Munger, Tolles & Olson litigators obtained a successful result on behalf of Tesoro Corporation from the California Court of Appeal. In a case of first impression, the court ruled that a company whose property straddles the boundary between two cities may purchase all of its electricity from the utility serving either city, even when one of those cities purports to be the exclusive supplier within its boundaries.
The Los Angeles Department of Water and Power and Tesoro became embroiled in litigation when Tesoro decided that it should be allowed to choose a different electricity supplier for its entire property, which straddles the boundary between Los Angeles and Carson. Tesoro obtained an order from the California Public Utilities Commission directing Southern California Edison − the supplier in Carson − to provide Tesoro’s full electricity requirements if Tesoro requested it. The DWP sued to block Tesoro from purchasing its electricity from Edison, demanding that Tesoro purchase all electricity consumed in Los Angeles from the DWP.
At issue was whether the city’s charter or the California constitution prevented Tesoro from purchasing power on the Carson side of its refinery and using it on the Los Angeles side, without the DWP’s consent. Although a Los Angeles County Superior Court found in favor of the DWP, the appellate court overturned the ruling on September 22, 2010 in a published opinion.
The Court of Appeal sided with Tesoro on multiple grounds urged by Munger Tolles, holding that Los Angeles’s constitutional authority in this context was limited to controlling the use of its streets, that the PUC’s authority was paramount, and that the trial court’s ruling improperly interfered with the PUC’s order.
Munger Tolles' Henry Weissmann represented Tesoro in its successful argument to the appellate court. Along with Mr. Weissmann, Munger Tolles litigators Manuel F. Cachán and Eric P. Tuttle assisted on the case.