Entergy Corp. v. Jenkins

• Decision Date: 28 July 2015
• Docket Number: NO. 01–12–00470–CV,01–12–00470–CV
• Citation: 469 S.W.3d 330
• Parties: Entergy Corporation, Entergy Services, Inc., Entergy Power, Inc., Entergy Power Marketing Corporation, Entergy Arkansas, Inc., and Entergy Texas, Inc., Appellants v. David Jenkins, George W. Strong, Francis N. Gans, and Gary M. Gans, Individually and on behalf of all persons similarly situated, Appellees
• Court: Texas Court of Appeals

469 S.W.3d 330

Entergy Corporation, Entergy Services, Inc., Entergy Power, Inc., Entergy Power Marketing Corporation, Entergy Arkansas, Inc., and Entergy Texas, Inc., Appellants

v.David Jenkins, George W. Strong, Francis N. Gans, and Gary M. Gans, Individually and on behalf of all persons similarly situated, Appellees

NO. 01–12–00470–CV

Court of Appeals of Texas, Houston (1st Dist.).

Opinion issued July 28, 2015

David C. Duggins, Patrick Joseph Pearsall, Duggins Wren Mann & Romero, LLP, Austin, Lawrence L. Germer, Kelli B. Smith, Germer Gertz, L.L.P., Beaumont, Paul A. Scheurich, Entergy Services, Inc., Beaumont, for Appellants.

E.R. Norwood, The Norwood Law Firm, Liberty, Joseph D. Jamail, Frank M. Staggs, Jr., Jamail & Kolius, Houston, Michael D. Sydow, The Sydow Firm, Houston, Fred Hagans, Jennifer Rustay, Hagans Burdine Montgomery & Rustay, Houston, John H. Conway, Brickfield Burchette Ritts & Stone, Washington, Joe F. Sandlin, Anahuac, for Appellees.

Panel consists of Justices Keyes, Huddle, and Lloyd.

OPINION ON REHEARING

Evelyn V. Keyes, Justice

Appellees, David Jenkins, George W. Strong, Francis N. Gans, and Gary M. Gans, individually and on behalf of all persons similarly situated (collectively, “Jenkins”), moved for rehearing and en banc reconsideration of our November 6, 2014 opinion. We granted rehearing and withdrew our November 6, 2014 opinion and judgment and the December 30, 2014 dissenting opinion. We now issue this opinion in its stead. Our disposition remains unchanged.

This is an interlocutory appeal challenging the trial court's order certifying a class action in a suit brought under the Texas Theft Liability Act (“the Theft Act”).¹ In three issues, appellants, Entergy Corporation, Entergy Services, Inc., Entergy Power, Inc., Entergy Power Marketing Corporation, Entergy Arkansas, Inc., and Entergy Texas, Inc. (collectively, “Entergy”), contend that the trial court (1) lacked subject matter jurisdiction over this suit, (2) abused its discretion in finding that the requisites for class certification had been established, and (3) abused its discretion by making findings of fact and conclusions of law that misstate and misapply the applicable law.

We reverse and render.

Background

A. Factual Background

Entergy Corporation is a public utilities holding company with six electric utility operating companies: Entergy Gulf States Louisiana, L.L.C., Entergy Arkansas, Inc., Entergy Louisiana, LLC, Entergy Mississippi, Inc., Entergy New Orleans, Inc., and Entergy Texas, Inc. (“ETI”). These six companies, which operate in four southern states, provide electrical service to approximately 2.6 million retail customers.²

Each operating company has electricity generation facilities, consisting of nuclear, coal, natural gas, or oil-fired generating plants. The companies are parties to the Entergy System Agreement (“ESA”), a federal tariff under which power is shared and distributed.³ The companies also purchase power from each other and from non-affiliated third parties in the power market. The ESA provides for centralized control of power purchases, operations, and use of available resources throughout the Entergy System. Although each company operates its generation, transmission, and distribution systems independently, production, purchasing, and sale of wholesale electricity on behalf of those companies to meet the needs of retail and wholesale customers are controlled centrally by Entergy Services, Inc. (“ESI”).

ESI operates a Systems Operation Center, located in The Woodlands, which controls the selection of power (“dispatch decisions”). The ESA permits the System Operator to purchase power at wholesale from third-party suppliers. The System Operator controls daily operations and is in charge of determining whether system-generated power is sufficient to meet capacity needs or whether purchasing third-party power is necessary. ESI performs a monthly accounting, assigning a portion of the total power resources used by the whole system to each operating company, generating an “intra-system” bill. The cost is dictated by a formula in Service Schedule MSS–3 of the ESA, which governs the intra-company accounting for system resources.

B. Procedural Background

On August 5, 2003, Jenkins filed suit against Entergy⁴ alleging that it had devised and operated an improper energy-purchasing scheme under which it had selected internally generated, higher-priced electrical power while rejecting less expensive, available third-party power, resulting in theft from Texas retail power customers in violation of the Theft Act. On September 15, 2003, Entergy removed the suit to federal court alleging federal question jurisdiction. The federal court remanded the case to state court, concluding that the suit did not invoke federal law.

On April 23, 2004, Entergy filed a motion to dismiss for want of jurisdiction, contending that jurisdiction of Jenkins's claims was preempted by the Federal Energy Regulatory Commission (“FERC”) and the Texas Public Utilities Commission (“PUC”) and that the claims were also barred by the tiled-rate doctrine. On November 24, 2004, the trial court granted Entergy's motion to dismiss, finding that it lacked subject matter jurisdiction over Jenkins's claims.

Jenkins appealed the trial court's order dismissing the case. In Jenkins v. Entergy Corp., 187 S.W.3d 785 (Tex.App.–Corpus Christi 2006, pet. denied) (“Jenkins I ”), the Corpus Christi Court of Appeals reversed the trial court's order dismissing the suit for lack of subject matter jurisdiction. On June 6, 2012, Jenkins filed a motion to certify a class consisting of Texas retail customers served by ETI who were billed and paid for electric power from January 1, 1994, to the present. Entergy filed a second motion to dismiss for lack of jurisdiction and three motions for summary judgment. The trial court denied the motion to dismiss and the summary judgment motions.

The parties submitted extensive briefing on class certification issues, and the trial court held a certification hearing lasting several days. On April 30, 2012, the trial court granted Jenkins's motion for class certification and issued extensive findings of fact and conclusions of law. Entergy timely perfected this interlocutory appeal.

Analysis

In three issues, Entergy contends that the trial court (1) lacks subject matter jurisdiction over Jenkins's claims, (2) abused its discretion in finding that Jenkins had established the requirements for class certification, and (3) abused its discretion by making findings of fact and conclusions of law that misstate and misapply the law. Jenkins argues that Jenkins I, which rejected Entergy's jurisdictional arguments, is the law of the case and prohibits reconsideration of the subject-matter-jurisdiction issue. Entergy urges us to hold that Jenkins I is not the law of the case because (1) the circumstances and evidence have changed, (2) Jenkins I was wrongly decided, (3) the law of the case doctrine should not be applied to subject matter jurisdiction determinations, and (4) Jenkins I did not address all of the issues raised in this appeal.

A. Law of the Case

Because this case comes to us on appeal following remand for further proceedings in the trial court by the Corpus Christi Court of Appeals in Jenkins I, which reversed the trial court's previous order dismissing the case for want of jurisdiction, we consider, as a preliminary matter, the law of the case doctrine to determine whether the Corpus Christi Court of Appeals' decision prevents us from considering Entergy's jurisdictional arguments.

“Subject matter jurisdiction is ‘essential to a court's power to decide a case.’ ” City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex.2013) (per curiam) (quoting Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex.2000) ). “Without jurisdiction the court cannot proceed at all in any cause; it may not assume jurisdiction for the purpose of deciding the merits of the case.” Fin. Comm'n of Tex. v. Norwood, 418 S.W.3d 566, 578 (Tex.2013) (quoting Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 431, 127 S.Ct. 1184, 1191, 167 L.Ed.2d 15 (2007) ). “The failure of a jurisdictional requirement deprives the court of the power to act (other than to determine that is has no jurisdiction), and ever to have acted, as a matter of law.” City of DeSoto v. White, 288 S.W.3d 389, 393 (Tex.2009) (quoting Univ. of Tex. Sw. Med. Ctr. v. Loutzenhiser, 140 S.W.3d 351, 359 (Tex.2004) ). Thus, “[a] judgment is void if rendered by a court without subject matter jurisdiction.” In re United Servs. Auto. Ass'n, 307 S.W.3d 299, 309 (Tex.2010) (orig.proceeding). “[N]ot only may an issue of subject matter jurisdiction ‘be raised for the first time on appeal by the parties or by the court’, a court is obliged to ascertain that subject matter jurisdiction exists regardless of whether the parties questioned it.” Id. at 306 (quoting Loutzenhiser, 140 S.W.3d at 358 ) (emphasis in original); City of Allen v. Pub. Util. Comm'n of Tex., 161 S.W.3d 195, 199 (Tex.App.–Austin 2005, no pet.) (“[T]he question of jurisdiction is fundamental and can be raised at any time in the trial of a case or on appeal.”).

The law of the case doctrine is defined as “that principle under which questions of law decided on appeal to a court of last resort will govern the case throughout its subsequent stages.” Loram Maint. of Way, Inc. v. Ianni, 210 S.W.3d 593, 596 (Tex.2006) ; Brown & Brown of Tex., Inc. v. Omni Metals, Inc., 317 S.W.3d 361, 373 (Tex.App.–Houston [1st Dist.] 2010, pet. denied). Under the law of the case doctrine, a court of appeals will ordinarily be bound by its initial decision if there is a subsequent appeal in the case. Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex.2003). “By narrowing the issues in the successive stages of the litigation, the law of the case doctrine is intended to achieve uniformity of decision as well as judicial economy and efficiency.” Id. (quoting ...