Opinion ID: 782799
Heading Depth: 5
Heading Rank: 3

Heading: Energy Reserves

Text: 48 Santa Ana next argues that Energy Reserves is squarely on point and thus an absolute defense. Furthermore, Defendant believes Energy Reserves either reversed or substantially limited the reasoning in U.S. Trust. 49 As in this case, the parties in Energy Reserves made their agreement subject to relevant present and future state and federal law. 459 U.S. at 416, 103 S.Ct. 697. The Court noted [t]his latter provision could be interpreted to incorporate all future price regulation, and thus dispose of the Contract Clause claim. However, Energy Reserves mentioned this in the context of impairment of a private agreement, id. at 409, 412-413, 103 S.Ct. 697, whereas the standard of review is more stringent when the State itself is a contracting party.... Id. at 412-413 & n. 14, 103 S.Ct. 697. As a practical matter, sharing the risk that a neutral third party might act in a manner that affects one's contract is substantially different from allegedly empowering an interested contracting party to alter its agreement at will. As explained above, a contract that allows one party to unilaterally rewrite central terms is not a contract at all. 50 Rather than reverse or limit U.S. Trust, Energy Reserves approves of U.S. Trust's holding and reasoning when state entities interfere with their own obligations. Id. at 412-413 & n. 14, 103 S.Ct. 697. The Ninth Circuit has also concluded that Energy Reserves has no direct effect on the Supreme Court's holding in [U.S.] Trust Co.  State of Nev. Employees' Ass'n, Inc., 903 F.2d at 1226. 51