Canada power firm gets no backing in high court

The U.S. Supreme Court ruled against a Canadian power company Monday, making it difficult for defendants to escape unfriendly state court juries by moving lawsuits to federal court.

The decision in a lawsuit involving Powerex Corp. stemmed from allegations of price fixing and price gouging during the California energy crisis of 2000 and 2001.

Powerex portrays itself as an arm of the British Columbia government and says it is therefore entitled to have its case moved to a U.S. federal court. A federal judge and the U.S. 9th Circuit Court of Appeals had ruled against Powerex, sending the case back to state court.

The Supreme Court ruled 7 to 2 that a defendant who moved a state court lawsuit to federal court cannot except in narrow circumstances appeal a federal judge’s ruling sending it back. A federal law on the subject is designed to give plaintiffs their day in court promptly, rather than having cases sidetracked indefinitely by defendants’ appeals over where a case should be heard.

In ruling against Powerex, Justice Antonin Scalia cited Congress’s “long-standing policy” against prolonged disputes over which court should handle a lawsuit. Dissenting from Scalia’s majority opinion, Justice Stephen G. Breyer said the federal judge’s order sending the case back to state court was appealable and that Powerex was entitled to be in federal court because it was an organ of the government of British Columbia. Justice John Paul Stevens voted with Breyer.

The class-action lawsuit involving Powerex initially was filed in California state court against U.S. power companies accused of conspiring to drive up wholesale prices during the state’s energy crisis.

If the case against Powerex had been allowed in federal court, the company would have been entitled to a bench trial with a judge delivering the verdict, rather than a jury delivering a verdict as in a state court trial.

California Treasurer Bill Lockyer, who formed a task force when he was attorney general to investigate power sellers, said the Supreme Court’s decision “vindicates California consumers and businesses.”

Powerex, which has denied wrongdoing, in 2005 refunded $1.3 million to settle Federal Energy Regulatory Commission allegations that it manipulated California power prices.