That is by far the best line of the day!!  Unconscionability may be the thing 
I'm remembering, but I think there is some more specific law related to 
market dislocations--i.e., the Hurricane example.  Its sort of a twist on 
market power law--i.e., if the fates hand you short term market power, you 
better not use it.  DF    




Susan Scott
11/21/2000 10:08 AM
To: Drew Fossum/ET&S/Enron@ENRON
cc: Kathy Ringblom/ET&S/Enron@ENRON 

Subject: Re: gouging  

I know there is some case law out there on contracts being voided because 
they are "unconscionable."  There are several examples in consumer law and 
employment law, in which one contracting party is a corporation and the other 
is a West Palm Beach voter.  However, if my memory serves me correctly, none 
of them involve contracts between 2 sophisticated business entities such as 
TW and Sempra or PG&E.  Absent evidence of fraud, courts uphold bargains 
struck at arms length.  
Kathy, I'd be happy to take the oars on this but if you've already done some 
looking, please let me know if you've found anything.



   
	
	
	From:  Drew Fossum                           11/20/2000 04:44 PM
	

To: Susan Scott/ET&S/Enron@ENRON, Kathy Ringblom/ET&S/Enron@ENRON
cc:  

Subject: gouging

Stuck on the phone so I thought I'd email you.  Stan has asked Mike Moran if 
TW has any potential exposure on the high value transport deals under "anti 
gouging" statutes or common law.  You know, the laws that say you can't 
charge $100 per sheet of plywood during a hurricane or $50 for a bucket of 
water during a drought.  I think we need to research two things:
1.  are there any such laws applicable to our business?  (Cal. state law 
would probably be the best place to start)
2.  could the political/regulatory fight in Cal about power and gas prices 
ever expand all the way to our transport pricing?  I.e., if the CPUC whacks 
the power sellers for taking unfair advantage of their monopoly power, its 
not a big leap for the CPUC or FERC or even U.S. congress to whack gas 
sellers for jacking prices up to $14/MMBtu, as happened on Friday.  If that 
happens, its just another small jump to whack us for charging $1 for 
transport, or so the logic goes.  I'd like to hear preliminary views by 8:30 
Monday am so I can talk to Mike before Stan's staff meeting (no written memo 
necessary).  Based on that prelim. research, we can decide what else need s 
to be done.  Thanks df