Arkansas utility customers granted stay, trial continues for Texas utility customers

Texarkana, Ark. - On July 25, Miller County Judge Jim Hudson granted a motion for stay applying only for Arkansas utility plaintiffs within a class action suit against Centerpoint Energy. Judge Hudson denied stay for Texas utility plaintiffs. Although the stay stops proceedings for the Arkansas plaintiffs, Judge Hudson may retain future jurisdiction.

In October 2004, plaintiffs Weldon Johnson of Miller County, Ark., and Guy W. Sparks of Bowie County, Texas, filed a (non-certified) class action suit against Centerpoint Energy and other pipeline companies and natural gas suppliers. The plaintiffs assert the utility companies committed fraud and conspiracy through "high-low" buying and selling attempts.

Allegedly, these actions raised natural gas costs for the utility customers of Arkansas, Texas, Mississippi, Louisiana, Montana and Oklahoma.

In the Circuit Court, the defense filed a motion to dismiss, which states jurisdiction belongs to state regulatory agencies. The motion was denied. Judge Hudson ruled that state regulatory agencies did not have the power to regulate the cost of natural gas.

Appealing Judge Hudson's decision, the defense filed a writ of prohibition to the Arkansas Supreme Court. A writ of prohibition is "only appropriate when the lower court is wholly without jurisdiction."

The writ asserts the suit is improperly filed within Judge Hudson's court and exclusive jurisdiction belongs to the state regulatory agencies. Plaintiffs' argument should be decided by the Arkansas Public Service Commission (APSC), which has authority over Arkansas gas rates, the writ claimed. Under Arkansas code the APSC can "conduct investigations and public hearings, mandate monetary refunds and billing credits, or to order appropriate prospective relief�"

The Arkansas Supreme Court ruled that the APSC only has jurisdiction over Arkansas customers. If the APSC finds evidence of fraud or conspiracy, jurisdiction may return to Judge Hudson's Miller County Court.

The Arkansas Supreme Court declined to judge over the Texas plaintiffs. The defense filed a petition in Travis County, Texas, asserting that jurisdiction of the Texas utility plaintiffs belongs to the Texas Railroad Commission (TRRC). However, Judge Hudson will continue the case proceedings.

Case No. 04-327-2