2005 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 10-20-2005 

# Ol yph ant v . PPL C orp P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 04-3283

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Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a nova U nive r sity S choo l of L a

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. PPL C orp " (2005). 2005 D e cisio n s . P ape r 373. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2005/373NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT N os . 04- 3283 and 04- 4295 ( cons ol i dat ed) BO RO UG H O F OLY PHA NT,

A ppel l ant v. PPL C O RPO RA TI O N ; PPL EL EC TR I C U TI LI TI ES C O RPO RA TI O N ; PPL GEN ERA TI ON , LLC A pp el l ees. ON AP P E AL F RO M T HE UNI T E D S T AT E S DI S T RI CT CO UR T F OR T HE

E A S T E R N D IS T R IC T O F P E N N S Y L V A N IA

( D . C . N o. : 03- cv- 4023) D istri ct Ju d g e: T h e H o n o rab le W il li am Y o h n , Jr. Subm i t t ed pur s uantt o L A R 34. 1( a) on Sept ember27, 2005. B e f o re : R E N D E L L , F U E N T E S , and G A R T H , C i r cui tJ udges ( Fi l ed: O ct ober20, 2005)

____________________ OPI NI ON O F THE COURT

_____________________ Fuent es , C i r cui tJ udge.2

Pl ai nt i ff Borough of

O l yphant , Penns y l vani a ( “O l yphant ”) appea l s t he D i s t r i ct C our t ’ s or der s : 1) deny i ng a j oi ntm ot i on byO l yphanti n i t s cas e B or ough of O l yphantv. PP& L , etal . ( D ocketN o. 03- 4023) and fourt een pl ai nt i ffs , i ncl udi ng O l yphant , i n another c a se , B o ro u g h o f

L a n sd a le, e t al. v . P P & L e t al. (D o c k e t N o . 0 2 -8 0 1 2 ) (th e “ L a n sd a le act i on”) t o cons ol i dat e the tw o cas es ; 2) gr ant i ng s um m aryj udgm entt o PPL di s m i s s i ng O l yph a nt ’ s c l a i ms; a nd 3) de ny i ng O l yph a nt ’ s mot i on fo rs umm a r yj ud gmen ton PPL Corpo r a t i on ’ s ( “ PPL”) c ou nt e r c l a i ms, a nd gr a nt i ng s umm a r yj ud gmen ti n f a vo rof PPL on one of PPL ’ s count er cl ai m s agai ns tO l yphant . B eca us e O l yphanthas not d e m o n stra ted th a t th e D istric t C o u rt a b u se d its d isc re tio n in d e n y in g th e m o tio n to cons ol i dat e, and s ubs t ant i al l yfort he r eas ons s t at ed i n t he D i s t r i ctC our t ’ s opi ni ons dat ed M a y1 4 , 2 0 0 4 , a n d Au g u s t1 9 , 2 0 0 4 , we wi l l a f f i r m. I. B eca us e w e w r i t e onl yfort he part i es , w e r eci t e onl yt he es s ent i al fac t s . O l yphant i s a muni ci pal corpor at i on or gani zed a nd exi s t i ng underPenns y l vani a l aw . PPL i s t he p a re n t h o ld in g c o m p a n yo f c o m p a n ies e n g a g e d in , am o n g o th e r th in g s, e lec tricity g e n e ra tio n , the m a rk e tin g a n d tra d in g o f w h o les a le e lec tricity , an d e lec tric s u p p lyto re tail cus t om er s . PPL s el l s pow eratw hol es al e t o O l yphant , butal s o compet es w i t h O l yphant for r et ai l cust om ers . O n M ay8, 1996, t he Feder al E ner gyR egul at or yC om m i s s i on ( t he “FER C ”) , w hi ch r egul at es t he s al e of w hol es al e pow er , i s s ued O r derN o. 888, w hi ch r equi r ed the3

u n b u n d lin g o f

th e w h o les a le p o w e r m a rk e t an d p e rm itt e d p re v io u slym o n o p o listic w h o les a ler s to re c o v e r f ro m c u sto m e rs“ stra n d e d c o sts ” w h ich th e yw o u ld lo se a s a re su lt of der egul at i on. O l yphantand s ever al ot herPenns y l vani a bor oughs fi l ed a pr ocee di ng be fo r e t he FER C t o d e t e r mi ne t he i rl i a bi l i t yfo rs t r a nd e d c os t s . O n J a nu a r y29 , 19 98 , PPL and the bor oughs r eac hed a s et t l ement( t he “Pow erSuppl yA gr eement ”) , w hi ch r es ol ved th a t P P L w o u ld n o t s e e k s tr a n d e d c o s ts f ro m th e B o ro u g h s . O n A pr i l 1, 1997, pur s uantt o Penns y l vani a’ s E l ectr i ci t yG ener at i on C us t om er C hoi ce a nd C om pet i t i on A ct( t he “Com pet i t i on A ct ”) , 66 Pa. C ons . St at . §§ 2801 et s eq. , w hi c h e ff

e c t i ve l yde r e gu l a t e s t he bu s i ne s s of e l e c t r i c i t yge ne r a t i on i n Pe nn s y l va ni a , PPL s ubm i t t ed a r es t ructur i ng pl an t o t he Penns y l vani a Publ i c U t i l i t yC om m i s s i on ( t he “PU C ”) , w hi ch i ncl uded pr opos ed r at es and s t r anded c os t s t hatw er e r ecove r abl e under t he C om pet i t i on A ct . A ft ers i gni fi cantdebat e i n r es pons e t o t he pr opos al , dur i ng w hi ch m anybor oughs fi l ed s ui ti n s t at e orfede r al cour t , t he PU C appr oved a J oi ntPet i t i on for Ful l Set t l ementof PP& L , I nc. ’ s R es t ruct i ng Pl an and Rel at ed C our tPr ocee di ngs ( “J oi nt Pet i t i on”) on A ugus t27, 1998. O n D e c e m b e r 5 , 2 0 0 1 , O lyp h a n t f iled su it i n th e M id d le D istric t o f P e n n sy lv a n ia as s er t i ng br eac h of contr actand vi ol at i ons of Sect i ons 1 and 2 of the Sherm an A ct , 15 U . S . C . § § 1 a n d 2 , a n d o f S e c t i o n 2 o f t h e C l a yt o n A c t , 1 5 U . S . C . § 13. PPLasser ted three count er cl ai m s , and moved fors um m aryj udgm ent . T he ca s e w as s ubs equent l yt r ans ferr ed to th e E a ste rn D istric t o f P e n n sy lv a n ia w ith th e m o tio n s f o r su m m a ryju d g m e n t still4

pendi ng. O n N ovember10, 2003, t he D i s t r i ctC our tdeni ed the mot i on m ade byO l yphant and the bor oughs t hatw er e part i es i n t he Lansda l e ac t i on, i ncl udi ng O l yphant , for cons ol i dat i on of the ca s es . O n M ay14, 2004, t he D i s t r i ctC our ti s s ued an opi ni on and o rd e r g ra n tin g su m m a ryju d g m e n t d ism iss in g O lyp h a n t’s b re a c h o f c o n tra c t cla im a n d its cl ai m underSect i on 1 of the Sherm an A ctand Sect i on 2 of the C l ayt on A ct , and gr ant i ng s um m aryj udgm entdi s m i s s i ng O l yphant ’ s cl ai m underSect i on 2 of the Sherm an A ct w ith o u t p re

ju d ic e to O lyp h a n t’ s a b ility to p u rs u e th e c la im in th e L a n s d a le a c tio n . B or ough of O l yphantv. PP& L , I nc. , N o. 03- 4023, 2004 W L 1091037 ( E . D . Pa. M ay14, 2 0 0 4 ). T h e D istri ct C o u rtd en ied O lyp h an t’ s m o ti o n s fo r sum m aryjud g m en t on P P L ’s co u n terclai m s. Id . O n A ugus t19, 2004, t he D i s t r i ctC our tgr ant ed PPL ’ s m ot i on for su m m a ryju d g m e n t as to P P L ’s c o u n ter c laim th a t O lyp h a n t h a d b re a c h e d th e d isp u te reso luti o n clau se o f th e p o w er su p p lyag ree m en t betw ee n the p arti es, bu t den ied P P L ’s m o tio n f o r su m m a ryju d g m e n t o n its c o u n ter c laim s f o r to rtio u s in ter f

e re n c e w ith contr actual r el at i ons . B or ough of O l yphantv. PP& L , I nc. , N o. 03- 4023, 2004 W L 1 8 5 8 0 4 5 (E . D . P a. A u g . 1 9 , 2 0 0 4 ). II. T hi s C our tr evi ew s t he D i s t r i ctC our t ’ s rul i ng on t he mot i on t o cons ol i dat e for ab u se o f d iscreti o n . S ee , e.g., Y o u n g v . C ityo f A u g u sta, 5 9 F . 3 d 1 1 6 0 , 1 1 6 9 (11 C ir . th 1 9 9 5 ). A n a b u se o f

d isc re tio n e x ists “ o n lyw h e n th e ju d icia l ac tio n is a rb itrar y , fa n c if u l, orunr eas onabl e, orw hen i m pr opers t andar ds , cr i t er i a, orpr ocedur es ar e us ed. ” Evans v.5

B uchana n, 555 F. 2d 373, 378 ( 3d C i r . 1977) . T he movi ng par t ybear s t he bur den of pr oof o n a m o t i o n t o c o n s o l i d a t e . K l i m a r s k i v . P a r e x e l I n t e r n , N o . C I V . A . 0 5 - 2 9 8 , 2 0 0 5 WL 857350, at*2 ( E . D . Pa. A pr . 4, 2005) ; Far ahmand v. R um s fel d, N o. C I V . A . 02- 1236, 2 0 0 2 W L 3 1 6 3 0 7 0 9 , a t * 1 (E .D . P a . N o v . 2 0 , 2 0 0 2 ). T h e D istric t C o u rt’s r u lin g s o n th e m o tio n s f o r su m m a ryju d g m e n t ar e su b jec t to pl enaryr evi ew . See C ur l eyv. K l em, 298 F. 3d 271, 276- 77 ( 3d C i r . 2002) . W e appl yt he s ame t es templ oy ed bya di s t r i ctcour tunderFeder al R ul e of Ci vi l Pr ocedur e 56( c) . See K e lle yv . T Y K R e f

ra c to ri e s C o ., 8 6 0 F .2 d 1 1 8 8 , 1 1 9 2 (3 d C ir . 1 9 8 8 ). III . O l yphantar gues t hati tw as an abus e of di s cr et i on fort he di s t r i ctcour tt o denyt he m ot i on t o cons ol i dat e bec aus e i tpr ecl uded O l yphantfr om benef i t t i ng fr om addi t i onal di s coveryi n t he Lansda l e ac t i on. A di s t r i ctcour thas br oad di s cr et i on w hen det erm i ni ng w hethercons ol i dat i on i s appr opr i at e. See Far ahmand, 2002 W L 31630709, at*1. A tt he t i m e the di s t r i ctcour tdeni ed the mot i on t o cons ol i dat e, fac tdi s coveryi n thi s cas e had been c l os ed fornear l ya y ear , w hi l e fa ctdi s coveryi n t he Lansda l e ac t i on had j us tbegun and w oul d notcl os e unt i l J ul y2004. I ti s w i t hi n a di s t r i ctcour t ’ s br oad di s cr et i on t o deny a m o tio n to c o n so lid a te if it w o u ld c a u se d e lay i n o n e o f th e c a se s, o r if

o n e o f th e c a se s is fur t heri nt o di s coveryt han the othercas e. I d. ( ci t i ng 9 C . W r i ght& A . M i l l er , Feder al Pr act i ce a nd Pr ocedur e, § 2383 ( C i vi l 2d. 2004) ) . T her efor e, t he di s t r i ctcour tdi d not abus e i t s di s cr et i on i n deny i ng t he mot i on t o cons ol i dat e.6

O l yphantal s o ar gues t hatt he di s t r i ctcour terr ed i n gr ant i ng s um m aryj udgm ent di s m i s s i ng i t s br eac h of contr actcl ai m and i t s cl ai m s underSect i ons 1 and 2 of the Sher m an A ctand Sect i on 2 of the C l ayt on A ct , deny i ng i t s m ot i on fors um m aryj udgm ent w i t h r e s pe c tt o PPL’ s c ou nt e r c l a i ms, a nd gr a nt i ng s umm a r yj ud gmen ti n f a vo rof PPL w i t h r es pectt o PPL ’ s count er cl ai m forbr eac h of the di s put e r es ol ut i on cl aus e. O l yphant a rg u e s th a t th e d istric t co u rt f a iled to re c o g n ize m a ter ial iss u e s o f f a c t w ith re sp e c t to its c laim s, th a t th e d istric t co u rt d id n o t co n sid e r th e e v id e n c e it su b m itt e d in o p p o sitio n to A ppel l ees ’ m ot i on fors um m aryj udgm enton one of thei rcount er cl ai m s , and thatt he di s t r i ctcour terr ed i n deny i ng O l yphant ’ s m ot i on t o m odi fyt he s chedul i ng or dert o ext end t he per i od i n w hi ch di s pos i t i ve mot i ons m aybe fi l ed. W e have car eful l ycons i der ed O l yphant s ’ s ar gum ent s on t hi s appea l and fi nd t hatt heyl ack mer i t . Fort he r eas ons s t at ed in the D istri ct C o u rt ’s w ell -reaso n ed an d tho rou g h o p inion , w e f ind that su m m ary j u d g me n twa s p r o p e r l yg r a n t e d . W e t h e r e f o r e a f f i r m.