Justia Government Contracts Opinion SummariesArticles Posted in Utilities Law
TruConnect Communications, Inc. v. Maximus, Inc.
The Lifeline Program provides discounted telecommunications services to low-income Californians. The California Public Utilities Commission (CPUC) administers the program under Pub. Util. Code 871. A “third-party administrator,” qualifies applicants, and there are procedures for service providers to seek reimbursement from CPUC for “LifeLine-related costs and lost revenues.” TruConnect provides free wireless telephone service through LifeLine. CPUC changed the third-party administrator to Maximus. TruConnect claimed Maximus was “woefully unequipped” and asked CPUC to delay the rollout of new software. The launch nonetheless went forward. Maximus recruited TruConnect to assist. TruConnect allegedly invested hundreds of thousands of man-hours. Maximus subsequently subcontracted work to Solix. TruConnect claims it incurred losses of more than $14 million in connection with the launch. TruConnect sought reimbursement from CPUC, which paid some claims but denied compensation for “lost opportunities,” customers who wanted TruConnect’s services but were unable to enroll because of the flawed rollout.TruConnect sued Maximus and Solix. The trial court dismissed the action for lack of jurisdiction. The court of appeal reversed and remanded for determination of whether the lawsuit is nonetheless barred because CPUC is an indispensable party or for other reasons. Section 1759 does not bar the lawsuit since recovery would not conflict with a CPUC order or interfere with its oversight of LifeLine. View "TruConnect Communications, Inc. v. Maximus, Inc." on Justia Law
California-American Water Co. v. Marina Coast Water Districtw
Monterey is an independent public agency responsible for analyzing Monterey County's water resources. Cal-Am is an investor-owned water utility providing water to over 100,000 residents on the Monterey Peninsula. Marina, a public agency, provides water for the City of Marina and neighboring Monterey Peninsula communities. In 1995 the State Water Resources Control Board ordered Cal-Am to stop drawing water from the Carmel River and develop an alternate water supply. In 2009 Marina, Monterey, and Cal-Am agreed to develop and construct a regional desalinization project to extract brackish water from beneath Monterey Bay, purify it, and deliver it to consumers. In 2010-2011, the parties entered into several agreements. The project was never built. The parties engaged in negotiation and mediation, ending in January 2012 without resolution.In September 2012, Cal-Am submitted a claim under the California Government Claims Act. Litigation followed. In 2019, the trial court entered summary adjudication against Monterey, finding that a negligence cause of action was barred by the two-year statute of limitations and against Cal-Am under the Government Claims Act. The court of appeal reversed. The trial court erred in finding that the “harm” accrued in 2010. There were triable issues of fact as to express waiver and as to the applicability of alternatives to the Claims Act. View "California-American Water Co. v. Marina Coast Water Districtw" on Justia Law
Vote Solar v. Montana Department of Public Service Regulation
The Supreme Court affirmed the order of the district court vacating and modifying the orders of the Montana Public Service Commission (PSC) reducing standard-offer contract rates and maximum contract lengths for small solar qualifying facilities (QFs), holding that the district court did not err.Specifically, the Supreme Court held (1) the district court did not err in determining that the PSC's calculation of the avoided-cost rate was arbitrary and unlawful; and (2) the district court did not err in concluding that the PSC arbitrarily and unreasonably calculated QF capacity contribution values and arbitrarily and unreasonably reduced maximum-length QF-1 contracts to fifteen years. View "Vote Solar v. Montana Department of Public Service Regulation" on Justia Law
Startley General Contractors, Inc. v. Water Works Board of the City of Birmingham et al.
Plaintiffs Startley General Contractors, Inc. ("Startley"), and Mandy Powrzanas, appealed the denial of their renewed motion to have Jefferson Circuit Court Judge Robert Vance, Jr. recuse himself from the underlying action the plaintiffs filed against the Water Works Board of the City of Birmingham ("BWWB"), Board members, Jones Utility and Contracting Co., Inc., and Richard Jones (collectively, “defendants.”). Plaintiffs alleged the defendants conspired to violate Alabama's competitive-bid law in ways that resulted in financial harm to the plaintiffs. Plaintiffs contended that Judge Vance had received monetary contributions to his 2018 campaign for Chief Justice of the Alabama Supreme Court from law firms and attorneys representing the defendants. The Alabama Supreme Court concluded the renewed motion to recuse did not fall under the auspices of section 12–24–3, Ala. Code 1975, because it was not based on campaign contributions in "the immediately preceding election." Moreover, “even if [section] 12–24–3 did apply, the plaintiffs failed to establish a rebuttable presumption for recusal because, in order to meet the required threshold, the plaintiffs: (1) included contributions from law firms and individuals who were not ‘parties,’ as that term is defined in 12–24–3(c), to the case; (2) aggregated campaign contributions from multiple parties in contravention to 12–24–3(b) addressing campaign contributions made by ‘a party to the judge or justice’; and (3) incorrectly assumed that ‘total campaign contributions raised during the election cycle’ refers to one-month totals for campaign contributions rather than the ordinary meaning of an ‘election cycle,’ which concerns a longer period.” The Court concluded plaintiffs did not establish that a single, actual "party" to this case gave a "substantial campaign contribution" that would give rise to the conclusion that "[a] reasonable person would perceive that [Judge Vance's] ability to carry out his ... judicial responsibilities with impartiality is impaired." View "Startley General Contractors, Inc. v. Water Works Board of the City of Birmingham et al." on Justia Law
City of Richardson v. Oncor Electric Delivery Co.
The pro-forma provision in the tariff in this case, which set the rates and terms for a utility’s relationship with its retail customers, did not conflict with a prior franchise agreement, which reflected the common law rule requiring utilities to pay public right-of-way relocation costs, or the common law, and the franchise agreement controlled as to the relocation costs at issue.At issue was whether the City of Richardson or Oncor Electric Delivery Company must pay relocation costs to accommodate changes to public rights-of-way. The City negotiated a franchise agreement with Oncor requiring Oncor to bear the costs of relocating its equipment and facilities to accommodate changes to public rights-of-way, but Oncor refused to pay such costs. While the relocation dispute was pending, Oncor filed a case with the Public Utility Commission (PUC) seeking to alter its rates. The case was settled, and the resulting rate change was filed as a tariff with the PUC. The City enacted an ordinance consistent with the tariff, which included the pro-forma provision at issue. The Supreme Court held that the provision in the tariff did not conflict with the franchise contract’s requirement that Oncor pay the right-of-way relocation costs at issue. View "City of Richardson v. Oncor Electric Delivery Co." on Justia Law
Russell City Energy Co. v. City of Hayward
In a 2005 Cooperation and Option Agreement to facilitate Russell's construction and operation of the Energy Center, a natural gas-fired, combined cycle electric generating facility in Hayward, the city granted Russell an option to purchase 12.5 acres of city-owned land as the Energy Center's site and promised to help Russell obtain permits, approvals, and water treatment services. Russell conveyed a 3.5-acre parcel to the city. The Agreement's “Payments Clause” prohibited the city from imposing any taxes on the “development, construction, ownership and operation” of the Energy Center except taxes tethered to real estate ownership. In 2009, Hayward voters approved an ordinance that imposes “a tax upon every person using electricity in the City. … at the rate of five and one-half percent (5.5%) of the charges made for such electricity” with a similar provision regarding gas usage. Russell began building the Energy Center in 2010. In 2011, the city informed Russell it must pay the utility tax. The Energy Center is operational.The court of appeal affirmed a holding that the Payments Clause was unenforceable as violating California Constitution article XIII, section 31, which provides “[t]he power to tax may not be surrendered or suspended by grant or contract.” Russell may amend its complaint to allege a quasi-contractual restitution claim. View "Russell City Energy Co. v. City of Hayward" on Justia Law
Pacific Gas & Elec. Co. v. United States
The power companies allege that they were overcharged for electricity during several months in 2000–2001 and sought to recover the overcharges from the federal government based on sales by the federal Western Area Power Administration (WAPA) and Bonneville Power Administration (BPA). The California Power Exchange (Cal-PX) and the California Independent System Operator (Cal-ISO) were responsible for acquiring and distributing electricity between producers and consumers in California and setting prices for the electricity. The power companies argued that a contract existed between all consumers of electricity (including themselves) and all producers of electricity (including the government agencies) in California. The government argued that the contracts were only between the middleman entities—Cal-PX and Cal-ISO—and the consumers and producers individually. The Claims Court dismissed for lack of standing. The Federal Circuit affirmed. The companies lack privity of contract or any other relationship with the government that would confer standing. Under the Tucker Act, the Claims Court has jurisdiction over contract cases in which the government is a party, 28 U.S.C. 1491(a)(1); normally a contract between the plaintiff and the government is required to establish standing. The court noted that the companies may have claims against the parties with whom they are in contractual privity, the electricity exchanges. View "Pacific Gas & Elec. Co. v. United States" on Justia Law
System Fuels, Inc. v. United States
The Nuclear Waste Policy Act of 1982 authorized the Department of Energy (DOE) to contract with power utilities for a planned national nuclear waste disposal system, 42 U.S.C. 10222. Utilities were to pay into a Nuclear Waste Fund; the government was to dispose of their spent nuclear fuel beginning by January 31, 1998.. Under the Standard Contract, utilities must provide “preparation, packaging, required inspections, and loading activities necessary for the transportation … to the DOE facility.” DOE is responsible for “arrang[ing] for, and provid[ing], a cask(s) and all necessary transportation … to the DOE facility.” In 1983, System Fuels entered Standard Contracts concerning the Grand Gulf and Arkansas Nuclear One power stations. The government has yet to begin accepting spent nuclear fuel. System Fuels obtained damages for costs incurred through August 31, 2005 (Grand) and June 30, 2006 (Arkansas), including costs to construct Independent Spent Fuel Storage Installations (ISFSIs) and later successfully sought damages for continued breach. The Claims Court denied costs incurred to load spent fuel into storage casks at the ISFSIs by first loading it into canisters, then loading those canisters into dry fuel storage casks and welding the casks closed. The Federal Circuit reversed, noting that under the Standard Contracts, DOE cannot accept any of the canistered fuel as is, so System Fuels will incur costs to unload the casks and canisters and to reload fuel into transportation casks if and when DOE performs. View "System Fuels, Inc. v. United States" on Justia Law
Constr. Indus. Force Acct. Council, Inc. v. Ross Valley Sanitation Dist.
A trade association of California unions, contractors’ associations and contractors filed suit. Following discovery and a contested hearing, the court ruled that defendant Ross Valley Sanitary District lacked authority under Public Contract Code 20803 to engage its own workforce to complete a sewer system improvement project costing more than $15,000 without putting the project out for competitive bid and contract. The trial court ordered the District to cease and desist from taking further action with respect to about 139 miles of its small diameter sewer pipe with in-house workers, and to conduct all future replacement of this pipe through competitive bid and contract. The court of appeal reversed. Section 20803 applies when a district contracts with a third party for public work, and not when a district relies on force account (in-house) work. View "Constr. Indus. Force Acct. Council, Inc. v. Ross Valley Sanitation Dist." on Justia Law
Pegastaff v. Pac. Gas & Elec. Co.
PegaStaff is a temporary staffing agency. A large part of PegaStaff’s business was providing staffing to PG&E) The California Public Utilities Commission (PUC) adopted General Order 156 (GO 156) to implement Public Utilities Code Article 5, the purpose of which is to encourage and develop the use of women-, minority-, and disabled veteran-owned business enterprises within the public utility sector. PegaStaff is not a minority enterprise, and after PG&E adopted a program to increase the utilization of minority enterprises, PegaStaff’s provision of labor to PG&E was substantially reduced. PegaStaff attributes this reduction to the implementation of a tier system preferential to minority enterprises and the transfer of many of its contingent workers to minority enterprises. PegaStaff filed suit, alleging constitutional challenges to Article 5 and GO 156. The trial court determined that it did not have subject matter jurisdiction to consider PegaStaff’s constitutional challenges and granted the PUC’s motion for judgment on the pleadings. The court of appeal affirmed. Remaining defendants also sought and obtained judgment on the pleadings. The court of appeal reversed, finding that the trial court erred in determining that it lacked subject matter jurisdiction to consider its claims against PG&E and another staffing agency. The suit will not interfere with PUC’s regulatory authority. View "Pegastaff v. Pac. Gas & Elec. Co." on Justia Law