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Circuit Court rules utility contract falls in state jurisdiction

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A dispute between a power generator and an electricity wholesaler should be heard in the state court, the 7th Circuit Court of Appeals ruled after finding the central issues did not arise under federal law.

The appeal involves two Indiana organizations and the issue of whether a claim for breach of a long-term requirements contract for wholesale electricity is governed by federal law or state law.

Since entering into a contract in 1977, Northeastern has purchased electricity from Wabash Valley. Under terms of a contract, Northeastern agreed to pay for the electricity at rates set by the Wabash Valley board of directors, subject to approval from what is now the Indiana Utility Regulatory Commission.  

When Wabash Valley took action in 2004 to transfer regulation of its rates from the IURC to the Federal Energy Regulatory Commission, Northeastern filed suit in Indiana state court seeking a declaration judgment that Wabash materially breached the original contract.

Wabash Valley removed the case to federal court on the theory that the claim for breach of contract necessarily arises under the Federal Power Act. Subsequently, the district court granted Wabash Valley’s motion for a preliminary injunction, agreeing that federal jurisdiction exists because Northeastern’s suit raises a question of federal law.

In Northeastern Rural Electric Membership Corp. v. Wabash Valley Power Association, Inc., 12-2037, the Circuit court found the dispute to be a question of state law. It vacated the preliminary junction granted by the U.S. District Court for the Southern District of Indiana and remanded the case so the District court may remand it to state court.

The Circuit court found Wabash Valley’s alleged breach took place before the filing of a federal tariff which means the complaint is not a federal question.

“For Northeastern to obtain its requested declaratory judgment it must show only that it has a valid contract and that Wabash Valley’s submission to the regulatory jurisdiction of FERC breached on the contract,” wrote Judge David Hamilton.. “Federal law is not at issue in either of these questions. The duty Northeastern claims Wabash Valley breached was not created by federal law or a filed tariff. And Northeastern does not seek to directly alter any duty or liability created by a filed tariff.”

 

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  1. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  2. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  3. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

  4. Well, I agree with you that the people need to wake up and see what our judges and politicians have done to our rights and freedoms. This DNA loophole in the statute of limitations is clearly unconstitutional. Why should dna evidence be treated different than video tape evidence for example. So if you commit a crime and they catch you on tape or if you confess or leave prints behind: they only have five years to bring their case. However, if dna identifies someone they can still bring a case even fifty-years later. where is the common sense and reason. Members of congress are corrupt fools. They should all be kicked out of office and replaced by people who respect the constitution.

  5. If the AG could pick and choose which state statutes he defended from Constitutional challenge, wouldn't that make him more powerful than the Guv and General Assembly? In other words, the AG should have no choice in defending laws. He should defend all of them. If its a bad law, blame the General Assembly who presumably passed it with a majority (not the government lawyer). Also, why has there been no write up on the actual legislators who passed the law defining marriage? For all the fuss Democrats have made, it would be interesting to know if some Democrats voted in favor of it (or if some Republican's voted against it). Have a nice day.

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