This memorandum further analyzes the ability of Enron and EES to remove to
federal court a California state court proceeding to enforce a subpoena for
documents and testimony. It specifically addresses the arguments raised by
the briefs filed by the  Reliant, Mirant and the California Attorney General
in April and May, 2001 in litigation relating to a similar enforcement
proceeding in Reliant Energy Power Generation, Inc., et al. v. Lockyer,
California Superior Court, Los Angeles County, Case No. BC 248689.
In light of the Reliant case, if EES removes an enforcement proceeding to
federal court the AG will probably argue that the petition for removal is
not a "civil action" because a petition to enforce the subpoena is a
"special proceeding" and not an "action."  We also anticipate that the AG
will argue that there is no federal question because the Government Code
sections provide an exclusive statutory scheme which provides jurisdiction
only to the California superior court.
These arguments do not change our previous analysis, but highlight the our
conclusion:  assuming the existence of a federal question in the AG's
enforcement petition, EES can file a petition for removal, but its burden to
prevail on a motion for remand will be difficult to meet.
I.	SUMMARY OF RELIANT ET AL. V. LOCKYER
In early 2001 Lockyer served subpoenas for documents on Reliant and Mirant
under Government Code sections 11180, et seq.  Reliant and Mirant did not
dispute the AG's ability to seek this information, and voluntarily produced
non-confidential information.  However, Reliant and Mirant disputed the AG's
ability to disclose confidential information without a protective order.
Several days before the AG, as a petitioner, filed an enforcement action in
San Francisco Superior Court to compel Reliant and Mirant to produce
documents,  Reliant and Mirant affirmatively filed a complaint as plaintiffs
for declaratory relief and an injunction in the Los Angeles Superior Court.

The AG filed a motion to dismiss the Reliant action primarily on the grounds
that the Government Code establishes the exclusive procedure for enforcement
of this subpoena (i.e., the AG's filing of a petition to enforce the
subpoena), the Government Code does not allow for the filing of injunctive
relief, and granting an injunction would violate the separation of powers
and circumvent the special proceedings of the Government Code.
On May 11, 2001 the Court denied the AG's demurrer. The AG then agreed to a
compromise interim protective order and Mirant and Reliant produced
requested documents while reserving  rights to continue the litigation.
II.	CASE OR CONTROVERSY UNDER ARTICLE III
As an initial matter, we considered whether an enforcement proceeding
constitutes a "case or controversy" under Article III of the United States
Constitution.  We conclude it probably does.
The power of federal courts is constitutionally limited to cases and
controversies.  See Flast v. Cohen (1968) 392 U.S. 83, 94.  This doctrine
limits the courts "to questions presented in an adversary context and in a
form historically viewed as capable of resolution through the judicial
process."  Id. at 95.  Furthermore, Article III is intended to "define the
role assigned to the judiciary in a tripartite allocation of power to assure
that the federal courts will not intrude into areas committed to the other
branches of government."  Id.  Applications of this doctrine include a
finding of no justiciable controversy "when the parties seek adjudication of
only political questions, when the parties are asking for only advisory
opinions, when the question sought to be adjudicated has been mooted by
subsequent developments, and where there is no standing to maintain the
action."  Id.
This  is not the issue here.  Upon the filing of a petition, the AG will
probably not dispute that there is a controversy.  The AG has conceded that
"as a matter of law, there is no actual controversy in an investigatory
proceeding until the Attorney General moves to enforce the subpoena."  AG
Reply at 9.  We found no cases where removal of a similar petition was
denied on the ground that it did not prevent a case or controversy under
Article III.
III.	REMOVAL OF PETITION
As discussed in our previous memorandum, removal jurisdiction is conferred
by federal statute.  See 28 U.S.C. ? 1441(a).  This statute provides in
relevant part that:
		Except as otherwise expressly provided by Act of Congress,
any civil action brought in a State court of which the district courts of
the United States have original jurisdiction, may be removed by the
defendant or the defendants, to the district court of the United States for
the district and division embracing the place where such action is pending.
As we previously concluded, in order for EES to remove any enforcement
action filed by the AG, EES must show that (1) the petition is a "civil
action" under the removal statute and (2) the AG's investigation, which
underlies the subpoena enforcement action, is preempted by federal law, thus
making removal proper on the basis of federal question removal jurisdiction.

The AG likely will argue that (1) that the petition to enforce the subpoena
is not a "civil action" but rather is a special proceeding and (2) that the
petition does not present a federal question because it is undertaking an
enforcement procedure created by California statutory which grants exclusive
jurisdiction to California courts.  These arguments are analyzed below.
	A.  AG's Argument That Petition is Not an "Action"
First, EES must show that a petition by the AG to enforce a subpoena is a
"civil action."  Under federal law, the definition of "civil action" is
extremely broad and appears to cover everything except criminal proceedings.
In our previous memorandum, we concluded that EES has a good faith argument
that a petition is a "civil action" for the purposes of removal.  In
Reliant, et al. v. Lockyer, filed in the Superior Court, County of Los
Angeles, the AG argued that petitions under the Government Code are "special
proceedings" not "civil actions."  The AG's arguments do not change our
previous conclusions.
The AG's arguments are founded solely upon language in See People ex rel
Franchise Tax Board v. Superior Court (1985) 164 Cal.App.3d 526.  In that
case, the court of appeals stated that:
				the hearing under section 11188 is a special
proceeding.  In practice the term 'special proceeding' is used in
contradistinction to 'action;' it refers only to proceedings which were not,
under the common law or equity practice, either an action at law or a suit
in equity.  They are proceedings which may be commenced independently of a
pending action, by petition or motion upon notice, in order to obtain
special relief.

Id. at 538.
Despite the AG's arguments, Franchise Tax Board has no weight in determining
whether the petition is a "civil action" under the federal removal statute.
Federal law determines whether there is an action is a "civil action."  See,
e.g., In re Exhumation of Meriwether Lewis (N.D. Tenn. 1998) 999 F.Supp.
1066.  Without a doubt, the term "civil action," has been "construed broadly
by the federal courts."  Wright & Miller, 14B Fed. Practice and Proc.,
Juris. 3d ? 3721 (West 1998).  According to Wright & Miller:
			The limitation to civil actions is not particularly
important, however, since the term 'civil action' has been construed broadly
by the federal courts.  For example, proceedings for garnishment or
condemnation and actions to compel arbitration or to confirm or vacate an
arbitration award are considered civil actions within the meaning of the
federal removal statute.  Moreover, special federal statutes permit the
removal of certain non-civil proceedings.  In effect therefore, the
limitation to civil actions in Section 1441 may mean no more than that state
court criminal, and perhaps penalty, actions are not removable except as
otherwise provided by a specific federal statute.
Applying a broad definition of "civil action," courts have held that
petitions to exhume a body, petition to enforce administrative subpoenas,
garnishment actions, actions to compel arbitration and contempt proceedings
are "civil actions" within the scope of Section 1441.  See, e.g., Agosto v.
Barcelo (D. P. R. 1984) 594 F. Supp. 1390, 1392 (enforcement of
administrative subpoena), overruled on other grounds, (1st Cir. 1984) 748
F.2d 1; Lewis v. Blackmon (S. D. Miss. 1994) 864 F. Supp. 1 (garnishment
action); Sears Roebuck and Co. v. Glenwal Co. (S.D.N.Y. 1970) 325 F. Supp.
86 (action to compel arbitration); Reynolds Metals Co. v. Crowther, (D. Mass
1982) 572 F. Supp 288, 289 (contempt proceeding); In re Exhumation of
Meriwether Lewis, 999 F. Supp 1066 (1998) (petition to exhume body).
Moreover, the cases relied upon by the AG support the notion that the
proceedings to enforce the subpoena are akin to an action.   See People ex
rel Franchise Tax Board v. Superior Court(1985) 164 Cal.App.3d 526 (in
hearing on petition under the Government Code, court "may judicially test
whether the subpoena duces tecum conforms to the requisite legal and
constitutional standards"); Fielder v. Berkeley Properties Co. (1972) 23
Cal.App.3d 30 (hearing on petition to enforce a subpoena "provides an
opportunity for adjudication of all claimed constitutional and legal rights
before one is required to obey the subpoena").
The AG also relies on Triple A Machine Shop Inc. v. California (1989) 213
Cal.App.3d 131.  This case is inapplicable.  Triple A has nothing to do with
the application of the Government Code at issue or the enforcement of
subpoenas under the Government Code.  Rather, Triple A analyzed the
propriety of enjoining criminal investigations.  In that case, the San
Francisco District Attorney and the State Department of Health commenced a
criminal and civil investigation into violations of law governing the
storage and disposal of hazardous waste.  The district attorney obtained a
search warrant.  The district attorney also brought a suit to enjoin
defendants from dissipating any assets.  Defendant filed an action for
injunctive relief to enjoin the state from contacting high level managerial
employees in violation of attorney client privilege and in violation of
their ethical duties.  The injunction was issued.  The court of appeals
reversed, holding that there was no threat of misconduct by the district
attorney or violations of the attorney client privilege.  The court further
stated that:
				The most significant effect of the
injunction lies in its impact on the investigation and prosecution of the
criminal charges.  The separation of powers doctrine requires judicial
restraint in enjoining criminal investigations or prosecutions. . . .  The
discretionary authority vested in the district attorney to investigate and
prosecute criminal conduct is considered too vital to the interest of public
order to be subjected to prior restraint by the courts except under
extraordinary circumstances.

Id. at 145 (emphasis added).
EES is not asking the court to enjoin the AG's investigation.  EES is merely
invoking the jurisdiction of the federal court pursuant to the federal
removal statutes in order to litigate the legal and constitutional issues
related to the AG's subpoena.  Thus, Triple A is inapposite.
	B.	The Petition Must Present a Federal Question
Second, EES must also argue that a federal question appears on the face of
plaintiff's well-pleaded complaint or that plaintiff's artfully pleaded
complaint involves a federal question.  As in the currently pending civil
lawsuits, EES will argue that the AG's investigation (or some of it) is
completely preempted by the Federal Power Act which governs wholesale energy
prices and thus presents a federal question.  Without a doubt, this presents
the biggest obstacle to successful removal, especially since EES cannot
inject a federal question sufficient to justify removal by way of defense.
This burden may be somewhat easier for Enron or Enron Wholesale services to
meet, since neither company does business on the retail level in California,
as EES does. However, as discussed in our previous memorandum, both EES and
Enron  must contend with contrary Ninth Circuit precedent.  See Lewis v.
Younger (9th Cir. 1980) 653 F.2d 1258.  In addition, the AG will argue, that
the petition does not present a federal question but is merely seeking to
enforce a subpoena under the provisions of the Government Code, which
provides the exclusive means for adjudicating any dispute relating to an
investigatory subpoena.  We will better know whether we have a reasonable
chance to prevail on this issue when Judge Whaley rules on the currently
pending remand motions.



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