879 F. Supp. 2d 1171
D. Or.2012Background
- PacifiCorp sues Northwest Pipeline and Gas Transmission Northwest (GTN) for state-law negligence, negligence/res ipsa loquitor, trespass, and nuisance arising from gas-contamination-related outages at the Hermiston Station, Oregon.
- Gas originates in Canada, flows through Northwest and GTN pipelines to Hermiston; tariff governs gas quality including prohibition on compressor oil contamination.
- Northwest and GTN tariff terms (merchantable, commercially free from impurities) interact with PacifiCorp’s contract rights; Northwest and GTN dispute the scope of duties owed to PacifiCorp.
- Oil and fuel-nozzle issues and multiple outages in 2007-2007 prompted investigations by PacifiCorp, HGC, and GE, with later testing by Core Laboratories and Texas Oil Tech.
- FERC investigated gas-quality issues; in 2010 FERC indicated no further action but noted its authority over tariff interpretation; court contemplates primary-jurisdiction referral to FERC for tariff construction.
- PacifiCorp sought discovery and expert testimony on causation and damages related to outages, while GTN and Northwest moved for summary judgment and spoliation sanctions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Negligence claims against Northwest/GTN under tariff law | Tariffs highligh duties; common-law duties apply to downstream injuries | Tariffs replace common-law duties; no general duty to downstream users | Tariffs replace common-law duty; negligence claims against Northwest and GTN barred |
| Suitability of GTN’s contract to bar negligence claims under Abraham/Fazzolari | Contract does not bar negligence claims for gas quality | Contract supersedes common-law duties regarding gas quality | Contract/tariff provisions replace, not merely inform, common-law duty; negligence claim barred against GTN |
| Spoliation sanctions for PacifiCorp's destruction of evidence | Destruction was mitigated evidence; not willful | Destruction prejudicial; entitles sanctions | Spoliation sanctions granted in part; exclusion/adverse-inference remedies limited to certain evidence; some evidence-not-preserved items permitted under conditions |
| Primary jurisdiction and tariff construction referral to FERC | Court can interpret tariff terms without agency aid | Ambiguity in tariff terms requires FERC construction | Court stays proceedings and refers tariff construction to FERC to interpret 'commercially free' and related terms; stay pending FERC response |
| Damages causation for forced vs. mitigation outages | Causation established by expert testimony linking GTN-contaminated gas to outages | Causation requires expert proof; some outages lack sufficient evidence | Causation triable for January and July 2007 outages; August/September 2007 causation excluded due to spoliation; mitigation-outage causation remains a jury issue |
Key Cases Cited
- Fazzolari v. Portland School Dist. No. 1J, 303 Or. 1, 734 P.2d 1326 (Or. 1987) (two-step duty/foreseeability analysis for negligence claims)
- Abraham v. T. Henry Const, Inc., 350 Or. 29, 249 P.3d 534 (Or. 2011) (contract may alter/eliminate common-law duty; tariff replacement of duty)
- United States v. Western Pac. R.R. Co., 352 U.S. 59, 77 S. Ct. 161 (U.S. 1956) (primary jurisdiction when expert, technical tariff interpretation needed)
- Western Transportation Co. v. Wilson and Co., 682 F.2d 1227 (7th Cir. 1982) (tariff interpretation principles; extrinsic evidence use)
- Glover v. BIC Corp., 6 F.3d 1318 (9th Cir. 1993) (sanctions for spoliation; evidentiary consequences)
- Silvestri v. Gen. Motors Corp., 271 F.3d 590 (4th Cir. 2001) (duty to preserve evidence; foreseeability standard)
- Brown v. MCI WorldCom Network Services, Inc., 277 F.3d 1166 (9th Cir. 2002) (filed-rate doctrine/ tariff interpretation considerations)
- Sierra Pacific Indus. v. United States, 2011 WL 2119078 (E.D. Cal. 2011) (post-2010 Rule 26 amendments; non-reporting vs reporting experts)