Sempra's $27B Class-Action Suit in Court

Arguments over whether the $27 billion class-action lawsuit against Sempra and its utilities should be dismissed in summary judgment are set to be heard at press time September 2. Sempra executives have expressed confidence that they will prevail in this five-year-old case but are skittish about its potential implications and have been tight-lipped with the financial community and journalists. An earlier request by Sempra to dismiss the case was turned down September 30, 2004. A motion for summary judgment in San Diego Superior Court by Sempra claims the plaintiffs have no "proof of causation of injury." The company expected the case to be dismissed early this week, but the judge has not done so. The group of plaintiffs' energy consumers during the energy crisis claim that utility executives, as well as executives from El Paso pipeline, arranged a "conspiracy" to set prices during a 1996 meeting in a Phoenix motel. The meeting allegedly set up cooperation between El Paso and SoCal Gas that benefited both corporations while shielding them from competing with each other. After that, SoCal Gas merged with San Diego Gas & Electric under the Sempra parent company, and El Paso acquired Tenneco. As deregulation set in, there were fewer gas pipelines than expected during the 1990s. Plaintiffs say the lack of competition was purposeful and caused energy prices to skyrocket. While Sempra denies any conspiracy, it maintains in legal documents that even if there was one, "The undisputed facts show that such a conspiracy would not have had any effect on the amount of natural gas flowing into California during 2000 and 2001." El Paso agreed to a $1.6 billion settlement in 2003, in part to put to rest its portion of the case's claims. Plaintiffs are seeking $9 billion in antitrust damages. That amount would triple under state law. Plaintiffs' attorneys did not answer a request for comment. If the case goes to trial, it's tentatively set for September 12.

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Sempra’s $27B Class-Action Suit in Court

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