California ex rel Lockyer v. Dynegy, Inc.

We must decide whether federal removal jurisdiction lies over California state court actions alleging that several power companies fraudulently failed to deliver reserve energy that might otherwise have helped to avert the state’s energy crises of 2000 and 2001.

*835 I

Far-reaching economic and regulatory changes in one of the largest electric éner-gy markets in the world provide the backdrop to this litigation. We begin with some context necessary to understanding the legal claims before us.

A

California adopted an energy policy in the mid-1990s that broke new ground in important respects. Prior to the events at issue here, California consumers had long-relied upon investor-owned utilities regulated by the California Public Utilities Commission (“CPUC”) for the generation, transmission, and distribution of electricity. The traditional regulatory policy came under review in the mid-1990s, however, as ascendant free market philosophies and “changes in federal law intended to increase competition in the provision of electricity” prompted policymakers to rethink traditional assumptions underlying the market’s structure. 1996 Cal. Adv. Legis. Serv. 854, *1 (Deering). Perhaps the…