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Entergy Nuclear Vermont Yankee, LLC v. Shumlin

ELR Citation: 43 ELR 20267
Nos. 12-4659, (2d Cir., 12/10/2013)

The Second Circuit held that it lacks jurisdiction to review an electric company's suit challenging the constitutionality of Vermont's Electrical Energy Generating Tax. The company owns a nuclear power plant that is the sole entity taxed under the scheme, which imposes a charge on electricity produced by every generating facility in the state with a capacity of least 200,000 kilowatts. The company claimed it was unconstitutional under the Supremacy, Commerce, Equal Protection, and Commerce Clauses of the U.S. Constitution. But the Tax Injunction Act (TIA) prohibits federal courts from interfering with state taxation schemes so long as the state courts offer an adequate forum to litigate the validity of the tax. Here, the Generating Tax is a "tax" for purposes of the TIA. And Vermont has provided a "plain, speedy and efficient" mechanism for raising the company's objections to the validity of the tax. The lower court, therefore, properly dismissed the case for lack of subject matter jurisdiction.