Borough of Lansdale v. Pp & L, Inc.

• Decision Date: 16 May 2007
• Docket Number: Civil Action No. 02-8012.
• Citation: 503 F.Supp.2d 730
• Parties: BOROUGH OF LANSDALE, Borough of Blakely Borough of Catawissa, Borough of Duncannon, Borough of Hatfield, Borough of Kutztown, Borough of Lehighton, Borough of Mifflinburg, Borough of Olyphant, Borough of Quakertown, Borough of Schuylkill Haven, Borough of St. Clair, Borough of Watsontown, Borough of Weatherly, Pennsylvania, Plaintiffs, v. PP & L, INC., PPL Electric Utilities Corp., PPL Energy Plus, L.L.C., and PPL Generation, L.L.C., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

503 F.Supp.2d 730

BOROUGH OF LANSDALE, Borough of Blakely Borough of Catawissa, Borough of Duncannon, Borough of Hatfield, Borough of Kutztown, Borough of Lehighton, Borough of Mifflinburg, Borough of Olyphant, Borough of Quakertown, Borough of Schuylkill Haven, Borough of St. Clair, Borough of Watsontown, Borough of Weatherly, Pennsylvania, Plaintiffs, v. PP & L, INC., PPL Electric Utilities Corp., PPL Energy Plus, L.L.C., and PPL Generation, L.L.C., Defendants.

Civil Action No. 02-8012.

United States District Court, E.D. Pennsylvania.

May 16, 2007.

COPYRIGHT MATERIAL OMITTED

C. J. Mustacchio, Scranton, PA, John F. Woods, Wheatley & Ranquist PA., Annapolis, MD, Jonathan B. Young, Dischell Bartle Yanoff & Dooley, Lansdale, PA, for Plaintiffs.

Christopher D. Oatway, David L. Meyer, Edward H. Rippey, James R. Atwood, Covington & Burling, Washington, DC, John G. Harkins, Jr., Karin E. Davis, Steven A. Reed, Harkins Cunningham LLP, Philadelphia, PA, for Defendants.

Charles F. Wheatley, Jr. Wheatley & Ranquist PA, Annapolis, MD.

MEMORANDUM and ORDER

YOHN, District Judge.

The Boroughs of Lansdale, Blakely, Catawissa, Duncannon, Hatfield, Kutztown, Leighton, Mifflinburg, Olyphant, Quakertown, Schuylkill Haven, St. Clair, Watsontown, and Weatherly, Pennsylvania ("the Boroughs") bring this action against PP & L, Inc., PPL Electric Utilities Corp., PPL Energy Plus, L.L.C., and PPL Generation, L.L.C. (collectively, "PPL") alleging various antitrust violations and asserting a claim for breach of contracts approved by the Federal Energy Regulatory Commission ("FERC"). (Compli ¶¶ 14-19, 20-22.) Defendants asserted counterclaims for breach of contract as to all plaintiffs, (Countercl. ¶¶ 19-24), and tortious interference with existing and ongoing contractual relations as to Olyphant, (Countercl.¶¶ 25-36). On March 30, 2006, I granted defendants summary judgment as to liability only on defendants' breach of contract counterclaims as to each plaintiff, except the Borough of Olyphant. See Borough of Lansdale v. PP & L, Inc., 2006 WL 859431, 2006 U.S. Dist. LEXIS 14972 (E.D.Pa. Mar. 30, 2006). On April 5, 2006, I granted defendants summary judgment on many of plaintiffs' claims. See Borough of Lansdale v. PP & L, Inc., 426 F.Supp.2d 264 (E.D.Pa.2006).

Now before me are the Boroughs' motions for reconsideration of both orders, defendants' responses, and the Boroughs' replies. The Boroughs contend that there were clear errors of law in the decisions and that reconsideration is necessary to prevent manifest injustice. For the reasons stated herein, the Boroughs' motions for reconsideration will be granted in part and denied in part.

STANDARD OF REVIEW

"The purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence." Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir.1985). Reconsideration is proper where the moving party demonstrates one of three grounds: "(1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court granted the motion for summary judgment; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice." Max's Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir.1999) (citing N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir.1995)); see also Local Rule 7.1(g).

DISCUSSION

Plaintiffs argue pursuant to the third ground for reconsideration that this court overlooked certain law and facts and that these deficiencies resulted in manifest errors of law and fact. Plaintiffs ask this court to grant their motions for reconsideration and to vacate the March 31 and April 5, 2006 orders.¹

I. March 31, 2006 Order — Summary Judgment on Defendants' Counterclaim

Plaintiffs argue that the court did not take into consideration evidence on record that indicated the existence of genuine issues of material fact regarding whether or not they breached the dispute resolution clause of the power supply contracts. (Pl. Mot. Reconsideration Mar. 31 Order 2.) However, they fail to demonstrate grounds under which the court may properly grant reconsideration.

First, without arguing any intervening change in the controlling law, plaintiffs provide new evidence with their motion for reconsideration. Plaintiffs' evidence consists of a letter PPL produced in discovery, which was also the subject of deposition testimony. (Pl. Mem. Supp. Reconsideration Mar. 31 Order 7 n. 4; Pl.Ex. 1.) Plaintiffs also present a fax sent by PPL to the`Boroughs on October 17, 2002. (Pl.Ex. 2.) Though these exhibits were available to plaintiffs at the time the court granted summary judgment, the Boroughs did not provide these documents as part of the record. As such, these exhibits do not constitute "newly discovered evidence" and the court will not consider them. See Bailey v. United Airlines, 279 F.3d 194, 201 (3d Cir.2002) ("A district court may properly refuse to consider evidence presented in a motion for reconsideration when the evidence was available prior to summary judgment.").

Second, plaintiffs' contention that the prior order contains manifest errors of law or fact is unpersuasive. The remainder of plaintiffs' motion for reconsideration presents nothing convincing to controvert this court's grant of summary judgment and merely seeks to rehash the same issues by citing different case law. The court already considered these arguments in the motion for summary judgment and will not revisit them again here. Accordingly, plaintiffs' motion for reconsideration of this court's order of March 30, 2006 will be denied.

II. April 5, 2006 Order — Summary Judgment on Plaintiffs' Claims

Plaintiffs request that this court reconsider its order of April 5, 2006, granting in part and denying in part defendants' motion for summary judgment on plaintiffs' claims. See Borough of Lansdale v. PP & L, Inc., 426 F.Supp.2d 264 (E.D.Pa.2006).

A. Plaintiffs' Price Squeeze Claim under Sherman Act § 2

Plaintiffs alleged two claims under Sherman Act § 2 in their complaint: 1) that defendants "monopolized the sale of electric power in the wholesale power market available to the Boroughs ... resulting in increases in the cost of power to the Boroughs," and 2) that defendants created a "price squeeze" by requiring plaintiffs "to pay wholesale prices for electric power substantially higher than the retail prices Defendants charge for comparable service to its commercial and industrial customers, based on the charge demanded of Plaintiffs by Defendants." (Comp ¶¶ 14, 15, 18.)

In the April 5, 2006 memorandum and order, I found that defendants were immune under the filed rate doctrine from antitrust liability on plaintiffs' Sherman Act § 2 claims. Lansdale, 426 F.Supp.2d at 283-89. I explained that plaintiffs' price squeeze claim was barred by the filed rate doctrine because both the wholesale rate and retail rates were filed with and approved by the federal and state government agencies. Id. at 283-84. Therefore, I found that a claim based on the interaction between the two rates was barred. Id. With regard to plaintiffs' second, more general monopolization claim, I also found that the claim was barred by the filed rate doctrine because PPL's alleged monopolistic behavior took place in the FERC and PJM-approved ICAP market. Id. at 284.

Plaintiffs contend that the court erred in finding that their price squeeze claim is barred, by the filed rate doctrine. First, plaintiffs claim that the court erred in not recognizing that their price squeeze claim falls within an exception to the filed rate doctrine for non-rate activities. Second, plaintiffs argue that the court was incorrect to rely on Utilimax.corn, Inc. v. PPL Energy Plus, LLC, 273 F.Supp.2d 573 (E.D.Pa.2003), affil, 378 F.3d 303 (3d Cir. 2004), because the plaintiff in that case did not assert a price squeeze claim.

In response, defendants maintain that the court's April 5, 2006 ruling is consistent with applicable authority, and that "the filed rate doctrine precludes a court from entertaining damage claims that are predicated on challenges to the level of rates Med with and subject to the jurisdiction of federal and state regulatory agencies." (Def. Opp'n Reconsideration Apr. 5 Order. 3 (citing Utilimax.com, 378 F.3d 303).) Defendants argue that because FERC and the Pennsylvania Public Utility Commission ("PUC") may consider the interaction of the wholesale and retail rates in deciding upon a reasonable rate, the filed rate doctrine should apply to the price squeeze claim. (Def. Opp'n Reconsideration Apr. 5 Order 3.) Defendants also argue that plaintiffs' price squeeze claim falls within the heart of the filed rate doctrine because plaintiffs seek antitrust damages in the form of a trebling of the alleged overcharges stemming from the FERC-approved rates, rather than profits on retail sales lost due to the alleged price squeeze. (Id. at 4.) Finally defendants claim that even if the filed rate doctrine does not apply, their "summary-judgment papers demonstrated a multitude of alternative grounds for dismissal of plaintiffs' § 2 claims." (Id. at 5.)

1. Application of the Filed Rate Doctrine to Price Squeeze Claims

Section 2 of the Sherman Act sanctions those "who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several states, or with foreign nations." 15 U.S.C. § 2. Conduct that constitutes a "price squeeze" may violate the Sherman Act § 2. United States v. Aluminum Co. of Am., 148 F.2d 416, 437-38 (2d Cir.1945). It is generally accepted that a "price squeeze involves a defendant who as a monopolist supplies the plaintiff at one level (e.g., wholesale), competes at another (e.g., retail), and seeks to destroy the plaintiff by holding up the wholesale price to the plaintiff while depressing the retail price...