UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
December 9, 1971
NATURAL RESOURCES DEFENSE COUNCIL, INC.
TENNESSEE VALLEY AUTHORITY
MOTLEY, District Judge
The opinion of the court was delivered by: MOTLEY
MOTLEY, District Judge.
I. Statement of Facts
This action arises from the alleged practice of the Tennessee Valley Authority (TVA) of purchasing and using strip-mined coal. In general, strip-mining is a practice of extracting coal by removing the covering top and subsoils, depositing them nearby and then removing the coal from the newly exposed surface. According to plaintiffs, strip-mining directly causes severe water pollution, defaces the land, and renders it useless for recreation, wildlife, timber production or living.
Plaintiffs charge that in purchasing and using strip-mined coal, the TVA has failed to comply with the mandates of the recently enacted National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. § 4321, et seq., in its planning, decision making, and daily administration. Specifically, it is charged that 1) defendants have failed to comply with § 102(2)(C) of NEPA by failing to prepare, circulate and file the requisite environmental impact statement prior to purchasing and using strip-mined coal; 2) defendants have failed to comply with § 102(1) of NEPA by failing to interpret and administer the TVA Act and regulations in a manner consistent with the policies expressed in NEPA; 3) defendants have failed to comply with §§ 102(2)(C)(iii) and 102(2)(D) of NEPA by failing to develop and describe appropriate alternatives to the purchase and use of strip-mined coal and properly evaluate their purchases in light of such alternatives; and 4) defendants have violated § 102(2)(G) of NEPA by failing to develop and use ecological information in the decision to purchase and use strip-mined coal.
The first cause of action alleges these failures of procedure in planning, decision making and administration with respect to a contract by the TVA for the purchase of coal strip-mined from land not owned by TVA; the second cause concerns similar failures with respect to a purchase of strip-mined coal from land owned by TVA. In both of these counts, plaintiffs seek to have the TVA action in awarding the contracts declared illegal, and to have the defendants enjoined from purchasing any coal under the contracts until the requirements of NEPA are met. The third cause of action relates to the TVA's overall policy of purchasing and using strip-mined coal, and similarly seeks to restrain that policy until the requirements of NEPA are met.
The case is now before the court on defendants' motion to dismiss the complaint. The grounds advanced for dismissal are: 1) improper service of process, 2) improper venue, 3) lack of jurisdiction, and 4) failure to join indispensable parties. For the reasons given below, the court finds all of these grounds insufficient and denies defendants' motion. National Audubon Society, Inc., has moved to intervene, and its motion is granted.
II. Service of Process
Defendants' claim that service of process was improper is totally without merit. Plaintiffs assert, and defendants do not deny, that defendants were duly served by certified mail. Subsection (e) of 28 U.S.C. § 1391 provides that in civil actions "in which each defendant is an officer or employee of the United States or any agency thereof acting in his official capacity or under color of legal authority, or an agency of the United States . . ." service of the summons and complaint to the officer or agency "may be made by certified mail beyond the territorial limits of the district in which the action is brought." That method of delivery is designed to supersede the method specified in Rule 4(d)(5) Fed. R. Civ. P. It is not disputed that TVA is an agency of the United States. The instant action falls within the class of cases described above, so service of process was proper, regardless of whether there is venue in this district. See Brotherhood of Locomotive Engineers v. Denver and Rio Grands R. R. Co., 290 F. Supp. 612, 616 (D. Colo. 1968), affd, 411 F.2d 1115 (10th Cir. 1969); Powelton Civic Home Owners Assoc. v. Department of Housing and Urban Development, 284 F. Supp. 809, 833 (E.D. Pa. 1968).
V. Indispensable Parties
Defendants contend that the private coal producers who have contracted to sell strip-mined coal to TVA are indispensable parties, and failure to join them should result in dismissal of plaintiffs' complaint. The first two causes of action seek to enjoin TVA performance of contracts made after January 1, 1970, the effective date of NEPA, to purchase strip-mined coal until the requirements of NEPA are met; the third cause of action does not concern any particular contracts, and therefore, cannot he upset for failure to join parties in any case.
The private contractors cannot be joined in this action because they cannot be served. Kentucky Oak Mining Co. is incorporated in Kentucky; W. B. Spradlin Coal Co. and West Coal Company are residents of Tennessee; Falcon Coal Co., agent and attorney in fact for Kentucky Oak Mining Co., is incorporated in Delaware and is doing business in Kentucky. None of these companies is doing business in the Southern District of New York. Since they cannot be joined the court must decide "whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable." Rule 19(b) Fed. R. Civ. P.
The first factor to consider is whether a judgment rendered in the instant case might be prejudicial to the absent parties. In National Licorice Co. v. NLRB, 309 U.S. 350, 84 L. Ed. 799, 60 S. Ct. 569 (1940), the Supreme Court explicitly recognized that public rights may be vindicated by restraining unlawful actions of a defendant even though the restraint prevented defendant's performance of contracts with third-parties who were not joined in the suit. That case found contracts between an employer and a number of employees to be in violation of the National Labor Relations Act and, therefore, unenforceable by the employer. None of the employees who were parties to the contract were parties to the action. There the action had been brought by the NLRB against the employer to enjoin it from enforcing the illegal contract it had made with its employees.
The Court noted the general rule that where rights arise upon a contract, all of the parties to the contract must be before the court. It then stated:
"But the different considerations may apply even in private litigation where the rights asserted arise independently of any contract which an adverse party may have made with another, not a party to the suit, even though their assertion may affect the ability of the former to fulfill his contract. The rights asserted in the suit and those arising upon the contract are distinct and separate, so that the court may, in a proper case, proceed to judgment without joining other parties to the contract, shaping its decree in such manner as to preserve the rights of those not before it." (Citations omitted) (Id. at 363) (Emphasis added).
The Court recognized that the effect of the NLRB's order was to preclude the petitioner from carrying out any of the contract provisions. But this order, the Court held,
"does not foreclose the employees from taking any action to secure an adjudication upon the contracts, nor prejudge their rights in the event of such adjudication." (Id. at 365).
The Court in National Licorice cited Virginian Railway Co. v. System Federation No. 40., 300 U.S. 515, 81 L. Ed. 789, 57 S. Ct. 592 (1937), an action by a private party asserting a right protected by federal statute:
"In Virginia Railway Co. v. System Federation No. 40 . . . the effect of the decree was to order the employer to deal exclusively with the Federation, although the employer had a contract with an association not a party to the suit, found to be a dominated labor organization. In every case the third persons were left free to assert such legal rights as they might have acquired under the contracts. But in all the public right was vindicated by restraining the unlawful actions of the defendants even though the restraint prevented his performance of the contracts."
The instant action, like that in National Licorice, seeks to enforce an essentially public right. See Scenic Hudson Preservation Conference v. Federal Power Commission, 354 F.2d 608 (2d Cir. 1965), cert. denied, 384 U.S. 941, 16 L. Ed. 2d 540, 86 S. Ct. 1462 (1966); Citizens Committee for the Hudson Valley v. Volpe, 425 F.2d 97 (2d Cir. 1970); Calvert Cliffs' Coordinating Committee v. Atomic Energy Commission, No. 24,839 (D.C. Cir., filed July 23, 1971).
Plaintiffs do not seek to abrogate the contracts, but to restrain defendants from purchasing coal under them "until such time as the requirements of the National Environmental Policy Act of 1969 are met" (Complaint p 15). If this relief were granted, the private contractors would still be able to assert their rights against TVA, except that specific performance could not be ordered while TVA was enjoined from purchasing coal under the contracts. National Licorice Corp. v. NLRB, supra, at 365.
Nor would participation by these third parties help much to elucidate the issue in the case: whether TVA followed the dictates of NEPA. They would have to take positions about TVA procedures and TVA estimates of environmental harms, topics on which they have no special knowledge.
The second factor Rule 19 directs us to consider is the extent to which prejudice, if any, can be lessened by the shaping of relief. The court could, for example, give TVA a period in which to show compliance before performance of any of the specified contracts was enjoined. In fact, since the longest-running contract expires in June, 1975, the court could conceivably allow TVA to fully perform the contracts, even if they were found to be against national policy. By the time this case is decided there will probably be no more than three years to run on any contract. Since the action seeks to enjoin purchases under the contracts only until the requirements of NEPA are met, and need not adjudicate the third-party rights a judgment rendered in their absence will be adequate, which fulfills the third consideration prescribed by Rule 19.
Fourth, and most important, it appears that plaintiffs will not have an adequate remedy if their suit is dismissed for non-joinder. Suit could not be brought in Alabama for the Kentucky companies could not be served there. Cf. McKenna v. Udall, 135 U.S. App. D.C. 335, 418 F.2d 1171 (D.C. Cir. 1969).
Further, the burden on the absent parties to protect their interest by intervening would not be overwhelming. Smith v. American Federation of Musicians, 47 F.R.D. 152 (S.D.N.Y. 1969); Advisory Committee's Note on Rule 19, 39 F.R.D. 89, 92 (1966).
VI. Motion to Intervene
National Audubon Society, Inc. (Audubon) moves to intervene pursuant to Rule 24(b) Fed. R. Civ. P. A reading of Audubon's complaint reveals that it presents common questions of law and fact with the main action. Furthermore, Audubon demonstrates a long-standing interest in and familiarity with strip-mining, expertise that may be helpful in clarifying the facts and issues in this case. It may be noted that Audubon has several chapters and thousands of members in the areas affected by strip-mining. Defendants point to no specific delay or prejudice that would result from Audubon's intervention. Its motion is therefore granted. See Levin v. Ruby Trading Corporation, 333 F.2d 592, 595 (2d Cir. 1964).
Submit order on 5 days' notice.
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