ILNews

Circuit Court rules utility contract falls in state jurisdiction

Back to TopCommentsE-mailPrintBookmark and Share

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.”

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Based on several recent Indy Star articles, I would agree that being a case worker would be really hard. You would see the worst of humanity on a daily basis; and when things go wrong guess who gets blamed??!! Not biological parent!! Best of luck to those who entered that line of work.

  2. I was looking through some of your blog posts on this internet site and I conceive this web site is rattling informative ! Keep on posting . dfkcfdkdgbekdffe

  3. Don't believe me, listen to Pacino: https://www.youtube.com/watch?v=z6bC9w9cH-M

  4. Law school is social control the goal to produce a social product. As such it began after the Revolution and has nearly ruined us to this day: "“Scarcely any political question arises in the United States which is not resolved, sooner or later, into a judicial question. Hence all parties are obliged to borrow, in their daily controversies, the ideas, and even the language, peculiar to judicial proceedings. As most public men [i.e., politicians] are, or have been, legal practitioners, they introduce the customs and technicalities of their profession into the management of public affairs. The jury extends this habitude to all classes. The language of the law thus becomes, in some measure, a vulgar tongue; the spirit of the law, which is produced in the schools and courts of justice, gradually penetrates beyond their walls into the bosom of society, where it descends to the lowest classes, so that at last the whole people contract the habits and the tastes of the judicial magistrate.” ? Alexis de Tocqueville, Democracy in America

  5. Attorney? Really? Or is it former attorney? Status with the Ind St Ct? Status with federal court, with SCOTUS? This is a legal newspaper, or should I look elsewhere?

ADVERTISEMENT