## Facts

- Cape Wind Associates, LLC proposed an offshore wind-generation project in federal waters in Nantucket Sound consisting of roughly 130 turbines spread across about 24 square miles.
- The project drew sustained opposition from local residents and groups on Cape Cod, Martha’s Vineyard, and Nantucket, including the Alliance to Protect Nantucket Sound and the Town of Barnstable.
- Beginning in the early 2000s, project opponents filed multiple administrative challenges and lawsuits directed at federal and state approvals related to the project (including approvals involving environmental review and transmission interconnection); those efforts were repeatedly rejected in other forums.
- In 2009, Massachusetts enacted and implemented the Green Communities Act, which directed Massachusetts electric distribution companies to enter into long-term contracts with renewable-energy generators, subject to state regulatory approval.
- National Grid entered into power purchase agreements with Cape Wind, and state and federal challenges to those agreements—raising Dormant Commerce Clause and Supremacy Clause theories—were unsuccessful.
- NSTAR Electric Company later entered into a long-term power purchase agreement with Cape Wind (the NSTAR–Cape Wind PPA).
- The Massachusetts Department of Public Utilities (DPU) issued an order approving the NSTAR–Cape Wind PPA, including cost-recovery treatment that would be reflected through retail rates paid by utility customers.
- Plaintiffs did not immediately challenge the DPU’s approval of the NSTAR–Cape Wind PPA; about fourteen months later, the Alliance and the Town of Barnstable filed this federal action against Massachusetts officials and agencies involved in the approval.
- Plaintiffs sought declaratory and injunctive relief aimed at invalidating the DPU’s approval and stopping implementation of the NSTAR–Cape Wind PPA, alleging unconstitutional burdening of interstate commerce and federal preemption under federal energy law.

## Issues

1. Whether a federal district court may grant declaratory or injunctive relief that would effectively set aside or block implementation of a Massachusetts DPU order approving a utility power purchase agreement affecting retail rates.
2. Whether plaintiffs stated a plausible claim that the DPU approval and related Massachusetts renewable-energy contracting framework violated the Dormant Commerce Clause by discriminating against or unduly burdening interstate commerce.
3. Whether plaintiffs stated a plausible Supremacy Clause claim that the approval and contracting framework were preempted by federal energy regulation (including the Federal Power Act and FERC’s authority).

## Decision

- The court granted the defendants’ motions to dismiss and dismissed the complaint.
- The court declined to use federal district-court litigation as a vehicle to undo or suspend the DPU’s order approving the NSTAR–Cape Wind PPA.
- The court concluded that, in any event, plaintiffs’ constitutional and preemption theories did not state a viable basis for the federal court to invalidate the state regulatory approval of the PPA.

## Legal Principles

- Federal courts are limited forums for challenges that function as collateral attacks on state public-utility commission orders affecting retail electric rates, particularly where state law supplies administrative process and judicial review.
- A Dormant Commerce Clause claim generally requires plausible allegations of discriminatory purpose or effect, or (absent discrimination) a showing that incidental burdens on interstate commerce are clearly excessive in relation to the state’s legitimate local objectives.
- Federal preemption under the Supremacy Clause requires a conflict with federal law or occupation of the field; state regulation of retail electric utilities and state-directed procurement may coexist with FERC’s regulation of wholesale markets absent a direct clash with federal authority.
- A complaint seeking to invalidate a particular state-approved power contract must plead more than disagreement with state energy choices or allegations that contract prices are “above market”; it must connect the challenged state action to a recognized constitutional or preemption violation.

## Conclusion

Town of Barnstable, Massachusetts v. Berwick dismissed a federal suit by Cape Wind opponents who sought to overturn the Massachusetts DPU’s approval of the NSTAR–Cape Wind power purchase agreement, holding that federal district court was not the proper forum to invalidate the state order and that plaintiffs’ Dormant Commerce Clause and Supremacy Clause/preemption allegations did not supply a basis for relief.


Town of Barnstable, Massachusetts v. Berwick, 17 F. Supp. 3d 113 (2014)