ORDER

On August 17, 2009, a hearing was held on Defendant Powerex Corp.’s (“Powerex”) motion for a stay or dismissal of this action, based on the argument that the California Attorney General (“CAG”) has recently caused all issues involved with Plaintiff California Department of Water Resources’ (“CDWR”) state claims in this federal district court case to be pending at the Federal Energy Regulatory Commission (“FERC”). Specifically, Powerex argues CDWR’s three state claims in this federal court case all require a finding on “the predicate act” whether Powerex engaged in illegal market manipulation, which Powerex contends is the same issue squarely before FERC today. CDWR opposes the motion, arguing FERC will not reach the issues CDWR seeks to have determined in this federal district court case.

BACKGROUND

CDWR, “by and through its California Energy Resources Scheduling Division” (“CERS”), filed its Second Amended Complaint (“SAC”) in this federal court case on September 22, 2008. (SAC Preface.) CDWR alleges in the SAC that the following occurred “during the California energy crisis of 2001”:

(SAC ¶¶ 1-3) (emphasis added). CDWR argues the contracts and transactions are void because CDWR entered them under “duress,” “undue influence” and “contrary to [California] public policy and interest” as a result of having been subjected to Powerex’s “participation in ... energy market manipulation.” (SAC ¶¶ 2, 37-43.)

The CAG argues in his Complaint at FERC (“FERC Complaint”), filed on behalf of the People of the State of California, that he is giving FERC “in first instance an opportunity to enforce the [Federal Powers Act] and remedy [energy]sales to CERS,” which is a division of CDWR. (FERC Compl. 2, 56; SAC Preface) (internal quotations omitted). The FERC Complaint is alleged against Powerex and 18 other “public utility sellers of short term bilateral energy to [CERS] during the period January 18, 2001 to June 20, 2001 that have not settled their refund liability with the [CAG].” (FERC Compl. 2.) The FERC Complaint states the following:

(FERC Compl. 2-3) (emphasis added.) Powerex also explains in its motion:

(Defs Mot. 5:3-14) (internal citation omitted.) The California Parties request the following in the FERC MTC, in which they also request summary disposition, and urge the FERC to combine FERC proceedings and issue expeditious relief:

(FERC MTC 5) (emphasis added). The California Parties also request in the FERC MTC:

(FERC MTC 7) (emphasis added).

The California Parties also filed at FERC a Motion for Refunds (“FERC MFR”) on June 9, 2009, which includes the following arguments:

(FERC MFR 3-11) (emphasis added).

DISCUSSION

Powerex argues the FERC Complaint, the FERC MTC, and the FERC MFR (collectively, the “FERC filings”) reveal the issues before this Court are now squarely before FERC, and therefore, this federal court case should be stayed. CDWR counters this argument is unavailing since it is not a Plaintiff in any of the FERC filings. The FERC filings do not support CDWR’s position. Each FERC filing seeks relief on behalf of CERS, and CDWR states its SAC is “by and through its [CERS] Division.” (SAC Preface.) In the FERC Complaint, “the [CAG] seeks refunds for California ratepayers on sales to CERS because those sales were made at unreasonable and unjust prices.” (FERC Compl. 2). The California Parties’ FERC MTC asks FERC to “expand the already familiar MMCP remedy ... to short-term sales to CERS.” (FERC MTC 7.) The California Parties also seek in the FERC MFR “to recover refunds for sales made to CERS at prices that exceeded the applicable cap during the Relevant Period ....’ ’’(FERC MFR 3.) Thus CDWR is clearly involved with the FERC filings through its CERS division, since each filing indicates CERS would benefit from any refund awarded by FERC.

Powerex also argues the same remedies and monetary relief sought in the SAC are sought at FERC. Further, Powerex argues the “monetary remedies available under the [Federal Powers Act]” concerning “ ‘just and reasonable rates’ ” or “disgorgement of profits for violations of statute or [FERC]-approved tariffs” remain the same regardless of where relief is sought. (Defs Reply 13:9-14:6.) CDWR counters that the amount of monetary recovery it could seek from FERC will be greater if the challenged transactions or contracts in the SAC are declared invalid. (Pl.’s Opp’n 1:24-27.) CDWR acknowledges, however, in its SAC that “any determination as to the amount of monetary relief involving issues of just, reasonable or fair rates would be addressed to [FERC]”. (SAC ¶ 3.)

Powerex and CDWR also clash on whether the FERC filings involve the same market manipulation allegations which are the basis of CDWR’s contract formation claims before this Court. CDWR argued at the hearing that each of its claims in this federal court case is based on California public policy. (Transcript of Hearing at 5-13.) Each claim in the SAC, however, incorporates by reference “market manipulation” allegations, which CDWR virtually conceded at the hearing are identical to the “market manipulation” claims in the FERC filings, although it did argue some of their market manipulation claims are different from what is at FERC. Powerex rejoined that the same market manipulation allegations are before FERC. The CAG’s FERC Complaint seeks refunds from sellers based on “sellers’ violation of applicable tariffs, exercise of undue market power in California’s electricity markets, [and the sellers’] manipulation of those markets through withholding and other abusive market schemes.... ” (FERC Compl. 2-3.) The California Parties also argue in the FERC MTC that their request for “[m]arket-wide relief ... is ... necessary to ensure that consumers are placed in the position that they had been in, had sellers’ exercise of undue market power, pervasive market manipulation, and violations of tariff and market rules not destroyed competitive market conditions. ” (FERC MTC 7) (emphasis added). Likewise, the California Parties argue in the FERC MFR that the relief they seek is based on “[Powerex’s] [sales of] electricity to CERS at unjustified, and therefore illegal, above-the-cap prices ....’ ’’(FERC MFR 3.)

CDWR failed to controvert Powerex’s position that CDWR’s “market manipulation” allegations in its SAC are intertwined with the “market manipulation” allegations against Powerex in the FERC filings. Thus, based on these allegations, whether Powerex manipulated the electricity energy market to artificially create the appearance of a shortage of electric power is an issue germane to resolution of the claims in the SAC and those pending at FERC. CDWR seeks a judicial declaration from this Court that the transactions entered into are void, or in other words, unreasonable because of market manipulation, which appears to be the same issue FERC must analyze when adjudicating each FERC filing.

Further, Powerex argues the reasonableness of the rates charged is also a gravamen of the state claims alleged in the SAC and the claims pending at FERC. Powerex indicates the district court should wait until FERC itself has spoken about market manipulation, the reasonableness of the rates, and refunds, which are intrinsically involved with the state claims in the SAC. CDWR failed to address whether a judicial decision on CDWR’s claims premised on state public policy could conflict with FERC’s findings involving any of the FERC filings.

STANDARD

Leyva v. Certified Grocers of Cal. Ltd., 593 F.2d 857, 863-64 (9th Cir.1979) (internal citations omitted).

Powerex argued at the hearing that it seeks a stay under the rationale of the Supreme Court decision in Landis v. North American Co., in which the Supreme Court stated:

299 U.S. 248, 254 , 57 S.Ct. 163 , 81 L.Ed. 153 (1936).

The Ninth Circuit “set out the following framework” for evaluating the propriety of a Landis stay decision and its requirements for a stay in Lockyer v. Mirant Corp.:

398 F.3d 1098 , 1110 (9th Cir.2005) (internal citation omitted).

In Leyva , the Ninth Circuit also stated “[a] stay should not be granted unless it appears likely the other proceeding will be concluded within a reasonable time in relation to the urgency of the claims presented to the court.” 593 F.2d at 864 . Leyva explains when deciding a stay motion, the court should be “cognizant” of whether “[i]t would waste judicial resources and be burdensome upon the parties if ... discovery [is permitted], ... pretrial proceedings [completed], and evidence ... determine[d][on] the merits of the case at the same time as [a concurrent proceeding] is going through a substantially parallel process.” Id.

CDWR argues under the first Landis factor, if a stay is imposed it will suffer “damage” because “a stay in this case would unfairly and unnecessarily disrupt [C]DWR’s ongoing discovery efforts in proceedings that have a definite and reasonable timetable____” (Pl.’s Opp’n 33:8-10.) CDWR states discovery in this case has involved “thousands of hours and dollars,” “lawyers and witnesses from at least two countries, four states, and the District of Columbia,” “twenty-five depositions in two different countries,” and a “million of pages of documents,” and now finally, “non-expert discovery has essentially been completed.” (Pl.’s Opp’n 34:5-13, 3:11-13.)

It has not been shown, however, that the parties would have a problem preserving evidence. The record reveals that virtually the same evidence is involved in the FERC and district court proceedings. Further, as the Ninth Circuit stated in CMAX, Inc. v. Hall:

300 F.2d 265 , 269 (9th Cir.1962). If FERC reaches the issue whether Powerex subjected the California Energy market to artificial manipulation on a massive scale and feigned energy crisis in the years 2000-2001, which is pending at FERC and in this district court, FERC’s finding could be “helpful in deciding the district court case.” Id.

CDWR also argues that a stay would be harmful because it would cause this district court case to be pending for an unreasonable time since “there is no definite end point for the adjudication of the [Federal Powers Act]-based claims currently before FERC ....” (PL’s Opp’n 32:8-11.) The FERC MFR, however, indicates if the California Parties prevail at FERC on their request to have the “calculation of th[e] refunds for sellers’ unlawful above-the-cap sales ... occur quickly[,] ... [FERC would] order the sellers to immediately pay these refunds to CERS, with interest at the FERC interest rate.” (FERC MFR 11.) Further, regardless of how long FERC may take to adjudicate the FERC filings now before it, the proceedings before this Court, FERC, and the Ninth Circuit have already lasted over eight years. “[T]he subject matter of the [proceedings at FERC and in this district court are] highly complex and it is the avoidance of a duplication of that very complexity that serves in part to justify the stay.” Chronicle Publishing Co. v. National Broadcasting Company, 294 F.2d 744, 749 (9th Cir.1961). The complex nature of the proceedings is not disputed. Each proceeding involves numerous energy transactions and highly complicated issues of energy market manipulation. “In the case before us, the stay relates only to the proceedings before [FERC]. If the stay, even so limited, be a protracted one, it is only because the subject matter of the proceedings is highly complex.” Id. These considerations favor a stay.

Moreover, “the known facts speak for themselves in respect [to the second factor of the Landis stay,] hardship [or inequity which a party may suffer in being required to go forward].” Chronicle, 294 F.2d at 747.

Id. at 749. CDWR essentially asks this Court in its SAC, and asks FERC through the FERC filings, to review and interpret the same voluminous documents, as well as decide the same issue whether there was market manipulation and artificial energy scarcity in the years 2000 and 2001. Even the CAG, along with the other California Parties, has indicated a stay is appropriate by arguing at FERC:

(FERC MTC 5) (emphasis added). The California Parties’ argument that “[piecemeal litigation ... would squander the resources of [FERC] and the parties (and potentially the courts), would create potentially inconsistent results, and would make it more difficult for the parties to discuss global settlements as an alternative to this already-protracted litigation themselves,” is persuasive and is contrary to CDWR’s position against a stay. This argument indicates CDWR will not suffer hardship or inequity if a stay is imposed.

Powerex argues it will suffer a hardship in the absence of a stay, because it will be engaged in dual litigation before this court and at FERC, and will soon try the state claims in the SAC in a trial expected to last a month. (Def s Mot. 13:3-4.) Powerex also argues a stay would “prevent concurrent adjudication of the same issue in federal court and at FERC ... [and] reduce the potential for inconsistent determinations concerning market manipulation or market power exercised by Powerex or other suppliers in the California wholesale energy markets.” (Def s Mot. 13:18-14:6.) Powerex and the California Parties appear to agree that a stay is appropriate to avoid “hardship” that would be experienced if dual litigation were to go forward.

The third Landis factor is whether a stay would serve the “orderly course of justice measured in terms of the simplify ing or complicating of issues, proof, and questions of law which could be expected to result from a stay.” Lockyer, 398 F.3d at 1110. Powerex argues a stay would “simplify or narrow the issues, evidence, and questions of law present in this case” because there is “a high likelihood that ongoing FERC proceedings will ... grant ‘make whole’ monetary relief[; and if] FERC denies relief — in whole or part— ... the scope of the transactions and the range of the issues for the Court to address will be radically narrowed, if not eliminated entirely.” (Def s Reply 18:9-10, 21:13-25:13; Defs Mot. 16:6-10.) Powerex is correct. In terms of “simplifying ... the issues or questions of law,” a stay is warranted. The district court could benefit from deferring to FERC’s review and findings on the reasonableness of the rates charged. Such findings could crystalize the state questions in the SAC and allow the judicial decision to be made on a more distilled record; especially since the issues involved in both proceedings appear fraught with federal policy considerations. “[A]t the very least, the [FERC] proceeding will provide a means of developing comprehensive evidence bearing upon the highly technical [question whether Powerex subjected the California Energy market to artificial manipulation on a massive scale and feigned an energy crisis in the years 2000-2001, which is also at issue in the district court case].” CMAX, 300 F.2d at 269. The Ninth Circuit has stated “even under the assumption that the court is not bound and controlled by the [concurrent proceeding’s] conclusions,” “findings, as well as the documents and testimony produced during the [concurrent proceeding] may be of valuable assistance to the court in resolving the ... claims presented .... ” Leyva, 593 F.2d at 863 . Therefore, consideration of the Landis factors reveals a stay should be issued.

CONCLUSION

Accordingly, Powerex’s motion for a stay is granted. This case is stayed during FERC’s adjudication of the above referenced FERC filings.

. MMCP is the "methodology established by FERC in its July 25, 2001 Order, as subsequently modified, to calculate just and reasonable rates for all sales in the [California Independent System Operator Corporation (“ISO”) and the California Power Exchange ("PX”) ] markets in place of unjust and unreasonable rates that were charged. Jurisdictional sellers are required to refund amounts collected above the MMCP.” (FERC MTC vii.) . "The California Refund Proceeding was established by FERC in a previous FERC order, San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Serv. Into Markets Operated by the Cal. Indep. Sys. Operator Corp. and the Cal. Power Exch., 96 FERC ¶ 61,120 (2001).” (FERC Compl. 3, n. 7.) This order dealt with determination of reasonable rates and refunds related to transactions "in the spot markets operated by [ISO and PX] during the period October 2, 2000 through June 20, 2001.” Id. This order also suggested exploration and investigation into whether there were "unjust and unreasonable charges for spot market sales in the Pacific Northwest from December 25, 2000 through June 20, 2001, and the calculation of any refunds associated with such charges.” . The Remand Proceedings are comprised of "three cases which [FERC] has before it on remand from the Ninth Circuit concerning the 2000-2001 Energy Crisis.” (FERC Compl. viii.) These cases are California ex rel. Lockyer v. FERC, 383 F.3d 1006 (9th Cir. 2004), Public Utilities Commission of California v. FERC, 462 F.3d 1027 (9th Cir.2006), and Port of Seattle, Washington v. FERC, 499 F.3d 1016 (9th Cir.2007). . June 19 Order, 95 FERC at ¶ 62,563-64, ¶ 62,568. . September 7 Order, 96 FERC at ¶ 62,002; October 5 Order, 97 FERC at ¶ 61,053.