Third-Party Practice in Court of Federal Claims:

Is there is a Pecuniary Interest in the Outcome?

In the contract dispute arising out the California Energy Crisis in the summer of 2001, the Pacific Gas & Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company, in conjunction with the State of California, filed a lawsuit in the U.S. Court of Federal Claims seeking refunds from the United States for allegedly over-charging for power by the Bonneville Power Authority and the Western Area Power Authority during the California Energy Crisis.

During the period in which Plaintiffs seek refunds, the California wholesale market was administered in part by the California Power Exchange Corporation (CalPX) with the regulatory approval of the Federal Energy Regulatory Commission (FERC). The trial judge granted the Government’s motion to send a notice to CalPX under RCFC 14(b), as a third-party defendant. In response, CalPX filed a motion to quash the notice, which the trial court granted, explaining:

“After careful review, the Court agrees with the arguments set forth by the CalPX. While it is true that the CalPX served as an administrator to the transactions at issue in these proceedings, that fact alone does not lead the Court to conclude that they have a pecuniary interest in the outcome of these proceedings.”

Please see full Memorandum Opinion below for more information.