In re Western States Wholesale Natural Gas Anti.

Decision Date18 November 2004
Docket NumberNo. CVS031436PMP.,No. CVS031431PMP.,No. CVS031434PMP,,No. MDL 1566.,No. CVS031435PMP.,No. CVS031433PMP.,No. CVS031432PMP.,No. CVS031438PMP.,MDL 1566.,CVS031431PMP.,CVS031432PMP.,CVS031433PMP.,CVS031434PMP,,CVS031435PMP.,CVS031436PMP.,CVS031438PMP.
PartiesIn re: WESTERN STATES WHOLESALE NATURAL GAS ANTITRUST LITIGATION, And all Related Cases. Team Design et. al. Plaintiffs, v. Reliant Energy, Inc., et. al., Defendants. Shanghai 1930 Restaurant Partners, L.P., Plaintiff, v. Encana Energy Services, Inc. et. al., Defendants. A.L. Gilbert Co., Plaintiff, v. Coral Energy Resources, L.P., et. al., Defendants, Oberti Wholesale Foods, Inc., Plaintiff, v. Encana Energy Services, Inc., et al., Defendants. David C. Brown, Plaintiff, v. Encana Energy Services, Inc., et. al., Defendants. Laurence Uyeda, et al., Plaintiffs, v. Centerpoint Energy, Inc., et al., Defendants. Craig Podesta, Plaintiff, v. Encana Energy Services, Inc., et al., Defendants. Vittice Corporation, et al., Plaintiffs, v. Encana Corporation, et al., Defendants. Mark and Susan Benscheidt, et al., Plaintiffs, v. AEP Energy Services, Inc., et al., Defendants. City of Los Angeles, Plaintiff, v. Reliant Energy Services, Inc., et al., Defendants.
CourtU.S. District Court — District of Nevada

Walter J. Lack, Engstrom, Lipscomb & Lack, Los Angeles, CA, for Haleema Silverman, Michael Silverman, Lynette Stevenson. Tom Stevenson, Team Design dba Timothy Engeln, Inc.

R. Alexander Saveri, Saveri & Saveri, Inc., San Francisco, CA, for Shanghai 1930 Restaurant Partners, L.P.

Clinton P. Walker, Damrell, Nelson, Schrimp, Pallios, Pacher & Selva, Modesto, CA, for A.L. Gilbert & Co.

Daniel J. Mulligan, Jenkins & Mulligan, San Francisco, CA, for Oberti Wholesale Foods, Inc.

William H. Parish, Parish & Small, Stockton, CA, for Craig Podesta.

Dennis Stewart, Hulett Harper Stewart IXP, San Diego, CA, for Texas-Ohio Energy, Inc.

Daniel C. Girard, Girard Gibbs & De Bartolomeo LLP, San Francisco, CA, for David C. Brown.

Reginald Terrell, Terrell Law Group, Richmond, CA, for Lois The Pie Queen.

Barry R. Himmelstein, Lieff, Cabraser, Heimann & Bernstein, LLP, San Francisco, CA, for H & M Roses, Inc.; Uyeda, Laurence.

Brad N. Baker, Baker, Burton & Lundy, Hermosa Beach, CA, for Team Design.

G. Mark Albright, Albright, Stoddard, Warnick & Palmer, P.C., Las Vegas, NV, MDL 1566 Liason Counsel Plaintiffs.

Joseph W. Cotchett, Cotchett, Pitre, Simon & Mccarthy, Burlingame, CA, for City of Los Angeles Department of Water and Power.

Gregory J.Copeland, Baker & Botts, Houston, TX, for Reliant Energy Services, Inc., Reliant Energy, Inc., Reliant Resources, Inc. and Kathleen Zanchoni.

Joel B. Kleinman, Dickstein Shapiro Morin & Oshinsky LLP, Washington, DC, for Duke Energy Corporation, Duke Energy Field Services, Inc., Duke Energy North

America, LLC and Duke Energy Trading and Marketing, L.L.C.

Richard P. Levy, Gibson, Dunn & Crutcher, LLP, Los Angeles, CA, for Sempra Energy.

Robert A. Sacks, Sullivan & Cromwell LLP, Los Angeles, CA, for EnCana Corp. and WD Energy Services, Inc.

Mark E. Haddad, Sidley Austin Brown & Wood LLP, Los Angeles, CA, for CMS Energy Corporation.

Diane E. Pritchard, Morrison & Foerster LLP, San Francisco, CA, for El Paso Corporation.

Joshua D. Lichtman, Fulbright & Jaworski, LLP, Los Angeles, CA, for Coral Energy Resources, L.P.

John L. Hendricks, Akin Gump Strauss Hauer & Feld LLP, Dallas, TX, for Centerpoint Energy Inc.

Alan Yudkowsky, Stroock & Stroock & Lavan LLP, Los Angeles, CA, for Sempra Energy Trading Corp.

Jonathan Abram, Hogan & Hartson LLP, Washington, DC, for American Electric Power, Inc.

Douglas Tribble, Pillsbury Winthrop LLP, San Diego, CA, for Dynegy Inc. and West Coast Power LLC.

Michael C. Lieb, Morgan, Lewis & Bockius LLP, Los Angeles, CA, for Xcel Energy, Inc.

ORDER

PRO, Chief Judge.

I. BACKGROUND

These cases arise out of the California energy crisis of 2000-2001. During that time, the California energy and natural gas markets became mutually dysfunctional, and, feeding off each other spiraled into a statewide energy crisis. Amendments to Blanket Sales Certificates, 68 Fed.Reg. 66323, 66325 (Nov. 17, 2003) (to be codified at 18 C.F.R. § 284.288). The Federal Energy Regulatory Commission ("FERC") undertook a fact finding investigation of the market crisis in which they concluded, "[S]pot gas prices rose to extraordinary levels, facilitating the unprecedented price increase in the electricity market." Id. FERC concluded the dysfunctions in the natural gas market stemmed from efforts to manipulate price indices compiled by private trade publications, including reporting of false data and wash trading.1

The above actions were originally filed in Superior Courts in the State of California, and were removed by Defendants to United States District Courts for the Central, Northern, Southern, and Eastern Districts of California. On November 6, 2003, January 7, 2004, and April 5, 2004, the Judicial Panel on Multidistrict Litigation entered Transfer Orders pursuant to 28 U.S.C. § 1407 centralizing the foregoing actions in this Court for coordinated or consolidated pretrial proceedings.

This Court is familiar with the factual background of these cases, as it stems from the California Energy Crisis that generated In re Cal. Retail Natural Gas and Elec. Antitrust Litig., 170 F.Supp.2d 1052 (D.Nev.2001). In that case, this Court presided over multidistrict litigation that addressed essentially identical claims to the litigation at issue here. In that case, Plaintiffs', natural gas consumers, filed actions in state court claiming violations of California's unfair competition and anti-trust laws. Defendants removed to federal court claiming federal law preempted the plaintiffs' state law claims. This Court remanded the cases to state court, finding that the Federal Power Act ("FPA") did not preempt California state law claims of antitrust violations and unfair competition. See id. at 1055.

In this litigation, Plaintiffs sue Defendants in multiple districts in the State of California seeking to recover damages on behalf of natural gas rate payers. In all Complaints, Plaintiffs allege Defendants engaged in anti-competitive activities with the intent to manipulate and artificially increase the price of natural gas for consumers.2 Plaintiffs allege Defendants' actions were in violation of the State of California's Cartwright Act (Cal. Bus. & Prof.Code §§ 16720 et. seq.), the California Unfair Competition Laws (Cal. Bus. & Prof.Code §§ 17200 et. seq.), and the common law.3

Presently before this Court are the Motions to Remand of Plaintiffs Shanghai 1930 Restaurant Partners, L.P. ("Shanghai 1930"), A.L. Gilbert Company ("Gilbert"), Oberti Wholesale Foods, Inc. ("Oberti"), David C. Brown ("Brown"), Laurence Uyeda, et al. ("Uyeda"), Craig Podesta ("Podesta"), and Mark and Susan Benscheidt ("Benscheidt").4 Plaintiffs Team Design, et al. ("Team Design") filed a Notice of Joinder in Plaintiffs Laurence Uyeda's and H & M Roses, Inc.'s Motion for Remand (CV-S-03-1431, Doc. # 8) on January 9, 2004. In addition, pending transfer to this Court, Plaintiff Vittice Corporation ("Vittice") filed a Notice of Joinder and Joinder in Motions for Remand of Cases to State Court (CV-S-04-0532-PMP(PAL), Doc. # 10) and incorporated fully the arguments set forth in Memoranda and Joint Reply Memoranda in support of the Motions to Remand Case to State Court filed by Plaintiffs Shanghai 1930, Gilbert, Oberti, Brown, Team Design and Uyeda.

Defendants Reliant Energy Inc., et al. ("Reliant"), Encana Energy Services, Inc. et. al. ("Encana Energy"), Coral Energy Resources, L.P., et al. ("Coral"), Centerpoint Energy, Inc., et al. ("Centerpoint"), and Encana Corporation, et al. ("Encana Corporation"), filed a Joint Consolidated Opposition to Motion for Remand (CV-S-03-1431-PMP(PAL), Doc. # 20) on February 6, 2004.

Plaintiffs Team Design and Uyeda filed a Consolidated Reply Brief in Support of Motions for Remand (CV-S-03-1431-PMP(PAL), Doc. # 26) on March 5, 2004. In addition to the Consolidated Reply Brief, Team Design and Uyeda filed a Request For Judicial Notice in Support of Plaintiffs' Consolidated Reply Brief (Id.). Defendants filed an Opposition to the Request for Judicial Notice (CV-S-03-1431-PMP(PAL), Doc. # 33) on March 23, 2003.

On April 2, 2004, this Court held a hearing on the aforementioned motions (CV-S-03-1431-PMP (PAL), Doc. # 38). The transcript was produced and placed in the record (CV-S-03-1431-PMP (PAL), Doc. # 44) on April 29, 2004.

In anticipation of pending transfer to this Court, Plaintiff City of Los Angeles, Department of Water and Power ("Los Angeles") filed a Notice of Joinder in Motions for Remand to State Court (CV-S-03-1431, Doc. # 29) on March 19, 2004. City of Los Angeles v. Reliant Energy Servs., Inc., et al. was transferred to this Court under 28 U.S.C. § 1407 and notice was filed on April 5, 2004 (CV-S-04-1431, Doc. # 39). For the reasons set forth below, the Court will grant Plaintiffs' Motions for Remand.

II. LEGAL STANDARD

Under 28 U.S.C. § 1441, "any civil action brought in a State court of which the district courts of the United States have limited jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441. The defendant bears the burden of establishing federal jurisdiction over a suit filed in state court. Harris v. Provident Life Acc. Ins. Co., 26 F.3d 930, 932 (9th. Cir.1994). A strong presumption exists against removal. Gaus v. Miles, 980 F.2d 564, 566 (9th. Cir.1992) ("Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance."). Removal statutes are to be strictly construed in favor of remand to the state courts. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-109, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). Where a case is improperly removed to the federal courts, remand to...

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