Electricity Markets

MRES entitled to legal fees tied to Minn. energy law case

Missouri River Energy Services, a public power joint action agency based in Sioux Falls, S.D., and several other plaintiffs are entitled to attorney’s fees of approximately $1.3 million related to a proceeding in which MRES and the other plaintiffs sued to stop Minnesota from enforcing an energy-related law called the Next Generation Energy Act.

The affirmation of a district court’s order was detailed in an Aug. 14 concurring opinion written by Judge Steven Colloton of the U.S. Court of Appeals for the Eighth Circuit.

In 2011, North Dakota sued Minnesota over the law, alleging that it violated the Commerce Clause of the U.S. Constitution by restricting transmission of electricity generated in North Dakota and consumed in Minnesota unless the generation of that electricity met Minnesota's carbon dioxide emission requirements.

Missouri River Energy Services was among those who joined North Dakota in the lawsuit. Basin Electric Power Cooperative and Minnkota Power Cooperative, Inc. also joined in the legal fight.

A district court concluded that the Act violated the dormant Commerce Clause and enjoined enforcement of the statute.

On appeal, a three-judge panel of the Court of Appeals for the Eighth Circuit affirmed the district court’s injunction but divided over the rationale. Two judges concluded that the Minnesota Act was preempted (each relying on a different federal statute), and one judge concluded that the state statute violated the dormant Commerce Clause.

The Court of Appeals for the Eighth Circuit then remanded to the district court to determine whether the plaintiffs were entitled to attorney’s fees.

The district court determined that the North Dakota state plaintiffs were “persons” eligible for an attorney’s fees award, that the private plaintiffs could recover attorney’s fees regardless of the state plaintiffs’ eligibility, and that there were no “special circumstances” barring a fee award. The court then awarded $1,310,088 in attorney’s fees and costs.

The state of Minnesota appealed the district court’s determination that the plaintiffs were entitled to attorney’s fees and, alternatively, the amount of the fee award.

But Colloton said that the amount of the district court’s fee award was not an abuse of discretion.

“The district court sufficiently scrutinized plaintiffs’ fee request to determine the appropriate number of hours reasonably expended,” he wrote, adding that the court set forth detailed analysis that addressed each of Minnesota’s objections, agreeing with some and disagreeing with others. “The district court’s itemized decisions were not unreasonable.”

The court also did not abuse its discretion by refusing to order the plaintiffs to produce their engagement agreement, because the relevant terms and facts of payment were described adequately in the plaintiffs’ affidavits, Colloton said.

“Finally, the district court permissibly awarded fees for hours spent on the unresolved dormant Commerce Clause claim, because that claim was not insubstantial and was reasonably related to the preemption claim on which the plaintiffs ultimately prevailed,” the judge wrote.