U.S. District Judge Henry Wingate said last week that he would rule within three weeks to 30 days on a motion for venue change requested by Entergy Mississippi.
Attorneys for Entergy Mississippi argue that the case of Hood v. Entergy Mississippi should be played out in a federal court, saying Hood's lawsuit against the company for over-charging Mississippi ratepayers qualifies as a massive tort action that falls under the Class Action Fairness Act.
"Hood has named four different defendants: Entergy Mississippi, Entergy Corporation, Entergy Services and Entergy Power," said Chicago attorney David Carpenter, who represented the power company during the May 28 hearing before U.S. District Judge Henry Wingate and at an earlier May 7 hearing.
Hood argued that the state has policing powers over monopoly utility companies, so the case should play out in state court.
"The U.S. Supreme Court declared one of the police powers of a state to be the governing of a monopoly utility. This is state law, and it needs to be decided in state court," Hood said. "CAFA does not apply."
Mississippi College School of Law professor Matt Steffey said the company may be seeking to help its case by arguing it in a court commonly regarded as friendlier to corporate defendants.
"The Fifth Circuit is one of the most conservative on many issues in the U.S., and the conventional wisdom is that corporate defendants are better off in the federal Fifth Circuit than they are in state forums. That's the belief for Louisiana and other southern states as well," Steffey told the Jackson Free Press. "That's not to say that Hood won't get a fair shake, but that's the conventional wisdom."
Hood said he was confident in his case against Entergy, no matter which court Wingate eventually decided to place it in. "The gist of the argument is they're trying to say this is a massive tort action so they can move it to federal court, but a judge is going to order the opening of the Entergy documents I've been fighting for no matter what court, and we're going to prove that they've been overcharging the state of Mississippi for power," he said.
Last year, Hood seized upon the results of two Louisiana court cases against Entergy affiliates as evidence that Entergy Mississippi has engaged in deceptive-trade practices, antitrust behavior, account manipulation and unlawful enrichment, among other charges. He claims Entergy made Mississippi "a dumping ground for high-cost electricity" by buying more expensive energy from Entergy affiliates, (which inflated company stock prices) instead of cheaper power from independent sources, as demanded by the company's regulatory compact with the state of Mississippi.
The attorney general also asserts that the company fraudulently claimed to the Mississippi Public Service Committee in 2008 that it was purchasing the cheapest power while engaging in discriminatory behavior against unaffiliated power companies.
Hood accuses both the power company and its sister company of using Mississippi ratepayers' money to finance the expensive operation of nuclear-power plants in the Northeast to keep the plants competitive with other local power suppliers and that the conglomerate diverted to the Northeast nuclear facilities $71 million in federal tax refunds related to the Gulf Opportunity Zone Act of 2005.
The attorney general launched his December lawsuit in response to an even earlier PSC hearing on a 30-percent rate increase that Entergy Mississippi was attempting to clear with the commission last August.
Entergy says a recent decision by the Louisiana Supreme Court to reduce a Louisiana appeal court's $34.3 million decision against Entergy New Orleans to $11.3 million is proof that Hood's allegations are unfounded.
John Mullins, vice president of customer operations for Entergy Mississippi, said in a statement that the Louisiana Supreme Court concluded that Entergy "acted in good faith and with no intent to harm its customers." Additionally, Mullins said, the decision shows that "although the AG tries to act as prosecutor and judge at the same time, mere claims of wrongdoing do not prove wrongdoing in our legal system."
Hood responded that the New Orleans decision means little because it only reduced the penalty and did not reverse the decision.
The power company is looking to get Hood removed as a PSC counselor over the issue, having submitted an April 17 protective order barring Hood's office, or any contractual attorneys associated with him, from access to Entergy documents.
Entergy claims Hood has been acting simultaneously in three conflicting roles in Entergy-related matters: as counsel for the commission; as advocate for the commission "in regulatory proceedings in which the AG's position is adverse to Entergy"; and "as an advocate before civil courts in civil actions," including the December civil action Hood filed against the company and its affiliates. The company also claims the protective order also serves to keep company trade secrets confidential and protected by attorney-general employees and attorneys doing contracted service with Hood's office.
Hood responded to Entergy's protective order with an April 28 letter claiming the Entergy motion is inappropriate because "it conflicts with Mississippi Public Records Act." Hood also called the order unwarranted, describing it as "a request for special treatment" which is "detrimental to the public interest and the public's right to know."
A lawyer friend who watched the arguments in the court room said that one of the things argued by the Attorney General was that CAFA didn't apply because Entergy can't prove it meets the dollar threashold, that this could be a case of $200 million or it could be a case of 75 cents. It seems he argued that his multi-million dollar suit should not be in federal court because it might actually not be worth that much.