these cases should be remembered to state court first because the attorney general's unfair competition claim arises only under state law under beneficial merrell dow winder and utley there is no federal subject matter hypothetical rate as to what is best and reasonable rate would have been for each of the thousands of transactions that underlie your complaint and why does that not directly conflict with the authority that congress has given to the federal energy regulatory commission under the federal power act if it does not your honor and let me explain why these are unusual cases no court will be asked to resolve any issue of federal law every issue a federal law in these cases either has been or will be resolved by for but if the fact finder in your case were to determine that the rates that were charge in fact just and reasonable you would have no case with you your honor the fact finder will not be required or even able to make that decision it will not be and it is not in will your complaint says that the basis of the unfair business practices was the charging of rates which were not fair and just i don't see how this case can proceed in superior court without a finding that the rates that were actually charged were neither just nor reasonable and i just don't see how you avoid the conflict with what purpose doing your honor we've made clear in our pleadings throughout the course of this litigation if we have not made it adequately clear in our complaint that we are relying so soley on determinations made by for and the to the extent necessary we will stay the state court action to permit  ways you can get into removal and want to as if if the state claim just inevitably depends upon the resolution of the difficult question of federal law and the way you pleaded i don't see how you can decide it pleadings need to be clarified in the state court to make more explicit what are our theory of the case is we will of course do so the cases to which you refer which we maintain  arguably no longer applicable after beneficial all require that the questions of federal law not only be substantial and disputed but be resolved by the fact finder by the court here there is no issue of federal law for a court to resolve as we have explained our case we will be leaving to fight for those issues which are squarely prefer to decide as congress intended the only issues for the courts to resolve in these cases will be whether the predicate act the predicate violations of federal law that has found constitute unfair competition under california is unfair competition law and the  penalties to be imposed that leaves two for what congress has left for which is the area of great regulation and leads to the state matters for state courts to decide but aren't you really saying that you want more in terms of remedies then what is empowered to award her can determine through its proceedings that refunds or perhaps some prospective change in the way that these transactions are priced should occur but you want more you want punitive damages under the statute and assuming that we find in line with my earlier questions that you're asking  jury or the judge to determine violations of california law based on violations of federal law why isn't the answer simply the only remedy that you have is to go to her and get those remedies and you just don't get the  competition just as the state of california has regulatory responsibilities do not include monitoring the energy markets the cases make clear that  position of remedies above and beyond what the statute permits and does not necessarily make for preemption number one number two this is really very much like a case in which parallel criminal and civil proceedings are imposed for violations of the same conduct that implicate different interests in businesses choose to do business and normally  and that's right your honor but the state of california has made clear that for those businesses that wish to do business here they must comply with all applicable all applicable laws state and federal or they will be subject to additional penalties there is to me that we have a preemptive this deal and now your honor when you refer to preemption of the field i just like to clarify something for a moment there are two different types of preemption floating around in these cases complete preemption and defensive preemption i believe that you are referring to issues of defensive preemption  preemption no court has found complete preemption under the federal power act and we maintain that there is none so that basis for federal removal jurisdictions simply is not  directly impact on her in the sense that part of its rate making authority has to look at the continued viability of the producers and if you render them bankrupt or unable to function because they can't pay all of the judgments that you hope to obtain in the state court why doesn't that interfere with perks ability to ensure just and reasonable rates on the wholesale market can't  commission have to take that into account as well well your honor the commission does not have any authority to do what it is not permitted to do but under the federal power act but to answer your question more directly there's and if the retail rate or the wholesale prices that were paid is any indication i mean i looked at numbers in your briefing that indicated you know twenty thirty billion dollars so i'm not sure that  my numbers are much bigger than what you're asking for i don't think my hypothetical is unreasonable at all if you're completely successful that's right but the state court judge also has the authority to use his or her discretion in ordering penalties penalties can be refused i don't think we should i'm not sure your answer my question my question is the federal energy regulatory commission has to determine rates based among other factors on the on the financial viability of the wholesalers who of preemption without doing some forecasting as to what the facts of this parallel proceeding might be on the commission's jurisdiction to say just in which we maintain it does not there's simply no basis for federal question jurisdiction here and the issues of defensive preemption are issues that a state court is quite competent to struggle with i have every expectation that we will continue to litigate these issues in  i don't like to point out with respect to your question about the two regulatory schemes that not only is the purpose of the federal power act different from the purpose of california's unfair competition law but the remedies are supreme court recently clarified and beneficial b andersen that a state claim may be remote removed to federal court under only two circumstances and congress expressly so provides or when a federal statute wholly displaces the state law complete preemption first absent an express removal provision or complete preemption which requires a federal cause of action and clearly expressed congressional intent to displace state law a state law cause of action cannot be recapped arise as a federal question and remove to federal court and as your honor pointed out this is not a case in which there the cause of action exists only under federal law that's right your honor nothing in beneficial limits its application to cases in which cases of complete preemption on the one hand or cases in which there is no mention of federal law in the international college of surgeons case if i recall the facts correctly there was a direct federal issue other line of authority well i'm not sure that the other president i'm not sure that the other president would be overruled by beneficial in any event i'm not sure that it was inconsistent necessarily inconsistent with beneficial but in any event there is simply no language in the case that would support such a limit on its application the second circuit in studio of rome and a number of other recent cases have adopted the same interpretation of that's right your honor if you haven't mentioned it here are you i'd be happy to even if there were a basis for removal jurisdiction in these appeals longstanding principles of sovereign immunity prevent removal a the state's consent to federal jurisdiction of suits brought by state in state court this is because the principles of sovereign immunity are founded on respect for the dual sovereign status of the states and the federal government and on respect for the state maritime commission that do not resolve this exact issue your honor and it has not been resolved by the ninth circuit but we rely on the principals in the reasoning of those cases we also rely on the defendants have relied in their briefing on the supreme court cases in ames in illinois and a number of lower court cases that followed those cases but those were not sovereign immunity cases your honor they dealt with distinct issues there is language in those cases that has been relied on and quoted often without significant substantive analysis but those cases do not govern here i'd like to reserve well unless thank you your honor my name is terry houlihan of the firm of bring in mccutcheon i represent the reliant defendants in this case i'll be taking half the time this morning to address the removal questions mr gordon court below in this case and in the case that follows that will resolve one of the problems that has kept these matters in litigation for years the uncertainty surrounding claims filed outside of for before for to be resolved perk we think is the forum with jurisdiction to deal with these problems to determine whether remedies are called for and what they should be in this case my task is to address the question of whether the case was properly removed i think there are three basis for concluding that it was one that on the basis of the complaint  forced rights that give rise to jurisdiction under sixteen u s c section eight twenty five p i think church can be that your question about the nature of the complaint illustrates that point the grandchild recognized by this court in letter is that there are certain claims that are quote inherently federal close quote justifying removal this we submit is one of those claims that the situation to the context where there is a separate jurisdictional statute but i'm left but it seems to me and said that you don't need a federal cause of action to sustain remove ability generally like most of the cases where they say well look this is just inherently federal are cases where the federal government has offered not only has probably exclusive jurisdiction very also offers  cause of action itself under federal law that if you accept the proposition that a federal cause of action is not necessary to removal under the tried or old question doctrine under thirteen thirty one and i think you have to if you accept for example the complete preemption doctrine that the supreme court acknowledged and confessional then the question becomes well why is it necessary that there be a federal private right of action for this particular branch i submit that it isn't but that what has happened is that at least in the past cases that are easily seen as inherently federal have been those where there is a private right of action under the federal statute but here we have a classic i think example of a situation where you have an inherently federal claim the underlying claims are violations of the federal power but you don't happen to have a federal cause of action you have instead federal administrative remedy at work which i think makes the case even more inherently federal then you know if there were a separate private right of action and several court to enforce the federal power act docket number zero two seven three zero nine three the other thing the second cause of action is charging rates that were neither just nor reasonable again that issue is before it's a perk in the so called refund proceeding where they're reviewing all the rights to determine what refunds are appropriate and these are all wholesale rates right we're not talking about claims by an individual homeowner who would have no legal cause of action to either intervene before the commission or to bring some kind of a private claim for damages based on an unfair and unjust wholesale many of the retail rates were frozen during this period so there was no direct attack from the high wholesale rates at the retail level and i think most importantly what's the remedy seeking the only remedy exception the second circuit's decision in rome has some broad language but i submitted to your honor today and the second circuit decision gracie the board of education just issued may eleventh construction or federal law in a context where there was no complete preemption and in the process it reaffirmed the second circuit's the alessio the new york stock exchange decision discussed at by this court so the second circuit also has clearly now indicated that it does not believe that non official change the law in a way that the attorney general has argued or you do with a very strong statements in are cases where there is no federal right of action so merrill tao is somewhat inconsistent with those cases my time is up i just want to mention in closing that on the eleventh amendment this case is of course just one aspect of a very long turf war between for going the state of california the a g t taking place both in congress and kirk in another courts generally quacking the attorney general dissatisfaction with actions taken by berger in the states energy crisis one of those cases locker versus first was argued before this court last summer and directly involves the underlying proceeding that gives rise to one of the causes of action in this case in fact a duplicate said almost completely and that has to do with the non filed rate part of the complaint in this case under the collateral attack doctrine the attorney refund proceedings or are incomplete at this time in the case of the nine file great part portion of the complaint as i mentioned that has already been appealed to the ninth circuit so even before you get into  dual regulatory scheme of regulation over wholesale power markets state and federal in fact that is not the case is that shown in a long line of supreme court case this route rather than being any area of concrete jurisdiction there is a dichotomy wholesale regulation being regulated by the federal government and the retail by the state government and in fact this whole or this whole argument was completely rejected in another case brought by the california state energy and that was p c of california versus burke where the basically is that in this day and unfair competition law plank which describes unlawful acts these the attorney general can say in effect swallow the entirety of the federal code any federal that a violation can be a basis for a state cause of action now that the you know you think about the implications of that argument upon various federal statutes take it national defense immigration environmental foreign trade tax labor state case under what they would argue they are the traditional police powers or consumer issues or to health and welfare type of issues it's simply proves too much you cannot be the case that state law can swallow federal law  problems there's enough problems with that argument to begin with in just the traditional federal case where you ply it in the case where there is federal preemption and there's a federal statute several federal statutes which provide for exclusive jurisdiction over the claims i it's not pled the complaint is not played that way if you look specifically at the complaints and i do they're all virtually identical you'll find that the time period for which the remedies are still have are being sought it's far more extensive in time than them involved in the court proceeding and the first proceeding that was a refund effective date the set up i think late in two thousand if you look at paragraph thirty five and thirty nine for example of the idaho power complaint in this case which is i'd like to make a few points in response first of all there's no turf battle here the attorney general is seeking those remedies in the park proceeding that he can get in the for proceeding and is enforcing his rights under a separate state statute to obtain different remedies the issues in the park proceeding which is on appeal at this to this court are different there is some overlap but they are different issues and we are properly litigating those issues elsewhere so the collateral the collateral attack argument i really a red herring i'd just like to address look at and sparta the holding in lip it actually supports our case because the court remanded the case finding its side only to enforce state unfair competition law and did not require a court to make an independent assessment of whether defendants violated federal law that is the case here as well your honor they are the only evidence of a just and reasonable rates will be a first finding on that subject we we submit that you can if the court decides not to follow beneficial merrill dow controls here in fact this is a stronger case than merrill dow because the state court will not be deciding any issues of federal law with respect  o with respect to so far even if it were still good law after beneficial loop it has limited it to cases involving self regulatory or organizations that do not have external obligations governing their conduct that's again not the case here we have the state law which requires that businesses in the state comply with all applicable laws or be subject to additional penalties i also wanted to just go back to judge tolman's hypothetical the the same would be true of any environment state environmental statute or any other type of statute like to reiterate that i think that this is is that the same i'm looking for example if you're twenty paragraphs fifty two on page eleven you're including some sentence each and every rape charge or price charged by defendants in violation of the federal power act as unfair and unreasonable and therefore unlawful that pretty clearly lays out that a predicate for a seven thousand two hundred violation is a violation of federal power i can see how it could be read that way your honor and we have gone on record and would be a stopped arguing anything different we've tried to make clear that our case does not involve  determination by a court that the rates for unjust and unreasonable to the extent we need to clarify are pleading and after to date so i don't think there's anything that needs to be clarified counsel it's very clear the way you set it out and you're stuck defendants make much pan am superior court first the superior court squarely held that an identical provision in the natural gas acted not provide an independent source of federal question jurisdiction thank you your hon