Opinion ID: 492041
Heading Depth: 1
Heading Rank: 5

Heading: Intervention by the LPSC

Text: 46 As set out above, the district court denied the LPSC's motion to intervene pursuant to Fed.R.Civ.P. 24. As we explain, a decision of this Court interpreting Rule 24 mandates that we reverse the district court and allow the LPSC to intervene. Rule 24 provides: 47 (a) Intervention of Right. Upon timely application anyone shall be permitted to intervene ... (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties. 48 (b) Permissive Intervention. Upon timely application anyone may be permitted to intervene in an action ... (2) when an applicant's claim or defense and the main action have a question of law or fact in common.... In exercising its discretion, the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties. 49 The LPSC meets all of the requirements of Rule 24(a) and may intervene as of right. First, it filed a timely motion to intervene. Second, it has an interest in the GSU-Southern litigation. Louisiana law charges the LPSC to investigate the reasonableness and justness of all contracts made by GSU, and the LPSC may disallow as an operating expense of [GSU] any unreasonable payments GSU makes to Southern. La.Rev.Stat.Ann. Sec. 45:1176 (West 1982). The LPSC is the only government party seeking to intervene, and it will have to determine whether GSU may pass-through to consumers the cost of its purchases from Southern. Third, the LPSC must intervene now to protect GSU's customers, before the results of this litigation are res judicata. Finally, though the LPSC's views of this case are not yet known, we cannot assume that GSU will represent the LPSC's interests. 50 Our analysis of Rule 24(a) is controlled by New Orleans Public Service, Inc. v. United Gas Pipeline Co., 690 F.2d 1203 (5th Cir.1982) (NOPSI I ). In NOPSI I, we held that the mayor and city council members of New Orleans could intervene as of right in a suit between NOPSI and its gas supplier, because the intervenors had a statutory obligation to oversee NOPSI's fiscal and public responsibilities. Id. at 1209. After deciding NOPSI I, we learned the law had been changed and that the LPSC--not the city officials--had been given the authority to regulate NOPSI's rates, and we reversed NOPSI I. New Orleans Public Service, Inc. v. United Gas Pipeline Co., 694 F.2d 421 (5th Cir.1982) (NOPSI II ). 13 The case before us resembles the case we perceived in NOPSI I, and NOPSI I mandates that the LPSC may intervene as of right. Accord Mississippi Power & Light Co. v. United Gas Pipeline Co., 621 F.Supp. 718 (S.D.Miss.1985) (ordering intervention as of right under facts similar to NOPSI I ); cf. NOPSI I, 690 F.2d at 1216-17 (Garwood, J., concurring) (expressing serious doubts that the regulatory agency has an interest in the litigation). 51 In the alternative, we would hold that the district court abused its discretion by denying permissive intervention under Rule 24(b), especially because neither GSU nor Southern opposed the LPSC's intervention or claimed that it would prejudice their rights or delay the litigation. See NOPSI I, 690 F.2d at 1209-10. 14 VI. Conclusion 52 We affirm the district court's exercise of subject matter jurisdiction subject to the limits discussed above. The district court may address GSU's claims that Southern failed to renegotiate in good faith, that the UPS and Interchange contracts were induced by fraud, that Southern is selling more than its available Long Term Power under Schedule E, and that the quantity of electricity GSU must take under its contracts excuses its performance under state contract law. As the litigation proceeds and GSU's theories become clearer, however, the district court may find that the FERC has exclusive or primary jurisdiction over some of GSU's claims. 53 Until the district court decides the merits of this case, it may within its discretion accept deposits under Rule 67 from GSU. Finally, the motion of the LPSC to intervene should be, and is, granted. The decision of the district court is 54 AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.