Source: http://openjurist.org/267/f3d/1042
Timestamp: 2013-05-22 09:57:40
Document Index: 656215032

Matched Legal Cases: ['§ 8572', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1291']

267 F3d 1042 Duke Energy Trading and Marketing Llc v. Gray Davis Governor of the State of California and California Power Exchange Corporation | OpenJurist
267 F. 3d 1042 - Duke Energy Trading and Marketing Llc v. Gray Davis Governor of the State of California and California Power Exchange Corporation	Home267 f3d 1042 duke energy trading and marketing llc v. gray davis governor of the state of california and california power exchange corporation
267 F3d 1042 Duke Energy Trading and Marketing Llc v. Gray Davis Governor of the State of California and California Power Exchange Corporation 267 F.3d 1042 (9th Cir. 2001)
DUKE ENERGY TRADING AND MARKETING, L.L.C., PLAINTIFF APPELLANT,v.GRAY DAVIS, GOVERNOR OF THE STATE OF CALIFORNIA, DEFENDANT APPELLEE, AND CALIFORNIA POWER EXCHANGE CORPORATION, DEFENDANT.
No. 01-55770
San Francisco, California Filed September 20, 2001Filed September 20, 2001
In the event of a default, the CTS Rate Schedule provides that "[a] default in the CTS Market will be deemed to be a default in the Core Market and vice versa." Section 6.7.6 of the CTS Rate Schedule sets forth the default mitigation provisions to which participants are bound. It provides:
On February 2, as the preliminary injunction surrounding the SCE block forward contracts was about to expire, Governor Davis issued an Executive Order purporting to "commandeer" SCE's block forward contracts "to be held subject to the control and coordination of the State of California." The Executive Order was promulgated pursuant to section 8572 of the California Emergency Services Act, which provides that "[i]n the exercise of the emergency powers hereby vested in him during a . . . state of emergency, the Governor is authorized to commandeer or utilize any private property or personnel deemed by him necessary in carrying out the responsibilities hereby vested in him as Chief Executive of the state and the state shall pay the reasonable value thereof." Cal. Gov't Code § 8572. On February 5, Governor Davis issued a similar Executive Order commandeering PG&E's block forward contracts. In press releases publicizing the Executive Orders, Governor Davis explained that "I am using my emergency powers to seize options to buy very inexpensive power that would otherwise be lost forever. . . . By acting quickly and decisively, we have rescued these contracts from the auction block and preserved their low-cost value for consumers."
On April 30, 2001, following a hearing on the summary judgment motions, the district court dismissed Duke's claims against Governor Davis on sovereign immunity grounds without further explanation. Duke thereupon dismissed the CalPX from the action pursuant to Fed. R. Civ. P. 41(a)(1)(i) and filed this timely appeal.
At the time that the district court dismissed this action against Governor Davis on sovereign immunity grounds, the CalPX still remained a defendant. Duke thereupon dismissed its claims against the CalPX without prejudice pursuant to Fed. R. Civ. P. 41(a)(1)(i),4 which grants plaintiffs the absolute right to dismiss an action without prejudice provided that the defendant has not yet filed an answer or a motion for summary judgment. On the same day that Duke dismissed the CalPX, Duke filed its notice of appeal challenging the district court's dismissal of Governor Davis on sovereign immunity grounds.
Governor Davis contends that we lack appellate jurisdiction over Duke's appeal under 28 U.S.C. § 1291. He argues that the district court's dismissal of Duke's claims against him was not a final judgment in light of the fact that Duke's claims against the CalPX still remained. Governor Davis further submits that Duke's subsequent dismissal of the CalPX without prejudice pursuant to Rule 41(a)(1)(i) constitutes an impermissible attempt by Duke to "manufacture" a final judgment in order to invoke our appellate jurisdiction.
Whether the district court's dismissal of Governor Davis constituted a final judgment for purposes of appellate jurisdiction under § 1291 depends upon the effect of Duke's dismissal of the CalPX pursuant to Rule 41(a)(1)(i). We have held that Rule 41(a)(1)(i) grants plaintiffs "an absolute right to dismiss [] without prejudice" claims against one or more defendant, and requires no action on the part of the court. Pedrina v. Chun, 987 F.2d 608, 610 (9th Cir. 1993). In Pedrina, we emphasized the absolute nature of the plaintiff's right to dismiss under Rule 41(a)(1)(i):
The [filing of a Rule 41(a)(1)(i) notice] itself closes the file. There is nothing the defendant can do to fan the ashes of that action into life and the court has no role to play. This is a matter of right running to the plaintiff and may not be extinguished or circumscribed by adversary or court. There is not even a perfunctory order of court closing the file. Its alpha and omega was the doing of the plaintiff alone.
Id. (quoting American Cyanamid Co. v. McGhee, 317 F.2d 295, 297 (5th Cir. 1963)). The effect of the filing of a notice of dismissal pursuant to Rule 41(a)(1)(i) "is to leave the parties as though no action had been brought." Commercial Space Mgmt. Co. v. Boeing Co., 193 F.3d 1074, 1077 (9th Cir. 1999). Once the notice of dismissal has been filed, the district court loses jurisdiction over the dismissed claims and may not address the merits of such claims or issue further orders pertaining to them. See id. at 1077 n.4, 1079.
Duke's exercise of its absolute right to dismiss the CalPX pursuant to Rule 41(a)(1)(i) following the district court's dismissal of Governor Davis on sovereign immunity grounds left "nothing for the court to do but execute the judgment." Thus, the district court's judgment constituted a "final decision" for purposes of 28 U.S.C. § 1291. See Coopers & Lybrand, 437 U.S. at 467. To hold otherwise would be tantamount to construing § 1291 as implicitly limiting a plaintiff's absolute right to dismiss a defendant without prejudice i.e., to "unjoin" a defendant pursuant to Rule 41(a)(1)(i). None of the cases cited by Governor Davis supports such a proposition.
Governor Davis relies upon Dannenberg v. The Software Toolworks Inc., 16 F.3d 1073 (9th Cir. 1994), as support for his argument that we lack appellate jurisdiction over this appeal. Governor Davis's reliance on Dannenberg is misplaced. In Dannenberg, we held that we did not have jurisdiction under § 1291 over an order granting partial summary judgment where the parties stipulated to the dismissal of the surviving claims without prejudice, subject to the plaintiff's right to reinstate them in the event of reversal on appeal. Id. at 1076-77. Observing that "[i]n essence, the claims [that had been dismissed without prejudice] remained in the district court pending a decision by this court," we concluded that "litigants should not be able to avoid the final judgment rule without fully relinquishing the ability to further litigate unresolved claims." Id. at 1077.
Dannenberg did not involve the effect of the complete dismissal of a defendant pursuant to Rule 41(a)(1)(i) for appellate jurisdiction purposes, and hence is distinguishable from the scenario presented here. The claims that survived partial summary judgment in Dannenberg "in essence . . . remained in the district court" pending a decision in our court; here, in contrast, the district court was immediately divested of jurisdiction over Duke's claims against the CalPX immediately upon Duke's filing of its Rule 41(a)(1)(i) notice of dismissal. Commercial Space Mgmt. Co., 193 F.3d at 1077 n.4, 1079. Hence, there are no "unresolved" claims that "in essence . . . remain in the district court." Dannenberg, 16 F.3d at 1077.
In State of Missouri ex rel. Nixon v. Coeur d'Alene Tribe, 164 F.3d 1102 (8th Cir. 1999), the Eighth Circuit held that a Rule 41(a)(1)(i) dismissal of a remaining defendant does not render a previous order finally dismissing another defendant "non-final" for purposes of appellate jurisdiction under 28 U.S.C. § 1291. The court explained:
164 F.3d at 1106. See also 8 Moore's Federal Practice ¶¶ 41.33[8][g][1] (3d ed. 1998) ("The plaintiff should [also] be permitted to expedite review of an involuntary dismissal of a defendant by dismissing the remaining defendants. Although an attempt to facilitate an appeal of an adverse order by voluntarily dismissing the remaining claims is generally prohibited unless the dismissal is with prejudice . . . the complete dismissal of a defendant from the lawsuit to expedite review should be permitted since the defendant will not be subject to the risk of multiple suits in different forums."). We agree with the Eighth Circuit and hold that we have jurisdiction over Duke's appeal.
Second, Governor Davis also appears to suggest that Duke does not have standing to pursue this action given that, under the CTS rate schedule, the decision whether to liquidate the IOUs' forward contract positions is left to the CTS itself "in its sole discretion." The fact that liquidation of the forward contracts is discretionary on the part of a third-party to this appeal raises a potential redressability issue. The standing requirement of Article III is not met where it is "purely speculative" whether the plaintiff's injury "fairly can be traced to the challenged action of the defendant," or instead "result[ed] from the independent action of some third party not before the court." Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41-42 (1976).
This case is distinguishable from the cases exploring the filed rate doctrine in one respect, however: By commandeering the wholesale suppliers' collateral, Governor Davis was acting solely in an area reserved for exclusive federal jurisdiction. Unlike the typical filed rate doctrine case, Governor Davis's orders were not even issued incident to an area of state regulatory authority. Thus, there can be little doubt that Governor Davis's orders constituted an impermissible intrusion into FERC's territory. As Justice Scalia has observed, "[i]t is common ground that if FERC has jurisdiction over a subject, the States cannot have jurisdiction over the same subject." Miss. Power & Light Co. v. Miss. ex rel. Moore, 487 U.S. 354, 377 (1988) (Scalia, J., concurring).
Fed. R. Civ. P. 41(a)(1)(i) provides that "an action may be dismissed by the plaintiff without order of the court . . . by filing a notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judgment, whichever first occurs . . . ."
We do not question the importance of California's interest in having a reliable and affordable supply of electricity; however, the importance of this interest does not bar the application of the Young doctrine. See Coeur d'Alene, 521 U.S. at 296 ("[W]e have never doubted the importance of state interests in cases falling squarely within our past interpretations of the Young doctrine.") (O'Connor, J., concurring in part and in the judgment).
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