County of Suffolk v. Alcorn

266 F.3d 131, 2001 WL 1159843
CourtCourt of Appeals for the Second Circuit
DecidedSeptember 28, 2001
DocketDocket No. 00-7473
StatusPublished
Cited by18 cases

This text of 266 F.3d 131 (County of Suffolk v. Alcorn) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
County of Suffolk v. Alcorn, 266 F.3d 131, 2001 WL 1159843 (2d Cir. 2001).

Opinion

WINTER, Circuit Judge:

MarketSpan Corporation, now KeySpan Corporation (“KeySpan”), appeals from Judge Weinstein’s decision finding that it breached a class settlement agreement and awarding damages. See County of Suffolk v. LILCO, 87 F.Supp.2d 187 (E.D.N.Y.2000); County of Suffolk v. LILCO, No. 87-CV-0646 (E.D.N.Y. Apr. 3, 2000) (Corrected Final Order and Judgment); County of Suffolk v. LILCO, No. 87-CV-0646 (E.D.N.Y. Mar. 24, 2000) (Final Order and Amended Judgment).

The district court ruled that KeySpan’s predecessor for all purposes relevant to this appeal, the Long Island Lighting Company (“LILCO”), had violated a 1989 Stipulation of Partial Settlement (“Settlement”) of a RICO class action and false claims suit. The Settlement required that LILCO pay $390 million in the form of rate reductions to a class of electricity ratepayers. In the present proceeding, the class claimed that LILCO violated the terms of the Settlement because it paid $21 million less in New York state utility taxes as a result of the reduction in the ratepayers’ electric bills pursuant to the Settlement. In the class’s view, a rate reduction means a decrease in revenue to LILCO net of utility taxes. The class therefore argued that the $21 million in reduced taxes should have been added to the $390 million in the form of further rate reductions. The district court agreed. We reverse.

BACKGROUND

The history of this litigation has been extensively detailed in previous opinions of the district court and this court, familiarity with which is assumed. See, e.g., County of Suffolk v. Stone & Webster Eng’g Corp., 106 F.3d 1112 (2d Cir.1997) (“Stone & Webster ”); County of Suffolk v. LILCO, 907 F.2d 1295 (2d Cir.1990); LILCO, 87 F.Supp.2d at 187; County of Suffolk v. LILCO, 14 F.Supp.2d 260 (E.D.N.Y.1998); County of Suffolk v. LILCO, No. 87-CIV-0646, 1995 WL 761828 (E.D.N.Y. Dec. 19, 1995); County of Suffolk v. LILCO, 710 F.Supp. 1387, 1405, 1406, 1407, 1422, 1428, 1477, 1487 (E.D.N.Y.1989); County of Suffolk v. LILCO, 122 F.R.D. 120 (E.D.N.Y.1988); County of Suffolk v. LILCO, 685 F.Supp. 38 (E.D.N.Y.1988). We therefore summarize only the facts relevant to the present appeal.

The underlying dispute arises from events that occurred as long ago as 1969, when LILCO announced plans to build a nuclear power plant at Shoreham, Long Island. In 1987, the County of Suffolk, a group of individual ratepayers, and a business corporation filed a class action suit alleging that, beginning in 1974, LILCO falsely portrayed the status of construction [134]*134at Shoreham to the New York State Public Service Commission (“PSC”), the agency with authority to approve applications for rate increases. The gravamen of the complaint, which asserted claims under the ■Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §.1961 et seq. (“RICO”), and New York common law, was that LILCO’s false representations caused the PSC to grant the company unwarranted and excessive rate increases. See LILCO, 907 F.2d at 1299-1300. A class was certified in February 1989, see Stone & Webster, 106 F.3d at 1114, and later that month, the parties entered into the Settlement, see LILCO, 710 F.Supp. at 1452-66.

■ The Settlement is a detailed, complex document. ' Given the district court’s decision, we must quote much of that detail at length. Paragraph 2(a) of the Settlement provides:

LILCO shall pay to the Ratepayer Class ... as hereinafter set forth in paragraphs 4, 5 and 6, the sum of Three Hundred Ninety Million Dollars ($390,-000,000) in the form of (i) rate reductions, and (ii) payments to Former Ratepayers.1

Id. at 1456. Paragraph 4, which is titled “The Rate Reduction Plan,” reads, in pertinent part:

Subject to the provisions of paragraphs 5 and 6 of this Stipulation, LILCO shall pay rate reductions provided for in this Stipulation as follows:
(a) LILCO shall pay the Ratepayer Class2 a total of $390 million in the form of rate reductions over a period of 10 years (the “Rate Reduction Plan”).
(d) The annual rate reductions required by this Stipulation shall be accomplished in accordance with the following schedule, commencing on the month and year indicated:
June 1990-$ 20 Million
June 1991-$ 20 Million
June 1992-$ 20 Million
June 1993-$ 30 Million
June 1994-$ 30 Million
June. 1995-$ 40 Million
June 1996-$ 50 Million
June 1997-$ 60 Million
June 1998-$ 60 Million
June 1999-$ 60 Million
(e) The Rate Reduction Plan shall reduce rates to LILCO’s ratepayers in proportion to the electric rate payments that would otherwise have been made by each ratepayer. The Rate Reduction Plan shall be an adjustment to individual twelve monthly electric bills. LILCO shall not seek any rate revenue which recovers any portion of the Rate Reduction Plan. LILCO will not attempt to obtain the sums listed above from its ratepayers.
(f) It is contemplated that each monthly bill will be reduced by a percentage calculated as the ratio of (i) the total dollar amount of the reduction to ratepayers for'that year, divided by (ii) LILCO’s anticipated revenue for that year as established in LILCO’s rates filed before the PSC....
(g) To assure compliance with this paragraph, LILCO shall file appropriate tariffs with the PSC showing the method [135]*135of adjusting individual bills as described above. LILCO also shall certify to the PSC in each rate application filed within the settlement period, and to the District Court and to Class Counsel and the Government’s Counsel in each a monitoring report filed hereunder, that LILCO has not sought nor been provided with any rate revenue which recovers any portion of the rate reductions called for by this paragraph and that the rates LILCO seeks do not attempt to obtain the sums of the reductions from LILCO ratepayers....
(h) The above revenue reductions are the total amount that LILCO shall guarantee payment for all purposes covered by this Stipulation ... except attorneys’ fees, expenses and costs....

Id. at 1456-57. Paragraph 6 states, in relevant part:

Class Counsel and LILCO agree that it is in the best interests of LILCO ratepayers for LILCO to return to financial health at the least cost to ratepayers. The District Court will retain continuing jurisdiction over this settlement throughout the implementation of this Stipulation and Rate Reduction Plan to further the purposes to be served by this settlement.
The District Court shall not enter any order which reduces or has the effect of reducing the total $390 million dollar amount of rate reductions agreed to.

Id. at 1457-58. Finally, paragraph 32 provides:

In the event of any dispute or disagreement with respect to the meaning, effect, or interpretation of the Stipulation ...

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Cite This Page — Counsel Stack

Bluebook (online)
266 F.3d 131, 2001 WL 1159843, Counsel Stack Legal Research, https://law.counselstack.com/opinion/county-of-suffolk-v-alcorn-ca2-2001.