Message-ID: <3172430.1075858720859.JavaMail.evans@thyme> Date: Mon, 10 Sep 2001 12:41:57 -0700 (PDT) From: susan.mara@enron.com To: d..steffes@enron.com, richard.shapiro@enron.com, paul.kaufman@enron.com, jeff.dasovich@enron.com Subject: FederalCourt assessment Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: Mara, Susan X-To: Steffes, James D. , Shapiro, Richard , Kaufman, Paul , Dasovich, Jeff , 'jbennett@gmssr.com', Williams, Robert C. X-cc: X-bcc: X-Folder: \RSHAPIRO (Non-Privileged)\Shapiro, Richard\Deleted Items X-Origin: Shapiro-R X-FileName: RSHAPIRO (Non-Privileged).pst Legal assessment of the federal court route. -----Original Message----- From: Ed Duncan [mailto:EDuncan2@ArterHadden.com] Sent: Saturday, September 08, 2001 8:12 AM To: Mara, Susan Cc: douglass@energyattorney.com Subject: Re: E-Mails Thank you for the addresses. =20 The Petition currently assumes that a foreign energy service provider will = be the Petitioner. Because of the political rhetoric, it would help if the= re was also a California energy service provider. =20 You indicated yesterday that there may also be some customers willing to ac= t as Petitioners. Since that would improve the posture of the case, please= use your best efforts to locate such a party. In anticipation of such a d= evelopment, we shall prepare an alternate Petition so it is available if th= ere is a customer Petitioner. =20 Following yesterday's conversation, we examined the availability of going i= nto the federal court system, rather than the California court system, foll= owing action by the Commission. There is access to federal courts because = the case will involve federal constitutional rights. But going directly to= federal court has its pitfalls. First, the 11th amendment prevents naming= the State (and presumably its subdivisions) as defendants. This limitatio= n can be circumvented by naming individuals as the defendants (such as the = Attorney General who is the chief law enforcement officer) using Ex Parte Y= oung, 209 U.S. 123. Second, the federal court will have wide discretion to= abstain (this is known as a Pullman Abstention) from hearing the case in o= rder to allow the California courts to decide the California constitutional= issues. Third, the federal courts may conclude this is really a dispute o= ver rate making and require that state remedies be exhausted (28 USC 1342).= There may be other pitfalls. =20 In our estimation, the federal courts would seek to abstain because the cas= e involves such important California legal and policy issues that the Legis= lature decided it was necessary to confer original and priority jurisdictio= n in the California Supreme Court. This presents a tactical dilemma becaus= e of the risk of alienating the Supreme Court by first going to District Co= urt which then decides to abstain. Also, it could create timing problems b= ecause relief must be sought from the Supreme Court no later than 30 days a= fter a rehearing application is denied by the Commission. The District Cou= rt would probably take more than 30 days to decide whether to abstain, thus= opening a new argument of timeliness when the state action is initiated. =20 This suggests the possibility of filing simultaneously in both courts. Suc= h a strategy should use separate claimants and separate attorneys to avoid = the claim of forum shopping. Even if the cases involved different claimant= s and different attorneys, such a strategy would probably have little likel= ihood of success because it would make it even easier for the federal court= to abstain since there would already be an existing state court proceeding= . By way of example, I was involved in a proceeding in the 9th Circuit con= cerned with Indian gaming which was deferred because of the proceeding that= was in the California Supreme Court involving the constitutionality of Pro= position 5 and then Proposition 1A. Because the California Supreme Court u= pheld Proposition 1A, the 9th Circuit never acted. Since the instant case = implicates state law and policy, the likelihood of abstention, even if two = separate cases are brought, is very high . =20 The foregoing analysis assumes that the Commission seeks to retroactively s= uspend existing contracts. We have not yet considered whether the pending = bill, if enacted by the Legislature, would change the analysis. =20 We shall keep you advised. EWD >>> "Mara, Susan" 09/07/01 04:34PM >>> Here are the: jbennett@gmssr.com rwillia2@enron.com paul.kaufman@enron.com jdasovic@enron.com jsteffe@ enron.com rshapiro@enron.com ********************************************************************** This e-mail is the property of Enron Corp. and/or its relevant affiliate an= d may contain confidential and privileged material for the sole use of the = intended recipient (s). Any review, use, distribution or disclosure by othe= rs is strictly prohibited. If you are not the intended recipient (or author= ized to receive for the recipient), please contact the sender or reply to E= nron Corp. at enron.messaging.administration@enron.com and delete all copie= s of the message. This e-mail (and any attachments hereto) are not intended= to be an offer (or an acceptance) and do not create or evidence a binding = and enforceable contract between Enron Corp. (or any of its affiliates) and= the intended recipient or any other party, and may not be relied on by any= one as the basis of a contract by estoppel or otherwise. Thank you.=20 **********************************************************************