the energy policy act which provided for the the development of mandatory reliability standards to prevent the exact type of blackout that occurred in this case i understand that act to have been a congressional  consistency of delivery of electricity against any one severe act how does that act  your plaintiffs so it is it is correct that the act specifically called for the development of mandatory reliability standards of the book power system and i also agree with me that the act did not provide a private cause of action as does section one nine hundred eighty three for instance for constitutional violations as does forty five u s c fifty one the federal employees viability act they provide for private cause of action this action did not yes your honor we have what you're trying to do is to say that under arizona common law as interpreted by arizona's cases there if you want to private cause of action i was a federal statute is that right well yes that is correct so arizona law provides a negligent per se cause of action whereby a party that violates statute and that was intended to prevent a certain particular type of risk what i was only authority would you submit to me to show that i was on a intended the federal tax to benefit an electricity consumers against the risk of electricity blackouts there is no arizona or california authority addressing the effect of the mandatory reliability standards  section eight twenty four i guess what we're trying to do is under arizona law it prides negligence per se cause of action and for statutes that were intended to prevent the type of harm that occurred and protect the class of persons including plaintiff and this case it's our position that the mandatory reliability standards in section eight twenty four were in acted in the wake of the northeast blackout of two thousand and three and if you look at the legislative history it's clear that they were enacted to prevent subsequent blackouts even though they govern them the bulk power system  of the energy policy act was trying to prevent future future blackouts so even though it governs the bulk power system it's it was intended for the public it was a effective for the public good why you say users of electricity i have in mind the cases all of vs pull the homes are you familiar with that case no i'm not here either oh well let me tell you about the case in solvent versus poly home sullivan was a subsequent buyer of a house had a retaining wall the retaining wall sullivan said was not constructed with in compliance with municipal building standards he then sued poldi who built a retaining wall he had no contractual privacy with poti there was no implied warranty it was a tort claim and he claimed to be said that statute does not constitute a basis for now this is per se is no duty owed to sullivan because that statute was for the protection of the public not the protection of any particular individual or class of persons and it did not intend to protect against the risk of mr sullivan having to rebuild the wall that being the case is that another analogy that we can apply to this states pacifically that this was an act in to protect and help people that had been stuck in elevators that were without power after the northeast blackout of two thousand and three so while the section eight twenty if it was to protect people who were caught in elevators like and that's a congressional testimony as for legislative history why didn't congress and act a cause of action however there have been continued violations for has noted that a p s has previously vial violated the mandatory reliability standards of three point five sufficient deterrent effect to prevent future violations of the mandatory reliability standards and i would just like to see also with respect to california law  believe that although there is no private cause of action under section eight twenty four if we look at the policy embodied in section eight twenty four zero the well when factors that are used to assess duty under california law would also support the existence of a duty here one of those is of or was pretty specific to the country wasn't i'm sorry which point decision well that case that case the forsee ability of the injury was extremely low because in operable street light was only one factor in causing the accident the court also noted that the burden on an inoperable street light if some of those location is dark is not hard to oversee that has consequences i'm not sure that that inference is any more remote than the inference you've tried to offer from the legislative history for the federal statute well vehicles driving at night or to generally supposed to use headlights and so i think that there were additional other precautions that could be taken i didn't i didn't read white as a foreseeability case or a causation case and see the court saying that the liability isn't doesn't fall on the utility because it wasn't really responsible in the language it's pretty explicit without without a contract between the utility and the customer service of it to be providing for the service the public utility owes no duty not a right but in that case i mean the if you look at the role and factors they still supported or were they did not support the existence of a duty what i'm saying is that in this case the rolling factors do support the existence of  duty the court found in that case that the burden of requiring the utility to monitor every single street light when you know street lights commonly go out would be immense in comparison the risk to society of not imposing a burden would be comparatively low in this case that the same is not true the cost to society of these blackouts is immense two point seven million people were affected and many were left without power for as many as twelve hours and the forsee ability here is is extremely high would chairman of for testify after the two thousand and three blackout that there are common causes underlying these blackouts and those common causes are what the mandatory reliability standards sought to address so it's our position that california under california law the rolen factors would support a duty in this case because the circumstances are somewhat different then in white and then second i would just point out that if the court finds that there is no duty  california the neven interest i mean your office elected to file the case in california your clients from california so why isn't california law for real well california law doesn't have an interest in this case because  california law does not fix tort liability and so in this sense it protects defendants from liability by requiring that plaintiffs prove each and every element of a cause of action for negligence even where there is a clear violation of the statute that was intended to prevent the type of crime that occurred so the the courts have held that a state's interest in limiting liability to prevent or to protect defendants from excessive financial burdens is primarily local so california doesn't have an interest in protecting our state utilities in this case from potentially excessive financial burdens you'll have to say when you your clients are in california seems to me california has an interest in protecting its citizens you elected to file the case in california have been filed in arizona in the defendants there so there's no question that your of law analysis under the governmental interest approach california does not you've correctly pointed out that california that this case involves california plaintiffs so california law limits liability for the defendants so california has no interest in applying its own law to deny recovery for its plain it was the choice of law rule that's the law we're plaintiffs when is the law that should be applied we shouldn't care about  pointing out something this is the second case that was filed with respect to the two thousand and eleven power outage that occurred the first case was the blue mcclatchey case that is referenced in our papers a case that was also assigned and decided by assigned to and decided by judge hough in the southern district of california in that case there were three claims that were brought a common law negligence claim under california law a nuisance claim under california law and a consumer protection act claim under california law judge hough dismissed all of those claims on a variety of grounds including some of the grounds that we're talking about here today the  case was not appealed to this court this case was then filed asserting only one cause of their action to get around the decisions the judge of it made the bull a coyote case they asserted a claim for negligence per se that's the only claim in this case and as you know judge has dismissed that claim as well in a i submit a very well reasoned decision as to why negligence persuaded not apply in this instance now there there are two fundamental problems with the theory the plaintiff's counsel has espoused here the first one and your honour's have touched upon these already so i'll be brief the first one is that arizona law somehow applies to these claims  they want that because they think there's an easier path through negligence pursue a claim under arizona law we don't think there is but they think there is that's wrong arizona law doesn't apply the second fundamental error  upon which their claims are premised is that they are within the class of person sought to be protected by the bulk power reliability standards that were were enacted they are not they clearly are not and i would submit to your honor's that you need look no further than the amicus brief that was filed in connection with this proceeding in which the a meek i point out very clearly that those bulk power standards were not in any way directly anyway intended to benefit in consumers well and the end at some level they were because nobody really cares about the electric companies trading power with each other in the end to get sold to the consumers well that's true your honor in the i point that out in this regard they say that one of the by products or one of the intended purposes if you will of the reliability standards was to lessen the probability of power outages that might occur but it certainly wasn't intended to eliminate them because if you look at the reliability standards one of the measures that is contained in the reliability standards is what's called load shedding which is basically  power as outages designed specifically to prevent larger power outages and disruption of expensive equipment that that the bulk transmission system relies upon to operate so the very notion that you have reliability standards that call for in certain instances design blackouts or design power outages and that that somehow gives rise to liability on the part of end user utilities is is i respectfully submit simply not workable so we don't think there's any basis for the assumption the plaintiffs are trying to make your that the that the reliability standards entitle them to the kind of relief that they're asking or that they're within the class of persons that are sought to be protected by those standards and i would simply remind the court as we point out in our brief that there are three levels broad levels to our electric distribution system in this country there's generation which is number one and you have some participants who are only generators they don't do anything else and then you have the transmission level the b transmission level which is usually operated by utilities but it doesn't have to be and then thirdly you have retail distribution which is generally regulated by the states in which the utilities are located but that b transmission of electric utility is regulated by fur and it's regulate it by among other things these reliability standards and certainly they're not intended to provide this kind of private cause of action that the pla are seeking but even if they were your honor let me turn to why it doesn't work in this instance clearly as judge hough indicated in in her opinion in this case california law does not permit a cause of action for negligence perceval even assuming that the reliability standards would otherwise apply for that purpose because california law as she said in if i could just briefly quote in opinion at page five she said under california law negligence perceval is not a separate cause of action but is the application of an evidentiary presumption provided by california evidence code six six nine and she goes on to say thus plaintiffs have not stated a claim for negligence perceval unless they have stablished the defendants owed them a duty of care meaning an independent duty of care under california law and as you pointed out judge clifton there is no independent duty of care under california law under the white case and other cases that have been decided by the california supreme court and by the way that was not unique to california as you know from our briefs that's the law of virtually every place in the country including arizona a non customer cannot sue a utility for harm allegedly caused by the willing give me a citation to an arizona case th there's an arizona case law for the proposition your honor that a consumer does not have a cause of action if that consumer is a non customer of the utility and other words there's no duty and that's the cold case that we  and there are other cases your honor that we we also cite in our brief but that is the seminal case if you will in arizona that one holds that there is no duty no tour of duty to the consumer for a blackout that the case stands for the proposition your honor that there is no duty here's here's the decision that the and this had to do with delivery of water your honor not sufficient to give a consumer a cause of action because the consumer did not have a direct contractual relationship with the water company only the city did so in that regard it's very similar to the holding of the california supreme court in the white customer and i would remind your honor that again we point this out in our briefs in the bullet cace case the plaintiffs in that case who not only are sort of public service but also san diego gas and electric which was one of the other companies that was supposedly responsible for the power outage and as you know was was also held responsible by firk along with three or four other utilities that were involved but in that case judge huff dismissed the claims against san diego gas and coal and electric by the blue akashi plaintiffs filed rate preemption theories so it's not as if a customer doesn't have a claim it's just that the customer has a claim only against his or her utility and only to the extent permissible by the law of the jurisdiction where the customer's located so if the california public utility authority wants to sanction sandia a gas and electric for some reason they apparently have the authority to do that but the california law does not permit a standalone separate cause of action against the utility and certainly doesn't permit one by a non customer so the the the the other thing in this regard i just want to touch briefly about on counsel's negligence perceval argument under arizona  arizona law is is very clear about one thing in this ends the negligence perceval inquiry even assuming that this court could somehow disagree with judge huff and conclude that arizona law applies and we don't think the court could under these circumstances obviously a federal court sitting in california has to apply california law choice of law principles conflict of law principles and in doing so it is clear that california's interests surmount in this case and therefore california law would have to apply as judge upheld but even if you concluded otherwise and said wait a minute we think arizona law would apply there's still no cause of action for negligence perceval because arizona law is clear and their number of cases that we've cited in our brief who are to case in the griffith case are the two principal ones those cases stand squarely for the proposition that in order for a statute or regulation to give rise to a negligence perceval claim the the prohibition in the statute has to be specific it cannot be general so for example in the whole are to case there's a statute that says that no motor vehicle shall be driven on the on the highway in an unsafe condition and a motor vehicle was was driven without a passenger seat belts and the passenger was injured and sued the owner of the car the court said that is not sufficient to give rise to a claim of negligence  perceval because the statute that says you shall not drive a car on the road in a unsafe condition doesn't specifically prohibit use of a car without seat belts and we're only going to allow a statute to give rise to  negligence perceval claim if the statute is specific and what the court said is and i quote this is from the who are to case at page ten such a general standard does not support negligence per you but it doesn't say that the reliability standards don't say that your honor and i respectfully submit they don't even come close to saying that what they say is that the the participants in the b transmission system shell do a number of things that are designed to make that system as reliable as possible and they are as i said before one of the mechanisms that is th delineated under the the reliability standards is the ability to engage in gage in what is called load shedding that's what it's call in other words shutting off the power in certain areas when it looks like there's going to be an overload th cause a transformer to explode or is going to cause the lines to go down so that that doesn't happen org that it doesn't expand into a greater outage but it doesn't say it and i respectfully submit it doesn't come close to saying the lights you'll never go out it's not that kind of a proscription it even the legislature or congress could an act something that says just that you could say the utility is the guarantor and if the lights go off the utility pays for any losses as a result that would suggest we have a different power grid than we have today and we have rates that would make the utility i'm sure question here is whether arizona has an effect if arizona law applies whether arizona has an effect adopted that by this negligence they are going your honor but as i said arizona would never apply even if arizona law applied would never apply negligence perceval under these circumstances because these reliability standards are anything but specific there are not specific proscriptions in those standards what there are basically are standards that require the utilities to do certain things of something that they're supposed to do isn't done or doesn't happen and then ferk and nerk which is the designated in foresman agent agency has the ability to investigate it and as they did in this instance sanction all of the utilities involved in this instance there were five utilities that were fined or enter into settlements with fur that's the enforcement mechanism but congress clearly could have a stablished a private right of action if they thought that what plaintiffs say they were doing was what they were doing and obviously they didn't use the top zero as they were for rule two says each transmission operator shall operate so that instability and control aeration or cascading outages will not occur as a result of the most severe single contingency yes but that's not i would submit your honor that's not the kind of specific pro scription that arizona law would permit to be transformed into a negligence perceval claim it's a it's it it's a generalized mandatory regulation that says we want you to cooperate to do these things so that this won't happen but it's it's it's not the kind of proscription that arizona law says is this if they can of to allow for a negligence proceed claim even assuming as i said that you can get the arizona law in the first place which we don't think you can thank you  rebuttal just a few points out with respect to busalacchi matter san diego gas and electric had specifically argued that arizona public service corporation could be liable under negligent per se theory the court the district court noted that however that plaintiff had not alleged in negligence per se cause of action in that case that is part of the reason why we based our complaint on a negligence proceed theory and then as to the issue of load shedding under the mandatory reliability standards the rule that we would propose would hold utilities liable for service interruptions caused by their violation of the mandatory reliability standards so if if they are complying with the mandatory reliability standards or the standards prescribed load shedding under certain circumstances then they would not be held liable for complying with the mandatory reliability standards and then what's with respect to the case distinguishable it was talking about a general statute that said utilities or public service corporations should furnish and maintain service it wasn't dealing with a statute that specifically address well that case was involving a general statute that said public service corporations should furnish and maintain service the court noted that it didn't specifically address providing sufficient water to enable  people to extinguish fires shell operator will be no instability but this statute specifically addresses outages and the mandatory reliability standards specifically address certain types of conduct that cause outages the maintain and furnish service to provide for the public it wasn't specific as to what type of service or anything of that nature ok thank you thank you we thank you