Free Declaration - District Court of Federal Claims - federal

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Nos. 02-70262, et al.
Date of Decision.: September 26, 2005 Panel: Judges Sidney R. Thomas, M. Margaret McKeown, Richard P. Clifton

IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Bonneville Power Administration; et al., Petitioners, V. Federal Energy Regulatory Commission, Respondent.

Docket Nos. 02-70262, et al.

OPPOSITION OF GOVERNMENTAL ENTITIES TO MOTION OF THE CALIFORNIA PARTIES TO STAY ISSUANCE OF THE MANDATE
Pursuant to Federal Rules of Appellate Procedure (FRAP) 27 and Circuit Rule 27- 1, the Governmental Entities' hereby respond in opposition to the March 13, 2007 Motion of the California Parties to Stay Issuance of the Mandate of Bonneville Power Administration v_ FERC, 422 F.3d 908 (9th Cir. 2005), rehearing denied (March 7 , 2007) (" Bonneville").

The Governmental Entities consist of Sacramento Municipal Utility District, Bonneville Power Administration, State Water Contractors/Metropolitan Water District, Modesto Irrigation District, Northern California Power Agency, Turlock Irrigation District, the California Cities of Santa Clara, Pasadena, Burbank, Glendale, Vernon, and Colton, Grant County, and Arizona Electric Power Cooperative, Inc. (which is not a Governmental Entity but was still found to be not subject to 1~ERC's refund jurisdiction). The Governmental Entities were all either petitioners or intervenors in the Bonneville case.

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Under FRAP Rule 41, a motion for stay of mandate pending the filing of a petition for certiorari "must show that the certiorari petition would present a substantial question and that there is good cause for a stay." As this Court observed in Coalition for Econofnic Equity v. Wilson, 122.F.3d 718 (9th Cir. 1997), its decision to grant or deny the stay will be informed by whether (1) rehearing en bane was denied, (2) there is any "inter-Circuit conflict on the law governing th[e] case," and (3) the movant has been able "to identify any other traditional criteria employed by the Supreme Court in granting certiorari." Id. at 719. The California Parties have not met, and cannot begin to meet, any of these elements.

First, rehearing and rehearing en bane of the Court's unanimous Bonnneville opinion was denied by the Court's March 7, 2007 order, and no Judge on the Circuit requested a vote on whether to rehear the matter en bane. The first factor thus completely disfavors stay of the mandate, which is why the California Parties simply ignored it. Second, the California Parties' claim that Bonneville presents an inter-Circuit conflict with United Distribution Companies v. FERC, 88 F.3d 1105 (D.C. Cir. 1996), has already been rejected twice, first in this Court's opinion and again in its March 7, 2007 Order denying rehearing. See Bonneville, 422 F.3d at 922; March

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7, 2007 Order at 2. Similarly erroneous is the California Parties' contention that the Court's decision conflicts with Pacific Gas & Electric Company v. FEPC 306 F.3d 1112 (D.C. 2002) ("PG&E"). The March 7, 2007 Order expressly rejected that contention, noting that the D.C. Circuit ruled in PG&E that "'publicly-owned utilities are not subject to FERC's §§ 205 and 206 jurisdiction."' March 2, 2007 Order at 2, quoting PG&E, 306 F.3d at 1114. The California Parties simply ignore these rulings, which make plain that their claims of an inter-Circuit conflict are ineritless. The California Parties attempt to depict the issue as being of great future importance with respect to centralized power markets generally. But there is no issue. Bonneville held that "Congress unambiguously removed government-owned utilities from FERC's refund jurisdiction." 422 F.3d at 921. Furthermore, Congress definitively addressed the liability of § 201(f) entities for refunds in centralized markets for the future in the Energy Policy Act of 2005, Pub. L. No. 109-58, § 1286, 119 Stat. 594, 981 (2005), as Bonneville noted. Id. at n.10. The statutory change negates any possible broader significance of any issue.

Stated differently, it is very unlikely that four Supreme Court Justices will vote to grant certiorari and five Justices will vote to reverse where (a) no Judge of the Ninth Circuit has disagreed with the Bonneville opinion, (b) there is no conflict among the Circuits, and (c) Congressional action has mooted the future

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significance of the i ssue (if there were any).2 Significantly, FERC, the federal agency whose decision is under review , did not seek rehearing and has not sought a stay of mandate from this Court. In short, grant of certiorari and reversal of Bonneville are highly unlikely. Finally, the California Parties claim that issuance of the mandate will have an adverse effect on the immediate dispute by permitting " a torrent of activity and litigation" over how to comply with Bonneville and diverting the parties from settlement efforts. These contentions are completely misplaced. First, remand proceedings at FERC are unavoidable . Since the Supreme Court, for reasons stated above, i s exceedingly unlikely to grant certiorari and reverse Bonneville, the California Parties ' contention amounts to a request to delay the inevitable . The far more appropriate -- and, in fact, the only responsible -'- The Supreme Court employs a similar test. See, e.g., Inite v. Florida, 458 U.S. 1341, 1302 (1982) (:Dowell, J., in chambers), stating that: The standards for granting a stay of mandate pending disposition of a petition for certiorari are well established: "(T)here must be a reasonable probability that four members of the Court would consider the underlying issue sufficiently meritorious for the grant of certiorari or the notation of probable jurisdiction; there must be a significant possibility of reversal of the lower court's decision; and there must be a likelihood that irreparable harm will result if that decision is not stayed ." Times-Picayune Publishing Corp. v. Schulingkamp, 419 U.S. 1341, 1305 (1974) (Powell, J., in chambers).
See.Karcher v..Daggett, 455 U.S. 1303 (1982) ( Brennan, J., in chambers); Whalen v. Roe, 423 U.S. 1313 (1975) (Marshall, J., in chambers).

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view is that if changes are going to be required, they should start sooner rather than later so that there will be less, and not more, waste of resources and delay. Second, it is unfortunate that there has been so much delay to date,3 but it is the California Parties -- not sellers, and certainly not the Governmental Entities -that have repeatedly sought to delay these proceedings. Notwithstanding their professed desire to reach closure, the California Parties have consistently sought to prolong the proceedings, undoubtedly because they perceive an advantage in the status quo and delay. Certainly the delay in the Court's mandate has impaired FERC's ability to conform to the decision in its actions. "[B]ecause the Court has not issued a mandate enabling the Commission to act on remand, the Commission cannot at this time revisit its final orders conceming the refund methodology." San Diego Gas & Elec. v. Sellers of Energy and Ancillary Serv., 115 FERC ¶61,171 at P60 (2006). Issuance of the mandate, and not a stay, will thus expedite resolution of the protracted dispute.

Denial of a stay would not prejudice the California Parties by loss of posted collateral. All of the Governmental Entities have assets and income streams, including the accounts receivable on millions of dollars owed to them by the ISO and the PX on sales for which the Governmental Entities were never paid. These

'The last day of the refund period was June 20, 2001, nearly six years ago. It is for this reason that the Governmental Entities opposed the California Parties' motion last fall to extend further the settlement "timeout" in Bonneville, 5

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assets could be used to pay any refunds that might be reinstated in the exceedingly unlikely event certiorari were granted and this Court's decision reversed. In contrast, further delay prejudices the Governmental Entities, as they have been deprived of the use of that collateral, and in some instances have been required to continue to pay fees to maintain letters of credit, even though the Governmental Entities delivered the power to California and have been waiting to be paid for that power for over five years. There is no reason to continue to inflict those costs on these Governmental Entities and their citizens and constituents.

The California Parties' final assertion is that issuance of the mandate will divert effort from settlement negotiations. The assertion defies credibility. In the six-plus years that the refund proceeding has been pending, the California Parties have reached settlement with exactly one Governmental Entity for a minor amount. There is no reason to think that delay of the mandate will promote settlement in any way, as this Court implicitly recognized in denying the California Parties' last request to extend the period for seeking rehearing. As the Governmental Entities explained in their opposition to that extension request, the general experience of the Governmental Entities is that progress in settlement discussions has been blocked by the sharp differences in views as to the litigation; issuance of the Bonneville mandate will serve to remove, or at least greatly narrow, one area of disagreement.

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The suggestion that the parties cannot litigate and negotiate at the same time is also far-fetched. The fact is that settlement occurs in the face of litigation all the time; indeed, litigation is often the spur to settlement. The California Parties have legions of lawyers, and enough can be spared from preparing a certiorari petition to pursue any negotiations that may be fruitful.

CONCLUSION For all the foregoing reasons, the motion for a stay should be denied. Respectfully submitted,

A4.1( d
Robert D. Rosenberg Slover & Loftus 1224 Seventeenth Street, N.W. Washington, DC 20036 Telephone: (202) 347-7170 Facsimile: (202) 347-3619 [email protected] Attorney for Arizona Electric Power Cooperative, Inc.,, Petitioner And on behalf ofPetitioners/Intervenors City of Santa Clara, State Water Contractors/Metropolitan Water District, Turlock Irrigation District , City of Pasadena, City of Burbank, City of Glendale, City of Los Angeles Department of Water and Power, Northern California Power Agency, City of Vernon, City of Colton, Grant County, and Modesto Irrigation District

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ROBERT S. GREENSPAN MARK W. PENNAK (202) 514-1673 Attorneys Appellate Staff
Civil Division , Room 7326 MAIN Department of Justice Washington , D.C. 20530.0001 Attorneys for Petition erlIntervenor Bonneville Power Administration

Dated: March 19, 2007

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CERTIFICATE OF SERVICE
1 hereby certify that have this day caused the foregoing document

to be served upon each of the parties on the attached Service List via first-class V.S. mail, postage prepaid. Dated. at Washington, DC this 19" day of March, 2007.

Robert D. Rosenberg

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RANDY A. ROACH, ESQUIRE OFFICE OF GENERAL COUNSEL BONNEVILLE POWER ADMINISTRATION POST OFFICE BOX 3621 905 NE I I"" AVENUE PORTLAND, OR 97208-3621 ROBERT S. GREENSPAN, ESQUIRE MARK W. PENNAK, ESQUIRE US DEPARTMENT OF JUSTICE CIVIL DIVISION/APPELLATE STAFF 601 D STREET, NW WASHINGTON, DC 20530-0001 PHILIP L. CHABOT, JR., ESQUIRE MCCARTHY, SWEENEY & HARKAWAY, PC 2175 K STREET, NW SUITE 600 WASHINGTON, DC 20037 PHILIS POSEY, ACTING SECRETARY FEDERAL ENERGY REGULATORY COMMISSION 888 FIRST STREET, NE ROOM 91-01 WASHINGTON, DC 20426 DAVID M. PERLMAN, ESQUIRE CONSTELLATION POWER SOURCE INC. I I I MARKET PLACE SUITE 500 BALTIMORE, MD 21202

BARRY J. BENNETT, ESQUIRE OFFICE OF GENERAL COUNSEL BONNEVILLE POWER ADMINIS'T'RATION POST OFFICE BOX 3621 905 NE I IIE' AVENUE PORTLAND, OR 97208-3621 MICHAEL J. KURMAN, ESQUIRE ARENT FOX., PLLC WASHINGTON SQUARE 1050 CONNECTICUT AVENUE, NW WASHINGTON, DC, 20036

JEFFREY D. WATKISS, ESQUIRE BRACEWELL & PATTERSON, LLP 2000 K STREET, NW SUITE 500 WASHINGTON, DC 20006-1872

BETH B. PACELLA, ESQUIRE FEDERAL ENERGY REGULATORY COMMISSION 888 FIRST STREET, NE ROOM 91-01 WASHINGTON, DC 20426 GEORGE M. GALLOWAY, ESQUIRE STOEL, RIVES, BOLBY, JONES & GREY STANDARD INSURANCE CENTER 900 SW 5T' AVENUE SUITE 2600 PORTLAND, OR 97204-1265

CYNTHIA A. MARLETTE, ESQUIRE GENERAL COUNSEL FEDERAL ENERGY REGULATORY COMMISSION 825 NORTH CAPITAL STREET, NE WASHINGTON, DC 20426

RONALD NEIL CARROLL, ESQUIRE BRACEWELL & PATTERSON LLP 2000 K STREET, NW SUITE 500 WASHINGTON, DC 20006-1872

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BONNIE S. BLAIR, ESQUIRE THOMPSON COBURN, LLP 1909 K STREET, NW SUITE 600 WASHINGTON, DC 20006 MARCIA HABER KAMINE, ESQUIRE ASSISTANT CITY ATTORNEY LOS ANGELES ATTORNEY'S OFFICE LOS ANGELES DEPARTMENT OF WATER & POWER I I I NORTH HOPE STREET ROOM 340 LOS ANGELES, CA 90012 HARVEY L. REITER, ESQUIRE STINSON MORRISON HECKER, LLP 1150 18"' STREET, NW SUITE 800 WASHINGTON, DC 20036-3816 WALLACE L. DUNCAN, ESQUIRE DUNCAN, WEINBERG, GENZER & PEMBROKE, PC 1615 M STREET, NW SUITE 800 WASHINGTON, DC 20036

HOWARD E. SHAPIRO, ESQUIRE VAN NESS FELDMAN PC 1050 THOMAS JEFFERSON ST., NW WASHINGTON, DC 20007

JOHN N. ESTES, 111, ESQUIRE SKADDEN, ARPS, SLATE, MEAGHER & FLOM, LLP 1440 NEW YORK AVENUE, NW WASHINGTON, DC 20005-2111

MARK. PERLIS, ESQUIRE DICKSTEIN, SHAPIRO, MORIN & OSHINSKY, LLP 1825 EYE STREET, NW WASHINGTON, DC 20006 KENNETH W. IRVIN, ESQUIRE MCDERMOTT, WILL & EMERGY LLP 600 13"' STREET, NW WASHINGTON, DC 20005

KURT W. BILAS, ESQUIRE SENIOR COUNSEL RELIANT ENERGY SERVICES, INC. 801 PENNSYLVANIA AVENUE, NW SUITE 620 WASHINGTON, DC 20004-2604

TIMOTHY W. MULLER , ESQUIRE THE WILLIAMS COMPANIES, INC. ONE WILLIAMS CENTER POST OFFICE BOX 2400 SUITE 4100 TULSA, OK 74172-2400

ROBERT H. SOLOMON, SOLICITOR FEDERAL ENERGY REGULATORY COMMISSION 888 FIRST STREET, NE WASHINGTON, DC 20426

RICHARD L. ROBERTS CATHERINE M. GIOVANNONI STEPTOE & JOHNSON, LLP 1330 CONNECTICUT AVENUE, NW WASHINGTON, DC 20036

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STAN BERMAN JOSEPH H. FAGAN IIELLER EFIRMAN LLP 1717 RHODE ISLAND AVENUE, NW WASHINGTON, DC 20036

KEVIN J. MCKEON LILLIAN S. HARRIS KATHERINE E. LOVETTE HAWKE, MCKEON, SNISCAK & KENNARD LLP POST OFFICE BOX 1778 100 NORTH TENTH STREET HARRISBURG, PA 17101 MICHAEL MACKNESS SOUTHERN CALIFORNIA EDISON COMPANY 224 WALNUT GROVE AVENUE ROSEMEAD, CA 91770

MARK D. PATRIZIO KERMIT R. KUBITZ PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE STREET, B30A POST OFFICE BOX 7442 SAN FRANCISCO, CA 94120 RANDOLPH L. WU MARY F. MCKENZIE ELIZABETH M. MCQUILLIAN PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA 505 VAN NESS AVENUE SAN FRANCISCO, CA 94102 DON GARBER SAN DIEGO GAS & ELECTRIC COMPANY 101 ASH STREET SAN DIEGO, CA 92101

ERIK N. SALTMARSH KRIS CHISHOLM STEVEN RUSSO CALIFORNIA ELECTRICITY OVERSIGHT BOARD 770 L STREET, SUITE 1250 SACRAMENTO, CA 95814

EDMUND G. BROWN JR. ATTORNEY GENERAL OF THE STATE OF CALIFORNIA JAMES HUMS CHIEF DEPUTY ATTORNEY GENERAL TOM GREENE CHIEF ASSISTANT ATTORNEY GENERAL 13001 STREET, SUITE 125 SACRAMENTO, CA 95814

DAVID M. GUSTAFSON DEPUTY ATTORNEY GENERAL 1515 CLAY STREET, 20TH FLOOR OAKLAND, CA 94612-0550

KURT W. BILAS, ESQUIRE ENERGY & COMMERCE COMMITTEE US HOUSE OF REPRESENTATIVES 2125 RAYBURN BUILDING WASHINGTON, DC 20004-2604

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ROBERT S. GREENSPAN, ESQUIRE MARK W. PENNAK, ESQUIRE US DEPARTMENT OF JUSTICE CIVIL DIVISION/APPELLATE STAFF 950 PENNSYLVANIA AVENUE, NW ROOM 9148 WASHINGTON, DC 20530-0001

ROBERT D. ROSENBERG SLOVER & LOFTUS 1224 SEVENTEENTH STREET, NW WASHINGTON, DC 200361

MICHAEL J. KURMAN, ESQUIRE ARENT FOX, PLLC WASHINGTON SQUARE 1050 CONNECTICUT AVENUE, NW WASHINGTON, DC 20035 PHILIS POSEY, ACTING SECRETARY FEDERAL ENERGY REGULATORY COMMISSION 888 FIRST STREET, NE ROOM 91-01 WASHINGTON, DC 20426 DAVID M. PERLMAN, ESQUIRE CONSTELLATION POWER SOURCE INC. 111 MARKET PLACE SUITE 500 BALTIMORE, MD 21202

JEFFREY D. WATKISS, ESQUIRE BRACEWELL & PATTERSON, LLP 2000 K STREET, NW SUITE 500 WASHINGTON, DC 20006-1872 BETH B. PACELLA, ESQUIRE FEDERAL ENERGY REGULATORY COMMISSION 888 FIRST STREET, NE ROOM 91-01 WASHINGTON, DC 20426 GEORGE M. GALLOWAY, ESQUIRE STOEL, RIVES, BOLBY, JONES & GREY STANDARD INSURANCE CENTER 900 SW 5TH AVENUE SUITE 2600 PORTLAND, OR 97204-1268