Summary
**Harper v. Southern Pine Electric** **Topics:** Federal officer removal jurisdiction; retroactive application of statutory amendments; vested rights; electric cooperative revenue distribution; Mississippi Electric Power Association Law (Miss. Code Ann. § 77-5-235(5)). **Holding:** The Fifth Circuit affirmed dismissal of member-ratepayers' claim that the cooperative must distribute $112.5 million in "excess revenues." Under Mississippi law, the cooperative's board has discretion to determine when revenues are "not needed" for reserves, and plaintiffs had no vested right to distributions before that determination. The modern statute applied retroactively under Mississippi's *Stone* exception because retroactive application did not abrogate a vested right. **Key Rule:** A right contingent on a board's future determination is not vested; no claim arises under either version of the statute where the board has not deemed revenues excess.
Topics
Practice areas
Questions Presented
- Whether the 2016 version of Mississippi's Electric Power Association Law applies retroactively to claims arising before its enactment.
- Whether plaintiffs have a vested right under the 1936 version of the statute that would preclude retroactive application.
- Whether plaintiffs stated a claim for relief under the 2016 version of the statute.
Holdings
- The 2016 version applies retroactively because the Stone exception to the presumption against retroactivity applies, as the 2016 statute modified the 1936 statute, and plaintiffs have no vested right that would be abrogated.
- Plaintiffs have no vested right because the statutory right to excess revenues is contingent on the board's determination that revenues are not needed, and a contingent right is not vested.
- Plaintiffs failed to state a claim because the 2016 statute grants the board discretion to determine when revenues are excess, and plaintiffs did not allege that the board made such a determination.
Key quotations
“Because Mississippi law does not impose that requirement, we affirm the dismissal for failure to state a claim.” (1)
“The general rule in Mississippi is that 'statutes will be construed to have a prospective operation only, unless a contrary intention is manifested by the clearest and most positive expression.'” (3)
“A right is vested when it has 'become . . . not contingent . . . .'” (9)
“Plaintiffs do not have a right to revenues until the board deems that those revenues are 'not needed' for other purposes.” (11)
Factual background
Southern Pine is an electric cooperative subject to Mississippi's Electric Power Association Law. The law requires cooperatives to distribute to members all revenues not needed for operating expenses, debt payments, and reserves as the board may prescribe. Plaintiffs claimed that Southern Pine held $248 million in accumulated income, which they argued far exceeded reasonable working reserves. They sought $112.5 million in excess revenues, contending that Southern Pine violated Section 20 of the 1936 Electric Power Association Act by failing to refund the excess.
Procedural history
Plaintiffs sued Southern Pine Electric Cooperative in Mississippi state court, alleging violations of the Electric Power Association Act. Southern Pine removed to federal court under 28 U.S.C. § 1442(a)(1). The district court granted plaintiffs' motion to remand, but the Fifth Circuit reversed, finding federal officer removal jurisdiction. Following remand, plaintiffs filed a fourth amended complaint. Southern Pine moved to dismiss under Rule 12(b)(6). The district court granted the motion, holding that the modern version of the statute applied retroactively and that plaintiffs failed to state a claim under either version. Plaintiffs appealed.