CHICAGO (CN) – A federal court has allowed a whistleblower to proceed in state court on his claim that Illinois energy giant Commonwealth Edison (commonly known as “ComEd”) exploited alternative energy laws to dodge taxes.
The case arose in the shadow of the federal Public Utility Regulatory Policies Act (PURPA), which the court noted was enacted “to encourage ‘cogeneration, small power production, and other alternative sources of electric generation.'”
PURPA “requires that utilities, such as ComEd, purchase energy from certain ‘Qualified Facilities’ at a rate that reflects the highest rate the utility would have paid for equivalent service had it purchased the energy elsewhere. This rate is known as the ‘Avoided Cost.'”
States have largely implemented PURPA’s provisions via state laws.
According to the judgment, Leon Greenblatt III filed his complaint under the Illinois Whistleblower Reward and Protection Act, claiming that “ComEd has reported artificially low Avoided Cost data to the ICC [and] taken improper tax credits pursuant to the Illinois PUA [Public Utilities Act].”
These actions have allegedly “deprived the State of Illinois of millions of dollars that it would have […] received under the Illinois Electricity Excise Tax Law.”
Given the ubiquity of ComEd services throughout Illinois, the People of the State of Illinois intervened in the lawsuit and joined Greenblatt as a plaintiff.
Although PURPA provides many of the standards that ComEd has allegedly abrogated, Greenblatt insisted that “no federal cause of action exists under PURPA” and that his case instead falls squarely under state law.
He thus originally filed suit in state court, leading to ComEd’s quick motion to remove to federal court. The motion hinged on the argument “that the federal statute, PURPA, would not only be relevant as statutory background to the case, but would present a substantial and disputed federal question under,” noted the court.
In her ruling, United States District Judge Amy St. Eve accepted Greenblatt’s contention that the injuries alleged would be best examined by an Illinois state court.
“Plaintiff specifically testified that he was not alleging any conflict between PURPA and Illinois’s implementation of PURPA through the Illinois PUA and the Code,” said Judge St. Eve. Moreover, “Plaintiff does not challenge the validity of any federal agency’s or employee’s action.”
Greenblatt did discuss federal law in his claim, but no federal issues are “actually disputed and substantial” in the litigation.
The judgment acknowledges that it “has long been recognized [that] a plaintiff may avoid federal court even though certain federal questions may implicitly arise in his or her claim, as long as the plaintiff is not artfully pleading in order to purposely avoid federal court.”
“There is no evidence that Plaintiff has acted improperly here,” concluded Judge St. Eve.
The litigation will continue in the Cook County court system.