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US Supreme Court Will Hear Powerex Appeal Over California Suit January 19, 2007

Posted by notapundit in Judiciary, US News.

WASHINGTON (Dow Jones)–The U.S. Supreme Court Friday said it will review a lawsuit against Canadian-owned Powerex Corp. over its role in California’s 2000-01 energy markets crisis to determine how the case should be handled in U.S. courts.

Powerex is a unit of the British Columbia Hydro and Power Authority, which is owned by the British Columbian government.

The company has argued it has immunity from a state-level lawsuit seeking the refund of several billion dollars from numerous power suppliers and traders to California consumers. The company instead said its lawsuit must be heard in federal court with a nonjury trial, according to limits in the Foreign Sovereign Immunities Act.

Powerex sells excess electricity generation for BC Hydro and sold power in California during the state’s energy crisis that could lead to hundreds of millions in liability if it is included in the giant lawsuit.

The 9th U.S. Circuit Court of Appeals ruled in December 2004 that Powerex didn’t qualify as an entity of a foreign nation that is immune from a state lawsuit.

U.S. Solicitor General Paul Clement, in a court brief filed in November, said that ruling was erroneous. “A proper analysis of the question demonstrates that petitioner is an organ of the province,” Clement said.

Clement urged the Supreme Court to take up the Powerex case and use it to clear up discrepancies in how federal appeals courts are handling the state immunity question.

The case is Powerex v. Reliant Energy Services, 05-85. Oral arguments will be held in early 2007 and a decision is likely by July.

By Mark H. Anderson, Dow Jones Newswires


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