Free Reply to Response to Motion - District Court of Federal Claims - federal

Case 1:07-cv-00184-LAS

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS ________________________________________________ ) THE PEOPLE OF THE STATE OF CALIFORNIA ) EX REL. EDMUND G. BROWN JR., ATTORNEY ) GENERAL OF THE STATE OF CALIFORNIA, and the ) CALIFORNIA DEPARTMENT OF WATER ) RESOURCES BY AND THROUGH ITS ) CALIFORNIA ENERGY RESOURCES SCHEDULING ) DIVISION, ) ) Plaintiffs, ) ) v. ) No. 07-184C ) (Senior Judge Smith) THE UNITED STATES, ) ) Defendant. ) ________________________________________________) DEFENDANT'S REPLY TO PLAINTIFFS' OPPOSITION TO DEFENDANT'S MOTION TO STAY PROCEEDINGS Pursuant to Rule 7 of the Rules of the United States Court of Federal Claims ("RCFC"), we respectfully submit this reply to plaintiffs' opposition to our motion to stay this matter. In our motion to stay, we established that it was reasonable for the Court to stay this case pending potential proceedings in the United States Supreme Court related to Bonneville Power Administration v. FERC, 422 F.3d 908 (9th Cir. 2005).1 Plaintiffs do not dispute that the Supreme Court's reversal of Bonneville could potentially moot a significant portion of this case. The Court should, accordingly, grant our motion to stay.

These proceedings remain viable. Plaintiffs recently requested, successfully, that the Supreme Court allow them more time to file a petition for a writ of certiorari, which is now due on July 20, 2007. Def. App. 1-10.

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ARGUMENT I. The Court Should Grant Our Motion To Stay A. There Is A Strong Basis To Stay This Matter

Plaintiffs assert that their potential petition for a writ of certiorari is a legally insufficient ground upon which the Court may stay this matter. Pl. Opp. 4.2 They cite the factors enumerated in Cherokee Nation of Okla. v. United States, 124 F.3d 1413, 1416 (Fed. Cir. 1997), and various other considerations, and assert that a denial of our motion is required. Pl. Opp. 4-5. Plaintiffs are mistaken. It is well within the Court's discretion to grant a stay in this case, and we respectfully suggest that the Court should do so. As an initial matter, we do not believe that Cherokee Nation is, as plaintiffs claim, the governing legal standard. Cherokee Nation applies when this Court seeks "to stay proceedings indefinitely." Cherokee Nation, 124 F.3d at 1416. We have not asked for an indefinite stay; we have asked for a stay until the completion of proceedings in the Supreme Court, should any be undertaken. As we noted in our motion to stay, any stay in this matter is likely to end when the Supreme Court denies certiorari; if the Court grants certiorari, proceedings in the Supreme Court would obviously continue, but the need for a stay would also deepen. Either way, the potential proceedings in the Supreme Court would be far shorter in duration than the proposed period for a stay in Cherokee Nation, which depended upon an unfiled action to quiet title that the parties agreed could take "decades" to resolve. Id. at 1416. Even if we are required to demonstrate some sort of "pressing need" or "hardship or inequity," this case easily meets that standard. As we pointed out in our motion to stay, this "Pl. Opp. ___" refers to Plaintiff The People's Opposition To Defendant's Motion To Stay Proceedings, filed on June 13, 2007. "Def. Mot. ___" refers to our motion to stay, filed on May 14, 2007. "Def. App. ___" refers to the appendix attached to this reply. 2
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matter is exceedingly complex, related matters have been the subject of litigation for years, and plaintiffs seek hundreds of millions of dollars in damages. If the Court does not stay this matter, both the parties and the Court will be forced to continue to invest significant resources in this case, an investment entirely unnecessary should the Supreme Court overturn Bonneville. Plaintiffs assert that the Supreme Court's potential reversal of Bonneville would not moot all of their claims against the United States, pointing out that their claims relating to "bilateral transactions" fall outside the refund proceedings at issue in Bonneville. Pl. Opp. 5. Plaintiffs also argue that this litigation would not duplicate the Bonneville litigation because the cases will not require duplicative discovery or resolution of the same factual or legal issues.3 Pl. Opp. 5-6. Plaintiffs do not dispute, however, that every count of their complaint concerns transactions that could be affected by the reversal of Bonneville. From this perspective, parallel litigation here is undeniably duplicative. Finally, we did not misstate the holdings of Pennsylvania Railroad Co. v. United States, 363 U.S. 202 (1960), and Loveladies Harbor, Inc. v. United States, 27 F.3d 1545 (Fed. Cir. 1994), as plaintiffs contend. Pl. Opp. 6-7. These cases demonstrate that it is appropriate for this Court to stay a case when proceedings in another forum could affect the nature, necessity, and validity of the case. Def. Mot. 8-9. Plaintiffs attempt to distinguish these cases on their facts,4 but they do not contest the underlying point that in both cases, as here, proceedings elsewhere had a significant impact upon proceedings in this Court, rendering a stay appropriate. In this
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Plaintiffs' also quibble with our characterization of Bonneville as not "final." Pl. Opp. 6 n. 2. We understand the technical definition of finality; our argument regarding potential Supreme Court review has nothing to do with that definition, which is accordingly irrelevant. Plaintiffs' assertion that Loveladies does not pertain to issuance of a stay is simply incorrect. Pl. Opp. 7. As the Federal Circuit made clear, this Court issued a stay in Loveladies pending the resolution of a case in district court. Loveladies, 27 F.3d at 1547. 3
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respect, this case does not differ materially from Pennsylvania Railroad and Loveladies Harbor, and a stay is appropriate in this case. B. We Do Not Seek To Avoid Adverse Precedent

Plaintiffs assert that our motive in seeking a stay in these proceedings is to avoid an adverse ruling. Pl. Opp. 7. This is meritless. In fact, our motive in seeking a stay in this matter is to conserve the resources of the parties and the Court, not to avoid adverse precedent. An adverse decision from this Court would have no bearing upon litigation elsewhere -- avoiding a judgment from this Court does not help us in some other forum. Further, and contrary to plaintiffs' claims, our request that the Court issue a stay is entirely consistent with our posture in the United States Court of Appeals for the Ninth Circuit. As plaintiffs state, we noted before the Ninth Circuit that it was "exceedingly unlikely" that the United States Supreme Court would grant plaintiffs' petition, should one be filed. Pl. Opp. 7. Our request for a stay comports with this assessment; the improbability of certiorari means that any stay in these proceedings will likely be limited in duration. If plaintiffs do not file a petition for a writ of certiorari, these proceedings can proceed apace before the end of summer. If plaintiffs do file a petition and the Supreme Court denies it, the proceedings in Bonneville should terminate before the end of this year, a minor delay. If the Court grants certiorari, then the justification for a stay will be greater, and further delay in these proceedings will be a necessary consequence of plaintiffs' own success before the Supreme Court. CONCLUSION For the foregoing reasons, we request that the Court grant our motion to stay, or, in the alternative to our motion to stay, our motion to enlarge.

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Respectfully submitted, PETER D. KEISLER Assistant Attorney General s/ Jeanne E. Davidson by Bryant G. Snee JEANNE E. DAVIDSON Director OF COUNSEL: Sean B. McNamara Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Peter Burger Attorney Bonneville Power Administration John D. Bremer Attorney Western Area Power Administration July 9, 2007 Attorneys for Defendant s/ Mark A. Melnick MARK A. MELNICK Assistant Director Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit, 8th Floor 1100 L St., NW Washington, D.C. 20530 Tele: (202) 616-0475 Fax: (202) 305-7644

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CERTIFICATE OF FILING I hereby certify that on this 9th day of July, 2007, a copy of the foregoing "DEFENDANT'S REPLY TO PLAINTIFFS' OPPOSITION TO DEFENDANT'S MOTION TO STAY PROCEEDINGS" was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. The parties may access this filing through the Court's system.

s/ Mark A. Melnick