declaratory judgment. Before the Court are ENEL's motion to

dismiss or, in the alternative, for summary judgment and the City's motion to amend the complaint. I. Factual Background This dispute concerns the installation of flashboards above the Pawtucket Dam ("the Dam") on the Merrimack River in Lowell, Massachusetts. Generally, the City claims that the five-foot-

high flashboards that have been installed on the Dam have caused and may continue to cause flooding on City property and in neighborhoods upstream, including the Clay Pit Brook neighborhood. More specifically, this case sets the City's

alleged contractual rights against the defendant's claim that a license issued by the Federal Energy Regulatory Commission

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("FERC") controls flashboard height at the Dam. In August, 1980, the Proprietors of Locks and Canals on the Merrimack River ("the Proprietors") signed a contract ("the Wang Agreement") with Wang Laboratories, Inc. ("Wang"), which owned property upstream from the Dam. Pursuant to the agreement, the

Proprietors refrained from maintaining flashboards higher than four feet from March through June of each year, when flooding was most likely, or higher than five feet for the remainder of each year. The City acquired Wang's property by deed in 1994 and

thereby arguably became the beneficiary of the Wang Agreement. In April, 1983, FERC granted a license authorizing Boott Mills and the Proprietors to construct, operate and maintain the Lowell Hydroelectric Project at the Dam ("the Project"). That

license provided that the Project would consist of, inter alia, "the 1,093-foot-long and 15-foot-high Pawtucket Dam with 5-foothigh collapsible flashboards". In December, 1983, FERC approved

the transfer of the license to Boott Hydropower, Inc. ("Boott"), a subsidiary of ENEL. In response to concerns expressed by residents about flooding, FERC began an investigation in early 2008 into the same subject at issue in this suit, i.e. the Dam's flashboard and flow-control operations. Lowell Hydroelectric Project FERC directed Boott to

Flashboards, FERC Docket No. 2790-052.

investigate options for a "crest control" system which could

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completely collapse during high flows.

In 2009, in response to

FERC's directive, Boott outlined three options and requested that FERC allow the use of four-foot boards in June, 2009 and additional one-foot top boards after July 1, 2009. In that

request, Boott proposed the so-called "4+1" design, in which a one-foot top board sits atop a four-foot board and can be removed. Boott explicitly contrasted that design with the one

authorized by the FERC license. The investigation is ongoing and, in early March, 2010, FERC acknowledged an increased urgency. Responding to additional

resident complaints, the agency demanded that Boott file its preferred solution to the problem within 15 days. Shortly

thereafter, Boott reported that it would proceed with installing a pneumatic crest control gate system which is apparently the best available technology. At the time of the filing of its

motion to dismiss in July, 2010, Boott planned to file a license amendment application to that effect. On July 22, 2010, the City moved to intervene with FERC in its investigation and sought to have FERC enforce the Wang Agreement. FERC allowed the motion to intervene on August 24,

2010, and, as a result, the City is authorized to participate fully in the FERC proceedings with respect to Boott's proposed crest gate system.

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II.

Procedural History On February 19, 2010, the City filed its complaint in the

Massachusetts Superior Court Department for Middlesex County, accompanied by a motion for a preliminary injunction to prohibit ENEL from installing five-foot flashboards on the Dam before the end of June each year and to require it to remove any flashboards higher than four feet. ENEL removed the case to this Court on

March 1, 2010 citing federal question jurisdiction based upon preemption. On April 12, 2010, this Court issued a Memorandum &

Order denying the City's motion for a preliminary injunction. The Court concluded that, because the flashboards are designed to bend or give in proportion to water pressure and the presumed difference in water levels resulting from the use of four-foot or five-foot flashboards is minimal, the City failed to demonstrate a serious risk of irreparable harm beyond speculation. In June of 2010, the parties participated in alternative dispute resolution proceedings but were unable to settle the case. On July 6, 2010, ENEL filed a motion to dismiss, or in the Subsequently, the City filed Both pending motions are

alternative, for summary judgment. a motion to amend its complaint. opposed.

III. Motion to Dismiss or for Summary Judgment Because there are no genuine issues of material fact and the Court can decide defendant's motion as a matter of law, the Court

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will treat the motion as one for summary judgment. A. Summary Judgment Standard

The role of summary judgment is "to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822

(1st Cir. 1991) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir. 1990)). The burden is upon the moving party to

show, based upon the pleadings, discovery and affidavits, "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." R. Civ. P. 56(c). A fact is material if it "might affect the outcome of the suit under the governing law." 477 U.S. 242, 248 (1986). Anderson v. Liberty Lobby, Inc., Fed.

"Factual disputes that are irrelevant Id. A genuine issue of

or unnecessary will not be counted."

material fact exists where the evidence with respect to the material fact in dispute "is such that a reasonable jury could return a verdict for the nonmoving party." Id.

Once the moving party has satisfied its burden, the burden shifts to the non-moving party to set forth specific facts showing that there is a genuine, triable issue. Catrett, 477 U.S. 317, 324 (1986). Celotex Corp. v.

The Court must view the

entire record in the light most hospitable to the non-moving party and indulge all reasonable inferences in that party's

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favor.

O'Connor v. Steeves, 994 F.2d 905, 907 (1st Cir. 1993).

Summary judgment is appropriate if, after viewing the record in the non-moving party's favor, the Court determines that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. B. Preemption by the Federal Power Act

ENEL proffers three reasons why the City's complaint must be dismissed but the Court will concentrate on ENEL's argument that the 1980 Wang Agreement is preempted by Boott's 1983 FERC License. ENEL maintains that this is so because 1) the Federal

Power Act ("FPA"), 16 U.S.C.

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