Florida Power & Light Company et al v. Georgia Power Company et al

Filing 87

OPINION & ORDER GRANTING Defendants' 68 , 69 , 70 , 71 Motions to Dismiss. Plaintiffs may file an amended complaint consistent with this Order for the limited purpose stated. The Court otherwise DISMISSES Plaintiffs' 65 amended complaint. Signed by Judge Michael L. Brown on 3/26/2024. (kng)

FIN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
Florida Power & Light Company
and JEA,
Plaintiffs,
Case No. 1:22-cv-1798-MLB
v.
Georgia Power Company, et al.,
Defendants.
________________________________/
OPINION & ORDER
For the reasons set forth below, the Court GRANTS the motions to
dismiss filed by Defendants Georgia Power Company, Oglethorpe Power
Company, Municipal Electric Authority of Georgia, and the City of
Dalton. (Dkts. 68, 69, 70, 71.)
I.

Background
The Robert W. Scherer Plant (“Plant Scherer”) is a coal-fired power

plant with four power generating units.

(Dkt. 65 ¶ 1.)

Defendants

Georgia Power Company (“Georgia Power”), Municipal Electric Authority
of Georgia (“MEAG”), Oglethorpe Power Company (“Oglethorpe”) and the

City of Dalton (“Dalton”) jointly own Units 1 and 2. (Id. ¶ 2.) Georgia
Power and Plaintiff Florida Power & Light Company (“FPL”) jointly own
Unit 3. (Id. ¶ 3.) Plaintiffs FPL and Jacksonville Electric Authority
(“JEA”) jointly own Unit 4. (Id.) Collectively, Plaintiffs and Defendants
are “Owners” of Plant Scherer. (Id. at 8.) This case arises from Plaintiffs’
decision to retire Unit 4 in 2021, Georgia Power’s and Plaintiff FPL’s
decision to retire Unit 3 in 2028, and Defendants’ decision to impose costs
on Plaintiffs for facilities that will be constructed and used after Units 3
and 4 are retired. (Id. ¶¶ 6–7, 10–11.)
A.

Contractual Framework

The parties have a series of agreements that set forth their roles,
rights, and obligations toward one another in owning and running Plant
Scherer and the individual units. All the parties, for example, signed the
Plant Scherer Managing Board Agreement (“Managing Agreement”),
which governs management of Plant Scherer.
(Managing Agreement).)

(Id. ¶ 33; Dkt. 65-1

The Managing Agreement established the

Managing Board, which consists of a person designated by each
owner—that is, all the parties to this case. (Dkt. 65-1 at 23.) The
Managing Agreement states that each board member “shall be

2

authorized to represent the Owners which appointed him or her and shall
have the authority to obligate such Owner.” (Id. at 24.)
Georgia Power and Plaintiff FPL also executed the Unit 3
Operating Agreement and Unit 3 Ownership Agreement, referred to as
the “Unit 3 Participation Agreements” to govern management of Unit 3.
(Dkts. 65 ¶¶ 33, 38; 65-5 (Unit 3 Operating Agreement); 65-6 (Unit 3
Ownership Agreement).) Likewise, Plaintiffs and Georgia Power signed
the Unit 4 Operating Agreement, the Unit 4 Ownership Agreement, and
the Unit 4 Accounting Agreement, which Plaintiffs refer to as the Unit 4
Participation Agreements and which govern management of Unit 4.1
(Dkts. 65 ¶¶ 33, 37; 65-2 (Unit 4 Operating Agreement); 65-3 (Unit 4
Ownership Agreement).)
This

lawsuit

involves

costs

for

so-called

common

facilities—generally defined as facilities at the plant that are shared by
some combination of the separate power generating units. The Units 3

Plaintiffs include the Unit 4 Accounting Agreement in their definition
of the “Participation Agreements.” (Dkt. 65 ¶ 41.) But the Unit 4
Operating Agreement does not include the Accounting Agreement in that
definition. (Dkt. 65-2 at 23.) Plaintiffs claim it is somehow “incorporated
by reference” but does not really explain that logic. (Dkt. 65 ¶ 41.)
1

3

and 4 Operating Agreements provide a more precise definition. They
define “Plant Scherer Common Facilities” as all real and personal
property “intended to be used in common” by one or both of Units 1 and 2
and one or both of Units 3 and 4. (Dkts. 65 ¶ 49; 65-5 at 26; 65-2 at 22.)
So the definition excludes real and personal property used only by
Units 1 and 2 or only by Units 3 and 4. The Ownership Agreements state
that the parties own the Plant Scherer Common Facilities as tenants in
common based on their pro rata ownership of the individual units.
(Dkts. 65-6 at 80–81; 65-3 at 84–85.) The Operating and Ownership
Agreements state that, unless expressly provided, costs arising from the
Plant Scherer Common Facilities are shared in proportion to a party’s
ownership interest therein. (Dkts. 65-6 at 81; 65-5 at 8, 91–92; 65-3 at
85; 65-2 at 8, 66.) In the Managing Agreement, the parties agreed that
the allocation of costs for the Plant Scherer Common Facilities can be
changed only with the approval of all parties. (Dkt. 65-1 at 75.)

4

The Managing Agreement names Georgia Power as the “Common
Facilities Agent” for all Plant Scherer Owners.2 (Dkts. 65 ¶ 54; 65-1 at
12.) As such, Georgia Power operates Plant Scherer and its common
facilities on behalf of the other Owners and undertakes (among other
things)

planning,

licensing,

design,

construction,

operation,

maintenance, renewal, addition, and replacement of (among other
things) the Plant Scherer Common Facilities.

(Dkt. 65 ¶ 58; 65-1

at 10–11.)3
The Managing Agreement also sets forth the budgeting process for
the Plant Scherer Common Facilities. It states that the Managing Board
shall “review and approve, disapprove or revise and approve the Capital
Budgets and Operating Budgets with respect to the Plant Scherer
Common Facilities to be submitted annually (or more often upon revision

Plaintiff FPL also appointed Georgia Power as its agent under the
Unit 3 Participation Agreements. (Dkt. 65 ¶ 153.) Plaintiffs did the
same under the Unit 4 Participation Agreements. (Id. ¶ 152.)

2

Strangely, Plaintiffs contend this provision of the Managing Agreement
imposes obligations on Georgia Power regarding “funding” and
“implementing various owner-approved budgets.” (Dkt. 65 ¶ 58.) It does
not. As explained, separate provisions impose those obligations.

3

5

by the Common Facilities Agent) by the Common Facilities Agent, all
pursuant to Article 5.1 hereof.” (Dkt. 65-1 at 26.)
Article 5.1 outlines the annual budgeting process for the Plant
Scherer Common Facilities.

Specifically, each owner may provide

Georgia Power (the Common Facilities Agent) “information to be used in
the formulation” of the next year’s capital budget and operating budget
for the Plant Scherer Common Facilities. (Id. at 36.) Georgia Power has
a certain amount of time to prepare and submit a proposed annual budget
for approval “by the Board by Requisite Owner Approval.” (Id.) This
requires approval by “Owners who collectively hold at least 76% of the
undivided ownership interest” in the power generating units. (Id. at 18
(defining “Requisite Owner Approval”).) If enough of the Owners do not
approve the proposed budget within the required time, the Managing
Board may adopt a revised budget, again by Requisite Owner Approval.
Article 5.1 states that any revised budget adopted by the Managing
Board in this situation “shall comply with the Prudent Utility Practice”
and legal requirements. (Id. at 37.) If the Managing Board fails to adopt
a revised budget within a certain time, the initial budget submitted by
Georgia Power automatically becomes binding.

6

(Id.)

Specifically,

Article 5.1 explains that, if the Managing Board is unable to approve any
other proposed budget, “then the budget to be utilized shall be the one
submitted by [Georgia Power], and such budget shall be deemed
approved by the Board and binding on the Owners.” (Id.)
The Managing Agreement states that the initial budget Georgia
Power proposes must “conform to the requirements and guidelines stated
in Appendix A.” (Id. at 36.) That appendix (titled “Guidelines for Capital
Budgets and Operating Budgets for Plant Scherer”) repeats some of
Article 5.1 but also provides additional obligations. As to Georgia Power’s
initial proposed budget, it states that, among other things: (1) each owner
can provide Georgia Power information it “wishes to be utilized [by
Georgia Power] in formulation of budgets for the following calendar
year”; (2) Georgia Power must prepare and submit “a written budget
estimate of Operating Costs and Cost of Construction for the Plant
Scherer Common Facilities”; and (3) Georgia Power’s budget “shall be
based on information reasonably available . . . [and] shall be in a format
that reflects the amounts [Georgia Power] would expect to bill each
Owner pursuant to the underlying Participation Agreements.”

(Id.

at 71.) Appendix A then recounts the approval process from Article 5.1,

7

specifically that, if the Managing Board does not approve Georgia
Power’s proposed budget by Requisite Owner Approval, the Managing
Board “by approval of a majority” may “submit an alternative revised”
budget that complies with the Prudent Utility Practice but that, if the
Managing Board fails to do so, “the budget to be used shall be the one
submitted by [Georgia Power], and such Budget be deemed approved by
the Board and binding on all of the Owners to which such Budget
applies.” (Id. at 72.) As explained, both Article 5.1 and Appendix A
recognize the possibility that, if the Owners reject Georgia Power’s
proposed budget but fail to adopt a revised budget within a certain time,
Georgia Power’s initial budget becomes effective automatically.
B.

New Environmental Regulations

In 2020, the U.S. Environmental Protection Agency released new
effluent limitation guideline (“ELG”) regulations applicable to Plant
Scherer and other coal-fired electric power plants. (Dkt. 65 ¶¶ 14, 65.)
The regulations allow operators to comply with the new requirements by
constructing new facilities to handle waste streams from active units or
by retiring subject units. (Id. ¶ 68.) To comply with the ELG regulations,
Plaintiffs decided to retire Unit 4, and Georgia Power and Plaintiff FPL

8

decided to retire Unit 3. (Id. ¶¶ 6, 7.) Neither will reverse their decision.
(Id. ¶ 12.) Defendants, however, decided against retiring Units 1 and 2,
instead electing to build new facilities to comply with the regulations.
(Id. ¶¶ 8, 9.) The facilities include new landfills and cells to store the
by-products of coal combustion and a new wastewater treatment facility
(“new facilities”). (Id. ¶ 9.)
C.

Fallout and the Present Suit

Understandably, Plaintiffs do not want to pay for the new facilities.
So, in September 2020, Plaintiff FPL informed Georgia Power of
Plaintiffs’ decision to retire Unit 4. (Id. ¶ 78.) About a week later, all the
Owners met in preparation for an upcoming board meeting for
consideration and approval of the 2021 common facilities budget. (Id.
¶ 79.) Plaintiffs again explained their decision to retire Unit 4, and
Plaintiff FPL explained Plaintiffs would not be responsible for future
ELG-related capital and operating costs, including costs for constructing
the new facilities. (Id. ¶¶ 79, 81.) Plaintiffs repeated their position at
the board meeting, saying “they should not be obligated for investment
costs related to the [new facilities], which would be incurred years after
the retirement of Unit No. 4.” (Id. ¶ 81.) Despite that, Georgia Power

9

proposed a budget that attributed costs for the new facilities to Plaintiffs.
(Id. ¶ 82.) Plaintiffs voted against the budget. (Id. ¶ 83.) Oglethorpe,
MEAG, and Dalton argued that, even if the owners of a unit elect to retire
their unit, the owners of that unit should still be responsible for costs
associated with the new facilities. (Id. ¶ 84.) After the meeting, Plaintiff
FPL submitted a “revised alternate 2021 budget” that eliminated
allocation of ELG-related capital and operating and maintenance costs to
Unit 4 owners. (Id. ¶¶ 85, 105.) Although not specifically alleged, it
appears the Managing Board rejected Plaintiff FPL’s revised 2021
budget, and Georgia Power’s budget became binding.
Plaintiff FPL continued to complain about allocation of costs to
Unit 4.

(Id. ¶¶ 86–87.)

It repeated this throughout the parties’

discussion of the 2022 budget. (Id. ¶¶ 88–104.) As part of that budgeting
process, Georgia Power proposed a Unit 4 business plan for 2022-2026
that attributed costs for the new facilities to Unit 4, Plaintiff FPL
submitted an “amended motion” to Georgia Power that objected to the
allocation, and Defendants responded by saying the Managing
Agreement and other contracts did not contemplate changes to
allocations of common facilities costs upon the retirement of a unit. (Id.

10

¶¶ 89–98.) Plaintiffs don’t allege that Georgia Power proposed a 2022
budget, but it must have done so because Plaintiffs allege that, at the
September 2021 budget meeting, they “voted down” several budgets: the
2022 proposed common facility operation and maintenance budget (along
with the common facility capital budget), the 2022 proposed Units 3 and 4
common operation and maintenance budget, an environmental capital
budget, and the 2022 proposed Units 3 and 4 common capital budgets.
(Id. ¶ 99.)4 Plaintiffs submitted proposed, revised budgets and, at a
subsequent meeting, continued to insist they should not have to bear any
costs associated with the new facilities since Units 3 and 4 will not use
them. (Id. ¶¶ 100–01.)
In October 2021, Georgia Power sent revised 2022-2026 business
plans for Unit 4, again allocating the costs at issue to Unit 4 owners. (Id.
¶ 103.) Plaintiff FPL objected to those business plans. (Id. ¶ 104.) Later
that month, Plaintiffs “submitted an alternate Common Facilities

How these budgets differ Plaintiffs do not explain, but apparently, they
in some way or another attributed costs for construction of the new
facilities to Unit 3 and 4 owners. Plaintiffs also do not explain exactly
when Plaintiff FPL (and Georgia Power) announced their decision to
retire Unit 3, but it must have happened before this because (as
explained) Plaintiffs objected to allocation of costs to that unit as well.

4

11

operations and maintenance budget and an alternate Common Facilities
capital budget in response to the budgets proposed by Georgia Power at
the September 30, 2021 Board meeting.” (Id. ¶ 105.) In November 2021,
Georgia Power told Plaintiff FPL that it had spoken with the other
Owners and they had (as a group) rejected Plaintiffs’ alternative budget.
(Id. ¶¶ 106, 108.)

As a result, the initially-proposed budget—that

attributes the contested costs to Plaintiffs—became effective. (Id.)
Plaintiffs filed suit for declaratory judgment.

(Dkt. 1.)

After

briefing, the Court held a hearing and dismissed the original complaint
with leave to amend.

(Dkts. 62, 63.)

Plaintiffs filed an amended

complaint, alleging breach of contract against Georgia Power (Count I),
breach of contract against all Defendants (Count II), declaratory
judgment against all Defendants (Count III), and breach of fiduciary duty
against Georgia Power (Count IV).

(Dkt. 65.)

Defendants move to

dismiss Plaintiffs’ amended complaint. (Dkts. 68, 69, 70, 71.)
II.

Standard of Review
“To survive a motion to dismiss, a complaint must contain sufficient

factual matter, accepted as true, to state a claim to relief that is plausible
on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A claim has

12

facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Id. This requires more than a “mere possibility
of misconduct.” Id. at 679. Plaintiffs’ well-pled allegations must “nudge[]
[his] claims across the line from conceivable to plausible.” Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007).
III. Discussion
As the Court noted, Plaintiffs’ initial complaint was difficult to
follow and did not clearly assert any breach of contract or right to relief.
(Dkt. 58.) After a hearing, the Court permitted Plaintiffs an opportunity
to amend their complaint. At the heart of Plaintiffs’ amended complaint
remains its allegation that the new facilities should not be considered
Plant Scherer Common Facilities under the Managing Agreement and
Participation Agreements. That is simple enough. As already explained,
those agreements define Plant Scherer Common Facilities as “all the
property, both real and personal, intended to be used in common by, or
in connection with, one or both of Scherer Unit No. 1 and Scherer Unit
No. 2 and one or both of Scherer Unit No. 3 and Scherer Unit No. 4.”
(Dkt. 65-2 at 22.) “Plant Scherer Common Facilities” also include “the

13

equipment and facilities listed” in exhibits to the Units 3 and 4
Ownership Agreements. (Id.; Dkt. 65-5 at 26.) Those exhibits list ash
handling and water treatment systems. (Dkts. 65-3 at 214; 65-6 at 203.)
The Participation Agreements further state that Plant Scherer Common
Facilities include additional facilities that may be constructed “which are
intended to be used in common” in the same manner provided that
(among

other

things)

“the

acquisition

of

such . . . additional

facilities . . . shall be necessary in order to keep one or both of Scherer
Unit No. 1 and Scherer Unit No. 2 and one or both of Scherer Unit No. 3
and Scherer Unit No. 4 in good operating condition or to satisfy the
requirements of any Governmental Authority having jurisdiction over
one or both of Scherer Unit No. 1 and Scherer Unit No. 2 and one or both
of Scherer Unit No. 3 and Scherer Unit No. 4.” (Dkt. 65-2 at 22–23).
Plaintiffs argue the new facilities are not Plant Scherer Common
Facilities because both Units 3 and 4 will retire before the new facilities
become functional, so they are not “intended to be used in common by, or
in connection with, one or both of Scherer Unit No. 1 and Scherer Unit
No. 2 and one or both of Scherer Unit No. 3 and Scherer Unit No. 4.”
(Dkts. 65 ¶ 117; 65-2 at 22).

14

Dalton says the Court should not credit Plaintiffs’ allegations
because their theory has not accrued. (Dkt. 71 at 29.) Dalton explains
the Court cannot assess whether Units 3 and 4 will use or intend to use
the new facilities because the facilities do not yet exist. (Id. at 27–29.)
Dalton thus challenges Plaintiffs’ factual allegations. But at the motion
to dismiss stage, the Court must accept Plaintiffs’ allegations as true.
Iqbal, 556 U.S. at 678. MEAG contends Plaintiffs essentially concede the
new facilities were intended to be Plant Scherer Common Facilities
because Plaintiffs allege the money was budgeted in 2019, before
Plaintiffs announced their plans to retire Units 3 and 4. (Dkt. 68-1 at
22–23.) But the amended complaint says that, in 2019, the capital budget
allocated money to address the ELG regulations. (Dkt. 65 ¶ 77.) It does
not say the money was budgeted for the new facilities specifically.5
Georgia Power argues the new facilities are Plant Scherer Common
Facilities because they are additional environmental compliance

To the extent Defendants raise new arguments about whether the new
facilities are Plant Scherer Common Facilities in their replies, the Court
will not consider them. United States v. Ga. Dep’t of Natural Res., 897 F.
Supp. 1464, 1471 (N.D. Ga. 1995) (“This court will not consider
arguments raised for the first time in a reply brief.”).
5

15

facilities “intended to be used in common by, or in connection with, each
of the four units at Plant Scherer.” (Dkt. 69-1 at 10.) It adds that these
costs previously were included as Plant Scherer Common Facilities, and
Plaintiffs’ subsequent decision to retire Units 3 and 4 does not change the
proper characterization of the facilities as Plant Scherer Common
Facilities. (Id. at 10–11.) Plaintiffs respond that the parties’ course of
dealing undermines Georgia Power’s interpretation of the agreement
because, as new landfills were constructed in the past, the Managing
Agreement was updated to expressly include those facilities. (Dkt. 77
at 5.) That might be a real dispute. And given Plaintiffs’ insistence that
“course of dealing” evidence supports their argument, that might be
enough to allege plausibly that the new facilities fall outside the
definition of Plant Scherer Common Facilities. See also Ga. Code Ann.
§ 11-1-303 (explaining that a course of dealing may be used to interpret
an express contract).
The issue presented, however, is whether Plaintiffs have a
contractual right to dispute the contrary interpretation adopted by
Defendants, specifically whether: (1) Georgia Power breached any
contract when it included costs for the new facilities in the 2021 and 2022

16

proposed budgets for Plant Scherer Common Facilities and (2) all
Defendants breached any contract when they rejected Plaintiffs’ revised
budgets that excluded those costs. This is what Plaintiffs struggle to
plausibly allege. The Court has difficulty following Plaintiffs’ contractual
theory. Bouncing from one agreement with certain obligations in certain
situations to other agreements with other obligations in other situations,
Plaintiffs amass a tangled skein of contractual rights that settles on an
obligation by all Defendants to follow a so-called “Prudent Utility
Practice” and some concept of “fairness” and “equity” in the budgeting
process. (Dkt. 65 ¶ 126.) They then assert from whole cloth an obligation
on all Defendants to do things like “engage in meaningful dialogue,”
“independently determine” how costs should be allocated, and vote some
way other than “up or down.” (Id. ¶¶ 45, 138.) The Court has given
Plaintiffs an opportunity to reallege their contract claim, but the more
Plaintiffs say, the less the Court knows.6
Indeed, one defendant moves to dismiss Plaintiffs’ amended
complaint as a shotgun pleading. (Dkt. 70-1 at 8–11.) The Court finds

6

Taylor Swift, willow, on Evermore (Republic Records 2020).
17

that a close call. The first three counts incorporate all prior paragraphs,
and Plaintiffs use vague terms throughout without specifying the
agreement to which they refer or from where they derived certain
contractual provisions.

Plaintiffs, for example, say Georgia Power

breached “the foregoing agreements,” having previously referred to
numerous provisions of six different contracts. (Dkt. 65 ¶ 126.) And they
identify five different ways in which Georgia Power allegedly did so. But
only one defendant moves to dismiss the amended complaint as a shotgun
pleading.

And, based on Defendants’ motions to dismiss, it appears

Defendants have (or believe they have) adequate notice of the claims
against them. See Yeyille v. Miami Dade Cnty. Pub. Sch., 643 F. App’x
882, 884 (11th Cir. 2016).7 So the Court declines to dismiss the amended
complaint as a shotgun pleading and has painstakingly tried to make
sense of Plaintiffs’ assertions. To the extent the Court has misunderstood
parts of the amended complaint, the fault lies with Plaintiffs.

The Court recognizes Yeyille is unpublished and nonbinding. The Court
cites it as instructive nonetheless. See Searcy v. R.J. Reynolds Tobacco
Co., 902 F.3d 1342, 1355 n.5 (11th Cir. 2018) (“Unpublished cases do not
constitute binding authority and may be relied on only to the extent they
are persuasive.”).

7

18

A.

Count I

The elements of a breach of contract claim are “(1) breach and the
(2) resultant damages (3) to the party who has the right to complain
about the contract being broken.” UWork.com, Inc. v. Paragon Techs.,
Inc., 321 Ga. App. 584, 590 (2013) (citing Norton v. Budget Rent A Car
Sys., 307 Ga. App. 501, 502 (2010)).
Plaintiffs allege Georgia Power breached the Managing Agreement,
the Participation Agreements, and the Accounting Agreement “by failing
to follow Prudent Utility Practice, fairness, and equity” when it:
(1) proposed the Unit 4 business plan that ignored the fact that Unit 4
would never use the new facilities; (2) mis-defined certain costs for the
new facilities as Plant Scherer Common Facilities; (3) proposed a revised
budget that again mis-defined and mis-allocated these costs; (4) voted to
approve the revised budget; and (5) rejected Plaintiffs’ revised budget
and imposed the previously contested budgets. (Dkt. 65 ¶¶ 123, 126.)
Georgia Power says the Prudent Utility Practice does not address the
allocation of common costs and that the Accounting Agreement
procedures do not apply to this dispute. (Dkt. 69-1 at 8–16.)

19

Plaintiffs’ first alleged breach is dead on arrival. Plaintiffs allege
Georgia Power’s proposed business plans violated the Prudent Utility
practice, fairness, and equity. Plaintiff, however, identifies no contract
that discusses business plans or Georgia Power’s obligations in creating
or providing business plans.

Plaintiffs identified no provision that

obligated Georgia Power to follow the Prudent Utility Practice, fairness,
or equity when creating business plans. And it does not allege that the
business plans caused the imposition of costs on Plaintiff.

To the

contrary, Plaintiffs allege that happened because of the proposed
budgets, not previous business plans. (Dkt. 65 ¶ 106.)8
Plaintiffs’ fourth alleged breach also fails immediately. Defendants
did not vote to approve the revised budget. The 2022 budget became
applicable—as Plaintiffs allege and as discussed in more detail

The Court notes the Unit 4 Operating Agreement imposes some
obligations on Georgia Power regarding the creation of business plans for
the unit. (Dkt. 65-2 at 37-38.) It provides that, if the Unit 4 operating
committee does not adopt Georgia Power’s proposed business plan, the
committee must establish a budget that “shall be sufficient to ensure
compliance with the Prudent Utility Practice.” (Id.) It does not, however,
require Georgia Power to do that in proposing the business plan. (Id.)
Regardless, it is not clear the Unit 4 business plan involves common
facilities, that process is not at issue here, and Plaintiffs don’t even
mention this provision in the Amended Complaint.

8

20

below—when Defendants rejected Plaintiff FPL’s proposed alternative
budget.

(Id.)

Indeed, Plaintiffs’ only allegation involving a “vote”

concerns the motion Plaintiff FPL submitted in 2021, not the budget. (Id.
¶ 95.) Plaintiffs may not proceed on these claims.
The Court thus considers whether Plaintiffs’ second, third, and fifth
allegations state a claim for breach of contract. To be clear, the Court
considers whether, as part of the 2022 budgeting process, Georgia Power
breached any of the contracts identified by not following Prudent Utility
Practice, fairness, or equity when it proposed a budget that included costs
for the new facilities as Plant Scherer Common Facilities and rejected
Plaintiffs’ revised budget.9
1.

Prudent Utility Practice

Plaintiffs say Georgia Power had an obligation under the Unit 4
Accounting Agreement and the Managing Agreement to allocate costs

It is not clear if Plaintiffs’ breach of contract claim involves the 2021
budget. After all, while Plaintiffs allege that Plaintiff FPL objected to
the imposition of costs for the new facilities on Unit 4 owners, voted
against Georgia Power’s proposed budget, and submitted a revised
budget, Plaintiffs do not allege the adoption of the 2021 budget or explain
the process by which that came about. (Dkt. 65 ¶¶ 81, 83, 85.) But it
does not really matter as the analysis is the same.

9

21

and propose budgets according to the Prudent Utility Practice. (Dkt. 65
¶ 123.)

They claim Georgia Power violated that obligation when it

treated costs for the new facilities as Plant Scherer Common Facilities,
proposed a “revised budget” that included those costs, and rejected
Plaintiffs’ “revised budget.”

(Id. ¶ 126.)

The Managing Agreement

defines Prudent Utility Practice as:
[A]ny of the practices, methods and acts engaged in or
approved by a significant portion of the electric utility
industry prior to such time, or any of the practices, methods
and acts which, in the exercise of reasonable judgment in light
of the facts known at the time the decision was made, could
have been expected to accomplish the desired result at the
lowest reasonable cost consistent with good business
practices, reliability, safety and expedition. ‘Prudent Utility
Practice’ is not intended to be limited to the optimum practice,
method or act to the exclusion of all others, but rather to be a
spectrum of possible practices, methods or acts having due
regard for, among other things, manufacturers’ warranties
and the requirements of Governmental Authorities of
competent jurisdiction and the requirements of the
Participation Agreements.
(Dkt. 65-1 at 17.)
Again, Plaintiffs say the Prudent Utility Practice applies broadly to
Georgia Power as the Common Facilities Agent, including when Georgia
Power sets budgets. (Dkt. 77 at 8.) Georgia Power says the Prudent
Utility Practice addresses the operation of the plant consistent with

22

accepted industry practices, not the allocation of costs among co-owners
in accordance with the provisions of the parties’ agreements. (Dkt. 69-1
at 11.) The Court agrees with Georgia Power.
Nothing in the definition of Prudent Utility Practice or the
budgeting process suggests that the standard applies to allocation of
costs among co-owners in the budgeting process. Rather, it appears to
invoke a general standard for how various utility-related obligations are
implemented. It refers to the “practices . . . approved by a significant
portion of the electric utility industry” or that would be “expected to
accomplish the desired result at the lowest reasonable cost consistent
with good business practices, reliability, safety and expedition.”
(Dkt. 65-1 at 17.) This sounds like practices for running a utility safely
and efficiently, not how to allocate costs between business partners. The
provision also states that the Prudent Utility Practice is not the
“optimum practice” but a “spectrum of possible practices, methods or
acts” that considers (among other things) “manufacturers’ warranties
and the requirements of Governmental Authorities of competent
jurisdiction”—again describing a range of behaviors more akin to
operations rather than cost allocation.

23

(Id.)

One would not expect

business partners to consider warranties and government regulations in
deciding how to equitably allocate costs between them. But one would
certainly consider those things in determining how to operate a utility.
Another provision of the Managing Agreement applies the Prudent
Utility Practice to the physical separation of the Plant Scherer Coal
Stockpile. (Id. at 43.) This provision buttresses the plain reading of the
Prudent Utility Practice as applying to operational issues rather than
budgeting for cost allocation.
Even if the Prudent Utility Practice applied to cost allocation,
Plaintiffs allege—in a conclusory manner—that Georgia Power breached
its obligations to perform under the Prudent Utility Practice. Plaintiffs
failed to allege that Georgia Power’s cost-allocation method would not
have been approved by a significant portion of the electric utility industry
or that it could not have been expected to accomplish the desired result
(compliance with the ELG regulations) at the lowest reasonable cost
consistent with good business practices, reliability, safety and expedition.
So, even if this provision applied, their conclusory allegation cannot state
a claim. Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d. 1182, 1188 (11th
Cir. 2002) (“[C]onclusory allegations, unwarranted deductions of facts or

24

legal conclusions masquerading as facts will not prevent dismissal.”).
Plaintiffs thus cannot establish that Georgia Power breached the
Prudent Utility Practice standard.
Other provisions of the Managing Agreement also preclude
Plaintiffs’ argument that Georgia Power was required to follow the
Prudent Utility Practice in allocating costs—at least in the process
Plaintiffs allege in the amended complaint. As explained above, Article
5.1 and Appendix A of the Managing Agreement set the guidelines for
capital and operating budgets for Common Facilities and explain Georgia
Power’s obligations in proposing budgets.

Nothing in those sections

impose the Prudent Utility Practice on Georgia Power when proposing
budgets. It is just not part of that language.10

The Court has already explained is conclusion the Prudent Utility
Practice involves obligations Georgia Power (and perhaps others) must
follow in operating the plant rather than how it (or they) must allocate
costs or propose budgets. For the remainder of this Order, the Court
assumes otherwise, that is, that the Prudent Utility Practice may be
imported into the actual budgeting process pursuant to Article 5.1 and
Appendix A of the Managing Agreement as Plaintiffs allege. The Court
does so because, even if Plaintiffs are correct that the standard applies in
some budgeting instances, it did not arise in the budgeting process that
occurred in this case.
10

25

It seems Plaintiffs know this. In their factual allegations, Plaintiffs
refer to Georgia Power’s 2020 and 2021 submissions to the Owners as
“budgets” or “proposed budgets”—but never “revised budgets.”

(Id.

¶¶ 82–83, 91, 99, 106.)11 They simply never allege the budgets Georgia
Power submitted in 2020 and 2021 for cost allocation were “revised”
budgets. But then, in their contract claim allegations, they use that term,
saying Georgia Power proposed a “revised” budget. (Dkt. 65 ¶ 126(c).)
Why did Plaintiffs suddenly change terminology? Maybe it was a
mistake. But maybe Plaintiffs were being more intentional and trying to
inject the Prudent Utility Practice into Georgia Power’s budgeting
process where it does not belong. (Id. ¶ 126; Dkt. 77 at 16–17.) Article
5.1 of the Managing Agreement says a “revised Capital Budget or
Operating Budget . . . shall comply with Prudent Utility Practice and
Legal Requirements.” (Dkt. 65-1 at 37 (emphasis added).) So maybe
Plaintiffs insert the word “revised” into their contract allegations to

Elsewhere, Plaintiffs refer to their own alternative budgets as “revised”
(id. ¶¶ 85, 100), to a “revised” business plan that Georgia Power provided
(id. ¶ 103), and to one discussion in 2019 about Georgia Power providing
a revised budget because of the new regulations (id. ¶ 77). But those
agreements are not part of Plaintiffs’ claim for breach of contract.

11

26

invoke this provision. Indeed, that is exactly what they argue. (Dkt. 77
at 16 (insisting the Prudent Utility Practice applies to budgets because
“[Article] 5.1 of the Managing Agreement explicitly specifies that a revise
capital budget or operating budget ‘shall comply with the Prudent Utility
Practice.’”).) But that provision explains that a “revised budget” is the
budget that the Managing Board may adopt after rejecting Georgia
Power’s proposed budget. (Dkt. 65-1 at 37.) Article 5.1 does not say
Georgia Power must propose a budget that complies with Prudent Utility
Practice.

To the extent the Prudent Utility Practice applies to the

allocation of costs (which it does not) it applies only to the “revised
budget” that the Managing Board adopts. Appendix A says the same.
(Id. at 71–72.)
And, of course, that did not happen in this case. The Managing
Board never proposed a revised budget, and Georgia Power’s initial
budget was enacted because of the automatic enactment provisions of
Article 5.1 and Appendix A. The Court concludes Plaintiffs used the term
“revised budget” in paragraph 126(c) to misconstrue what happened, a
near admission that they cannot inject the Prudent Utility Practice under
the provisions that actually apply to Georgia Power’s conduct. Again,

27

Plaintiffs point to no contract provision that required Georgia Power to
apply the Prudent Utility Practice in “rejecting” Plaintiffs’ proposed
budget. Indeed, the agreements impose no standards by which an owner
must evaluate another owner’s budget—or at least Plaintiffs have
identified none. So that allegation can provide no contract claim.
Finally, Georgia power did not “impose” the “previously contested
budgets” as Plaintiffs allege. (Dkt. 65 ¶ 126(e).) While Plaintiffs use the
word “impose” (id. ¶ 108), that is a mischaracterization of the automatic
enactment provision of Article 5.1 and Appendix A of the Managing
Agreement. The Court need not accept as true factual allegations that
contradict the clear language of the contract. Darrin Cupo, D.M.D, P.A.
v. Orthodontic Centers of Am., Inc., 2008 WL 11333239, at *4 (S.D. Fla.
Jan. 15, 2008) (“Where a cause of action stems from a contract that is
attached to the complaint as an exhibit, the contract is considered part of
the record for a Rule 12(b)(6) motion to dismiss.

If the contract

demonstrates unambiguously that the plaintiff’s relief is not merited, the
claims should be dismissed.” (alteration omitted)).
The Court concludes Plaintiffs’ reliance on the Prudent Utility
Practice fails to state a breach of contract based on Georgia Power’s

28

allocation of costs for the new facilities in the 2021 and 2022 proposed
budgets or its rejection of Plaintiffs’ revised budgets for the same years.
2.

Fair and Equitable Policy

Plaintiffs also say that, by mis-defining the new facilities as Plant
Scherer Common Facilities, Georgia Power failed to allocate fairly and
equitably costs to Plaintiffs under the Accounting Agreement. (Dkt. 65
¶¶ 126, 128.)
The Accounting Agreement provides:
[i]f no accounting policy or allocation method or procedure has
been specified herein, for a particular cost or cost component,
[Georgia Power], as Agent, or the Scherer Unit No. 4
Participants shall propose a fair and equitable policy or
allocation method to be used and submitted for approval by
Scherer Unit No. 4 Participants and [Georgia Power], as
Agent.
(Dkt. 65-4 at 9 (Accounting Agreement) (emphasis added).) As Georgia
Power points out, Plaintiffs do not allege the absence of an existing
accounting policy or allocation method for the new facilities or that
Georgia Power failed to propose a fair and equitable policy. Rather,
Plaintiffs bootstrap this provision into a general “fair and equitable”
standard that (they say) controls Georgia Power’s allocation of costs
generally. That is not what the contract says. Plaintiffs’ reliance on the

29

“fair and equitable” language in the Accounting Agreement fails to state
a breach of contract based on Georgia Power’s allocation of costs for the
new facilities in the 2021 and 2022 proposed budgets or its rejection of
Plaintiffs’ revised budgets for the same years.
3.

Provision of Studies to Plaintiffs

Plaintiffs next allege Georgia Power breached the Managing
Agreement by failing to provide requested information to Plaintiffs.
(Dkt. 65 ¶ 129.) Georgia Power disputes this, pointing out that Plaintiffs
identify no contract provision requiring them to provide studies for
compliance with the ELG regulations. (Dkt. 69-1 at 16–17.) The Court
agrees with Georgia Power. Plaintiffs identify no obligation by Georgia
Power to provide such studies to Plaintiffs. While Plaintiffs may have
alleged that the Managing Board had an obligation to conduct studies
(which Georgia Power allegedly did), Plaintiffs identify no provision
requiring Georgia Power to provide the studies to Plaintiffs. (Dkt. 65
¶¶ 35, 164.) Plaintiffs cannot establish a breach here either.
4.

Good Faith and Fair Dealing

Finally, Plaintiffs allege Georgia Power breached the implied
covenant of good faith and fair dealing by improperly allocating costs to

30

Plaintiffs. (Id. ¶ 131.) As Georgia Power points out, it followed the
express terms of the parties’ agreements to impose a budget for the Plant
Scherer Common Facilities. (Dkt. 69-1 at 17-18.) The Managing Board
took it from there. Plaintiffs thus cannot establish a breach of the implied
covenant of good faith and fair dealing. Automatic Sprinkler Corp. of Am.
v. Anderson, 243 Ga. 867, 868 (1979) (“There can be no breach of an
implied covenant of good faith where a party to a contract has done what
the provisions of the contract expressly give [it] the right to do.”); see also
Metellis v. Bank of Am., N.A., 2016 WL 7985330, at *3 (M.D. Ga. Mar. 28,
2016) (citations omitted) (“Georgia law does not recognize an
independent cause of action based on the covenant of good faith and fair
dealing.”).
For

all

these

reasons,

the

Court

dismisses

Plaintiffs’

breach-of-contract claim against Georgia Power.
B.

Count II

Plaintiffs contend Georgia Power (in its capacity as a co-owner
rather than as the Common Facilities Agent) and the other Defendant
Owners violated the Managing Agreement by allowing Plaintiffs to be
responsible for costs of the new facilities. (Dkt. 65 ¶ 138.) To get to that

31

conclusion, Plaintiffs cobble together inapplicable sections of sometimes
inapplicable contracts to impose obligations that do not exist.

(Id.

¶¶ 42–45, 135–38.)12
As the first step in their creation of a contractual right, Plaintiffs
allege that Appendix A to the Managing Agreement requires the Board
to “perform its obligations in a way that is consistent with the
unit-specific agreements, which are referred to as ‘Participation
Agreements.’”

(Id. ¶ 42.)

They claim this includes cost allocation,

budgeting, operations, and maintenance.

(Id.)

That is not what

Appendix A says. It refers to Participation Agreements twice. In the first
instance, Appendix A says that, when Georgia Power initially proposes
the Common Facilities budget, its proposal “shall be in a format that
reflects the amounts GPC would expect to bill each Owner pursuant to
the underlying Participation Agreements.”

(Dkt. 65-1 at 71.)

That

Defendant Dalton argues it has not waived sovereign immunity. But
it did so only in a footnote, incorporating by reference its previous
argument on the issue. (Dkt. 71 at 11 n.4.) That, of course, allows
Defendant Dalton to avoid briefing limitations. The Court will not hunt
and peck to determine applicable arguments, especially ones raised only
in a footnote. The Court permitted an amended complaint to streamline
the process. Defendant Dalton did not reassert the issue, and the Court
will not address it.
12

32

provision imposes no obligation on the individual owners. In the second
instance, Appendix A says that, if the Managing Board adopts a revised
budget, that budget (among other things) “shall comply with Prudent
Utility Practice, Legal Requirements and all other requirements set forth
in the Managing Board Agreements and the applicable Participation
Agreements.”

(Id. at 72.)

As already explained several times, that

provision does not apply in this case because the Managing Board did not
adopt a proposed budget.

Plaintiffs cite seven other sections of five

different agreements to support their allegation that the Managing
Agreement imposes some overarching obligation on Defendant Owners.
(Dkt. 65 ¶ 42.) Plaintiffs do not discuss those provisions anywhere in
their amended complaint, but the Court has reviewed them and none
impose the obligation alleged. Plaintiffs’ contractual path towards the
Defendant Owners fails at its first step.
As a second step, Plaintiffs allege each Participation Agreement
requires Defendants to exercise their obligations as members of the
Managing Board in accordance with the Prudent Utility Practice. (Id.
¶¶ 43, 135.) Plaintiffs cite no specific language from any agreement that
expressly states this. Plaintiffs merely make this bold allegation and cite

33

21

sections

of

six

different

contracts—totaling

more

than

250 pages—while quoting nothing from the contracts. (Id. ¶ 43.) The
Court has reviewed those provisions and can find nothing to support
Plaintiffs’ conclusory assertion.

From the Managing Agreement, for

example, Plaintiffs cite the definition of the Prudent Utility Practice, the
budgeting process in Article 5.1 and Appendix A, and two other sections
that apply to unit common facilities (rather than plant-wide common
facilities). None of those provisions impose an overarching obligation on
the Defendant Owners to “exercise their obligations of the Plant Scherer
Managing Board in accordance with the Prudent Utility Practice.” (Id.
¶¶ 43, 135.)13

From the Unit 4 Operating Agreement, as another

example, Plaintiffs cite Article 2 (which creates an operating committee
for Unit 4 and the responsibilities of that committee), Article 5 (which
establishes certain operational issues, including ownership of the
common coal stockpile used to run the generator and how power from the
unit will be allocated), and Article 6 (which sets forth expectations for

At best, those provisions impose a requirement that the Managing
Board ensure any revised budget it adopts comply with the Prudent
Utility Practice. As said many times, that did not happen here.
13

34

cooperation between the owners and an allocation of liabilities between
them). Again, those provisions do not create some obligation to follow the
Prudent Utility Practice while serving on the Managing Board. The
Court will not summarize each provision, particularly when Plaintiffs
make no effort to do so. But Plaintiffs’ contractual path towards the
Defendant Owners also fails at its second step.
Next, Plaintiffs add that the Unit 4 Accounting Agreement, “to
which all Defendants are bound,” requires Defendants to use a fair and
equitable accounting policy and to otherwise act in a fair and equitable
manner. (Id. ¶¶ 44, 137.) Only Plaintiffs and Georgia Power are parties
to the Unit 4 Accounting Agreement.

(Dkt. 65-4.)

On its face, its

provisions do not apply to Defendants MEAG, Oglethorpe, or Dalton.
Plaintiffs identify no avenue for holding them accountable to it. And even
if they could, the agreement does not impose the standard alleged for the
reasons discussed above. Plaintiffs’ contract path fails here as well.
From these steps, Plaintiffs reach the conclusion that, when the
Managing Board discharges its duties to review the budgets proposed by
Georgia Power, Defendants are required to do so in accordance with
Articles 5, 7, 11 and Appendix A of the Managing Agreement, “that is,

35

using Prudent Utility Practice and, separately, fairly and equitably
allocating costs.” (Dkt. 65 ¶ 45.)14 Again, Plaintiffs cite no provision that
requires this or any series of obligations that come together to impose
this obligation. Plaintiffs then say this means the Managing Board is
required to do more than a simple “up or down” vote. (Id.) Plaintiffs don’t
even try to cite a provision for this allegation.
With all of this windup, Plaintiffs allege Defendants breached the
Managing Agreement when they (1) “disregarded evidence” that the
allocation of costs for the new facilities “was inconsistent with the
Prudent Utility Practice, unfair and inequitable”; (2) “took no steps to
independently determine” whether that allocation was consistent with
“Prudent Utility Practice, fair and equitable”; (3) “refused to modify the
budgets originally imposed by [Georgia Power] so as to bring them in
accordance with Prudent Utility Practice and make them fair and
equitable”; (4) refused to engage in meaningful dialogue “which is

Notably, Plaintiffs do not even discuss Articles 7 or 11 while building
their contractual claim; they just throw them in at the last step. Article 7
discusses “Other Issues Requiring Managing Board Approval.”
(Dkt. 65-1 at 46–50.) Article 11 sets forth how the Managing Agreement
relates to the other existing agreements. (Id. at 59–60.) If they apply in
this case, Plaintiffs have not explained how.

14

36

essential to exercising Prudent Utility Practice and a fair and equitable
analysis”; (5) implemented an “unfair budget” that imposed costs on
Plaintiffs for the new facilities; (6) rejected Plaintiffs’ revised budget
while claiming they could simply vote “up or down” without “regard for
the Prudent Utility Practice, fairness and equity”; and (7) voted to
approve the revised budget. (Id. ¶ 138(a)–(g).)
None of these allegations state a claim.

As already explained,

Plaintiffs have identified no provision that imposes the Prudent Utility
Practice, fundamental fairness, or equity on Defendant Owners when
they act as members of the Managing Board, and the Court can find none
either. And the Prudent Utility Practice does not apply to the budgeting
process that occurred for the 2021 and 2022 budgets at issue. And even
if Plaintiffs could get past all of that, they cite no provision that even
remotely suggests the Prudent Utility Practice or some sense of fairness
and equity would require Defendants to make any independent
determination of cost or contract interpretation, engage in “meaningful
dialogue,” “accept Plaintiffs’ evidence,” or vote in any way other than
“yes” or “no.”

It really appears that Plaintiffs are simply riffing or

improvising as to what they wish the contracts had said. By all accounts,

37

Defendant Owners followed the budgeting process, and Plaintiffs have
thus failed to allege plausibly any breach of contract or covenant of good
faith and fair dealing. The Court dismisses Plaintiffs’ breach-of-contract
claim against Defendant Owners.
C.

Count III

Plaintiffs assert a claim for declaratory judgment that “they are not
responsible for costs in any way related to the design, construction,
operation, maintenance, or closure” of the new facilities. (Id. ¶ 145.) As
Plaintiffs have failed to state a substantive claim for breach of contract
against Defendants, Plaintiffs’ claim for declaratory judgment is also
subject to dismissal. See Hull v. CitiBank, N.A., 2013 WL 4955584, at *4
(N.D. Ga. Sept. 11, 2013) (dismissing plaintiff’s claim for declaratory
judgment after concluding all substantive claims failed to state a claim
for relief).
D.

Count IV

Plaintiffs allege Georgia Power breached fiduciary duties it owes
them by wrongfully imposing Plant Scherer Common Facility costs on
them for the new facilities. (Dkt. 65 ¶¶ 161–62, 165–67.) Georgia Power
says Plaintiffs’ claim fails because it is duplicative of their breach of

38

contract claim and thus barred by Georgia’s economic loss rule.
(Dkt. 69-1 at 22–23.) The Court agrees with Georgia Power.
“The economic loss rule generally provides that a contracting party
who suffers purely economic losses must seek his remedy in contract and
not in tort.” Gen. Elec. Co. v. Lowe’s Home Centers, Inc., 608 S.E.2d 636,
637 (Ga. 2005) (internal quotation marks omitted). In other words, “a
plaintiff may not recover in tort for purely economic damages arising
from a breach of contract.” Hanover Ins. Co. v. Hermosa Const. Grp.,
LLC, 57 F.Supp.3d 1389, 1395 (N.D. Ga. 2014). Where, however, “an
independent duty exists under the law, the economic loss rule does not
bar a tort claim because the claim is based on a recognized independent
duty of care and thus does not fall within the scope of the rule.” Liberty
Mut. Fire Ins. Co. v. Cagle’s, Inc., 2010 WL 5288673, at *3 (N.D. Ga.
Dec. 16, 2010).
As Georgia Power points out, its duties to Plaintiffs arise
exclusively from the parties’ contracts.

(Dkt. 69-1 at 23.)

Plaintiffs

hardly respond, saying Georgia Power owed and continues to owe
fiduciary duties to Plaintiffs. (Dkt. 77 at 22–23.) Plaintiffs identify no
independent duty under the law. (Id.) So the economic loss doctrine bars

39

Plaintiffs’ claim for breach of fiduciary duty. The Court dismisses that
claim.
E.

Pleading Deficiency

As discussed above, the Court has tried its best to understand
Plaintiffs’ tangled contract claims and believes it has addressed them
fully. But, in Count I, Plaintiffs also allege Georgia Power agreed it
would not make any adverse distinction under the Participation
Agreements. (Dkt. 65 ¶ 124.) Georgia Power argues that Plaintiffs failed
to allege that it breached this provision. (Dkts. 69-1 at 8 n.2.) As a result,
Georgia Power did not adequately address the issue.

The Court

understands Georgia Power’s reasoning. After all, despite noting the
“adverse distinction” provision in Count I, Plaintiffs did not expressly
allege a violation of that provision when it alleged Georgia Power
breached “the foregoing agreements by failing to follow Prudent Utility
Practice, fairness, and equity.” (Dkt. 65 ¶ 126.) Plaintiffs did not allege
in Count I, for example, that Georgia Power breached its obligation not
to make adverse distinctions between Plaintiffs and other owners when
it allocated costs. Plaintiffs, on the other hand, insist this was part of
their claim. (Dkt. 77 at 10.)

40

The Court finds the parties’ briefing insufficient to evaluate this
claim. The Court will allow Plaintiffs one final—and limited—chance to
properly and clearly allege a breach of the adverse distinction provision
and any derivative claims based on that provision. Should Plaintiffs seek
to file another amended complaint to do so, they should keep in mind the
federal pleading requirements, including Federal Rules of Civil
Procedure 8–11.

This means, among other things, any amended

complaint must make a short and plain statement of the factual
allegations supporting each claim, clearly identify which facts support
which claim, and omit any material that is irrelevant, extraneous,
convoluted, incoherent, confusing, distracting, conclusory, unfocused,
vague, unclear, or otherwise hard to understand and tie directly to
Plaintiffs’ claims.

Specifically, Plaintiffs should not incorporate

hundreds of prior allegations to support their claim (which, in turn,
incorporates hundreds of contractual provisions that are irrelevant or not
clearly explained). Plaintiffs should not add any new claims or seek to
re-assert the claims dismissed in this order. Plaintiffs may only add a
claim that the allocation of costs violated applicable “no adverse
distinction” provisions.

41

IV.

Conclusion
Defendants’ Motions to Dismiss are GRANTED (Dkts. 68, 69, 70,

71). Plaintiffs may file an amended complaint consistent with this Order
for the limited purpose stated.

The Court otherwise DISMISSES

Plaintiffs’ amended complaint (Dkt. 65).
SO ORDERED this 26th day of March, 2024.

(1

1

MICH"K E L L. B R O W N

42