Chimney Rock Public Power District et al v. Tri-State Generation and Transmission Association, Inc. et al

Filing 345

ORDER denying 310 Defendants Motion to Strike Jury Demand as to Plaintiffs Only Remaining Withdrawal Claim Seeking the Equitable Remedy of Restitution By Disgorgement; and The 5-Day Jury Trial set to begin on May 19, 2014 in this case is hereby VACATED and RESET for a 7-Day Jury Trial to begin on May 19, 2014 at 8:00 a.m. in Courtroom A801. No trial proceedings will be held on May 26, 2014, which is a Court holiday. The Final Trial Preparation Conference remains set for May 1, 2014 at 2:00 p.m. by Judge William J. Martinez on 4/28/2014.(evana, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 10-cv-02349-WJM-KMT
CHIMNEY ROCK PUBLIC POWER DISTRICT,
MIDWEST ELECTRIC COOPERATIVE CORPORATION,
NORTHWEST RURAL PUBLIC POWER DISTRICT, and
PANHANDLE RURAL ELECTRIC MEMBERSHIP ASSOCIATION,
Plaintiffs,
v.
TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC.,
Defendant.

ORDER DENYING DEFENDANT’S MOTION TO STRIKE JURY DEMAND

Plaintiffs Chimney Rock Public Power District, Midwest Electric Cooperative
Corporation, Northwest Rural Public Power District, and Panhandle Rural Electric
Membership Association (collectively “Plaintiffs”) bring this action for breach of contract
against Defendant Tri-State Generation and Transmission Association, Inc.
(“Defendant”). The case is set for a five-day jury trial beginning on May 19, 2014, with
the Final Trial Preparation Conference set for May 1, 2014. (ECF No. 302.) This
matter is before the Court on Defendant’s Motion to Strike Jury Demand as to Plaintiffs’
Only Remaining Withdrawal Claim Seeking the Equitable Remedy of Restitution By
Disgorgement (“Motion”). (ECF No. 310.) For the reasons set forth below, Defendant’s
Motion is DENIED.
I. ANALYSIS
Defendant’s Motion is predicated on Plaintiffs’ Response to Defendant’s Motion

to Exclude Expert Testimony (ECF No. 294), in which Plaintiffs contended that the
testimony of their damages expert should not be limited because the expert calculated
damages based on a disgorgement theory. (ECF No. 306 at 12-13.) Defendant now
argues that because Plaintiffs have presented evidence supporting only a disgorgement
theory of damages, Plaintiffs are no longer entitled to a jury trial because disgorgement
is an equitable remedy. (ECF No. 310 at 2-6.)
In response, Plaintiffs raise three arguments, each in the alternative: (1) in
addition to disgorgement, Plaintiffs seek expectancy damages, a legal remedy which
entitles them to a jury trial; (2) even if Plaintiffs may only seek a disgorgement remedy,
disgorgement can be either legal or equitable, and here it is legal, entitling Plaintiffs to a
jury trial; and (3) even if there is a possibility that Plaintiffs are not entitled to a jury trial,
the Court should empanel a jury for an advisory verdict. (ECF No. 318.) Because the
Court agrees with Plaintiffs that their request for expectancy damages entitles them to a
jury trial, the Court’s analysis will begin with that argument.
The Seventh Amendment preserves the right of trial by jury “[i]n Suits at common
law, where the value in controversy shall exceed twenty dollars.” U.S. Const. amend.
VII. The Supreme Court has held that in order “[t]o determine whether a particular
statutory action is more analogous to cases tried in courts of law than to suits in courts
of equity or admiralty, [the Court] examine[s] both the nature of the statutory action and
the remedy sought.” Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340, 348
(1998); see also Chauffeurs, Teamsters & Helpers Local No. 391 v. Terry, 494 U.S.
558, 565 (1990). “The more important factor is whether the remedy sought is legal or
equitable in nature.” Adams v. Cyprus Amax Minerals Co., 149 F.3d 1156, 1159 (10th
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Cir. 1998) (citing Terry, 494 U.S. at 565).
The parties agree that Plaintiffs’ remaining claim is a breach of contract claim,
which lies in law, not in equity. (ECF Nos. 310 at 3; 318 at 1.) However, the parties
disagree about the nature of the remedy sought. Plaintiffs point to their Complaint, in
which they requested money damages as well as equitable relief, and contends that it
has never withdrawn that request. (See ECF Nos. 2; 318 at 2-6.) Defendant
recognizes that Plaintiffs pled a request for expectancy damages, but contends that,
because Plaintiffs have not presented any evidence supporting their request for
expectancy damages, they cannot recover expectancy damages as a matter of law,
and thus Plaintiffs’ sole remedy requested is disgorgement of profits, an equitable
remedy. (ECF No. 319 at 1-6.)
Defendant supports its argument that Plaintiffs cannot recover expectancy
damages by pointing out that Plaintiffs admit they have no direct evidence of any
commitments from alternative power suppliers with whom they could have contracted if
Plaintiffs had been able to withdraw from the contract with Defendant. (Id. at 4.) In
response to Plaintiffs’ suggestion that the likelihood of such commitments can be
inferred, Defendant contends that any such inference is purely hypothetical and
speculative. (Id. at 6.)
The Court finds that, despite the lack of direct evidence supporting the
calculation of damages proposed by Plaintiffs, Plaintiffs nevertheless retain their
original request for expectancy damages. Plaintiffs have not withdrawn their request for
such damages, nor has Defendant moved for summary judgment on the grounds that
expectancy damages cannot be proven. Defendant’s arguments go to whether
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Plaintiffs will be able to prove a particular calculation of expectancy damages, or
whether Plaintiffs will be able to present sufficient evidence to establish that Defendant
caused those damages—not whether Plaintiffs’ claim supports a request for such
damages in the first instance. Accordingly, the Court declines to preemptively decide
as a matter of law that Plaintiffs cannot prove expectancy damages by inference from
the evidence they will produce at trial. Rather, it is a question for the jury to determine
whether Plaintiffs are able to show, by a preponderance of the evidence, that they merit
expectancy damages.
Because the Court has found that Plaintiffs seek a legal remedy, this case is
distinguishable from those cases wherein courts have struck a jury demand because
the plaintiff was entitled only to an equitable remedy. See Adams, 149 F.3d at 1161-62
(holding that plaintiffs had no entitlement to monetary benefits “unless and until a court
exercise[d] its equitable powers”, and therefore “their claim for monetary relief [was]
inextricably intertwined with equitable relief” and did not merit a jury trial); see also In re
YRC Worldwide, Inc. ERISA Litig., 2010 WL 4920919, at *5 (D. Kan. Nov. 29, 2010)
(same, citing Adams); Maldonado v. Flynn, 477 F. Supp. 1007, 1010 (S.D.N.Y. 1979)
(because “[t]he typical remedy for elections of directors obtained by misleading proxy
statements is equitable relief setting aside the tainted election”, plaintiff’s request for
money damages did not entitle it to a jury trial where its underlying action was in equity
and claims were “essentially equitable in nature”). Here, the underlying claim is
undoubtedly a legal claim, arising from a contractual duty, and which naturally gives rise
to a remedy in contract. Plaintiffs have requested that contractual remedy, in addition
to equitable relief. The Court finds that the question of Plaintiffs’ entitlement to
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contractual expectancy damages is a matter of common law, not equity, and is a jury
question under the Seventh Amendment.
Therefore, Plaintiffs are entitled to a jury trial on the question of their entitlement
to expectancy damages. Because the Court finds Plaintiffs entitled to a jury trial, it
need not decide the remainder of the arguments raised in the parties’ briefing, namely
whether a demand for disgorgement alone would entitle Plaintiffs to a jury trial, or
whether an advisory jury is appropriate here. (See ECF No. 318 at 7-11.)
As a related matter, the parties’ filings have raised the issue of the length of this
trial. (See, e.g., ECF Nos. 320 at 4-5; 329 at 2; 334 at 1.) The Court sua sponte
reduced the length of this trial from nine days to five days based on the reduction of
claims after two rulings on summary judgment. (ECF No. 302.) The Court has
reviewed the Final Pretrial Order and the parties’ pretrial filings, and has decided that
this case requires seven days to try to a jury. Accordingly, the Court will extend the
current length of the trial to run from Monday, May 19, 2014, through Wednesday, May
28, 2014, with the exception of Monday, May 26, 2014, which is a Court holiday.
II. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.

Defendant’s Motion to Strike Jury Demand as to Plaintiffs’ Only Remaining
Withdrawal Claim Seeking the Equitable Remedy of Restitution By Disgorgement
(ECF No. 310) is DENIED; and

2.

The 5-Day Jury Trial set to begin on May 19, 2014 in this case is hereby
VACATED and RESET for a 7-Day Jury Trial to begin on May 19, 2014 at 8:00
a.m. in Courtroom A801. No trial proceedings will be held on May 26, 2014,
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which is a Court holiday. The Final Trial Preparation Conference remains set for
May 1, 2014 at 2:00 p.m.
Dated this 28th day of April, 2014.
BY THE COURT:

William J. Martínez
United States District Judge

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