Class action suit against Entergy enters settlement negotiations

By Alejandro de los Rios | Jul 16, 2010


An 11-year-old class action suit against the New Orleans energy company Entergy has entered settlement negotiations in Orleans Parish Civil District Court, according to court records.

Reverend C.S. Gordon Jr. on behalf of the New Zion Baptist Church, Michael Malek, Darryl Malek-Wiley, Willie Webb Jr. and Quality Inn Maison St. Charles are the lead plaintiffs in a case over claims that Entergy violated Louisiana anti-trust laws and overcharged customers after a rate adjustment in 1999.

The case had been scheduled for a hearing July 12 on several motions for broad exceptions filed by the defendants, but was continued without date. Court documents showed that the parties had entered negotiations for a settlement.

New Orleans attorney Walter Thompson Jr. is the lead counsel for the class. New Orleans attorneys Mark Seyler, Edwin Murray, Michael Darnell; Baton Rouge attorneys Larry Roedel, Kenton Parson, C.J. Blache, Luke Piontek; and Lafayette attorneys Bob Wright, and James Parkerson Roy are also acting as class counsel.

The named defendants are Entergy New Orleans Inc. (ENO), Entergy Corp., Entergy Services Inc., and Entergy Power Inc.

New Orleans attorneys Marcus Brown, Ewell Eagan Jr., Philip Antis Jr., Brian Guillot, Richard Stanley, William Ross and Thomas Owen Jr. are acting as defense counsel.

Judge Robin Giarusso is overseeing this case.

In February 2005, the case went before the New Orleans City Council, which voted unanimously on Resolution No. R-04-66, that while Entergy had overcharged customers in excess of $27 million, ratepayers were not entitled to a full refund.

In May 2005, Judge Giarusso signed a judgment affirming the City Council's decisions, stating: "Council's decision not to order refunds resulting from the system's use of a margin in making power purchases in the wholesale market is supported by the evidence in the record, and is affirmed. The Council's decision to require ENO to provide and annual analysis of third-party offers to demonstrate that the use of the margin remains an effective tool to secure power at the lowest reasonable cost is supported by the evidence in the record and is affirmed."

The class appealed the City Council's decision to the Louisiana Fourth Circuit Court of Appeals, claiming that Entergy's "improper or imprudent fuel adjustment charges exceeded $90 million since 1985."

The class counsel also claimed that, during the City Council hearings, the Council's own experts determined that Entergy's overcharges exceeded $34 million and they recommended a refund.

The Fourth Circuit overturned the City Council's ruling, stating that the Council had acted arbitrarily in denying refunds for the full amount of improper charges.

After Hurricane Katrina struck New Orleans, Entergy filed for Chapter 11 bankruptcy and pleaded in bankruptcy court that the case be withdrawn.

The class action was removed to Federal court in 2006 (Case No. 2006-0846).

In February 2006, the bankruptcy court lifted a stay to permit plaintiffs to go through appeal and in October 2006, the Federal Court of the Eastern District of Louisina affirmed the bankruptcy court's decision without prejudice.

Orleans Parish Case 1999-05707

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