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State ex rel. Slatery v. Tennessee Valley Authority

United States District Court, M.D. Tennessee, Nashville Division

May 14, 2018

STATE OF TENNESSEE ex rel. HERBERT H. SLATERY III, in his official capacity as the Attorney General and Reporter of Tennessee and ROBERT J. MARTINEAU, JR., Commissioner of the Tennessee Department of Environment and Conservation, Plaintiffs,
v.
TENNESSEE VALLEY AUTHORITY, Defendant. and TENNESSEE CLEAN WATER NETWORK and TENNESSEE SCENIC RIVERS ASSOCIATION, Plaintiff-Intervenors,

          MEMORANDUM OPINION

          WAVERLY D. CRENSHAW, JR. CHIEF UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the motions of Plaintiffs (the “State”) and Plaintiff-Intervenors (“Citizens Groups”) to remand the case to the Chancery Court for Davidson County, Tennessee. (Doc. Nos. 12, 14.) Defendant Tennessee Valley Authority (“TVA”) has responded in opposition (Doc. No. 19), and the State and the Citizens Groups have replied (Doc. Nos. 21, 22). For the following reasons, the Court will grant the motions.

         I. Background[1]

         TVA owns and operates an active coal-fired power plant (the “Gallatin Plant”) located on the north bank of the Cumberland River, within approximately five miles of Gallatin, Tennessee. Until 1970, coal combustion residual material (“CCR”) generated through the operation of the Gallatin Plant was treated in a series of unlined ash ponds located on the western edge of the site. In 1970, these ponds were closed after reaching capacity; that area is typically referred to as the “Non-Registered Site.” Under Tennessee law, the Non-Registered Site is considered a solid waste disposal site, and it is managed by the Tennessee Department of Environment and Conservation's (“TDEC”) Division of Solid Waste Management under the Tennessee Solid Waste Disposal Act (“SWDA”). See Tenn. Code Ann. §§ 68-211-101 to 68-211-124.

         After 1970, TVA began treating its CCR using a series of unlined ponds located north-northeast of the Non-Registered Site. This area includes Bottom Ash Pond A (“Pond A”), Fly Ash Pond E (“Pond E”), and Stilling Ponds B, C, and D (together, the “Ash Pond Complex”). The Ash Pond Complex covers several hundred acres, and it ultimately discharges to the Cumberland River under a TDEC-issued National Pollutant Discharge Elimination System (“NPDES”) permit.

         On June 26, 2012, TDEC's Division of Water Resources issued the most recent version of TVA's individual NPDES permit (the “NPDES Permit”). The NPDES Permit authorizes TVA to discharge treated effluent from the Ash Pond Complex in a certain manner and imposes certain daily maximum and monthly average limits on effluent characteristics. The NPDES Permit requires TVA to conduct inspections of the Ash Pond Complex for structural defects and to identify certain conditions that may be indicative of structural instability.

         On November 10, 2014, the Citizens Groups issued a 60-day Notice of Violation Letter to TVA, TDEC, and the Environmental Protection Agency under the citizen suit provision of the Clean Water Act, 33 U.S.C § 1365, alleging multiple violations at the Gallatin Plant. See 33 U.S.C §§ 1251-1387. In response, on January 7, 2015, the State filed a complaint against TVA in the Chancery Court for Davidson County, Tennessee (“Chancery Court”), alleging violations of the SWDA, the Tennessee Water Quality Control Act of 1977, as amended, Tenn. Code Ann. §§ 69-3-101 to 69-3-137 (“TWQCA”), and the NPDES Permit. With TVA's agreement, the Citizens Groups intervened pursuant to Tenn. R. Civ. P. 24.01(3). On February 27, 2015, the Citizens Groups filed their complaint in intervention, also alleging violations of the SWDA, TWQCA, and the NPDES Permit at the Gallatin Plant. TVA answered the State's and Citizens Group's complaints on March 3, 2015, and April 1, 2015, respectively.[2] TVA did not seek to remove the state court case.

         The parties engaged in discovery and motion practice for over two years pursuant to multiple scheduling orders.[3] In April 2017, the Chancery Court set trial for December 2017 and extended certain discovery deadlines. In May 2017, the Chancery Court denied TVA's motions to (1) bifurcate the liability and remedy portions of trial and (2) condition the Citizen Groups' participation in depositions and at trial. In June 2017, the Chancery Court denied TVA's motions for (1) summary judgment on the State's complaint and (2) judgment on the pleadings on the Citizens Groups' complaint in intervention.[4] On June 30, 2017, TVA filed a motion for leave to file amended answers.

         On July 6, 2017, the State forwarded a proposed amended complaint to the parties.[5] (Doc. No. 17-1.) TVA did not consent to the proposed amended complaint and thus, on July 13, 2017, the State filed a motion to amend. On July 17, 2017, TVA filed a motion seeking interlocutory appeal of the Chancery Court's order denying summary judgment. The Chancery Court held TVA's motion to amend its answers in abeyance until after disposition of the State's motion to amend. But then TVA did not oppose the State's amendments, and on August 2, 2017, the Chancery Court entered an order granting the State's motion, entering the amended complaint, and ordering TVA to serve its answer within 30 days.

         The amended complaint provides more information on a variety of subjects, including management of the Non-Registered Site, handling of CCR, and NPDES permit authorization. (Doc. No. 18-1 at Ex. 5, ¶¶ 22-48.) It also adds additional information concerning the ongoing investigation at the Gallatin Plant, including alleged TVA violations. (Id. at ¶¶ 45, 50-52.) Perhaps most notably, the amended complaint subjects Pond A and Pond E to treatment as solid waste disposal sites under the SWDA (in the same manner as the Non-Registered Site), as opposed to wastewater treatment sites.[6] Finally, the amended complaint seeks the same types of relief originally pled in the complaint, including injunctive relief and the potential assessment of civil penalties under the TWQCA; however the request for injunctive relief has been broadened to incorporate Pond A and Pond E under the SWDA on an accelerated basis, a result that TVA claims would have “dire consequences.” (Doc. No. 19 at 9.) While TVA argues that “the new SWDA cause of action potentially exposes TVA to millions of dollars in additional liability, ” (id.), the State has affirmatively represented to the Court that TVA's “potential exposure to civil penalties under the amended complaint is no more than under the original complaint.” (Doc. No. 22 at 9.)

         On August 4, 2017, the Chancery Court denied TVA's motion for permission to appeal the denial of summary judgment. On August 9, 2017, TVA filed a motion to exclude three of the State's disclosed experts. On August 10, 2017, the State moved to compel TVA to comply with discovery obligations ahead of the trial. That same day, one week before the parties were set to begin deposing dozens of fact and expert witnesses, TVA filed a Notice of Removal, removing the action to this Court over two and one-half years after it was initially filed in the Chancery Court.

         II. Discussion

         A. Background Law

         The United States or any agency thereof may remove any civil action or criminal prosecution relating to official acts that is commenced against it in a state court “to the district court of the United States for the district and division embracing the place wherein it is pending.” 28 U.S.C. § 1442(a)(1). The notice of removal of a civil action or proceeding must be filed “within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.” 28 U.S.C. § 1446(b)(1). Stated differently, “the 30-day period in § 1446(b)(1) starts to run only if the initial pleading contains “solid and unambiguous information that the case is removable.” Holston v. Carolina Freight Carriers Corp., No. 90-1358, 1991 WL 112809, at *3 (6th Cir. June 26, 1991) (per curiam). If the initial pleading lacks solid and unambiguous information that the case is removable, the defendant must file the notice of removal “within 30 days after receipt . . . of a copy of an amended pleading, motion, order or other paper” that contains solid and unambiguous information that the case is removable. See 28 U.S.C. § 1446(b)(3); Berera v. Mesa Med. Grp., PLLC, 779 F.3d 352, 364 (6th Cir. 2015); Charles Alan Wright, Arthur R. Miller, et al., 14B Fed. Prac. & Proc. Juris. § 3731 (4th ed. 2018) (“[Section 1446(b)(3)] requires . . . that a previously unremovable case has become removable.”).[7] A party may seek remand of a removed action “within 30 days after the filing of the notice of removal.” 28 U.S.C. 1447(c); Wisconsin Dep't of Corr. v. Schacht, 524 U.S. 381, 392 (1998).

         “The right of removal of a suit from state court to federal court is a statutory right.” Regis Assocs. v. Rank Hotel (Mgmt.), Ltd., 894 F.2d 193, 195 (6th Cir. 1990) (citing 28 U.S.C. § 1441). The party seeking removal bears the burden of establishing its right to removal. Byrd v. Tenn. Wine & Spirits Retailers, Ass'n, No. 3:16-cv-02738, 2017 WL 67993, at * 3 (M.D. Tenn. Jan. 6, 2017). The removal statute is to be strictly construed, with any ambiguity resolved against removal. Id; see also Syngenta Crop Protection, Inc. v. Henson, 537 U.S. 28, 32 (2002); Smith v. Nationwide Prop. & Cas. Ins. Co., 505 F.3d 401, 405 (6th Cir. 2007); Jacada, Ltd. v. Int'l Mktg. Strategies, Inc., 401 F.3d 701, 704 (6th Cir. 2005); Brown v. New Jersey Mfrs. Ins. Grp., 322 F.Supp.2d 947, 950 (M.D. Tenn. 2004). On a motion to remand, the defendants bears the burden of establishing that removal was proper. Her Majesty the Queen v. Detroit, 874 F.2d 332, 339 (6th Cir. 1989); Atkinson v. Morgan Asset Mgmt., Inc., 664 F.Supp.2d 898, 902 (W.D. Tenn. 2009). Upon such a motion, “all doubts” about whether removal is proper must be resolved in favor of remand. Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999).

         B. TVA's Notice of Removal Was Untimely Under ...


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