Ethyl Corp. v. Gulf States Utilities, Inc.

836 So. 2d 172, 2001 La.App. 1 Cir. 2230, 2002 La. App. LEXIS 2871
CourtLouisiana Court of Appeal
DecidedOctober 2, 2002
Docket2001 CA 2230
StatusPublished
Cited by10 cases

This text of 836 So. 2d 172 (Ethyl Corp. v. Gulf States Utilities, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ethyl Corp. v. Gulf States Utilities, Inc., 836 So. 2d 172, 2001 La.App. 1 Cir. 2230, 2002 La. App. LEXIS 2871 (La. Ct. App. 2002).

Opinion

836 So.2d 172 (2002)

ETHYL CORPORATION
v.
GULF STATES UTILITIES, INC.

No. 2001 CA 2230.

Court of Appeal of Louisiana, First Circuit.

October 2, 2002.
Writ Denied December 19, 2002.

*174 David L. Guerry, Michael A. Patterson, Jennifer J. Vosburg, Baton Rouge, for Plaintiffs—Appellee Ethyl Corporation.

Kenneth P. Carter, W.T. Tete, Eugene G. Taggart, Terrence G. O'Brien, Stephen T. Perrien, New Orleans, John A. Braymer, Baton Rouge, for Defendant—Appellant Entergy Gulf States, Inc.

Before: FOIL, FOGG, and KLINE,[1] JJ.

FOGG, J.

On appeal in this action for negligent misrepresentation, the defendant raises issues of subject matter jurisdiction, prescription, and liability. For the following reasons, we affirm, as amended.

FACTS AND PROCEDURAL HISTORY

Ethyl Corporation is a Virginia corporation that, among other things, produces specialty industrial and petroleum chemicals. Ethyl operated a chemical plant in Baton Rouge, Louisiana from 1942 to 1986. The plant was devoted principally to the production of a gasoline additive, tetraethyl lead, commonly known as lead "antiknock" compound.

Operation of the plant required large quantities of both steam and electricity, which Entergy Gulf States, Inc. ("Entergy") (successor by merger to Gulf States Utilities, Inc.) supplied. Entergy is a public utility corporation that generates, transmits and distributes electricity in parts of Texas and Louisiana, and was the sole and monopoly provider of electric power to Ethyl's plant.

Prior to 1981, Entergy served Ethyl's electric requirements directly from a facility known as Louisiana Station, which was comprised of two units: Louisiana Station No. 1 and Louisiana Station No. 2. Louisiana Station 1 served only two customers, Ethyl and Exxon Corporation. The steam and the majority of the electricity consumed by these companies came from Louisiana Station 1, which produced steam and cogenerated electricity and was unregulated by the Louisiana Public Service Commission ("LPSC"). Both Ethyl's and Exxon's electric needs exceeded the amount of electricity that could be generated by Louisiana Station 1. Therefore, Entergy provided supplemental electricity from Louisiana *175 Station 2, a generating station fueled by natural gas and regulated by the LPSC. Electricity, transmitted at 13.8 kV, was delivered directly from buses at Louisiana Station through underground feeders to these customers. Thirteen Ethyl-owned 13.8 kV underground cables were directly connected to Entergy's buses at Louisiana Station.

In the mid-1970's, Entergy advised Ethyl that it intended to convert its transmission system from 13.8 kV to 230 kV, a less expensive way to move more power. In early 1975, Entergy informed Ethyl that Louisiana Station 2, which was approximately forty-five years old, would be shut down necessitating the construction of new electrical facilities to supply Ethyl's requirements. Representatives of Ethyl and Entergy engaged in numerous conversations and meetings to discuss the various methods of meeting Ethyl's electric requirements, and Entergy conducted a study of alternatives for service. In April of 1976, Entergy produced a report entitled "Alternative Electric Power Sources For Steam Products Customers At Louisiana Station As Steam Demand Is Reduced And Gas Contract Expires For LA STA. Units 7, 8, And 9" ("Alternatives Report"), and discussed parts of the report with Ethyl and Exxon. Entergy continually represented to Ethyl that its only source of reliable power was to take power from Entergy's new 230 kV system, then reduce the voltage to 13.8 kV for use at Ethyl's plant through a step down substation that would have to be constructed.

In March of 1979, Entergy informed Ethyl that it would no longer be able to supply the total of Ethyl's requirements from the 13.8 kV buses at Louisiana Station after January 1, 1981. On August 28, 1979, representatives of Ethyl and Entergy met and reached an agreement as to quantities and delivery of regulated electric service through an electric substation to be built by Ethyl. A contract reflecting this agreement was executed on January 1, 1980.

Ethyl built the ECORP substation, which became operational in March of 1981 and was used through 1985 to receive electric service from Entergy's facilities. Ethyl ceased to manufacture chemicals at its facility in August of 1985, after the Environmental Protection Agency severely limited the use of lead additives in gasoline. Ethyl dismantled the ECORP substation in 1987 and sold it as scrap.

On December 2, 1986, Ethyl filed suit against Entergy, seeking to recover the cost of the ECORP substation as well as compensation for Entergy's alleged unauthorized use of the ECORP facility. It asserted claims of unjust enrichment and intentional or negligent misrepresentation.[2] Entergy responded by raising exceptions of lack of subject matter jurisdiction and prescription, which were denied by the trial court. The matter proceeded to trial, and after presentation of the plaintiff's case, the defendant moved for a directed verdict as to the plaintiff's claim for unjust enrichment. The trial court granted the motion and dismissed the claim for unjust enrichment.

After hearing the matter, the jury returned a verdict in favor of Ethyl and against Entergy on Ethyl's claim of negligent misrepresentation, awarding the sum of $4,146,229 in damages and assessing 75% of the fault to Entergy and 25% to Ethyl. On April 5, 2001, the trial court rendered judgment in accordance with the *176 jury verdict as well as interest from the date of judicial demand. Entergy appeals.

SUBJECT MATTER JURISDICTION

Initially, Entergy asserts that the district court erred in overruling its declinatory exception raising the objection of lack of subject matter jurisdiction. Entergy asserts that Ethyl's claim is either a rate matter or a service matter, both of which are beyond the original jurisdiction of the district court and within the jurisdiction of the LPSC. Ethyl asserts that its cause of action is a tort claim for negligent misrepresentation properly within the jurisdiction of the district court.

Louisiana Constitution article V, § 16 vests the district courts with "original jurisdiction of all civil and criminal matters," unless there is other jurisdictional authorization in the Constitution. LSA-Const. art. IV, § 21(B) establishes the LPSC as an administrative agency within the executive branch and grants the LPSC the power to "regulate all ... public utilities" and "such other regulating authority as provided by law."[3] Specifically, the LPSC has original jurisdiction over subject matters that principally involve the right to fix and regulate the rates to be charged and the services to be furnished by a public utility. LSA-R.S. 45:1163. The legislature has never "provided by law" for the LPSC to exercise jurisdiction over other subject matters and areas of litigation in which public utilities are involved. Central Louisiana Elec. Co., Inc. v. Louisiana Public Service Com'n, 601 So.2d 1383 (La. 1992) (hereinafter "CLECO"). Therefore, the district courts do not have jurisdiction over matters involving the fixing and regulating of rates and services by a public utility, and the LPSC does not have jurisdiction over other subject matters and areas of litigation in which public utilities are involved, such as tort actions and contract disputes. CLECO, 601 So.2d at 1386.

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Bluebook (online)
836 So. 2d 172, 2001 La.App. 1 Cir. 2230, 2002 La. App. LEXIS 2871, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ethyl-corp-v-gulf-states-utilities-inc-lactapp-2002.