Judge likely to return $2B utility case to state court
JACKSON, Miss. — After more than 10 years of wrangling and delays in federal court, Mississippi Attorney General Jim Hood and the state’s largest private utility appear to be headed back to state court in a lawsuit where Hood alleges hundreds of thousands of customers were overcharged.
U.S. District Judge Carlton Reeves on Thursday told lawyers that he’s likely to send claims that Entergy Mississippi overcharged its customers back to Hinds County Chancery Court, pulling the plug on a trial that had already begun. Hood argues Entergy owes up to $2 billion in damages and interest to 447,000 Mississippi customers because it failed to buy cheaper electricity from third parties. Reeves said a written ruling could arrive as soon as Friday.
“I understand this case has been around for a while, but I can only imagine it will be around even longer if the court retains jurisdiction over this matter,” Reeves said, according to the Clarion Ledger .
It’s a surprising development in a high-stakes case that moved in recent months toward a bench trial that began Monday and was supposed to last for weeks. Reeves began openly questioning his jurisdiction to hear the case after opening arguments, and kept interrupting the trial to ask lawyers for the state and the unit of New Orleans-based Entergy Corp. to discuss the issue. Finally, he asked both sides for fresh briefs and argument on the jurisdictional question, even though a previous federal judge had ruled the matter should stay in federal court.
Both Hood and Entergy argued Thursday that the case should stay in federal court, although Entergy said it should only stay long enough for Reeves to send the case to one of two utility regulators — The Federal Energy Regulatory Commission or the Mississippi Public Service Commission. Staying in federal court was consistent with Entergy’s longtime position, but a reversal for Hood, who had previously sought to return to state court.
Reeves pressed lawyers for Hood on the change in their position. “I don’t think anyone has moved more than the state has,” Reeves said during a Friday hearing.
But Harold Pizzetta, who directs civil litigation for Hood and has quarterbacked the state’s case, told Reeves that the state had concluded that U.S. District Judge Henry T. Wingate was right in 2015 when he ruled the case involved important federal interests. Pizzetta also said Hood’s office didn’t want to give up a chance to try the case, with the last months of Hood’s term ticking away. Hood, a Democrat, is giving up his role as the state’s chief lawyer to run for governor.
“It does sting after 10 years to state you were right the first time,” Pizzetta told Reeves on Thursday. “It stings to say it’s 10 years later we were this close. We continue to fight for the quickest relief.”
Kathleen Sullivan, a former Stanford University Law School dean hired to argue the case by Entergy, urged Reeves to send the case to FERC or the state Public Service Commission. She said Entergy would argue the same point before a chancery judge, but it would be more efficient for Reeves to rule.
Hood said in a statement he would try to prevent another long delay, blaming Entergy for the 10-plus-year detour through federal court.
“I will ask for a trial date to be set quickly so there is no more delay by Entergy in their attempt to not pay back Mississippi’s ratepayers after knowingly overbilling them for years,” said Hood, who attended Thursday’s arguments.
Entergy spokeswoman Mara Hartmann said it would be “premature” to comment further before Reeves issues a written ruling.