Powerex Corp. v. Reliant Energy Services
Issues
Whether Powerex Corp., a wholly owned subsidiary of a corporation that is wholly owned by the government of Canada, is an “organ” of Canada and, thus, entitled to the benefits of the Foreign Sovereign Immunities Act (FSIA), including the right to remove suits brought against them in state court to federal court. Also, whether the Ninth Circuit had jurisdiction to review the District Court’s remand order, despite the fact that 28 USC §1447(d) prohibits appellate review of an order remanding a case to the state court from which it is removed.
Alleging illegal manipulation of the electricity market, the State of California and individual energy customers (collectively, “California energy customers”), brought suit in California state court against Powerex Corp., a Canadian corporation that is wholly owned by a corporation that is—in turn—wholly owned by the Canadian government. Powerex removed the case to the United States District Court for the Southern District of California under the Foreign Sovereign Immunities Act (FSIA) which gives “organs” of foreign states the right to remove suits brought against them in state court to federal court. The District Court concluded that Powerex did not qualify as an “organ” of a foreign state under FSIA and remanded the case to state court. On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the District Court’s determination that Powerex is not an “organ” of a foreign state and thus not entitled to the benefits of the FSIA. In this case, the Supreme Court will likely provide a new test for determining what constitutes an “organ” of a foreign state under the FSIA. The Supreme Court will also decide the threshold question of whether the Ninth Circuit had jurisdiction to review the District Court’s remand.
Questions as Framed for the Court by the Parties
- Whether an entity that is wholly and beneficially owned by a foreign state’s instrumentality, and whose sole purpose is to perform international treaty and trade agreement obligations for the benefit of the foreign state’s citizens, may nonetheless be denied status as an “organ of a foreign state” under the Foreign Sovereign Immunities Act of 1976(FSIA), 28 USC § 1603(b)(2), based on an analysis of sovereignty that ignores the circumstances surrounding the entity’s creation, conduct, and operations on behalf of its government.
- Whether the Court of Appeals had jurisdiction to review the District Court’s remand order, notwithstanding 28 USC §1447(d).
The Petitioner, Powerex Corp. (“Powerex”), is a Canadian corporation wholly owned by BC Hydro, a Canadian corporation that is wholly owned by the Canadian government. Amicus Curiae Brief for the United States at 2.