Powerex v. Reliant
After the energy crisis in the state of California in 2000-2001, the state and several other parties, including PowerEx, sued Reliant Energy and several other power generators in California state court, alleging that the defendants conspired to fix the prices of wholesale electricity. PowerEx, which markets and exports surplus Canadian hydropower to the United Statesis, is a wholly owned subsidiary of BC Hydro, which is a crown corporation of the Canadian province of British Columbia created by the British Columbia Hydro and Power Authority Act of 1964. Reliant counter-sued PowerEx and BC Hydro, alleging that Powerex contributed to the manipulation of energy markets.
Powerex and BC Hydro removed the case to federal district court, on the basis of being foreign corporations. The district court ruled that PowerEx was not the instrumentality of a foreign sovereign and granted the defendant's motion to remand the case to state court. On appeal of the remand order, the Ninth Circuit Court of Appeals held that it had jurisdiction to review the remand order because the district court properly had jurisdiction to decide substantive issues of law, such as the sovereign status of PowerEx, that preceded the remand order. The court upheld the district court's decision that PowerEx was not the instrumentality of a foreign sovereign because it was not run by government appointees, was not staffed with civil servants, was not wholly owned by the government, was not immune from suit, did not exercise any regulatory authority, had a high degree of independence from the government of British Columbia, had no financial support from the government, and no special privileges or obligations under Canadian law.
Questions Presented:
1. Whether an entity that is wholly and beneficially owned by a foreign state’s instrumentality, and whose sole purpose is to perform international treaty and trade agreement obligations for the benefit of the foreign state’s citizens, may nonetheless be denied status as an “organ of a foreign state” under the Foreign Sovereign Immunities Act of 1976 (“FSIA”), 28 U.S.C. § 1603(b)(2), based on an analysis of sovereignty that ignores the circumstances surrounding the entity’s creation, conduct, and operations on behalf of its government.
2. Whether the court of appeals had jurisdiction to review the district court's remand order, notwithstanding 28 U.S.C. §1447(d).
