Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-05735/USCOURTS-cand-3_15-cv-05735-4/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

HANERGY THIN FILM POWER 

AMERICA INC.,

Plaintiff,

v.

COLUMBIA SOLAR ENERGY, LLC,

Defendant.

Case No. 15-cv-05735-RS 

ORDER FOR FURTHER BRIEFING

As noted in a prior order, this action arises from a complex, multi-party transaction, 

involving the development of a solar electric generating facility in Pittsburg, California. Two of 

the parties, plaintiff Hanergy Thin Film Power America, Inc., and defendant Columbia Solar 

Energy, LLC., are now engaged in a payment dispute, with each side asserting contractual claims 

against the other. Hanergy has moved for summary judgment, in whole or in part, contending the 

undisputed facts permit a conclusion that the project achieved “Substantial Completion” and 

“Final Completion” as defined in the relevant contract between the parties, and that as a result, 

Hanergy is now owed a Substantial Completion payment of $6,368,205.29 and a Final Completion 

Payment of $3,263,990.56.

Columbia previously was a subsidiary of Hanergy1, and its primary business was 

 

1

 Various related entities using “Hanergy” in their names were involved in the transactions at 

issue. At this juncture, the distinctions among them are not relevant. For convenience, this order 

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CASE NO. 15-cv-05735-RS

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United States District Court

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development of the solar power project at issue. In broad terms, the various agreements called for 

Hanergy to sell Columbia and the project to PSEG Solar California, LLC, while the project was 

still under development, but after certain conditions had been satisfied. That sale was the subject 

of a Purchase and Sale Agreement (“the PSA”) between Hanergy and PSEG. The PSA was 

executed when Columbia was still a Hanergy subsidiary. 

The contract expressly at issue in this action was a “Master Procurement Agreement” (“the 

MPA”), entered simultaneously with the PSA, whereby Hanergy agreed to procure and provide to 

Columbia certain equipment and services necessary to develop the project. Although the MPA 

and the PSA are separate agreements, involving separate parties, it is undisputed that they both 

relate to the same basic transaction, as do several other agreements involving additional parties 

including Pacific Gas & Electric Company, a construction company, and the California 

Independent System Operator Corporation (“CAISO”).

Hanergy acknowledges that it has moved for summary judgment at a very early stage in 

this litigation, before discovery has progressed, much less been completed. It nevertheless 

contends that when the relevant contracts are read in light of the undisputed facts, it is entitled to 

judgment as a matter of law, or at least to a determination in its favor on certain subsidiary issues.2

Hanergy’s moving papers focus on establishing its contention that it has performed all of 

its obligations under the MPA between it and Colombia that were precedent to its right to receive 

the Substantial Completion and Final Completion Payments. Hanergy’s reply brief makes clear, 

however, it is not contending, at least for purposes of this motion, that satisfaction of its 

 

will refer to any and all of them simply as “Hanergy.”

2 Columbia complains that the motion is procedurally deficient because it fails to identify 

sufficiently each claim or defense—or part thereof—on which summary judgment is sought. 

Although Hanergy perhaps could have tied its motion to the claims pleaded in its complaint with 

greater specificity, the motion adequately discloses that Hanergy is seeking either a judgment in its 

favor for the amounts claimed, or whatever subset of findings in its favor may be warranted. See 

Fed. R. Civ. P. 56(g) (“If the court does not grant all the relief requested by the motion, it may 

enter an order stating any material fact — including an item of damages or other relief — that is 

not genuinely in dispute and treating the fact as established in the case.”)

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CASE NO. 15-cv-05735-RS

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United States District Court

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obligations to PSEG under the PSA are irrelevant. As crystalized following the reply brief, the 

dispute between the parties appears to turn primarily on whether Hanergy had any obligation to 

ensure and verify that a certain “Network Upgrade” known as the “East Shore-Oakland J 115 kV 

Reconductoring Project & Pittsburg-San Mateo 230 kV Looping Project” (“the East ShoreOakland Reconductoring”) had been completed before closing the sale of Columbia to PSEG. 

Columbia contends that because the East-Shore Oakland Reconductoring had not in fact been 

completed (or even started), Hanergy breached the PSA and made material misrepresentations. As 

a result, Columbia contends, the value of the solar generating facility is substantially less than 

anticipated.

Columbia has made an adequate showing that, at least for purposes of a summary 

judgment motion, Hanergy cannot prevail merely by showing full performance under the MPA, 

standing alone. Columbia has also shown there is, at a minimum, a triable issue of fact as to 

whether Hanergy’s obligations under the PSA included ensuring and/or representing that the 

condition of Section 2.6(h) of that agreement had been satisfied prior to closing on the sale of 

Columbia to PSEG.

3

 

The question, therefore, is whether Section 2.6(h) required completion of the East-Shore 

Oakland Reconductoring. Section 2.6(h) called for the solar power plant project to have achieved 

“all of the Mechanical Completion Requirements set forth in Exhibit J” to the PSA. Exhibit J, in 

turn, required that all “Network Upgrades” to “have been completed in accordance with the 

SGIA.”

The “SGIA”—Small Generator Interconnection Agreement—was formed among 

Columbia, PG&E, and CAISO. The SGIA specifies the “network upgrades” applicable to this 

project in Attachment 6, at p. 52. Under the language of the document, the “network upgrades” 

are only those shown in Table 6-1. The East-Shore Oakland Reconductoring is not among them.

 

3

 While Hanergy likely is correct that it had no “affirmative obligation” to carry out or pay for the 

work contemplated by Section 2.6(h), that is not the issue. 

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Columbia nonetheless argues the East-Shore Oakland Reconductoring “was one of the 

network upgrades required under the SGIA and so was one of the network upgrades required for 

the Project to achieve Mechanical Completion under the PSA.” All of Columbia’s breach of 

contract and misrepresentation claims appear to flow from this premise. Columbia contends the 

absence of the East-Shore Oakland Reconductoring from Table 6-1 is not dispositive because 

Attachment 6 also makes reference to “Appendix A, of the Cluster 3 & 4 Phase II Final Study 

Report, dated November 5, 2012” (and an addendum to that appendix), which Columbia insists 

incorporates a reference to the East-Shore Oakland Reconductoring.

The problem with Columbia’s argument is that the Cluster 3 & 4 Phase II Final Study 

report encompassed many more projects across Northern California than the one at issue here. 

Columbia relies on the fact that Table 4.4 of the report mentions the East-Shore Oakland 

Reconductoring. That table, however, appears to be only a list of “new transmission projects”—

not directly limited to the Columbia project. Indeed, Appendix A of the report, and its addendum 

(which are specific to the Columbia project) expressly state that the necessary network upgrades 

are those shown in Table 4.5 of the report, not Table 4.4. Once again, the East-Shore Oakland 

Reconductoring does not appear in that table.

Hanergy’s moving papers were primarily directed at establishing its full performance 

under the MPA and its argument that it breached no affirmative obligation under subsections (b) 

and (c) of section 2.6 of the PSA. As such, Columbia has not had an opportunity to respond to the 

arguments in the reply brief, and the tentative conclusions set out above—namely, that even 

assuming Hanergy cannot recover any or all of what it seeks under the MPA if there was a breach 

or misrepresentation under the PSA, and even assuming it had disclosure and warranty obligations 

under the Section 2.6(h) of the PSA or otherwise, completion of the East-Shore Oakland 

Reconductoring simply was not a condition precedent under any of the relevant contracts.

Accordingly, within 20 days of the date of this order, Columbia may file a supplemental 

brief, not to exceed 15 pages, addressing (1) the issues discussed above, and; (2) whether, if the 

Court concludes no factual disputes preclude a conclusion that completion of the East-Shore 

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CASE NO. 15-cv-05735-RS

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Oakland Reconductoring was not a condition of any of the relevant contracts, there is any other 

reason judgment in Hanergy’s favor should not be entered. 

No later than 10 days thereafter, Hanergy may file a supplemental reply, also not to exceed 

15 pages. The matter will then again be submitted for decision, or set for argument, in the Court’s 

discretion. The pending motion to dismiss Columbia’s counterclaim will remain under submission, 

in light of the potential impact a ruling on the summary judgment may have on the viability of the 

claims advanced.

IT IS SO ORDERED.

Dated: December 9, 2016

______________________________________

RICHARD SEEBORG

United States District Judge

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