Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

The United States Court of Appeals for the Ninth Circuit affirmed the district court’s summary judgment for the Orange County Transportation Authority (OCTA) in a case brought by two utilities, Southern California Edison Company and Southern California Gas Company. The utilities claimed they were entitled to compensation under the Takings Clause or under state law for having to relocate their equipment from public streets to allow for the construction of a streetcar line.The court held that the utilities did not have a property interest under California law in maintaining their facilities at their specific locations in the face of OCTA’s efforts to construct a streetcar line. The California Supreme Court recognized in a previous case that a public utility accepts franchise rights in public streets subject to an implied obligation to relocate its facilities therein at its own expense when necessary to make way for a proper governmental use of the streets.The court rejected the utilities’ argument that constructing rail lines is per se a proprietary activity, not a governmental one. California common law has traditionally required utilities to bear relocation costs when governments construct subways, and there is no reason why above-ground rail lines should be treated differently.Finally, the court rejected the utilities’ supplemental state-law claim that California Public Utilities Code section 40162 places the costs of relocation on OCTA. That provision says nothing about imposing the costs of relocation on OCTA. Thus, section 40162 does not apply to OCTA’s project. View "SOUTHERN CALIFORNIA EDISON COMPANY V. ORANGE COUNTY TRANSPORTATION AUTHORITY" on Justia Law

The Federal Energy Regulatory Commission (FERC) awarded “incentive adders,” upward adjustments to utilities’ rate of return on equity, to three California-based public utilities. FERC regulations allow for incentive adders to induce voluntary membership in independent system operators. The Ninth Circuit previously concluded that FERC improperly awarded incentive adders to PG&E without considering the California Public Utilities Commission’s (CPUC) assertion that PG&E’s membership in the California independent system operator (CAISO) is mandated. The court directed FERC to “inquire into PG&E’s specific circumstances, i.e., whether it could unilaterally leave the C[AISO].” On remand, FERC concluded that membership in CAISO is voluntary.The Ninth Circuit upheld the decision, holding that its previous decision did not resolve whether California law prevented the utilities from leaving CAISO without approval. FERC did not deviate from the mandate on remand. There was no error in FERC’s conclusion that membership in CAISO was voluntary despite a contrary suggestion in a CPUC 1998 Decision. FERC was not required to apply the Erie doctrine and defer to California’s interpretation. The incentive adder and its requirements arose from federal law. The California Supreme Court has not decided whether membership in CAISO is voluntary; no California Code provision mandates CAISO membership, and no case law discusses whether CAISO members must remain such. California courts would not defer to the CPUC’s 1998 Decision because it was inconsistent with the statute. View "California Public Utilities Commission v. Federal Energy Regulatory Commission" on Justia Law

The Ninth Circuit withdrew the case from submission and certified to the Supreme Court of California the following two questions of state law: (1) Does California Public Utilities Code 1759 preempt a plaintiff’s claim of negligence brought against a utility if the alleged negligent acts were not approved by the California Public Utilities Commission, but those acts foreseeably resulted in the utility having to take subsequent action (here, a Public Safety Power Shutoff), pursuant to CPUC guidelines, and that subsequent action caused the plaintiff’s alleged injury? (2) Does PG&E’s Electric Rule Number 14 shield PG&E from liability for an interruption in its services that PG&E determines is necessary for the safety of the public at large, even if the need for that interruption arises from PG&E’s own negligence? View "Gantner v. PG&E Corp." on Justia Law

The district court dismissed a suit alleging that a price plan adopted by Salt River Project Agricultural Improvement and Power District (SRP) unlawfully discriminated against customers with solar-energy systems and was designed to stifle competition in the electricity market.The Ninth Circuit affirmed in part, applying Arizona’s notice-of-claim statute, which provides that persons who have claims against a public entity, such as SRP, must file with the entity a claim containing a specific amount for which the claim can be settled.The district court erred in dismissing plaintiffs’ equal protection claim as barred by Arizona’s two-year statute of limitations. The claim did not accrue when SRP approved the price plan, but rather when plaintiffs received a bill under the new rate structure. The plaintiffs alleged a series of violations, each of which gave rise to a new claim and began a new limitations period.Monopolization and attempted monopolization claims under the Sherman Act were not barred by the filed-rate doctrine, which bars individuals from asserting civil antitrust challenges to an entity’s agency-approved rates. SRP was not entitled to state-action immunity because Arizona had not articulated a policy to displace competition.The Local Government Antitrust Act shielded SRP from federal antitrust damages because SRP is a special functioning governmental unit but the Act does not bar declaratory or injunctive relief. The district court erred in concluding that plaintiffs failed to adequately allege antitrust injury based on the court’s finding that the price plan actually encouraged competition in alternative energy investment. View "Ellis v. Salt River Project Agricultural Improvement and Power District" on Justia Law

Under the Johnson Act, federal courts lack jurisdiction over all suits affecting state-approved utility rates. The Ninth Circuit affirmed the district court's dismissal based on lack of subject matter jurisdiction of an action brought by public utility ratepayers challenging California Assembly Bill 1054, which addresses the financial burdens that wildfires impose on electrical utilities. The panel concluded that plaintiffs' claims challenge ratemaking within the meaning of the Johnson Act, as this circuit's precedent has interpreted it. The court also concluded that the CPUC satisfied the Johnson Act's procedural requirements. Accordingly, the Johnson Act applies to this case and the panel lacked subject matter jurisdiction. View "Cannara v. Nemeth" on Justia Law

Maricopa Domestic Water Improvement District supplies water to about 300 households, including the public housing tenants of a Pinal County complex. Property owners like Pinal County are responsible for paying any past tenant’s delinquent water accounts. Pinal County acknowledged that responsibility but consistently refused to pay, contending it was immune to that policy based on its status as a public municipality. In response, the District imposed a new policy that increased to $180 the refundable security deposit required of new public housing customers before the District would provide water services. New non-public housing customers were subject to a $55 deposit.The Ninth Circuit rejected a challenge to the policy under the federal Fair Housing Act (FHA), 42 U.S.C. 3604 and 3617, which bars discriminatory housing policies and practices, including those that cause a disparate impact according to certain protected characteristics or traits—race, color, religion, sex, handicap, familial status, or national origin. Although the District’s public housing customers are disproportionately African American, Native American, and single mothers, the District established by undisputed evidence that the policy served in a significant way its legitimate business interests; the plaintiffs failed to establish a triable issue of fact that there existed an equally effective, but less discriminatory, alternative. There was insufficient evidence that discriminatory animus was a motivating factor behind the District’s decision to implement its policy. View "Southwest Fair Housing Council, Inc. v. Maricopa Domestic Water Improvement District" on Justia Law

The Ninth Circuit affirmed the district court's dismissal of an action brought by plaintiffs, customers of the DWP, claiming that DWP overcharged for electric power and then transferred the surplus funds to the City, thereby allowing the City to receive what amounts to an unlawful tax under California law. Plaintiffs alleged claims under the Hobbs Act, the Racketeer Influenced and Corrupt Organizations Act (RICO), and 42 U.S.C. 1983, as well as claims under state law.The panel agreed with its sister circuits that the Hobbs Act does not support a private civil right of action; held that municipal entities are not subject to liability under RICO when sued in their official capacities, but the RICO claims in this case were asserted against the defendant City and DWP officials in their personal capacities; held that the RICO claim was nonetheless properly dismissed because it failed as a matter of law because it did not adequately allege a predicate act in extortion under California law or the Hobbs Act, mail and wire fraud, or obstruction of justice; and held that, under the Johnson Act, the district court lacked jurisdiction over the the section 1983 claims. Because plaintiffs have provided no basis for concluding that any of these deficiencies could be cured by an amendment of the complaint, and based upon the panel's own thorough review of the record, the panel held that amendment would be futile. View "Abcarian v. Levine" on Justia Law

The Ninth Circuit affirmed the district court's judgment for plaintiffs in an action brought under the Public Utility Regulatory Policies Act (PURPA) against Commissioners of the California Public Utilities Commission. In order to regulate terms under which electric utilities purchase power from Qualifying Cogeneration Facilities (QFs), the Commission established the Renewable Market Adjusting Tariff (Re-MAT) program.The panel held that Re-Mat violates PURPA's requirements, because it caps the amount of energy utilities are required to purchase from QFs and because it sets a market-based rate, rather than one based on the utilities' avoided cost. Because California did not offer a PURPA-complaint alternative, the panel held that PURPA preempts Re-Mat. Finally, the district court did not abuse its discretion by fashioning equitable relief when it declined to award plaintiffs preferred remedy of a particular contract. View "Winding Creek Solar, LLC v. Peterman" on Justia Law

The Ninth Circuit granted CPUC's petition for review of FERC's determination that PG&E was eligible for an incentive adder for remaining a member of the California Independent System Operator Corporation (Cal-ISO) when state law prevented PG&E's departure without authorization. The panel held that FERC's determination that PG&E was entitled to incentive adders for remaining in the Cal-ISO was arbitrary and capricious, because FERC did not reasonably interpret Order 679 as justifying summary grants of adders for remaining in a transmission organization. The panel explained that, because FERC's interpretation was unreasonable, FERC's grants of adders to PG&E were an unexplained departure from longstanding policy. Furthermore, FERC created a generic adder in violation of the order. View "CPUC V. FERC" on Justia Law

Petitioners seek review of FERC's determination that various energy companies committed tariff violations in California during the summer of 2000. As part of a deregulation program, California created two nonprofit entities: the California Power Exchange Corporation (“CalPX”) and the California Independent System Operator Corporation (“Cal-ISO”). Both entities were subject to FERC jurisdiction, with CalPX operating pursuant to a FERC-approved tariff and wholesale rate schedule. The Cal-ISO tariff comprehensively regulated California’s power markets, and incorporated the Market Monitoring and Information Protocol (“MMIP”), which set forth rules for identifying and protecting against abuses of market power. The court concluded that FERC’s determination that Shell, MPS, and Illinova (“sellers”) violated the Cal-ISO tariff and MMIP during the Summer Period was not arbitrary, capricious, or an abuse of discretion. In this case, FERC reasonably interpreted the Cal-ISO tariff and the MMIP according to the plain text of those documents. Therefore, the court rejected the sellers’ claims that the tariff and MMIP did not proscribe the practices identified by the agency. Furthermore, FERC’s interpretation of the Cal-ISO tariff and the MMIP finds support not only in text, but in policy as well. The court concluded that FERC reasonably interpreted the Cal-ISO tariff and the MMIP to prohibit the practices of False Export, False Load Scheduling and Anomalous Bidding. In addition, the agency reasonably concluded that the tariff and MMIP sufficed to put sellers on notice that such practices were not permitted. The court also concluded that FERC reasonably concluded that the sellers engaged during the Summer Period in the practices deemed tariff violations by the orders on review. Finally, the court concluded that FERC’s Summer Period determinations regarding APX and BP were not arbitrary, capricious, or an abuse of discretion. Accordingly, the court denied the petitions for review in part and dismissed in part. View "MPS Merchant Serv. v. FERC" on Justia Law