200 F. Supp. 3d 1012
N.D. Cal.2016Background
- UET sues PG&E for an “attempt to monopolize” under 15 U.S.C. § 2; Sherman Act claim denied previously and renewed in SAC.
- PG&E is a California utility regulated by the CPUC with a pre-approved rate formula.
- CTAs like UET buy gas on the open market and use PG&E’s distribution system; Consolidated Billing lets PG&E bill CTAs and collects on their behalf.
- UET alleges three schemes (Payment Withholding, Energy Credit, Reversal) used via PG&E’s billing role to deter CTAs.
- SAC pleads market power in the core California gas market, barriers to entry, and anti-competitive effects leading to higher consumer prices and reduced CTA competition.
- Court previously granted partial dismissals and allowed amendment for the Sherman Act claim; this order denies dismissal again and sets scheduling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SAC plausibly pleads market power. | UET claims PG&E holds dominant share (70–90%). | PG&E contends market power not adequately pled. | SAC adequately pleads market power. |
| Whether alleged schemes constitute anticompetitive conduct. | Schemes are anti-competitive and harm CTAs. | Circumstances insufficient to show anti-competitive effect. | SAC pleads anti-competitive conduct (including alternative allegations) plausibly. |
| Whether there is a dangerous probability of monopoly power. | Evidence shows rising PG&E control and deterred entry. | Entry of CTAs in other states undermines monopoly claim. | Plausible dangerous probability of monopoly power. |
| Whether plaintiff plead antitrust injury. | Harm to CTAs and consumers from anti-competitive schemes. | CTAs may benefit from higher prices; injury not shown. | SAC pleads antitrust injury. |
Key Cases Cited
- Rebel Oil Co. v. Atlantic Richfield Co., 51 F.3d 1421 (9th Cir. 1995) (antitrust elements and dangerous probability of monopolization; relevant framework)
- Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (U.S. 2004) (essential facilities doctrine limits where regulation exists; access is key)
- Newcal Indus., Inc. v. Ikon Office Sol., 513 F.3d 1038 (9th Cir. 2008) (market power elements need not be pled with specificity)
- Vess v. Ciba-Geigy Corp. U.S.A., 317 F.3d 1097 (9th Cir. 2003) (fraud pleading standards limited to fraud elements)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard; factual allegations required)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (facial plausibility standard; rejection of bare conclusions)