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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Big Dog who wrote (13987)	10/17/2002 5:38:54 PM
From: ItsAllCyclical	Read Replies (2) \| Respond to of 206110

More litigation woes for EP biz.yahoo.com Court rules to keep Calif energy lawsuits in-state Thursday October 17, 5:22 pm ET By Spencer Swartz SAN FRANCISCO, Oct 17 (Reuters) - Civil lawsuits against El Paso Corp. (NYSE:EP - News) and two Sempra Energy (NYSE:SRE - News) units alleging harmful anti-competitive behavior during California's energy crisis got a boost from a court ruling saying the lawsuits fall under state law. ADVERTISEMENT A San Diego court judge ruled on Wednesday there is no jurisdiction for moving the 11 lawsuits against El Paso and Sempra's Southern California Gas (SCG) and San Diego Gas & Electric (SDG&E) to the Federal Energy Regulatory Commission (FERC) in Washington. The decision will put the cases before California jurors instead of federal regulators. A guilty verdict from a California jury in any of the cases could result in far stiffer penalties than anything FERC might impose since California's strict anti-trust law can cost violators three times the amount of actual damages. While no firm numbers exist, lawyers for some of the plaintiffs said guilty verdicts could generate penalties near $1 billion. Denise King, a Sempra spokeswoman, said the company was disappointed with the judge's ruling, saying Sempra wanted the seven lawsuits in which it is named to be heard before FERC which has jurisdiction over interstate gas and power issues. "It's important to know that the judge's ruling was just a decision on where the venue will be for these lawsuits. It is not a ruling on the facts of the lawsuits or whether they will even go forward," she said. El Paso, which is named in all 11 lawsuits, was not immediately available for comment. But Mark Fogelman, a San Francisco lawyer representing plaintiffs in one of the lawsuits, had a far different interpretation, saying the San Diego court ruling was likely to push the lawsuits to trial as early as September 2003. "The significance of this ruling is that both El Paso and Sempra wanted these cases dismissed, not just moved to FERC, and the judge denied them on all fronts," he said. Fogelman said evidence gathering in the lawsuits had not yet begun, but dismissed concerns the lawsuits would not make it to trial. San Diego Superior Court Judge Richard Haden said FERC does not have jurisdiction over California antitrust and unfair competition claims, the basis of the lawsuits. "Simply put, FERC cannot adjudicate this claim," the judge wrote. THE LAWSUITS, FERC CASE The 11 civil lawsuits are based mainly on allegations El Paso withheld natural gas on its pipeline network, the biggest system into California, during the state's 2000-2001 energy crisis, in turn driving energy prices sharply higher. The price jump triggered a huge rise in home heating bills and, because natural gas fuels about half of the state's power plants, a big rise in wholesale electricity prices. California energy regulators and the state's two largest utilities claim EL Paso's action cost Californians an extra $3.3 billion during the crisis. The lawsuits also focus on a 1996 non-competition agreement allegedly struck among El Paso, SCG and SDG&E at a Arizona hotel. Plaintiffs allege that in the agreement, El Paso and Sempra canceled pipeline projects that could have provided California with new gas supplies to avoid competing against each another. Sempra has said a meeting took place but that it sought to ensure Californians would not face higher gas prices. All three companies have denied ever conspiring to drive up prices. The civil lawsuits are separate from a case pending before FERC brought by California energy regulators and the state's two biggest utilities. In that case, FERC Administrative Law Judge Curtis Wagner last month issued a preliminary report that said El Paso withheld large amounts of gas shipped to California. Wagner said El Paso's system to California operated at just 79 percent capacity between November 2000 and March 2001. El Paso has accused the FERC judge of "second guessing" the company's pipeline maintenance activities, which involved operating pipelines at reduced capacity. The U.S. Department of Transportation required El Paso to operate a New Mexico-to-California pipeline at reduced capacity for several months after the line was repaired following an explosion on the line in August 2000 that killed 12 people. El Paso and some industry analysts warn Wagner's decision could encourage a pipeline operators to put economic considerations ahead of safety and reliability factors. El Paso has asked the FERC to for a Nov. 22 hearing to challenge Wagner's preliminary ruling. The Houston-based company has also asked the FERC to make a final ruling by Dec. 31.