Entergy Corporation, Entergy Services, Inc., Entergy Power, Inc., Entergy Power Marketing Corporation, Entergy Arkansas, Inc., and Entergy Texas, Inc. v. David Jenkins, George W. Strong, Francis N. Gans and Gary M. Gans, Individually and on Behalf of All Persons Similarly Situated

CourtCourt of Appeals of Texas
DecidedNovember 7, 2014
Docket01-12-00470-CV
StatusPublished

This text of Entergy Corporation, Entergy Services, Inc., Entergy Power, Inc., Entergy Power Marketing Corporation, Entergy Arkansas, Inc., and Entergy Texas, Inc. v. David Jenkins, George W. Strong, Francis N. Gans and Gary M. Gans, Individually and on Behalf of All Persons Similarly Situated (Entergy Corporation, Entergy Services, Inc., Entergy Power, Inc., Entergy Power Marketing Corporation, Entergy Arkansas, Inc., and Entergy Texas, Inc. v. David Jenkins, George W. Strong, Francis N. Gans and Gary M. Gans, Individually and on Behalf of All Persons Similarly Situated) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Entergy Corporation, Entergy Services, Inc., Entergy Power, Inc., Entergy Power Marketing Corporation, Entergy Arkansas, Inc., and Entergy Texas, Inc. v. David Jenkins, George W. Strong, Francis N. Gans and Gary M. Gans, Individually and on Behalf of All Persons Similarly Situated, (Tex. Ct. App. 2014).

Opinion

Opinion issued November 6, 2014

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-12-00470-CV ——————————— ENTERGY CORPORATION, ENTERGY SERVICES, INC., ENTERGY POWER, INC., ENTERGY POWER MARKETING CORPORATION, ENTERGY ARKANSAS, INC., AND ENTERGY TEXAS, INC., Appellants V. DAVID JENKINS, GEORGE W. STRONG, FRANCIS N. GANS, AND GARY M. GANS, INDIVIDUALLY AND ON BEHALF OF ALL PERSONS SIMILARLY SITUATED, Appellees

On Appeal from the 344th District Court Chambers County, Texas Trial Court Case No. CV20666

OPINION

This is an interlocutory appeal challenging the trial court’s order certifying a

class action in a suit brought under the Texas Theft Liability Act (“the Theft Act”). 1 In three issues, appellants, Entergy Corporation, Entergy Services, Inc.,

Entergy Power, Inc., Entergy Power Marketing Corporation, Entergy Arkansas,

Inc., and Entergy Texas, Inc. (collectively, “Entergy”), contend that the trial court

(1) lacked subject matter jurisdiction over this suit, (2) abused its discretion in

finding that the requisites for class certification had been established, and

(3) abused its discretion by making findings of fact and conclusions of law that

misstate and misapply the applicable law.

We reverse and render.

Background

A. Factual Background

Entergy Corporation is a public utilities holding company with six electric

utility operating companies: Entergy Gulf States Louisiana, L.L.C., Entergy

Arkansas, Inc., Entergy Louisiana, LLC, Entergy Mississippi, Inc., Entergy New

Orleans, Inc., and Entergy Texas, Inc. (“ETI”). These six companies, which

operate in four southern states, provide electrical service to approximately 2.6

million retail customers.2

1 TEX. CIV. PRAC. & REM. CODE ANN. §§ 134.001–.005 (Vernon 2011 & Supp. 2014). 2 The generation and bulk transmission assets of these six companies are referred to as the “Entergy System.”

2 Each operating company has electricity generation facilities, consisting of

nuclear, coal, natural gas, or oil-fired generating plants. The companies are parties

to the Entergy System Agreement (“ESA”), a federal tariff under which power is

shared and distributed. 3 The companies also purchase power from each other and

from non-affiliated third parties in the power market. The ESA provides for

centralized control of power purchases, operations, and use of available resources

throughout the Entergy System. Although each company operates its generation,

transmission, and distribution systems independently, production, purchasing, and

sale of wholesale electricity on behalf of those companies to meet the needs of

retail and wholesale customers are controlled centrally by Entergy Services, Inc.

(“ESI”).

ESI operates a Systems Operation Center, located in The Woodlands, which

controls the selection of power (“dispatch decisions”). The ESA permits the

System Operator to purchase power at wholesale from third-party suppliers. The

System Operator controls daily operations and is in charge of determining whether

system-generated power is sufficient to meet capacity needs or whether purchasing

third-party power is necessary. ESI performs a monthly accounting, assigning a

portion of the total power resources used by the whole system to each operating

3 A “tariff” is a document listing a public utility’s rates and services and having the force and effect of law. See First Assembly of God, Inc. v. Tex. Utils. Elec. Co., 52 S.W.3d 482, 489 (Tex. App.—Dallas 2001, no pet.).

3 company, generating an “intra-system” bill. The cost is dictated by a formula in

Service Schedule MSS-3 of the ESA, which governs the intra-company accounting

for system resources.

B. Procedural Background

On August 5, 2003, David Jenkins, George W. Strong, Francis N. Gans, and

Gary M. Gans, individually and on behalf of all persons similarly situated

(collectively, “Jenkins”), filed suit against Entergy4 alleging that it had devised and

operated an improper energy-purchasing scheme under which it had selected

internally generated, higher-priced electrical power while rejecting less expensive,

available third-party power, resulting in theft from Texas retail power customers in

violation of the Theft Act. On September 15, 2003, Entergy removed the suit to

federal court alleging federal question jurisdiction. The federal court remanded the

case to state court, concluding that the suit did not invoke federal law.

On April 23, 2004, Entergy filed a motion to dismiss for want of

jurisdiction, contending that jurisdiction of Jenkins’s claims was preempted by the

Federal Energy Regulatory Commission (“FERC”) and the Texas Public Utilities

Commission (“PUC”) and that the claims were also barred by the filed-rate

doctrine. On November 24, 2004, the trial court granted Entergy’s motion to

dismiss, finding that it lacked subject matter jurisdiction over Jenkins’s claims.

4 Although not originally named as a defendant in the suit, Entergy Gulf States, Inc. (appellant ETI’s predecessor) later intervened.

4 Jenkins appealed the trial court’s order dismissing the case. In Jenkins v.

Entergy Corp., 187 S.W.3d 785 (Tex. App.—Corpus Christi 2006, pet. denied)

(“Jenkins I”), the Corpus Christi Court of Appeals reversed the trial court’s order

dismissing the suit for lack of subject matter jurisdiction. On June 6, 2012, Jenkins

filed a motion to certify a class consisting of Texas retail customers served by ETI

who were billed and paid for electric power from January 1, 1994, to present.

Entergy filed a second motion to dismiss for lack of jurisdiction and three motions

for summary judgment. The trial court denied the motion to dismiss and the

summary judgment motions.

The parties submitted extensive briefing on class certification issues, and the

trial court held a certification hearing lasting several days. On April 30, 2012, the

trial court granted Jenkins’s motion for class certification and issued extensive

findings of fact and conclusions of law. Entergy timely perfected this interlocutory

appeal.

Analysis

In three issues, Entergy contends that the trial court (1) lacks subject matter

jurisdiction over Jenkins’s claims, (2) abused its discretion in finding that Jenkins

had established the requirements for class certification, and (3) abused its

discretion by making findings of fact and conclusions of law that misstate and

misapply the law. Jenkins argues that Jenkins I, which rejected Entergy’s

5 jurisdictional arguments, is the law of the case and prohibits reconsideration of the

subject matter jurisdiction issue. Entergy urges us to find that Jenkins I is not the

law of the case because (1) the circumstances and evidence have changed,

(2) Jenkins I was wrongly decided, (3) the law of the case doctrine should not be

applied to subject-matter jurisdiction determinations, and (4) Jenkins I did not

address all of the issues raised in this appeal.

A. Law of the Case

Because this case comes to us on appeal following remand for further

proceedings in the trial court by the Corpus Christi Court of Appeals in Jenkins I,

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Entergy Corporation, Entergy Services, Inc., Entergy Power, Inc., Entergy Power Marketing Corporation, Entergy Arkansas, Inc., and Entergy Texas, Inc. v. David Jenkins, George W. Strong, Francis N. Gans and Gary M. Gans, Individually and on Behalf of All Persons Similarly Situated, Counsel Stack Legal Research, https://law.counselstack.com/opinion/entergy-corporation-entergy-services-inc-entergy-power-inc-entergy-texapp-2014.