Wyoming v. Oklahoma/Opinion of the Court
On April 14, 1988, Wyoming submitted a motion for leave to file a complaint under this Court's original jurisdiction provided by Art. III, § 2, of the Constitution. The complaint challenged Okla.Stat., Tit. 45, §§ 939 and 939.1 (Supp.1988) (the Act), [1] which requires Oklahoma coal-fired electric generating plants producing power for sale in Oklahoma to burn a mixture of coal containing at least 10% Oklahoma-mined coal. Wyoming sought a declaration that the Act violates the Commerce Clause, U.S.C.onst., Art. I, § 8, cl. 3, and an injunction permanently enjoining enforcement of the Act. On June 30, 1988, we granted Wyoming leave to file its bill of complaint over Oklahoma's objections that Wyoming lacked standing to bring this action and, in any event, should not be permitted to invoke this Court's original jurisdiction. 487 U.S. 1231, 108 S.Ct. 2893, 101 L.Ed.2d 927. Oklahoma next filed a motion to dismiss on August 29, 1988, raising these same arguments. We denied the motion to dismiss on October 31, 1988, and ordered Oklahoma to answer Wyoming's complaint within 30 days. 488 U.S. 921, 109 S.Ct. 300, 102 L.Ed.2d 320. We thereafter appointed the Special Master, 489 U.S. 1063, 109 S.Ct. 1334, 103 L.Ed.2d 805 (1989), who ordered the parties to complete discovery and to file a stipulation of uncontested facts, any affidavits believed to be necessary, and a short statement of any disputed issues of material fact that may require a hearing. The parties complied, and each moved for summary judgment. Wyoming argued that the Act is a per se violation of the Commerce Clause. Oklahoma reasserted its arguments on standing and the appropriateness of this Court's exercise of original jurisdiction, submitting as well that the Act was constitutional.
The Report of the Special Master was received and ordered filed on October 1, 1990. 498 U.S. ----, 111 S.Ct. 31, 112 L.Ed.2d 9. Based on the record before him, the Special Master recommended findings of fact, to which the parties do not object, and conclusions of law generally supporting Wyoming's motion for summary judgment and rejecting Oklahoma's motion for summary judgment. More specifically, the Report recommends that we hold, first, that Wyoming has standing to sue and that this case is appropriate to our original jurisdiction; and second, that the Act discriminates against interstate commerce on its face and in practical effect, that this discrimination is not justified by any purpose advanced by Oklahoma, and that the Act therefore violates the Commerce Clause. The Report also recommends that the Court either dismiss the action as it relates to an Oklahoma-owned utility without prejudice to Wyoming to assert its claim in an appropriate forum, or, alternatively, find the Act severable to the extent it may constitutionally be applied to that utility.
Subsequently, the parties requested the Court to enter a stipulated decree adopting the Special Master's Report and containing conclusions of law. [2] If the decree was to rule on the constitutionality of the Act, however, we preferred to have that issue briefed and argued, and the case was set down for oral argument. 501 U.S. ----, 111 S.Ct. 2822, 115 L.Ed.2d 993 (1991). We now adopt the Special Master's recommended findings of fact, and with one exception, his recommended conclusions of law.
* The salient facts, gathered from those recommended by the Special Master and from other materials in the record, are as follows.
Wyoming is a major coal-producing State and in 1988 shipped coal to 19 other States. [3] While the State of Wyoming does not itself sell coal, it does impose a severance tax upon the privilege of severing or extracting coal from land within its boundaries. Wyo.Stat. §§ 39-6-301 to 39-6-308 (1990 and Supp.1991). The tax is assessed against the person or company extracting the coal and is payable when the coal is extracted. The valuation of the coal for severance tax purposes is based on its fair market value. Wyoming has collected severance taxes on coal extracted by eight mining companies that sell coal to four Oklahoma electric utilities.
The Fortieth Oklahoma Legislature, at its session in June 1985, adopted a concurrent resolution "requesting Oklahoma utility companies using coal-fired generating plants to consider plans to blend ten percent Oklahoma coal with their present use of Wyoming coal; effecting a result of keeping a portion of ratepayer dollars in Oklahoma and promoting economic development." Okla.S.Res. 21, 40th Leg., 1985 Okla.Sess.Laws 1694 (hereinafter Res. 21). The recitals and resolutions in relevant part stated:
"WHEREAS, the use of Oklahoma coal would save significant freight charges on out-of-state coal from the State of Wyoming; and
"WHEREAS, the savings on such freight charges could offset any possible costs associated with plant adjustments; and
"WHEREAS, the coal-fired electric plants being used by Oklahoma utilities are exclusively using Wyoming coal; and
"WHEREAS, the Oklahoma ratepayers are paying $300 million annually for Wyoming coal; and
"WHEREAS, a 1982 Ozark Council Report states that $9 million of the ratepayers dollars was paid as severance tax to the State of Wyoming. . . .
"NOW, THEREFORE, BE IT RESOLVED . . .:
"THAT Oklahoma utilities using coal-fired generating plants seriously consider using a blend of at least ten percent Oklahoma coal with Wyoming coal and continue to meet air quality standards.
"THAT the result of such a blend would assure at least a portion of the ratepayer dollars remaining in Oklahoma and enhancing the economy of the State of Oklahoma." The four Oklahoma electric utilities subject to the requirements of the Act are Oklahoma Gas and Electric Company, Public Service Company of Oklahoma, and Western Farmers Electric Cooperative, all privately owned, and the Grand River Dam Authority (GRDA), an agency of the State of Oklahoma. None of these four heeded this precatory resolution. At its second session, the Fortieth Legislature adopted the Act challenged in this case, thus mandating the 10% minimum purchases that the previous resolution had requested. Fifteen months after the effective date of the Act, facing substantially less than full compliance by any of the utilities, [4] the next Oklahoma Legislature adopted a concurrent resolution directing the GRDA, Oklahoma's state-owned public utility, to comply with the Act. Okla.S.Res. 82, 41st Leg., 1988 Okla.Sess.Laws 1915. [5]
Charts set out in the Special Master's Report show the percentages of each utility's purchases of Oklahoma-mined coal and Wyoming-mined coal on an annual basis from 1981 through the first four months of 1989. See Report of Special Master 7-8. Those charts reveal that during the years 1981 through 1984, the four Oklahoma utilities purchased virtually 100% of their coal requirements from Wyoming sources. These purchases decreased slightly, if at all, in 1985 and 1986 following the adoption of the original concurrent resolution. After January 1, 1987, the effective date of the Act, these utilities reduced their purchases of Wyoming coal in favor of coal mined in Oklahoma.
Unrebutted evidence demonstrates that, since the effective date of the Act, Wyoming lost severance taxes in the amounts of $535,886 in 1987, $542,352 in 1988, and $87,130 in the first four months of 1989. [6] These estimates are based on an equivalence of BTU (British Thermal Unit) ratings, thus accounting for the hotter-burning propensities of Oklahoma coal. [7] Other unrebutted submissions confirm that Wyoming has a significant excess mining capacity, such that the loss of any market cannot be made up by sales elsewhere, where Wyoming's supply has already risen to meet demand. [8]
In its motion for summary judgment before the Special Master, Oklahoma again challenged Wyoming's standing, and now excepts to the Special Master's recommendation that we reject Oklahoma's submission in this respect. Having granted Wyoming leave to file its complaint over Oklahoma's objection to standing, and having denied Oklahoma's motion to dismiss for want of standing, and the parties having submitted the case on cross-motions for summary judgment, we are not at all inclined to dismiss the action at this juncture. Although we have been reluctant to import wholesale law-of-the-case principles into original actions, Arizona v. California, 460 U.S. 605, 618-619, 103 S.Ct. 1382, 1391-1392, 75 L.Ed.2d 318 (1983), prior rulings in such cases "should be subject to the general principles of finality and repose, absent changed circumstances or unforeseen issues not previously litigated." Id., at 619, 103 S.Ct., at 1391. Here, Oklahoma in no way suggests any change of circumstance, whether of fact or law. In each brief submitted on the issue, Oklahoma has recited the same facts, cited the same cases, and constructed the same arguments. Of course, we surely have the power to accede to Oklahoma's request at this late date, and if convinced, which we are not, that we were clearly wrong in accepting jurisdiction of this case, we would not hesitate to depart from our prior rulings.
Article III, § 2, cl. 2, of the United States Constitution provides this Court with original jurisdiction in all cases "in which a State shall be a Party." Congress has seen fit to designate that this Court "shall have original and exclusive jurisdiction of all controversies between two or more States." 28 U.S.C. § 1251(a). "In order to constitute a proper 'controversy' under our original jurisdiction, 'it must appear that the complaining State has suffered a wrong through the action of the other State, furnishing ground for judicial redress, or is asserting a right against the other State which is susceptible of judicial enforcement according to the accepted principles of the common law or equity systems of jurisprudence.' " Maryland v. Louisiana, 451 U.S. 725, 735-736, 101 S.Ct. 2114, 2123-2124, 68 L.Ed.2d 576 (1981) (quoting Massachusetts v. Missouri, 308 U.S. 1, 15, 60 S.Ct. 39, 42, 84 L.Ed. 3 (1939)); see also New York v. Illinois, 274 U.S. 488, 490, 47 S.Ct. 661, 661, 71 L.Ed. 1164 (1927).
We are quite sure that Wyoming's submission satisfies this test. We agree with the Master's conclusion, arrived at after consideration of all the facts submitted to him, that Wyoming clearly had standing to bring this action. The Master observed:
"The effect of the Oklahoma statute has been to deprive Wyoming of severance tax revenues. It is undisputed that since January 1, 1987, the effective date of the Act, purchases by Oklahoma electric utilities of Wyoming-mined coal, as a percentage of their total coal purchases, have declined. . . . The decline came when, in response to the adoption of the Act, those utilities began purchasing Oklahoma-mined coal. The coal that, in the absence of the Act, would have been sold to Oklahoma utilities by a Wyoming producer would have been subject to the tax when extracted. Wyoming'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 (1981) (quoting Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 41-42, 96 S.Ct. 1917, 1925-1926, 48 L.Ed.2d 450 (1976))." Report of Special Master 11. [9]
The Master recognized that Courts of Appeals have denied standing to States where the claim was that actions taken by United States Government agencies had injured the State's economy and thereby caused a decline in general tax revenues. See, e.g., Pennsylvania v. Kleppe, 174 U.S.App.D.C. 441, 533 F.2d 668, cert. denied, 429 U.S. 977, 97 S.Ct. 485, 50 L.Ed.2d 584 (1976); State of Iowa ex rel. Miller v. Block, 771 F.2d 347 (CA8 1985), cert. denied, 478 U.S. 1012, 106 S.Ct. 3313, 92 L.Ed.2d 725 (1986). He concluded, however, that none of these cases was analogous to this one because none of them involved a direct injury in the form of a loss of specific tax revenues-an undisputed fact here. See n. 6, supra. In our view, the Master's conclusion about Wyoming's standing is sound.
Oklahoma argues that Wyoming is not itself engaged in the commerce affected, is not affected as a consumer, and thus has not suffered the type of direct injury cognizable in a Commerce Clause action. The authorities relied on by Oklahoma for this argument, Oklahoma v. A., T., & S.F.R. Co., 220 U.S. 277, 287-289, 31 S.Ct. 434, 436-437, 55 L.Ed. 465 (1911), and Louisiana v. Texas, 176 U.S. 1, 16-22, 20 S.Ct. 251, 256-258, 44 L.Ed. 347 (1900), are not helpful, however, for they involved claims of parens patriae standing rather than allegations of direct injury to the State itself. Moreover, we have rejected a similar argument in Hunt v. Washington Apple Advertising Comm'n, 432 U.S. 333, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). In Hunt, the Washington Apple Advertising Commission brought suit to declare as violative of the Commerce Clause a North Carolina statute requiring that all apples sold or shipped into North Carolina in closed containers be identified by no grade other than the applicable federal grade or a designation that the apples were not graded. The Commission was a statutory agency designed for the promotion and protection of the Washington State apple industry and composed of 13 state growers and dealers chosen from electoral districts by their fellow growers and dealers, all of whom by mandatory assessments financed the Commission's operations. The North Carolina officials named in the suit vigorously contested the Commission's standing, either in its own right or on behalf of the apple industry it represented, arguing that it lacked a "personal stake" in the litigation because, as a state agency, it was "not itself engaged in the production and sale of Washington apples or their shipment into North Carolina." Id., at 341, 97 S.Ct., at 2440. After addressing the Commission's analogues to associational standing, we turned to the Commission's allegations of direct injury:
"Finally, we note that the interests of the Commission itself may be adversely affected by the outcome of this litigation. The annual assessments paid to the Commission are tied to the volume of apples grown and packaged as 'Washington Apples.' In the event the North Carolina statute results in a contraction of the market for Washington apples or prevents any market expansion that might otherwise occur, it could reduce the amount of the assessments due the Commission and used to support its activities. This financial nexus between the interests of the Commission and its constituents coalesces with the other factors noted above to 'assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions.' Baker v. Carr, [[[369 U.S. 186]], 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962) ]; see also NAACP v. Alabama ex rel. Patterson, 357 U.S. 449, 459-460 [78 S.Ct. 1163, 1170-1171, 2 L.Ed.2d 1488] (1958)." Id., at 345, 97 S.Ct., at 2442.
That the Commission was allowed to proceed in Hunt necessarily supports Wyoming's standing against Oklahoma, where its severance tax revenues are directly linked to the extraction and sale of coal and have been demonstrably affected by the Act.
Over Oklahoma's objection, which is repeated here, the Special Master also concluded that this case was an appropriate one for the exercise of our original jurisdiction. We agree, and we obviously shared this thought when granting Wyoming leave to file its complaint in the first instance. We have generally observed that the Court's original jurisdiction should be exercised "sparingly," Maryland v. Louisiana, 451 U.S., at 739, 101 S.Ct., at 2125; United States v. Nevada, 412 U.S. 534, 538, 93 S.Ct. 2763, 2765, 37 L.Ed.2d 132 (1973), and this Court applies discretion when accepting original cases, even as to actions between States where our jurisdiction is exclusive. As stated not long ago:
"In recent years, we have consistently interpreted 28 U.S.C. § 1251(a) as providing us with substantial discretion to make case-by-case judgments as to the practical necessity of an original forum in this Court for particular disputes within our constitutional original jurisdiction. See Maryland v. Louisiana, 451 U.S. 725, 743 [101 S.Ct. 2114, 2127, 68 L.Ed.2d 576] (1981); Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493, 499 [91 S.Ct. 1005, 1010, 28 L.Ed.2d 256] (1971). We exercise that discretion with an eye to promoting the most effective functioning of this Court within the overall federal system." Texas v. New Mexico, 462 U.S. 554, 570, 103 S.Ct. 2558, 2568, 77 L.Ed.2d 1 (1983).
Specifically, we have imposed prudential and equitable limitations upon the exercise of our original jurisdiction, and of these limitations we have said: "We construe 28 U.S.C. § 1251(a)(1), as we do Art. III, § 2, cl. 2, to honor our original jurisdiction but to make it obligatory only in appropriate cases. And the question of what is appropriate concerns, of course, the seriousness and dignity of the claim; yet beyond that it necessarily involves the availability of another forum where there is jurisdiction over the named parties, where the issues tendered may be litigated, and where appropriate relief may be had." Illinois v. City of Milwaukee, 406 U.S. 91, 93, 92 S.Ct. 1385, 1387, 31 L.Ed.2d 712 (1972); California v. Texas, 457 U.S. 164, 168, 102 S.Ct. 2335, 2337, 72 L.Ed.2d 755 (1982).
It is beyond peradventure that Wyoming has raised a claim of sufficient "seriousness and dignity." Oklahoma, acting in its sovereign capacity, passed the Act, which directly affects Wyoming's ability to collect severance tax revenues, an action undertaken in its sovereign capacity. As such, Wyoming's challenge under the Commerce Clause precisely "implicates serious and important concerns of federalism fully in accord with the purposes and reach of our original jurisdiction." Maryland v. Louisiana, 451 U.S., at 744, 101 S.Ct., at 2127. Indeed, we found it not to be a "waste" of this Court's time in Maryland v. Louisiana to consider the validity of one State's "first-use tax" which served, in effect, as a severance tax on gas extracted from areas belonging to the people at large, to the detriment of other States on to whose consumers the tax passed. Ibid. Wyoming's claim here is no less substantial, and touches on its direct injury rather than on any interest as parens patriae.
Oklahoma makes much of the fact that the mining companies affected in Wyoming could bring suit raising the Commerce Clause challenge, as private parties aggrieved by state action often do. But cf. Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). For reasons unknown, however, they have chosen neither to intervene in this action nor to file their own, whether in state or federal court. [10] As such, no pending action exists to which we could defer adjudication on this issue. See, e.g., Illinois v. City of Milwaukee, supra, 406 U.S., at 98, 108, 92 S.Ct., at 1390, 1395; Washington v. General Motors Corp., 406 U.S. 109, 114, 92 S.Ct. 1396, 1398, 31 L.Ed.2d 727 (1972). Even if such action were proceeding, however, Wyoming's interests would not be directly represented. See Maryland v. Louisiana, supra, 451 U.S., at 743, 101 S.Ct., at 2127; cf. Arizona v. New Mexico, 425 U.S. 794, 96 S.Ct. 1845, 48 L.Ed.2d 376 (1976). Indeed, Wyoming brings suit as a sovereign seeking declaration from this Court that Oklahoma's Act is unconstitutional. The Constitution provides us original jurisdiction, and Congress has made this provision exclusive as between these parties, two States. It was proper to entertain this case without assurances, notably absent here, that a State's interests under the Constitution will find a forum for appropriate hearing and full relief.
Oklahoma points to the general requirement, reflected in the controlling principles explained above, that "[b]efore this court can be moved to exercise its extraordinary power under the Constitution to control the conduct of one State at the suit of another, the threatened invasion of rights must be of serious magnitude and it must be established by clear and convincing evidence." New York v. New Jersey, 256 U.S. 296, 309, 41 S.Ct. 492, 496, 65 L.Ed. 937 (1921); see also Connecticut v. Massachusetts, 282 U.S. 660, 669, 51 S.Ct. 286, 289, 75 L.Ed. 602 (1931); Missouri v. Illinois, 200 U.S. 496, 521, 26 S.Ct. 268, 270, 50 L.Ed. 572 (1906). On this basis Oklahoma suggests that Wyoming's interest is de minimis solely for the reason that loss in severance tax revenues attributable to the Act has generally been less than 1% of total taxes collected. See Affidavit of Richard J. Marble (attached as Exh. B of Appendix to Motion of Wyoming for Summary Judgment). We decline any invitation to key the exercise of this Court's original jurisdiction on the amount in controversy. [11] Oklahoma's argument is, in fact, no different than the situation we faced in Pennsylvania v. West Virginia, 262 U.S. 553, 43 S.Ct. 658, 67 L.Ed. 1117 (1923). When Pennsylvania challenged a West Virginia statute designed to keep natural gas within its borders, there was no question but that the issue presented rose to a level suitable to our original jurisdiction:
"The question is an important one; for what one State may do others may, and there are ten States from which natural gas is exported for consumption in other States. Besides, what may be done with one natural product may be done with others, and there are several States in which the earth yields products of great value which are carried into other States and there used." Id., at 596, 43 S.Ct., at 665.
And so it is here. 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. "[T]he practical effect of [Oklahoma's] statute must be evaluated not only by considering the consequences of the statute itself, but also by considering how the challenged statute may interact with the legitimate regulatory regimes of the other States and what effect would arise if not one, but many 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 (1989).
Because of the nature of Wyoming's claim, and the absence of any other pending litigation involving the same parties or issues, we find the present case appropriate for the exercise of this Court's original jurisdiction. Accordingly, we accept the recommendation of the Special Master that Wyoming should be permitted to bring this action, and we reject Oklahoma's exceptions to the Special Master's Report.
We also agree with the Special Master's ultimate conclusion that the Act is invalid under the Commerce Clause.
The Commerce Clause of the United States Constitution provides that "[t]he Congress shall have Power . . . [t]o regulate Commerce . . . among the several States. . . ." Art. I, § 8, cl. 3. It is long-established that, while a literal reading evinces a grant of power to Congress, the Commerce Clause also directly limits the power of the States to discriminate against interstate commerce. See New Energy Co. of Indiana v. Limbach, 486 U.S. 269, 273, 108 S.Ct. 1803, 1807, 100 L.Ed.2d 302 (1988) (citing Hughes v. Oklahoma, 441 U.S. 322, 326, 99 S.Ct. 1727, 1731, 60 L.Ed.2d 250 (1979); H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 534-535, 69 S.Ct. 657, 663, 93 L.Ed. 865 (1949); Welton v. Missouri, 91 U.S. 275, 23 L.Ed. 347 (1876)). "This 'negative' aspect of the Commerce Clause prohibits economic protectionism that is, regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors." New Energy Co., supra, 486 U.S., at 273-274, 108 S.Ct. at 1807; see also Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 270-273, 104 S.Ct. 3049, 3054-3056, 82 L.Ed.2d 200 (1984); H.P. Hood & Sons, supra, 336 U.S., at 532-533, 69 S.Ct., at 662. When a state statute clearly discriminates against interstate commerce, it will be struck down, see, e.g., New Energy Co., supra, unless the discrimination is demonstrably justified by a valid factor unrelated to economic protectionism, see, e.g., Maine v. Taylor, 477 U.S. 131, 106 S.Ct. 2440, 91 L.Ed.2d 110 (1986). Indeed, when the state statute amounts to simple economic protectionism, a "virtually per se rule of invalidity" has applied. Philadelphia v. New Jersey, 437 U.S. 617, 624, 98 S.Ct. 2531, 2535, 57 L.Ed.2d 475 (1978). [12]
The Special Master correctly found that the Act, on its face and in practical effect, discriminates against interstate commerce. See Bacchus Imports, Ltd v. Dias, supra, 468 U.S., at 270, 104 S.Ct., at 3054. Section 939 of the Act expressly reserves a segment of the Oklahoma coal market for Oklahoma-mined coal, to the exclusion of coal mined in other States. Such a preference for coal from domestic sources cannot be characterized as anything other than protectionist and discriminatory, for the Act purports to exclude coal mined in other States based solely on its origin. See New Energy Co., supra, 486 U.S., at 274, 108 S.Ct., at 1807; Philadelphia v. New Jersey, supra, 437 U.S., at 626-627, 98 S.Ct., at 2537. The stipulated facts confirm that from 1981 to 1986 Wyoming provided virtually 100% of the coal purchased by Oklahoma utilities. In 1987 and 1988, following the effective date of the Act, the utilities purchased Oklahoma coal in amounts ranging from 3.4% to 7.4% of their annual needs, with a necessarily corresponding reduction in purchases of Wyoming coal.
As in its jurisdictional arguments, Oklahoma attempts to discount this evidence by emphasizing that the Act sets aside only a "small portion" of the Oklahoma coal market, without placing an "overall burden" on out-of-state coal producers doing business in Oklahoma. The volume of commerce affected measures only the extent of the discrimination; it is of no relevance to the determination whether a State has discriminated against interstate commerce. Bacchus Imports, Ltd. v. Dias, supra, 468 U.S., at 268-269, 104 S.Ct., at 3053-3054; Maryland v. Louisiana, 451 U.S., at 760, 101 S.Ct., at 2136; Lewis v. BT Investment Managers, Inc., 447 U.S. 27, 39-42, 100 S.Ct. 2009, 2017-2018, 64 L.Ed.2d 702 (1980). As we have only recently reaffirmed:
"Our cases . . . indicate that where discrimination is patent, as it is here, neither a widespread advantage to in-state interests nor a widespread disadvantage to out-of-state competitors need be shown. . . . Varying the strength of the bar against economic protectionism according to the size and number of in-state and out-of-state firms affected would serve no purpose except the creation of new uncertainties in an already complex field." New Energy Co., supra, 486 U.S., at 276-277, 108 S.Ct., at 1809.
Because the Act discriminates both on its face and in practical effect, the burden falls on Oklahoma " 'to justify it both in terms of the local benefits flowing from the statute and the unavailability of nondiscriminatory alternatives adequate to preserve the local interests at stake.' " Hughes v. Oklahoma, supra, 441 U.S., at 336, 99 S.Ct., at 1736 (quoting Hunt v. Washington Apple Advertising Comm'n, 432 U.S., at 353, 97 S.Ct. at 2446). "At a minimum such facial discrimination invokes the strictest scrutiny of any purported legitimate local purpose and of the absence of nondiscriminatory alternatives." Hughes v. Oklahoma, supra, 441 U.S., at 337, 99 S.Ct., at 1737. We agree with the Special Master's recommended conclusions that Oklahoma has not met its burden in this respect. In this Court, Oklahoma argues quite briefly that the Act's discrimination against out-of-state coal is justified because sustaining the Oklahoma coal-mining industry lessens the State's reliance on a single source of coal delivered over a single rail line. This justification, as the Special Master noted, is foreclosed by the Court's reasoning in Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 55 S.Ct. 497, 79 L.Ed. 1032 (1935), and H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 69 S.Ct. 657, 93 L.Ed. 865 (1949), cases that the State's brief ignores. We have often examined a "presumably legitimate goal," only to find that the State attempted to achieve it by "the illegitimate means of isolating the State from the national economy." Philadelphia v. New Jersey, 437 U.S., at 627, 98 S.Ct., at 2537.
The State embellishes this argument somewhat when suggesting that, by requiring the utilities to supply 10% of their needs for fuel from Oklahoma coal, which because of its higher sulfur content cannot be the primary source of supply, the State thereby conserves Wyoming's cleaner coal for future use. We have no reason to doubt Wyoming's unrebutted factual response to this argument: reserves of low sulfur, clean-burning, sub-bituminous coal from the Powder River Basin are estimated to be in excess of 110 billion tons, thus providing Wyoming coal for several hundred years at current rates of extraction. Reply Brief for Wyoming 9, n. 4 (citing Geological Survey of Wyoming, Guidebook of the Coal Geology of the Powder River Basin, Public Information Circular No. 14, p. 126 (1980)). In any event, this contention, which is raised for the first time in Oklahoma's brief on the merits, finds no support in the records made in this case. See Hughes v. Oklahoma, 441 U.S., at 337-338, and n. 20, 99 S.Ct., at 1737; cf. Maine v. Taylor, 477 U.S., at 148-149, 106 S.Ct., at 2452-2453.
Oklahoma argues more seriously that the "saving clause" of the Federal Power Act, 16 U.S.C. § 824(b)(1), [13] which reserves to the States the regulation of local retail electric rates, makes permissible the Act's discriminatory impact on the movement of Wyoming coal in interstate commerce. Oklahoma argues that it "has determined that effective and helpful ways of ensuring lower local utility rates include 1) reducing over-dependence on a single source of supply, a single fuel transporter, and 2) conserving needed low-sulfur coal for the future." Brief for Oklahoma 65. Even if the Act is accepted as part of the State's rate-regulating authority, we cannot accept the submission that it is exempt from scrutiny under the Commerce Clause. Congress must manifest its unambiguous intent before a federal statute will be read to permit or to approve such a violation of the Commerce Clause as Oklahoma here seeks to justify. Maine v. Taylor, 477 U.S., at 139, 106 S.Ct., at 2447; South-Central Timber Development, Inc. v. Wunnicke, 467 U.S. 82, 91, 104 S.Ct. 2237, 2242, 81 L.Ed.2d 71 (1984). We have already examined § 824(b)(1) in New England Power Co. v. New Hampshire, 455 U.S. 331, 102 S.Ct. 1096, 71 L.Ed.2d 188 (1982), and found nothing in the statute or legislative history "evinc[ing] a congressional intent 'to alter the limits of state power otherwise imposed by the Commerce Clause.' " Id., at 341, 102 S.Ct., at 1102 (quoting United States v. Public Utilities Comm'n of California, 345 U.S. 295, 304, 73 S.Ct. 706, 712, 97 L.Ed. 1020 (1953)). There is no hint in that opinion, as suggested by Oklahoma, that a partial -instead of total -ban would have been permissible, or that in-state purchasing quotas imposed on utilities in an effort to regulate utility rates are within the "lawful authority" of the States under by § 824(b)(1). Instead, our decision turned on the recognition that "Congress did no more than leave standing whatever valid state laws then existed relating to the exportation of hydroelectric energy; by its plain terms, [§ 824(b) ] simply saves from pre-emption under Part II of the Federal Power Act such state authority as was otherwise 'lawful.' " New England Power Co., supra, 455 U.S., at 341, 102 S.Ct., at 1101. Our decisions have uniformly subjected Commerce Clause cases implicating the Federal Power Act to scrutiny on the merits. See, e.g., New England Power Co., supra; Arkansas Electric Cooperative Corp. v. Arkansas Public Service Comm'n, 461 U.S. 375, 393, 103 S.Ct. 1905, 1917, 76 L.Ed.2d 1 (1983).
We need say no more to conclude that Oklahoma has not met its burden of demonstrating a clear and unambiguous intent on behalf of Congress to permit the discrimination against interstate commerce occurring here. In light of the foregoing, we adopt the Special Master's conclusion that the Act manifests fatal defects under the Commerce Clause.
Finally, we address a question of severability raised in the exceptions filed by Wyoming to the Special Master's Report.
The GRDA is an agency of the State of Oklahoma, and, as such, Oklahoma acts as a market participant in directing its purchases of coal. We have recognized that the Commerce Clause does not restrict the State's action as a free market participant. Reeves, Inc. v. Stake, 447 U.S. 429, 436-437, 100 S.Ct. 2271, 2277, 65 L.Ed.2d 244 (1980); Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 806-810, 96 S.Ct. 2488, 2496-2498, 49 L.Ed.2d 220 (1976). The Special Master recommends that the market-participant exception is available to Oklahoma, but only if the application of the Act to the GRDA may be considered separately, or severed, from its application to the three private utilities. As the determination of severability will in this situation be one of state law, Hooper v. Bernalillo County Assessor, 472 U.S. 612, 624, 105 S.Ct. 2862, 2869, 86 L.Ed.2d 487 (1985), the Special Master recommends that we enter judgment with respect to the three private utilities but dismiss Wyoming's complaint as it relates to the GRDA without prejudice to the right of Wyoming to reassert the claim in an "appropriate forum." Report of Special Master 32. We sustain Wyoming's exception to these recommendations of the Special Master. This action is one between two States presented under our original jurisdiction; this Court is the appropriate forum to decide issues necessary to afford the complaining State complete relief. Cf. Dorchy v. Kansas, 264 U.S. 286, 291, 44 S.Ct. 323, 325, 68 L.Ed. 686 (1924). We deem it proper and advisable to address the issue of severability ourselves.
In the alternative, the Special Master looked to Oklahoma law and found the Act severable as to the GRDA, a conclusion with which we disagree. It is true that Oklahoma courts have held that valid portions of a statute are severable " 'unless it is evident that the Legislature would not have enacted the valid provisions with the invalid provisions removed, if with the invalid provisions removed the rest of the act is fully operative as a law.' " Englebrecht v. Day, 201 Okla. 585, 591, 208 P.2d 538, 544 (1949) (citing Sterling Refining Co. v. Walker, 165 Okla. 45, 25 P.2d 312 (1933)). It is also true that under Oklahoma law, a severability clause in a statute creates a presumption that the Legislature would have adopted the statute with the unconstitutional portions omitted. Ibid.; see Champlin Refining Co. v. Corporation Commission of Oklahoma, 286 U.S. 210, 234-235, 52 S.Ct. 559, 563-565, 76 L.Ed. 1062 (1932) (inquiring into severability under Oklahoma law). The Act in this case contains a severability provision:
"The provisions of this act are severable and if any part or provision shall be held void, the decision of the court so holding shall not affect or impair any of the remaining parts or provisions of this act." Act of Mar. 26, 1986, Ch. 43, § 3, 1986 Okla.Sess.Laws 74.
But there are no parts or separate provisions in the invalid § 939 of the Act. It applies to "[a]ll entities providing electric power for sale to the consumer in Oklahoma" and commands them to purchase 10% Oklahoma-mined coal. Okla.Stat., Tit. 45, § 939 (Supp.1988). Nothing remains to be saved once that provision is stricken. Accordingly, the Act must stand or fall as a whole.
We decline Oklahoma's suggestion that the term "all entities" be read to uphold the Act only as to the GRDA, for it is clearly not this Court's province to rewrite a state statute. If "all entities" is to mean "the GRDA" or "state-owned utilities," the Oklahoma Legislature must be the one to decide. Indeed, this argument perceives the nature of the severability clause to be much different than that written by the Oklahoma Legislature. Severability clauses may easily be written to provide that if application of a statute to some classes is found unconstitutional, severance of those classes permits application to the acceptable classes. [14] Moreover, the statute could itself have been written to address explicitly the GRDA. [15] The legislature here chose neither course.
The State provides no additional insight into the intent of its legislature on this question. The Act would become a fundamentally different piece of legislation were it construed to apply only to the GRDA. We leave to the Oklahoma Legislature to decide whether it wishes to burden this state-owned utility when private utilities will otherwise be free of the Act's restrictions.
We deny Oklahoma's motion for summary judgment and grant that of Wyoming. In sum, we hold that the Act is unconstitutional under the Commerce Clause. No portion is severable as to any entity touched by its mandate. A judgment and decree to that effect and enjoining enforcement of the Act will be entered. Jurisdiction over the case is retained in the event that further proceedings are required to implement the judgment.
So ordered.
Justice SCALIA, with whom THE CHIEF JUSTICE and Justice THOMAS join, dissenting.
Notes
[edit]- ↑ Act of Mar. 26, 1986, Ch. 43, §§ 1, 2, 1986 Okla.Sess.Laws 73. In full, § 939 provides:
- ↑ In the proposed decree, the parties agreed to the Special Master's findings of fact and his conclusions that the Act, as applied to the privately-owned utilities, violated the Commerce Clause, but that, as applied to the Oklahoma-owned utility, the Act was constitutional. Oklahoma agreed that application of the Act to the private utilities would be enjoined, and Wyoming agreed that the Act would not be enjoined as to the state-owned utility.
- ↑ In 1988, just over 163.8 million tons of Wyoming coal was mined. Only 14.6% of Wyoming's coal production was sold in-state. Oklahoma purchased 8% of the coal mined, making it the third largest out-of-state consumer, behind Texas at 19.7% and Kansas at 8.3%.
- ↑ To date, no investigations or prosecutions have taken place. However, violations of the Act can be prosecuted as a misdemeanor, and the utilities can be enjoined from further violations upon recommendation of Oklahoma's State Mining Commission. See Oklahoma's Response to Wyoming's Interrogatory No. 6.
- ↑ The recitals and resolutions included the following:
- ↑ See Affidavit of Richard J. Marble, Director, Minerals Tax Division, Wyoming Department of Revenue and Taxation 3 (attached as Exh. B of Appendix to Motion of Wyoming for Summary Judgment). Oklahoma does not contradict these estimates. Instead, its expert, an economist familiar with energy and coal-related issues, emphasizes only that Wyoming experienced a more severe loss in severance tax revenues due to its reduction of the severance tax rate and a decline in coal market prices. Affidavit of David M. Weinstein 2-3 (attached as Exh. G of Appendix to Motion of Oklahoma for Summary Judgment). At best, Oklahoma's counter-affidavit suggests that the estimate of lost severance tax revenues is a bit too high, pointing to the slight percentages of Oklahoma coal purchased prior to the Act as indicative that Wyoming did not provide 100% of the coal purchased. Id., at 3.
- ↑ A coal's BTU rating reflects the heat-generating efficiency of the coal when burned. Coal extracted from Wyoming's Powder River Basin-the source of coal shipped to Oklahoma since 1980-has a lower average BTU rating than the Oklahoma coal delivered to the utilities. Accordingly it takes less Oklahoma coal by weight to generate the same amount of energy as the Wyoming coal. Because sulfur content factors into Oklahoma's later argument, we note here as well that Wyoming coal has a lower average sulfur content than Oklahoma coal, thus less sulfur escapes and pollutes the air when Wyoming coal is burned.
- ↑ One affidavit, from a principal of a consulting firm conducting economic analysis of the coal industry reflects that in 1987 the Wyoming Powder River Basin had an annual production capacity of 186.4 million tons, versus actual 1987 production of 127.1 million tons. Affidavit of Seth Schwartz (App. to Wyoming's Response to Motion to Dismiss A-2). Moreover, the Director of the Wyoming Department of Environmental Quality, who oversees programs for permitting coal mines, informs us that as of 1987, permitted capacity in the Powder River Basin was 318 million tons, whereas total production from all coal mines was 146.5 million tons. Affidavit of Randolph Wood (App. to Wyoming's Response to Motion to Dismiss A-5).
- ↑ We note as well that the recitals in Oklahoma's initial concurrent resolution reflect that coal-fired electric plants within Oklahoma were exclusively using Wyoming coal, with the attendant recognition that "$9 million of the ratepayers dollars was paid as severance tax to the State of Wyoming." Res. 21. The Wyoming coal that would have been sold-but no longer will be sold due to the Act-to Oklahoma utilities by a Wyoming producer is subject to the tax when extracted. Wyoming, which stands to regain these lost revenues should its suit to overturn the Act succeed, is thus "directly affected in a 'substantial and real' way so as to justify [its] exercise of this Court's original jurisdiction." Maryland v. Louisiana, 451 U.S. 725, 737, 101 S.Ct. 2114, 2124, 68 L.Ed.2d 576 (1981); see also Texas v. Florida, 306 U.S. 398, 407-408, 59 S.Ct. 563, 568-569, 83 L.Ed. 817 (1939); Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 39, 96 S.Ct. 1917, 1924, 48 L.Ed.2d 450 (1976) (plaintiff seeking to invoke Article III judicial power must "stand to profit in some personal interest").
- ↑ A challenge in the Oklahoma courts brought by a group of Oklahoma consumers was dismissed for lack of standing, upon a finding that they could not suffer injury due to the Act's prohibition on cost increase to consumers. See Northeast Oklahoma Electric Cooperative, Inc. v. Grand River Dam Authority, Case No. C-88-127 (Dist. Ct. Craig Cy., Okla., Sept. 2, 1988) (Journal Entry of Judgment attached as Appendix to Reply Brief for Oklahoma on Motion for Summary Judgment).
- ↑ We would not, in any event, readily find the amount here to be de minimis. True, the taxes lost have amounted to less than 1% of revenues received by Wyoming, but even this fractional percentage exceeds $500,000 per year. Wyoming approaches this case viewing such a drain on its tax base year after year, and it aptly paraphrases a famous statement of Senator Everett Dirkson: "a half million dollars here and a half million dollars there, and pretty soon real money is involved." Reply Brief for Wyoming 5, n. 3. See Respectfully Quoted: A Dictionary of Quotations Requested from the Congressional Research Service 155 (S. Platt ed. 1989) ("A billion here, a billion there, and pretty soon you're talking about real money").
- ↑ There are circumstances in which a less strict scrutiny is appropriate under our Commerce Clause decisions. "When . . . a statute has only indirect effects on interstate commerce and regulates evenhandedly, we have examined whether the State's interest is legitimate and whether the burden on interstate commerce clearly exceeds the local benefits." Brown-Forman Distillers Corp. v. New York State Liquor Auth., 476 U.S. 573, 579, 106 S.Ct. 2080, 2084, 90 L.Ed.2d 552 (1986); see also Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 847, 25 L.Ed.2d 174 (1970). While we have recognized that there is no "clear line" separating close cases on which scrutiny should apply, Brown-Forman Distillers, supra, 476 U.S., at 579, 106 S.Ct., at 2084, this is not a close case.
- ↑ "The provisions of this subchapter shall apply to the transmission of electric energy in interstate commerce and to the sale of electric energy at wholesale in interstate commerce, but except as provided in paragraph (2) shall not apply to any other sale of electric energy or deprive a State or State commission of its lawful authority now exercised over the exportation of hydroelectric energy which is transmitted across a State line." 16 U.S.C. § 824(b)(1).
- ↑ See, e.g., INS v. Chadha, 462 U.S. 919, 932, 103 S.Ct. 2764, 2774, 77 L.Ed.2d 317 (1983), where the severability clause provided: " 'If any particular provision of this Act, or the application thereof to any person or circumstance, is held invalid, the remainder of the act and the application of such provision to other persons or circumstances shall not be affected thereby' " (emphasis deleted).
- ↑ See, e.g., Mo.Ann.Stat § 34.080 (Vernon 1969), which expressly requires all State agencies to purchase Missouri coal if it is available at a competitive price.
This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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