The lawyers behind a massive class action against ComEd over its alleged bribery of Illinois’ powerful former House Speaker, have asked a federal judge to zap an effort by the electrical utility to pull the plug on their lawsuit.
They say ComEd is seeking “an absurd outcome,” essentially arguing it can bribe state officials to shortcircuit the state’s utility rate approval process and then use that same process to shut down any attempts by the bilked customers to claw back the company’s windfall.
“Defendants believe they have a sweeping get-out-of-jail-free card: the filed-rate doctrine,” the plaintiffs’ lawyers wrote in their brief.
“The premise of their motion is that a utility company can bribe the legislature to impose mandatory rate changes and create entirely new corporate subsidies— ripping off energy consumers to the tune of hundreds of millions of dollars as a direct and intended result—and no adjudicator, anywhere, can do anything to hold them accountable to, or compensate, the victims.”
The brief was filed March 9 by attorneys Jonathan D. Selbin, of the firm of Lief Cabraser Heimann & Bernstein, of New York; Derek W. Loeser, of Keller Rohrback, of Seattle; and Matthew J. Piers, of Hughes Socol Piers Resnick & Dym, of Chicago.
They were joined by fellow plaintiffs’ lawyers Laurel G. Bellows, of The Bellows Law Group; Gary M. Klinger, of Mason Lietz & Klinger; and Michael I. Leonard, of LeonardMeyer LLP, all of Chicago.
The brief was filed as a response to a motion brought by ComEd in February, asking a federal judge to dismiss the class action, which could be worth many millions of dollars, should plaintiffs prevail.
The class action is a consolidation of several lawsuits brought on behalf of ComEd customers in the wake of a series of federal indictments brought against ComEd, as well as several ComEd executives and political allies of Madigan, the Democratic political boss who presided over the Illinois House of Representatives for four decades, and built a political empire in the process.
According to federal prosecutors, Madigan allegedly helped secure legislation that ComEd raise rates, which allowed ComEd to rake in hundreds of millions, if not billions, of dollars more than the company would have otherwise been permitted under Illinois’ existing regulatory system.
As part of the criminal proceedings, ComEd agreed to pay $200 million and cooperate with federal prosecutors as they investigate the allegations.
The lawsuits argue ComEd should be made to repay its allegedly ill-gotten gains to the Illinois customers it allegedly ripped off.
Following the indictments, a group of Madigan’s fellow House Democrats helped to orchestrate his ouster as Speaker. Madigan was replaced by one of his political allies, Democrat Emanuel “Chris” Welch, of suburban Hillside. Madigan has since also resigned his House seat in the state’s 22nd District, in Chicago.
He has also been replaced as chairman of the Illinois Democratic Party.
In response to the lawsuits, ComEd argues the court should thwart the lawsuits, because the Illinois Commerce Commission later signed off on the rate increases authorized by state lawmakers.
"The Illinois Commerce Commission reviewed and authorized every charge ComEd billed to customers. Calculating damages would require the Court to determine what rates should have been — in other words, to engage in rate-setting — something this Court cannot do," ComEd said in a brief filed on Feb. 4.
In their response, the plaintiffs legal team argued ComEd’s legal reasoning was dim.
They said the so-called “filed-rate doctrine” should not apply. That legal doctrine generally insulates utilities from lawsuits brought over increased rates authorized by regulators.
But in this case, they said, ComEd’s invocation of the filed-rate doctrine is faulty. The plaintiffs argued their legal claims don’t target the Illinois Commerce Commission’s decision to stamp ComEd’s new rates. Rather, they take aim at “ComEd’s admitted bribery of the legislature to obtain legislation overriding the ICC rate-making process.”
“Here, Plaintiffs allege a straightforward and unbroken causal link: Defendants paid and then concealed secret bribes to Speaker Madigan’s associates to reach Madigan, who, through not only his legislative post but also his role in the state party, single-handedly determined whether legislation … passed or failed,” the plaintiffs wrote.
“As a result, the legislation did in fact pass, directing and guaranteeing Defendants billions of dollars in earmarked subsidies and capital projects to be paid for by their customers, including Plaintiffs, regardless of any action by the ICC.”
ComEd is represented in the action by attorneys from the firm of Jenner & Block, of Chicago.