Columbia Steel Casting Co., Inc. v. Portland General Elec. Co.
| Decision Date | 03 April 1997 |
| Docket Number | 93-35958,Nos. 93-35902,s. 93-35902 |
| Parties | Util. L. Rep. P 14,142, 97 Cal. Daily Op. Serv. 2503, 97 Daily Journal D.A.R. 4457 COLUMBIA STEEL CASTING CO., INC., an Oregon corporation, Plaintiff-Appellee, v. PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation, Defendant-Appellant. COLUMBIA STEEL CASTING CO., INC., an Oregon corporation, Plaintiff-Appellant, v. PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation; Public Utility Commission of the State of Oregon, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Allan M. Garten and Barbee B. Lyon, Tonkon, Torp, Galen, Marmaduke & Booth, Portland, Oregon, for Portland General Electric Company.
Michael C. Dotten, Heller, Ehrman, White & McAuliffe, Portland, Oregon, for Columbia Steel Casting Co., Inc.
Jas. J. Adams, Assistant Attorney General, Oregon Department of Justice, Salem, Oregon, for the Public Utility Commission of Oregon.
Robert B. Nicholson and David Seidman, United States Department of Justice, Washington, DC, for the United States as amicus curiae.
Appeals from the United States District Court for the District of Oregon, Helen J. Frye, District Judge, Presiding. D.C. Nos. CV-90-00592-HJF, CV-90-00524-HJF.
The opinion filed on December 27, 1996, 103 F.3d 1446, is amended as follows:
With the above amendments, the panel, as constituted above, has voted unanimously to deny the petition for rehearing. Judge Browning has voted to reject the suggestion for a rehearing en banc, and Judges Reavley and Norris have recommended the same.
The full court has been advised of the suggestion for en banc rehearing and no judge of the court has requested a vote on the suggestion for rehearing en banc. Fed.R.App.P. 35(b).
The petition for rehearing is DENIED, and the suggestion for a rehearing en banc is REJECTED.
Before: BROWNING, REAVLEY *, and NORRIS, Circuit Judges.
The Petition for Rehearing, filed August 3, 1995, is hereby GRANTED.
The Opinion filed July 20, 1995, and reported at 60 F.3d 1390, 1396 (9th Cir.1995), is WITHDRAWN and the attached Opinion is ordered filed instead.
This appeal arises out of an antitrust action that Columbia Steel Casting Co., a large consumer of electric power in Portland, Oregon, brought against two electric utilities, Portland General Electric (PGE) and Pacific Power & Light (PP & L), charging them with dividing the city of Portland into exclusive service territories in violation of the Sherman Act, 15 U.S.C. §§ 1-2. 1 PGE raised a state-action immunity defense on the basis of a 1972 order of the Oregon Public Utility Commission which, PGE argued, approved a division of the Portland market into exclusive service territories. See Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). The district court rejected this state-action immunity defense and awarded summary judgment to Columbia Steel. PGE appeals the summary judgment in favor of Columbia Steel and the denial of its own motion for summary judgment. Columbia Steel cross-appeals the amount of its damage award. We affirm the summary judgment in favor of Columbia Steel on PGE's antitrust liability and vacate and remand the damage award for further proceedings.
The facts are undisputed. Until 1972, PGE and PP & L competed for customers throughout Portland. This competition resulted in the duplication of transmission lines and poles, substations, and transformers throughout the city. For many years the two utilities attempted to gain regulatory approval for a division of the Portland market into exclusive service territories. In 1962, for example, PGE applied to Oregon's Public Utilities Commission (OPUC) for an allocation of an exclusive service territory in the city of Portland. 2 These efforts to secure exclusive service territories within Portland were unsuccessful, however, in part because of opposition from the city. Portland had a longstanding policy of encouraging competition among utilities, and the city charter provided that "[n]o exclusive franchises shall be granted." Portland City Charter, § 10-206. See, e.g., Portland, Or., Resolution 28879 (1962) (opposing PGE's 1962 application to the OPUC for an "allocation of exclusive areas for electric service within ... Portland").
In 1972, PGE and PP & L jointly submitted to the city of Portland a plan to eliminate competition between them by dividing the city into exclusive service territories. This plan provided, inter alia, that "[s]ubject to the necessary regulatory approvals ... it is proposed that Parcels A & B [two defined areas within the city of Portland] be served exclusively by PP & L," and that "[s]ubject to the necessary approvals, it is proposed that Parcel C [a defined area within the city of Portland] ... be exclusively served by PGE." CR 269, exh. 47 at 2-3.
The Portland City Council disapproved the utilities' 1972 plan to displace competition with territorial monopolies in Portland. The City Council agreed, however, that the duplication of facilities should be eliminated for aesthetic, safety, and economic reasons. In the ordinance it passed, the City Council declared, "both [PGE and PP & L] operate under non-exclusive franchises and ... the obligation to supply properties within the City must remain binding upon both companies." Portland, Or., Ordinance 134416 (Apr. 26, 1972). The only action that the ordinance approved was "the sale, transfer and exchange of plant and property between PGE and PP&L." 3 Id.
After securing the City Council's approval of the exchange of utility properties, but not the establishment of exclusive service territories, PGE and PP & L entered into an agreement, dated July 18, 1972 (the "1972 Agreement"), which they submitted to the OPUC for approval. In contrast to the plan submitted to the Portland City Council, the 1972 Agreement said nothing about exclusive service territories in Portland. The "whereas" clauses of the 1972 Agreement recited that one of its purposes was to comply with the terms of the Portland ordinance, which had approved an exchange of plant and property, but had disapproved exclusive service territories. The 1972 Agreement recited:
WHEREAS, [PGE] and [PP & L] wish to provide for the elimination of duplicating electric facilities in [the city of Portland]; and
WHEREAS, the City of Portland, by Ordinance No. 134416, passed April 26, 1972, effective May 26, 1972, consented to the exchange by [PGE] and [PP & L] of certain properties located within the city;
NOW, THEREFORE, in order to implement the elimination of said duplicating facilities and to comply with Ordinance 134416, it is agreed....
The 1972 Agreement used the following language to effect the exchange of facilities:
1. Exchange of Facilities
(a) [PP & L] shall transfer and convey to [PGE] and [PGE] shall acquire from [PP & L] all of the electric distribution plant, including distribution substations, poles, lines, transformers, meters, related distribution facilities, and all easements necessary for the operation thereof, owned, operated and maintained by [PP & L] in ... the area [in Portland] designated as Parcel C....
(b) [PGE] shall transfer and convey to [PP & L] and [PP & L] shall acquire from [PGE] all of the electric distribution plant, including distribution substations, poles, lines, transformers, meters, related distribution facilities, and all easements necessary for the operation thereof, owned, operated and maintained by [PGE] in the areas [in Portland] designated as Parcels A and B....
The 1972 Agreement was approved by an order of the OPUC issued in December 1972. The 1972 Order provided, in relevant part:
The Commissioner's approval is needed prior to the sale, lease, assignment or other disposition of public utility property pursuant to ORS 757.480....
On July 18, 1972, [PP & L] and [PGE] entered into an agreement whereby an exchange of property and utility facilities would be made between [PGE and PP & L] in the City of Portland.... This exchange ... also involves the transfer of customers from one party to the other.
....
ORDERED that [PP & L] may transfer to [PGE] all electric distribution plant ... situated within or used for providing utility service within the boundaries of Parcel A ... [and] Parcel B....
ORDERED that [PGE] may transfer to [PP & L] all electric distribution plant ... used for providing utility service within the boundaries of [Parcel C]....
....
ORDERED that the manner and method of accomplishing the transfer and exchange of property, facilities and customers, and the terms and conditions...
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