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Arizona Solar-Power Challenge Heads to High Court

The Supreme Court took up a challenge where an Arizona power supplier is accused of hurting solar-power business by setting unfair prices.

WASHINGTON (CN) - The Supreme Court took up a challenge where an Arizona electrical supplier is accused of hurting solar-power business by setting unfair prices.

Though the underlying case implicates questions of monopoly power and government immunity, the issue going before the court this term hinges on the timing of appeals.

Both a political subdivision of the Grand Canyon State and an electrical supplier for the greater Phoenix area, the Salt River Project Agricultural Improvement and Power District claims that its sovereignty means that it has immunity from antitrust claims filed against it by Tesla subsidiary SolarCity.

A federal judge found the immunity question too close to call, however, because of uncertainties concerning the power district’s state-law authority and business.

The power district hoped the Ninth Circuit would dismiss the case on appeal, but the three-judge panel ruled against it as well in June.

“We join the Fourth and Sixth Circuits in holding that the collateral-order doctrine does not allow an immediate appeal of an order denying a dismissal motion based on state-action immunity,” U.S. Circuit Judge Michelle Friedland wrote for the court.

This circuit split is now headed to the Supreme Court, which agreed late Friday to decide “whether orders denying state-action immunity to public entities are immediately appealable under the collateral-order doctrine.”

Per its custom, the justices did not issue any comment in taking up the case. They did not grant any more writs of certiorari in Monday's order list.

Representatives for Tesla have not returned a request for comment. Solarcity’s attorney, Boies Schiller partner Richard Feinstein, referred a request for comment to Tesla.

SolarCity accuses the power district of changing rates to hurt its business. Indeed SolarCity's retailers allegedly received 96 percent fewer applications for new solar-panel systems in the territory governed by the power district after new rates took effect.

“Under the new pricing structure, any customer who obtains power from his own system must pay a prohibitively large penalty,” a summary of the claims in Friedland’s ruling states.

The power district is represented by Wilmer Hale attorney Molly Boast. She referred a request for comment to the power district.

Scott Harelson, a spokesman for the district, said "state-action immunity is important to public entities across the country – from cities and towns to special-purpose districts like SRP."

"Appellate courts have been divided over how the immunity should be applied when private parties, such as SolarCity, use the antitrust laws to challenge actions by public entities to carry out state policy," Harelson said in an email. "The state-action immunity doctrine is rooted in decades of Supreme Court precedent. As applied in this case, the doctrine leaves utility rate-making to publicly elected officials rather than private litigation, and bars SolarCity from challenging the ratemaking decisions of SRP’s elected board.

"By taking this case, the Supreme Court will be able to clarify whether public entities asserting this immunity have the right to immediately seek an appeal if a lower court denies the immunity," Harelson added.

Groups like the American Public Power Association intervened in the case as well. Greene Espel attorney John Baker represented them in an October amicus brief. They declined to comment on the grant of certiorari.

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Categories / Appeals, Business, Government

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