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Antonino Busalacchi, Anis Ben Adj Yahia v. Arizona Public Service Company

July 27, 2012

ANTONINO BUSALACCHI, ANIS BEN ADJ YAHIA, JOE SYRIANI, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
ARIZONA PUBLIC SERVICE COMPANY, AN ARIZONA CORPORATION;
PINNACLE WEST CAPITAL CORPORATION, AN ARIZONA CORPORATION;
SAN DIEGO GAS & AND ELECTRIC COMPANY, A CALIFORNIA CORPORATION; AND ,
APS AND PINNACLE'S DEFENDANTS.



The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court

ORDER: (1) GRANTING IN PART AND DENYING IN PART DEFENDANT SDG&E'S MOTION TO DISMISS NEGLIGENCE CAUSE OF ACTION; (2) DENYING DEFENDANT SDG&E'S MOTION TO DISMISS UCL CAUSE OF ACTION; (3) GRANTING DEFENDANT SDG&E'S MOTION TO DISMISS PUNITIVE DAMAGES REQUEST; (5) DENYING DEFENDANT SDG&E'S MOTION TO DISMISS REQUEST FOR INJUNCTIVE RELIEF WITHOUT PREJUDICE; (4) GRANTING DEFENDANTS MOTION TO DISMISS NUISANCE CAUSE OF ACTION

On June 18, 2012, Defendants Arizona Public Service Company ("APS") and Pinnacle West Capital Corporation ("Pinnacle") filed a motion to dismiss Plaintiffs' first amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. No. 23.) On July 16, 2012, Plaintiffs Anis Ben Adj Yahia, Antonino Busalacchi, and Joe Syriani filed their opposition to Defendants APS and Pinnacle's motion to dismiss. (Doc. No. 26.) On July 23, 2012, Defendants APS and Pinnacle filed their reply in support of their motion to dismiss. (Doc. No. 27.)

On June 21, 2012, Defendant San Diego Gas & Electric ("SDG&E") also filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. No. 24.) On July 16, 2012, Plaintiffs filed their opposition to Defendant SDG&E's motion. (Doc. No. 26.) On July 23, 2012, Defendant SDG&E filed its reply. (Doc. No. 28.) The Court held a hearing on the matter on July 30, 2012.

The Court, pursuant to Local Rule 7.1(d), determines the matters are appropriate for resolution without oral argument, submits the motion on the parties' papers, and vacates the scheduled hearing. For the following reasons, the Court grants Defendants APS and Pinnacle's motion to dismiss Plaintiffs' nuisance claim; grants in part and denies in part Defendant SDG&E's motion to dismiss Plaintiffs' negligence claim; denies Defendant SDG&E's motion to dismiss Plaintiffs' UCL claim; grants Defendant SDG&E's motion to dismiss Plaintiffs' request for punitive damages as legally insufficient; and grants Defendant SDG&E's motion to dismiss Plaintiffs' request for injunctive relief without prejudice.

Background

Plaintiffs' class-action complaint arises from a large-scale power failure in San Diego, Imperial, Orange, and Riverside Counties that occurred on September 8, 2011. (Doc. No. 1.) According to Plaintiffs, 1.4 million SDG&E customers were without power for up to twelve hours. (Doc. No. 1.) Because of the outage, Plaintiffs allege that they were forced to discard perishable food that spoiled when their refrigerators lost power. (Doc. No. 1.) According to Plaintiffs, the outage resulted from an APS employee's negligence in conducting a procedure near Yuma, Arizona. (Doc. No. 1.)

On March 21, 2012, the Court granted Defendant SDG&E's motion to stay the case pending resolution of the issues by the U.S. Federal Energy Regulatory Commission ("FERC") and the California Public Utilities Commission ("PUC"). (Doc. No. 21.) On May 1, 2102, the FERC Report issued and provided FERC's key findings and recommendations. (Doc. No. 24-3, Ex. 1.)

Plaintiffs' complaint alleges negligence and a violation of California Business & Professions Code section 17200, et seq. against Defendant SDG&E. (Doc. No. 22.) Plaintiffs also allege nuisance against Defendants APS and Pinnacle. (Id.)

Discussion

I. Defendant SDG&E's Request for Judicial Notice

In general, the scope of review on a motion to dismiss for failure to state a claim is limited to "allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice." Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). Federal Rule of Evidence 201 allows a court to take judicial notice of facts that are either "(1) generally known within the territorial jurisdiction of the trial court; or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b).The Court may also consider additional documents under the "incorporation by reference" doctrine as long as "the plaintiff's claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not dispute the authenticity of the document, even though the plaintiff does not explicitly allege the contents of that document in the complaint." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).

Here, Defendant SDG&E submits for judicial notice the FERC Report; SDG&E's Tariff Rules 3, 4, and 14; FERC Order No. 752, and PUC Opinion D.12-04-024. (Doc. No. 24-3.) Plaintiffs and Defendants APS and Pinnacle do not object to judicial notice of these documents. (Doc. Nos. 23, 25.) Accordingly, the Court takes judicial notice of Defendant SDG&E's exhibits.

II. Motion to Dismiss Pursuant to 12(b)(6): Legal Standards

A motion to dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. Navarro v. Black, 250 F.3d 729, 732 (9th Cir. 2001). Rule 8(a)(2) requires that a pleading stating a claim for relief contain "a short and plain statement of the claim showing that the pleader is entitled to relief." The function of this pleading requirement is to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. A complaint does not "suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (citing 5 Wright & Miller, Federal Practice and Procedure § 1216, 235--36 (3d ed. 2004)). "All allegations of material fact are taken as true and construed in the light most favorable to plaintiff. However, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim." Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996); see also Twombly, 550 U.S. at 555.

III. SDG&E's Motion to Dismiss

A. Negligence Claim Against SDG&E Customers

The California Legislature has provided the California Public Utilities Commission (PUC) with broad supervisory and regulatory powers. Waters v. Pac. Tel. Co., 12 Cal. 3d 1, 6 (1974). As a public utility, SDG&E is subject to and must obey all of the rules and orders of the PUC. Cal. Const., art XII, § 6; Cal. Pub. Util. Code §§ 701-702. In accordance with California law, SDG&E must file tariff rules with the PUC covering the terms and conditions, including rates, classifications, and attendant liabilities, under which it renders service to the public. Cal. Pub. Util. Code. § 489(a). "The tariff, with any limitations of liability specified therein, is the document that governs the rights and liabilities between a public utility . . . and its customers." Pink Dot, Inc. v. Teleport Commc'ns Grp., 89 Cal. App. 4th 407, 410 (Ct. App. 2001); see also L.A. Cellular Tele. Co. v. Superior Court, 65 Cal. App. 4th 1013, 1017 (Ct. App. 1998). "A public utility's tariffs filed with the PUC have the force and effect of law." Dollar-A-Day Rent-A-Car Sys., Inc. v. Pac. Tel. & Tel. Co., 26 Cal. App. 3d ...


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