In Re: Western States Wholesale Natural Gas Antitrust Litigation (MDL 1566)

Filing 1957

ORDER that Plaintiffs Motion for Reconsideration of the Courts March 9, 2009 Dismissal of American Electric Power Company, Inc., and AEP Energy Services, Inc. for Lack of Personal Jurisdiction 1652 is hereby DENIED. Signed by Judge Philip M. Pro on 10/29/10. (Copies have been distributed pursuant to the NEF - ECS)

In Re: Western States Wholesale Natural Gas Antitrust Litigation (MDL 1566)

Doc. 1957

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 P re se n tly before this Court is Plaintiffs' Motion for Reconsideration of the C o u rt's March 9, 2009 Dismissal of American Electric Power Company, Inc., and AEP E n e rg y Services, Inc. for Lack of Personal Jurisdiction (Doc. #1652), filed on June 1, 2009. Defendants filed an Opposition (Doc. #1693) on July 10, 2009. Plaintiffs filed a Reply (D o c . #1720) on July 31, 2009. I. BACKGROUND T h e parties are familiar with the factual background of the case and the Court w ill not repeat the facts here except where necessary. Defendants American Electric Power C o m p a n y, Inc. ("AEP") and AEP Energy Services, Inc. ("AEPES") previously moved to d is m is s , arguing this Court lacks personal jurisdiction over them. The Court granted that m o tio n . (Order (Doc. #1548).) /// UNITED STATES DISTRICT COURT D IS T R IC T OF NEVADA *** IN RE: WESTERN STATES ) W H O L E S A L E NATURAL GAS ) A N T IT R U S T LITIGATION ) ___________________________________ ) ) A R A N D E L L CORP., et al., ) ) Plaintiffs, ) ) v. ) ) X C E L ENERGY, INC., et al., ) ) Defendants. ) ) M D L 1566 2 :0 3 -C V -0 1 4 3 1 -P M P -P A L B A S E FILE

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O R D E R RE: PLAINTIFFS' MOTION T O RECONSIDER (Doc. #1652)

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P la in tif f s now move the Court to reconsider. Plaintiffs contend they have u n c o v e re d evidence that AEPES made sales to Plaintiffs' agent, Kaztex Energy M a n a g e m e n t ("Kaztex"), in Wisconsin. Additionally, Plaintiffs argue that Defendants c o m m itte d acts in furtherance of the price fixing conspiracy in the forum, and that should s u f f ic e to support personal jurisdiction. Plaintiffs contend that AEP is subject to ju ris d ic tio n in Wisconsin because of its relationship with AEPES. Finally, Plaintiffs request th e Court transfer the action to Ohio if the Court declines reconsideration. D e f e n d a n ts respond that the Kaztex information is not "new," as Plaintiffs were a w a re of the information several weeks before this Court issued its prior Order. Defendants f u rth e r argue that the new evidence does not establish Kaztex purchased natural gas from A E P E S , and AEPES in fact did not sell any natural gas to Kaztex. Defendants also contend th e Court should reject Plaintiffs' attempt to expand the "but for" prong of the specific p e rs o n a l jurisdiction test to include forum-related contacts from which Plaintiffs' claims do n o t arise. Defendants lastly assert that transfer is not appropriate because the Court already h a s dismissed Defendants and Plaintiffs previously indicated they did not want Ohio as a f o ru m . I I . DISCUSSION R e c o n s id e ra tio n of a prior ruling is appropriate only in limited circumstances, s u c h as the discovery of new evidence, an intervening change in controlling law, or where th e initial decision was clearly erroneous or manifestly unjust. Nunes v. Ashcroft, 375 F.3d 8 0 5 , 807-08 (9th Cir. 2004). "A motion for reconsideration is not an avenue to re-litigate th e same issues and arguments upon which the court already has ruled." Western Shoshone N a t'l Council v. United States, 408 F. Supp. 2d 1040, 1053 (D. Nev. 2005). A . New Information P la in tif f s ' new information consists of a statement made by Kaztex's re p re se n ta tiv e at a deposition held a few weeks before the Court issued its prior Order: 2

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Q : Do you know whether Kaztex has ever purchased anything f ro m AEP Energy Services, Incorporated? And I'm asking this, of c o u rs e , in your capacity as the designated representative of Kaztex. M r. Edison: Are you asking ever, from the beginning of time? M r. Kass: I'm asking during the time period 2000 through the e n d of 2002. A : AEP Energy Services showed up on our monthly buy file for th e Wisconsin business during that period. Q : Has that filed [sic] been turned over to counsel for p ro d u c tio n in this proceeding? A : No. (D e c l. of William E. Fischer (Doc. #1653), Ex. A at 210-11.) Neither party presents e v id e n c e that anyone followed up with Kaztex's representative as to what he meant by A E P E S showing up in Kaztex's buy file.1 However, in response to a subpoena requesting a ll documents relating to any transactions Kaztex entered into with any of Defendants for th e purchase or sale of natural gas, Kaztex produced a list of "all those companies Kaztex p u rc h a s e d gas from for the pool from January 2000 through 2002." (Decl. of Robert B. W o lin s k y (Doc. #1693), Ex. B at 5.) The list, which Kaztex provided the day before the d e p o s itio n , does not include AEP or AEPES. (Id., "Gas Suppliers for WI 200-Oct2002.") The Court will not grant reconsideration on the basis of new information. The K a z te x representative's ambiguous comment is at odds with the direct evidence Kaztex c o n te m p o ra n e o u s ly presented on the issue in the form of the list of Defendant entities from

Defendants present an affidavit from one of its attorneys indicating that following the deposition, he contacted Kaztex to confirm whether the list of entities from which Kaztex bought natural gas, which did not include AEPES, was correct and Kaztex confirmed that it was. (Decl. of Robert B. Wolinsky (Doc. #1693) at 2.) The purported statement by the Kaztex representative is hearsay and the Court will not consider it. 3

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w h ic h Kaztex purchased natural gas during the relevant period. Neither AEP nor AEPES a re on that list. Plaintiffs therefore have not met their burden of making "a prima facie s h o w in g of facts supporting jurisdiction through its pleadings and affidavits to avoid d is m is s a l." Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1 1 1 9 (9th Cir. 2002). B . Personal Jurisdiction T h e Court incorporates its statement of law relating to personal jurisdiction from its prior Order (Doc. #1548). Plaintiffs' reconsideration motion is directed at this Court's a p p lic a tio n of the second prong of the specific jurisdiction test, which provides that the p la in tif f 's claim must arise out of or result from the defendant's forum-related activities. See Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir. 2006). Plaintiffs contend th e Court's "but for" analysis did not consider the fact that multiple defendants could cause P la in tif f s ' harm, yet no single Defendants' act would be the sole "but for" cause of P la in tif f s ' injuries. Plaintiffs further argue that any act a defendant commits in the forum w h ic h is in furtherance of the conspiracy should support personal jurisdiction. Plaintiffs a ls o contend the Court should adopt the "substantial factor" causation test from tort law to d e te rm in e whether Defendants' forum-related contacts were a substantial factor in causing P la in tif f s ' harm. Defendants respond that the Court properly applied the "but for" test. A s a general proposition, Plaintiffs are correct that if their claim arises from the f o ru m -re la te d acts of multiple defendants, each defendant may be subject to specific p e rs o n a l jurisdiction in the forum. In the cases upon which Plaintiffs rely, however, the d e f e n d a n ts' forum-related acts were directed at the named plaintiff, not at some other p e rs o n or entity, such that the particular plaintiff's claim would not have arisen but for the /// /// /// 4

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d e f e n d a n ts' forum-related acts.2 None of these cases suggest that specific personal ju ris d ic tio n may exist based on a defendant's alleged participation in a conspiracy combined w ith forum-related acts directed at third parties, but not at the named plaintiffs. Plaintiffs also rely on Wilden Pump & Engineering Co. v. Versa-Matic Tool Inc., b u t Wilden is a straightforward application of the "but for" test even though the Wilden c o u rt expressed otherwise. No. 91-1562 SVW (SX), 1991 WL 280844, *4 (C.D. Cal. 1991) (u n p u b lis h e d ). The defendant in Wilden manufactured allegedly patent-infringing products in Pennsylvania. Id. The defendant also solicited distributors in California, resulting in s a le s of the allegedly infringing product to California distributors. Id. As the Wilden court a c k n o w le d g e d , a patent infringement claim arises every time an infringing product is m a n u f a c tu re d , used, or sold. Id. Consequently, but for the sales to California distributors, th e plaintiff's claim as to each act of infringement related to those sales would not have a rise n . The exercise of personal jurisdiction in California therefore was appropriate. P la in tif f s suggest that under this Court's reasoning, "any defendant in a case w h e re there are multiple defendants would be able to gain dismissal for lack of personal ju ris d ic tio n , so long as that defendant is able to show that the plaintiff would still have s u f f e re d some harm absent the moving defendant's wrongful forum-related acts." (Pls.' M o t. to Recons. (Doc. #1652) at 17.) Plainly, that is not what the Court has ruled. As P la in tif f s ' own motion to reconsider makes evident, had Plaintiffs been able to present

See Ziegler v. Indian River County, 64 F.3d 470, 472-73 (9th Cir. 1995) (the defendants took actions in Florida designed to effectuate the plaintiff's arrest for theft in California even though the defendants had evidence in their possession showing the check the plaintiff signed was good when he signed it); Scentsy, Inc. v. Performance Mfg., Inc., No. CV08-553-S-EJL, 2009 WL 320334, *1, 5 (D. Idaho 2009) (unpublished) (defendants purchased the plaintiff's products, visited the plaintiff's facility, and then manufactured products similar to the plaintiff's); Metalmark Nw., LLC v. Stewart, No. 04682-KI, 2006 WL 488715, *10 (D. Or. 2006) (unpublished) (defendants allegedly conspired to deprive the plaintiff of a contract for an ornamental door); Lung v. Yachts Int'l, Ltd., 980 F. Supp. 1362, 1366 (D. Haw. 1997) (plaintiffs' claims arose out of their purchase of a yacht). 5

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e v id e n c e that they purchased natural gas from AEPES, the Court could exercise personal ju ris d ic tio n over AEPES even if other Defendants also had sold natural gas to Plaintiffs at a lle g e d ly manipulated prices. As in Wilden, in such circumstances, but for each of D e f e n d a n ts' forum-related acts, Plaintiffs' claims would not have arisen, either at all or to th e same extent. H o w e v e r, the Court will not go so far as to hold that any forum-related act in f u rth e ra n c e of a conspiracy will suffice to support specific personal jurisdiction, as it cannot b e said that a particular plaintiff's claim would not have arisen but for each and every act in f u rth e ra n c e of a conspiracy. Rather, the "but for" test requires that Defendants' forumre la te d acts be acts out of which Plaintiffs' claims arise, or, stated alternatively, Plaintiffs' c la im s would not have arisen in the absence of Defendants' forum-related acts. That is why th is Court stated in its prior Order that regardless of the sales AEPES made in Wisconsin to u n re la te d third parties, and regardless of any guarantees AEP made to enable such tra n s a c tio n s , Plaintiffs still would have been harmed in their own transactions with other D e f e n d a n ts. In other words, Plaintiffs' claims do not arise from these forum-related c o n ta c ts because irrespective of whether AEPES made a hundred sales to unrelated third p a rtie s in Wisconsin or no sales to unrelated third parties in Wisconsin, Plaintiffs' claims in th is action would be precisely the same in both character and scope.3

The Court did not rule that the "only way" the Court could exercise jurisdiction over AEPES was if AEPES made a direct sale to Plaintiffs. (Pls.' Mot. to Recons. at 10.) Rather, in the context of the evidence before the Court, the forum-related sales were the only evidence Plaintiffs presented that possibly could subject AEPES to personal jurisdiction in Wisconsin. Other evidence could have sufficed had Plaintiffs presented any in support. For example, if Defendants had met in Wisconsin and there agreed to engaged in a price-fixing conspiracy, Defendants would have engaged in an in-forum act in furtherance of the conspiracy, and but for their agreement to engage in price fixing, Plaintiffs' claims would not have arisen. See In re New Motor Vehicles Canadian Export Antitrust Litig., 307 F. Supp. 2d 145, 152-53 (D. Me. 2004) (exercising personal jurisdiction where Canadian not-for-profit organization attended meeting in New York where it allegedly agreed to withhold Canadian vehicles from the American market); U. S. Dental Inst. v. Am. Ass'n of Orthodontists, 396 F. Supp. 565, 571 (D. Ill. 1975) (exercising personal jurisdiction where defendants met in Illinois to approve guidelines 6

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County of Stanislaus v. Pacific Gas & Electric Co. does not alter the Court's c o n c lu s io n . No. CV-F-93-5866-OWW, 1995 WL 819149 (E.D. Cal. 1995) (unpublished). The Stanislaus court set forth the jurisdictional contacts as follows: A & S is a foreign corporation that itself transacted no business in C a lif o rn ia . It was allegedly created by PG & E for the purpose of p u rc h a sin g and aggregating gas for end-users in California. In excess o f 90% of the gas A & S sold annually, for 32 years, was sold for tra n s p o rta tio n and sale to PG & E's California customers, with other C a n a d ia n gas that was indirectly sold to California customers. A & S's g a s contracts had "bargained for and contemplated" effects in C a lif o rn ia ; the price A & S paid for natural gas was determined by the m a rk e t price of gas sold at the California border. A & S would not h a v e contracted to purchase gas from Canadian producers if it did not h a v e the assurance that the gas would be purchased by PGT, PG & E, a n d ultimately, California end-users at prices equal to or more than A & S paid for Canadian gas. A & S engaged in activities which could e f f e c t injury to ultimate California purchasers of the gas it aggregated. T h e undisputed facts establish that A & S intended and expected that th e gas it aggregated in Canada would be sold and used in California. Id . at *4. The Stanislaus court concluded that the plaintiffs' claims arose out of those c o n ta c ts . Id. at *6. As set forth in another order in that case, the plaintiffs in that action had " p a id for the purchase of natural gas" from the defendants and "purchased gas from PG & E f o r unreasonably high prices." County of Stanislaus v. Pacific Gas & Elec. Co., No. CF-F9 3 -5 8 6 6 -O W W , 1994 WL 706711, *4 (E.D. Cal. 1994) (unpublished). Consequently, the plaintiffs in Stanislaus were not relying on A & S's forumre la te d sales to unrelated third parties to support exercising personal jurisdiction over A & S in California for their own antitrust claims. Rather, they alleged they purchased the natural g a s A & S supplied to PG & E at inflated prices, which costs were passed on to the p la in tif f s . But for A & S "conspir[ing] with Canadian gas producers to establish an a rtif ic ia lly inflated price for natural gas to be sold in California and to deny PG & E's

out of which the plaintiff's claim arose). However, in the context of this case, the only possible means of exercising specific personal jurisdiction over AEP or AEPES on the present record is through sales activity in Wisconsin. 7

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c o m p e tito rs access to PGT's pipeline," the plaintiffs' claims arising out of their own p u rc h a s e s of gas from PG & E, which obtained the gas from A & S, would not have arisen. Id. at *6. The same reasoning applies to Plaintiffs' reliance on Core-Vent Corp. v. Nobel In d u s trie s AB. There, the United States Court of Appeals for the Ninth Circuit assumed w ith o u t deciding that publication of libelous articles which disparaged the named plaintiff's p ro d u c ts would suffice to support not only libel claims, but an antitrust claim where the p la in tif f alleged the publication was done in furtherance of the antitrust conspiracy. 11 F.3d 1 4 8 2 , 1485 n.2 (9th Cir. 1993). As an initial matter, the Ninth Circuit only assumed without d e c id in g that the antitrust claim arose out of the forum-related activity. Id. Further, the N in th Circuit did not indicate that any act in furtherance of the conspiracy would suffice. Rather, the acts alleged were articles which libeled the plaintiff's products, and the articles a lle g e d ly were part of a larger antitrust conspiracy to defame the plaintiff's products to a s s is t the plaintiff's major competitor. Id. at 1483-84. Core-Vent did not indicate whether th e Court would find the "but for" prong satisfied by allegations that the defendant p a rtic ip a te d in an antitrust conspiracy which harmed the plaintiff and third parties, but the d e f e n d a n t's only forum-related acts were to publish articles which defamed a third party's p ro d u c ts rather than the plaintiff's products. Such a factual scenario would be more a n a lo g o u s to the facts presented here. T h e Court will deny reconsideration of its prior ruling regarding personal ju ris d ic tio n . Plaintiffs' claims in this action do not arise "but for" Defendants' forumre la te d contacts. C. Transfer P la in tif f s ' alternatively request the Court transfer this action to Ohio. This Court p re v io u s ly has explained why transfer is not an available option. The Court adopts its re a s o n in g expressed in the Court's June 4, 2010 Order (Doc. #1946). 8

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III.

CONCLUSION IT IS THEREFORE ORDERED that Plaintiffs' Motion for Reconsideration of

th e Court's March 9, 2009 Dismissal of American Electric Power Company, Inc., and AEP E n e rg y Services, Inc. for Lack of Personal Jurisdiction (Doc. #1652) is hereby DENIED.

D A T E D : October 29, 2010

_______________________________ PHILIP M. PRO United States District Judge

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