US Supreme Court Term To Open With Heavy Business Docket
Dow Jones News Service, 09/24/01
USA: UPDATE 1-Sizing up CEO aplomb under duress a major concern.
Reuters English News Service, 09/24/01
USA: UPDATE 2-Calif. ISO, FERC, companies discuss refund issue.
Reuters English News Service, 09/24/01
NORWAY: Helsinki bourse to trade weather derivatives.
Reuters English News Service, 09/24/01
INDIA: Enron gets impatient as Indian unit's row lingers.
Reuters English News Service, 09/24/01
Northwest Power Sellers Shouldn't Pay Refunds, FERC Judge Says
Bloomberg, 09/24/01



US Supreme Court Term To Open With Heavy Business Docket
By Scott Ritter
Of DOW JONES NEWSWIRES

09/24/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

WASHINGTON -(Dow Jones)- When the U.S. Supreme Court formally returns to work next Monday, the justices will face a docket chock full of disputes certain to leave a mark on America's businesses and workers. 
Indeed, fully half of the 42 cases already selected for the high court's 2001-2002 term are business-related - "the largest number in at least nine years," notes Washington appellate attorney Roy T. Englert. Several deal with employment issues, while others will decide key questions in the high-stakes effort to deregulate the nations' electricity and telecommunications industries.
The docket also finds the court returning to the landmark 1995 Adarand decision involving minority preferences in government contracting. Other closely-watched cases involve the scope of federal patent-law protections, and statutes in many states that allow for independent review of treatment decisions made by health maintenance organizations. 
Additional appeals - culled from the thousands of cases that crossed the justices' desks this summer - are expected to be added to the docket this week. 
Return Of The ADA 

A pair of cases will test anew the reach of the Americans With Disabilities Act, the 1990 statute that has prompted several significant Supreme Court interpretations in the last couple of years. 
In Toyota vs. Williams, 00-1089, the justices will decide whether workers who can't perform some of their duties because of a limited impairment are "disabled" under the statute. Business groups like the National Association of Manufacturers worry that a lower court ruling in the case will force employers to accommodate workers who aren't really disabled. 
The case involves former Toyota Motor Corp. (TM) employee Ella Williams, who was diagnosed with carpal tunnel syndrome and tendinitis while working as an engine builder at the company's Georgetown, Ky., plant in the early 1990s. She claims her ailment amounts to a disability, and says the company should accommodate her by giving her different duties. 
A federal appeals court in Cincinnati, deeming Williams "disabled" under the statute, said her lawsuit could proceed. 
In a second ADA case, the justices will use an appeal from US Airways Group Inc. (U) to clarify whether companies are required to accommodate disabled workers by moving them into jobs reserved for more senior employees. The Arlington, Va., carrier says moving customer service representative Robert Barnett to a less-demanding mailroom job would upset its seniority system. Barnett injured his back in 1990 while handling cargo at the San Francisco International Airport. 
A federal appeals court in San Francisco ordered Barnett's case to trial, ruling that US Airways' seniority system - which wasn't based on a collective bargaining agreement - didn't bar his transfer to the mailroom. The case is US Airways vs. Barnett, 00-1250. 
A Patent Bar 'In Disarray' 

The justices will also wade into a pair of disputes over patent law, including one that's left the "patent bar completely in disarray," says Seth P. Waxman, a former solicitor general in the Clinton administration. 
At issue in that case, Festo vs. Shoketsu Kinzoku, 00-1543, is a principle of the U.S. patent system, known as the "doctrine of equivalents," which says imitators cannot avoid patent infringement by simply making minor changes to a patented invention. 
The U.S. Court of Appeals for the Federal Circuit settled the dispute by crafting new rules that make it tougher in many cases for inventors to invoke the doctrine's protections. Festo Corp., a unit of Germany's Festo AG, alleges that Japan's SMC Corp. copied - with minor modifications - its patented design for magnetic rodless cylinders. 
Festo filed its suit in 1988, and won a series of judgments until last year, when the Federal Circuit ruled 8-4 that SMC hadn't infringed Festo's patents. "It's not too much say that the decision ... has dealt the patent system a crippling blow," says Robert H. Bork, a former federal judge who is representing Festo. 
In J.E.M. Ag Supply vs. Pioneer, 99-1996, the justices will decide whether seeds and plants grown from seeds can be patented. 
The U.S. Patent and Trademark Office has issued utility patents on crops grown from seeds since 1985, and their validity was largely untested before 1998, when DuPont Co.'s (DD) Pioneer Hi-Bred International Inc. unit sued a Belmond, Iowa, farm-supply company for selling Pioneer-brand seed corn without its permission. 
The supplier, Farm Advantage Inc., argues that Congress never intended utility patents to be awarded for plant varieties. Companies like DuPont have spent big money to modify seeds genetically and want to shield new varieties from copycats. The Federal Circuit agreed with Pioneer. The justices will hear arguments Oct. 3. 
Deregulation Battles 

Several appeals will force the high court to resolve some key disputes over efforts by federal regulators to open the nation's local telephone markets to competition. The Federal Communications Commission, long-distance carriers and local phone companies all found reason to disagree with a ruling last year from a federal appeals court in St. Louis. 
The nation's high court has already waded into the murky waters of telecommunications deregulation, ruling that Congress in 1996 gave the FCC the authority to formulate the prices local carriers charge would-be rivals for access to their networks. 
The appeals now before the justices arose from the same litigation, but this time focus on the FCC rules themselves rather than the agency's statutory authority. "This court's intervention is needed again," the government says. "This time the stakes are, if anything, even higher." The lead case is Verizon vs. FCC, 00-511. Arguments are set for Oct. 10. 
The justices will also decide whether the FCC can set rates some cable television systems and wireless phone companies pay to string wires or hang antennas on electric poles. A federal appeals court in Atlanta nixed some of the FCC's rate-setting powers. 
Power companies say the FCC overstepped its authority when it set "pole attachment" rates for cable companies that provide high speed Internet access over their lines. They also say Congress never intended for the agency to regulate rates charged to wireless providers who want to use their poles. 
The cases, National Cable Television Association vs. Gulf Power, 00-832 and FCC vs. Gulf Power, 00-843, will be argued Oct. 2. 
The justices will turn their attention the following day to the $215 billion electricity industry when it hears challenges to landmark federal rules requiring utilities to open their high-voltage power lines to competitors. 
Several state regulators say the Federal Energy Regulatory Commission overreached when it issued Order 888 in 1996. Under the rules, utilities must provide access to their transmission lines to anyone buying or selling electricity in the interstate market. The rules were backed by a federal appeals court here last year. 
The high court will also consider a separate appeal from Enron Corp.'s (ENE) power marketing unit, which argues that FERC didn't go far enough in exerting its jurisdiction over retail electricity sales. The cases are New York vs. FERC, 00-568 and Enron vs. FERC, 00-809. 
'Like Ships Passing In The Night' 

The upcoming term also finds the justices stepping into the contentious debate over patients' rights. In Rush Prudential HMO vs. Moran, 00-1021, the court will consider an Illinois law that allows independent review of HMO treatment decisions. Thirty-seven states and the District of Columbia have enacted similar measures. 
Debra C. Moran sued her HMO to recover $94,841 she paid for surgery to correct a shoulder ailment. The HMO had recommended a less complicated and less costly surgical procedure and declined to pay even after an independent reviewing physician said Moran should receive the more expensive treatment. 
A federal appeals court in Chicago, considering an appeal by a unit of Wellpoint Health Networks Inc. (WLP), upheld the statute. A similar statute in Texas, however, was rejected by a U.S. appeals court in New Orleans, which said it was trumped by the federal Employee Retirement Income Security Act, which governs employee benefit plans. 
The high court will also take another look at a retooled program that helps minority-owned and disadvantaged businesses land highway construction jobs. The appeal, Adarand vs. Mineta, 00-730, comes from a Colorado company that first challenged the Transportation Department program more than a decade ago after losing a bid to build guardrails on a federal road project. 
In a landmark 1995 decision, the Supreme Court cast doubt on the program when it ruled that affirmative-action initiatives must be "narrowly tailored to remedy specific past discrimination." Congress and the Transportation Department have since taken several steps in hopes of making the road program fit within the high court's guidelines. With those changes in place, the program passed constitutional muster, a federal appeals court in Denver ruled last year. 
"Amazingly, this case is a mess," says Waxman, the former solicitor general, who says there's a significant chance the justices may simply dismiss the case. The two sides are "like ships passing in the night," he says, with little or no agreement on even the basic facts of the dispute. 
Supreme Court Web site: http://supremecourtus.gov 
-By Scott Ritter, Dow Jones Newswires; 202-862-6687; scott.ritter@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	


USA: UPDATE 1-Sizing up CEO aplomb under duress a major concern.

09/24/2001
Reuters English News Service
(C) Reuters Limited 2001.

(Adds more on why Skilling left Enron in paragraph 7, rewrites paragraphs 6, 20) 
By Jamie LaReau
NEW YORK, Sept 24 (Reuters) - When Thomas Neff took over executive recruitment firm Spencer Stuart, little did he know he would soon be widowed and a single parent while running a rapidly growing worldwide company. 
Neff, now chairman of Spencer Stuart, was an effective CEO from 1979 to 1987, though a personal tragedy and his company's rapid expansion made his job especially stressful. 
"My wife died in 1985 and I had three young boys," Neff told Reuters. "It was stressful in that we quadrupled our revenues and doubled the number of offices in the world, so the travel load increased, so that just adds to stress." 
Company boards are taking a long look at how executives cope with stress, and not just the anxiety of running a Fortune 500 company, as unforeseen events such as the loss of human life after the attacks on the World Trade Center can have enormous repercussions on a company. 
Companies are looking for people like Neff who can handle a hectic schedule and enormous responsibility with grace and success, and will not unexpectedly leave the company. 
On Aug. 14, CEO Jeff Skilling of energy company Enron Corp. resigned after only six months on the job, leading shares to plunge on his shock departure. Skilling had enduring months of weakness in Enron's stock price and several high-profile stumbles, which left questions if his departure had less to do with personal reasons, as he stated, and more to do with unyielding stress. 
Skilling declined several requests for an interview, though he told The Wall Street Journal in August pressure he felt from a plummeting stock price and the deaths of three workers in an English power plant accident reminded him "how tenuous life is." 
SPOTTING SIGNS OF STRESS: 
Neff now helps Spencer Stuart and other companies decide who would make a good chief executive and who is just not cut out for the task. He calls it "one of the most important decisions the board makes" and therefore, the board should lead the process of succession and not the outgoing chief executive. 
The board must also learn to watch for signs of anxiety, such as when Skilling called a fund manager an "asshole" during an analyst conference call in April, said Dr. Paul Baard, associate professor of communications and management at Fordham University's Graduate School of Business, 
He said the incident was a clear indication Skilling was "cracking" under the pressure. 
"If your life is tied up in your position and you're hypervigilant in your environment and you get a short seller who says this guy isn't capable of taking the company's stock price higher, that's a major threat," Baard said. 
Many industry experts said boards should offer overstressed corporate officers an "executive coach" for some counseling when they see signs of stress and they should keep in mind that the smartest person in the company might not make the best boss. 
"Most of the challenge of business to me is the people side," said Mark Nevins, vice president of Human Resources and professional development as executive search firm Korn/Ferry International . 
"At the end of the day, running a business is partly about understanding cash flow, inventory costs, balance sheets ... those are tough to learn, but you can do it. People, however, have their own motivations, they're perverse and they don't want to be managed. Part of the challenge is to deal with that and motivate them." 
Nevins said a board should look outside the company when conducting a search for chief executive so that there's a benchmark of candidate comparison. 
THE INTERVIEW PROCESS 
Boards should also seek the guidance of either psychologists or executive consultants on how to effectively interview candidates, said Baard, who has written about workplace issues on leadership for several academic journals. 
The board needs to ask the right questions and to know what the answers really tell about a person's work ethic and personality, he said. 
As chairman of Spencer Stuart and a board member for other companies, Neff has been a part of developing a careful selection process to find the right CEO, including a close look at how candidates handled tough times at other companies. 
Neff suggested asking these questions: 
- Do you have the stomach to make tough decisions that need to be made and might involve people you've known for years, such as job cuts? 
- How does your family feel about you being a CEO and the added pressures and travel that the job would present? 
"It's amazing at how often those questions are not being asked," Neff said. 
Asking a candidate to tell the board about himself or herself, and knowing what the answers reveal is important, Baard said. 
For example, if the person talks only about their career accomplishments and no other dimension of their life, there might be some concern that the person is not balanced, Baard said. 
He said asking questions about how the executive has handled past conflict will show if they take responsibility and own their errors or if they are an "avoider" of conflict. 
A good question is, "What does becoming a chief executive mean to you?" If the answer involves a lot of self-focus with little emphasis on team work and a desire to help others, than that person might not make a good chief executive, Baard said. 
Another important question is to ask which constituency would give the candidate the most trouble. This makes the candidate consider who they are reporting to and can reveal if that person would be upfront with or hide from certain people, he said. 
"Ask, 'What did you really screw up?'" Baard said. "That question will shock them, but you're looking for ownership. You're waiting for the 'but' and if you don't hear it, that's good."

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

USA: UPDATE 2-Calif. ISO, FERC, companies discuss refund issue.
By Chris Baltimore

09/24/2001
Reuters English News Service
(C) Reuters Limited 2001.

WASHINGTON, Sept 24 (Reuters) - U.S. regulators met with California state energy officials on Monday as part of ongoing mediation efforts to determine potential refunds in the western power market, a spokeswoman for the Federal Energy Regulatory Commission said. 
Separately, a House of Representatives panel signaled a possible probe into alleged price manipulation by two government-controlled California bodies that buy power for the state, according to a memo obtained by Reuters.
FERC will facilitate meetings on Monday and possibly Tuesday with the California Independent System Operator, the California Department of Water Resources - the state's main power buyer - seven private energy firms and the state's investor-owned utilities. 
FERC is concerned that "reliability is being compromised" on the California power grid, Andrea Wolfman, a lawyer in FERC's enforcement office, wrote in a letter dated Sept. 17 obtained by Reuters. 
"We have become concerned that the scheduling and dispatch procedures of the California ISO ... are not well understood or are not well suited to the current market structure," she said. The ISO manages the state's power grid. 
FERC MULLS CALIFORNIA REFUNDS 
FERC intervened in western power markets in July after months of soaring electricity prices caused blackouts and forced PG&E Corp.'s Pacific Gas & Electric utility into bankruptcy. 
A FERC judge is currently considering whether energy firms owe the state refunds for overcharges in western power markets. California officials say they are owed nearly $9 billion in refunds, while energy firms say the claims are unjustified. 
The closed-door meeting was to include staff from FERC's market tariffs and rates unit and its newly formed market enforcement division, as well as Richard Miles, FERC's director of dispute resolution services. 
Also invited were energy firms Reliant Energy , Williams Cos. , Duke Energy Corp. , Calpine Inc., Enron Corp. , Mirant Americas Inc. and Dynegy Inc. , and utilities Pacific Gas and Electric Co., San Diego Gas and Electric, and Southern California Edison . 
HOUSE COMMITTEE EYES ACTION 
A separate congressional probe into the buying practices of the California ISO and the water department may be forthcoming in the Republican-led House Committee on Government Reform, according to a confidential internal committee memo. 
Evidence gathered from private energy firms suggests "that complaints of market manipulation ... should be investigated," the memo said. 
The memo cited long-term power contracts signed by California Democratic Gov. Gray Davis and state energy officials when electricity prices soared from the normal $30 per megawatt hour range to over $1,000 per megawatt hour in May. Cool weather and sagging demand pushed spot market prices down to about $50 per megawatt hour last month. 
One megawatt is enough to power about 1,000 residential houses. 
"The information that they have provided all leads to a theory that the California ISO is manipulating the market ... to purchase surplus (California Department of Water Resources') power at high prices and protect Governor Davis from embarrassment," said the memo, dated Sept. 20. 
The California Department of Water Resources became the main power purchaser for the state's 34 million residents in January after soaring wholesale prices drained the state's two biggest utilities of their cash and credit. 
Last week, California utility regulators dismantled another provision of the state's failed 1996 law to deregulate its electric industry by immediately suspending consumers' right to choose their power provider. The disastrous deregulation law also had capped retail electricity rates, which blocked investor-owned utilities from passing sharply higher wholesale costs on to customers.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	


NORWAY: Helsinki bourse to trade weather derivatives.
By Bunny Nooryani

09/24/2001
Reuters English News Service
(C) Reuters Limited 2001.

OSLO, Sept 24 (Reuters) - Finland's Helsinki stock market said on Monday it planned to start trading in weather derivatives this autumn, becoming the first bourse in Europe to trade the contracts. 
"This is a way for firms to hedge their risk of bad weather and its effects on net sales," Jyrki Kivineimi, derivatives advisor at the Helsinki bourse told Reuters.
Weather derivatives contracts, which originated in the United States, allow companies to hedge against the financial impact on their operations of changes in the weather. 
He said the bourse planned to offer the market derivatives contracts based on an average temperature index and with a duration of one month. 
Kivineimi declined to give a precise date for the launch of weather derivatives. 
London's LIFFE derivatives exchange launched three European weather indices in July and also has plans to start weather derivatives trading, possibly in the fourth quarter this year. 
Kivineimi said groups whose sales could be affected by changes in weather - such as travel companies, transport, consumer goods and energy firms - had shown particular interest in the offer. 
"Many companies are interested in these products and there has already been a lot of trading in the (over-the-counter) OTC market," Kivineimi said. 
"But the most potential customers are energy firms." 
Energy companies use weather derivatives to protect themselves against the impact of temperature fluctuations in electricity and gas prices. 
OTC weather derivatives trading has expanded over the last year with deals reported in France and Germany. 
The liberalisation of Europe's energy markets over the last couple of years has sparked interest in weather derivatives as consumers face increasinly volatile gas and electricity prices. 
Using the example of an electricity firm selling heating, Kivineimi said the firm could sign a derivatives contract specifying expected sales at a expected average temperature for a given month. 
"If heating sales are lower than expected because of the weather being warmer than expected, the firm will be compensated for its loss that month," he said. 
But he acknowledged the difficulty of entering contracts that are based on predicting weather conditions several months ahead, when meteorologists often fail to accurately predict weather from one day to the next. 
"A weather derivative is more an insurance against bad weather than a prediction of good weather," he said. 
Companies which are active in the European weather derivatives market include U.S.-owned firms Enron and Aquila, a subsidiary of Utilicorp and SocGen, the investment banking arm of French bank Societe Generale .

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

INDIA: Enron gets impatient as Indian unit's row lingers.

09/24/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW DELHI, Sept 24 (Reuters) - U.S. energy firm Enron Corp sees no early solution to its bitter dispute with a local utility despite an assurance from Prime Minister Atal Behari Vajpayee that New Delhi will step in to resolve the row. 
The company wrote to Vajpayee more than a month ago with an offer to sell its 65-percent stake in Dabhol Power Co but the federal government has not responded, Enron India spokesman Jimmy Moghal told Reuters on Monday.
"It's been more than a month since we have communicated to government authorities and have yet to receive any response." 
He said Enron Chairman Kenneth Lay had written another letter to New Delhi expressing "disappointment" at the lack of progress. 
The company wrote to Vajpayee saying a long legal dispute would "raise serious questions about India's image as a safe and relialbe destination for foreign investment", Moghal said. 
Earlier this month, Vajpayee said the federal government would facilitate a quick solution to Enron's dispute with the Maharashtra State Electricity Board (MSEB), which was the sole buyer of Dabhol's power. 
But Enron is not optimistic. 
"Contrary to recent impressions created...regarding a quick resolution of the Dabhol project, little progress has so far been made with, in fact, no proximity to reaching a fair and reasonable solution," it said in the statement. 
The Times of India said Kenneth Lay wrote in his letter to Vajpayee that foreign investors would doubt the sanctity of contracts signed in India. 
"Any other foreign investor or lender is going to ask himself why his contract is any more likely to be honoured than ours has been," it quoted Lay as saying. 
Moghal declined comment on the newspaper report. 
Enron says India may face $5 billion in liabilities for violating contractual obligations. 
In May, Enron issued a preliminary notice to MSEB to terminate the contract. That move put in place a six-month deadline for the two to work out differences or the contract would be terminated. 
The six-month period expires on November 19 after which Enron would decide on issuing a final termination notice. 
"Consideration will be taken after November 19 whether or not we will move towards final termination, which would then lead to arbitration," Moghal said. 
The first phase of the $2.9-billion project, with a generating capacity of 740 MW has been idle since May when MSEB stopped buying power. The second phase, which will add 1,444 MW of capacity, is 97-percent complete.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Northwest Power Sellers Shouldn't Pay Refunds, FERC Judge Says
2001-09-24 16:45 (New York)

Northwest Power Sellers Shouldn't Pay Refunds, FERC Judge Says

     Washington, Sept. 24 (Bloomberg) -- Enron Corp., Sempra
Energy, El Paso Corp. and other companies that sell power in the
Pacific Northwest shouldn't have to return profits they made
earlier this year when electricity prices soared, an
administrative law judge said.

     A power shortage in California sent prices soaring among all
states on the western power grid last year and much of this year.
Prices surged fourfold on average in California.

      Buyers in the Northwest are seeking $2 billion in refunds,
saying the prices paid clearly did not meet the Federal Energy
Regulatory Commission's standard of ``just and reasonable.''

     ``The prices were not unreasonable or unjust, and refunds
should not be ordered in this proceeding, '' said Federal Energy
Regulatory Commission Judge Carmen Cintron, in a report to the
commission.

     The commission will make its own ruling in the case, and the
judge's finding is not binding unless followed by the
commissioners.  The Washington-state cities of Seattle and Tacoma
are among those seeking refunds for sales from Dec. 25 to June 20.

     FERC ordered Cintron to gather evidence about these
allegations during a Sept. 4-6 hearing and to recommend whether it
should consider ordering refunds. The commission hasn't said when
it plans to decide, though it has a regularly scheduled meeting
set for Wednesday.