Frequently Asked Questions
- What is this lawsuit about?
- Who is Covered by the Settlement?
- What are the Terms of the Settlement?
- What are My Rights?
1. What is this lawsuit about?
Certain Plaintiffs allege that Sempra Energy, SoCal Gas, and SDG&E conspired with El Paso Corporation and its subsidiaries and affiliates ("El Paso") to, among other things, eliminate competing pipeline projects under development which would have increased supplies of natural gas to Southern California and reduced or averted natural gas shortages and high natural gas and electricity prices experienced throughout California in 2000-2001. In addition, certain Plaintiffs allege that Sempra Energy and some of its affiliates and subsidiaries engaged in unlawful natural gas price reporting and trading activities which caused further increases in the price of natural gas experienced throughout California in 2000-2001. The lawsuits sought damages and restitution based on higher energy costs. The Sempra Energy, its affiliates and subsidiaries and El Paso deny these allegations.
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2. Who is Covered by the Settlement?
All individuals and entities in California that purchased natural gas and/or electricity for use and not for resale or generation of electricity for the purpose of resale, between September 1, 1996 and January 4, 2006, inclusive. Excluded from the Class are Defendants, Defendants' predecessors, affiliates, subsidiaries, officers and directors, any and all judges and justices assigned to hear any aspect of this litigation, along with their spouses and any minor children residing in their households, and any persons within the third degree of relationship of any judge or justice assigned to hear any aspect of this litigation.
For more information, please review the Notice of Proposed Class Action Settlement or call (888-262-4479).
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3. What are the Terms of the Settlement?
In exchange for a release of all claims arising out of alleged misconduct relating to the California energy crisis (the release is described more fully below), the Plaintiffs and the Sempra Parties reached an agreement which the Plaintiffs value at approximately $1.7 billion, consisting of:
- $325 million in cash payments to be paid in eight annual installments.
- $300 million in savings associated with price reductions on a power contract with the California Department of Water Resources ("CDWR") through September 2011, the cost of which would otherwise be passed on to class members, subject to offset from other pending or future litigation or prepayment.
- Change in energy delivery locations. Plaintiffs place a value of $270 million in savings caused by a change in energy delivery locations.
- Up to $ 73 million in discounts for natural gas from a Sempra facility in Mexico.
- Structural changes to utility operations of certain Sempra Parties, subject to review and approval by the California Public Utilities Commission ("CPUC"). Plaintiffs place a value of $745 million in structural changes to utility operations.
The details of terms of the CDWR contract price reduction, the changes in the energy delivery locations, the discounted rates of natural gas received from Sempra's facility in Mexico, and the structural changes are set forth in the Settlement Agreement, which is posted on the website, www.naturalgasantitrustlitigation.com.
The Settlement Agreement itself does not ascribe a monetary value to the structural relief. Plaintiffs' class counsel have worked with experts retained in this case to value the Structural Relief. Based upon expert analyses, the Structural Relief will significantly reduce upward pressures on the California border price for natural gas. Based upon a seven year analysis, experts retained by Plaintiffs' class counsel have calculated that it is economically rational to value the Structural Relief at $745 million.
Elements of the consideration being offered by the Sempra Parties in connection with this settlement can be adversely impacted by other pending litigation, administrative proceedings, and other future events. (See the Settlement Agreement for a full description of the terms of the settlement.)
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4. What are My Rights?
If you wish to remain in the Settlement Class, you need not take any action at this time. However, you will be bound by the rulings of the Court if the settlement is approved. This will include a release of your claims against the Sempra Parties.
Only members of the New Settlement Subclasses who are not members of any of the Existing Subclasses may request exclusion from the Settlement Class. All members of the Existing Subclasses previously received notice and were given an opportunity to request exclusion from the Existing Subclasses. No member of the Existing Subclasses has the right to be excluded from the Settlement Class.
If you are a member of a New Settlement Subclass and not a member of any Existing Subclasses and do not wish to participate in the settlement or be bound by the settlement terms, you must submit a request for exclusion, post-marked on or before April 13, 2006. The address to which exclusion requests should be sent, and the information required, vary depending on whether you are a residential, commercial, or industrial energy user.
Residential users: If you are residential user of natural gas and electricity, your request for exclusion must state your name and address (giving an attorney's name and address is not sufficient), and that you are excluding yourself from the Class. You must also sign the exclusion request. The exclusion request must be postmarked on or before April 13, 2006, and mailed to:
Sempra Exclusions - Residential Users
c/o Brad Baker
Baker, Burton & Lundy
515 Pier Avenue
Hermosa Beach, CA 90254
Members of the Non-Core Natural Gas Subclass including Commercial, Industrial and Agricultural Users: If you own or manage a business, other than an industrial or agricultural business, your request for exclusion must state the business name, list every address at which the business receives natural gas or electricity service within the State of California, and state that the business is excluding itself from the Class. The exclusion request must be signed by someone with the legal authority to act for the business, and state that person's capacity (e.g., owner, general partner, president). In addition, you must submit a recent bill for natural gas and for electricity for your business. The exclusion request must be postmarked on or before April 13, 2006, and mailed to:
Sempra Exclusions - Commercial/Industrial/Agricultural Users
c/o Brad Baker
Baker, Burton & Lundy
515 Pier Avenue
Hermosa Beach, CA 90254
A hearing will be held by the Court on June 8, 2006, at 1:30 p.m. in the courtroom of the Honorable J. Ronald S. Prager, Judge of the San Diego County Superior Court, Department 72, located at 330 W. Broadway, San Diego, California 92101, to determine whether the settlement with the Sempra Parties is fair, adequate, and reasonable and should be given final approval. At the same time, the Court will hold a hearing to determine the amount of attorneys' fees and costs to be awarded to the law firms representing the Class. Although you may attend the hearing, you are not required to do so to participate in the settlement. The date, time, or location of the hearing may be changed by the Court without further notice to the Class, but any such changes will be posted on the website, www.naturalgasantitrustlitigation.com
Any member of the Settlement Class who cannot or has not timely requested exclusion may appear at the final approval hearing to comment on the proposed settlement and/or Class counsel's application for attorneys' fees and expenses. If you are a member of the Settlement Class, have not requested exclusion and wish to comment in support of, or in opposition to, any aspect of the proposed settlement and/or Class counsel's application for attorneys' fees and expenses, and/or you wish to speak at the hearing, you must file with the Court, not later than April 13, 2006, a signed statement which includes: (1) the name and number of this coordination proceeding, NATURAL GAS ANTITRUST CASES I-IV, J.C.C.P. No. 4221, et al.; (2) your complete name and residence or business address (giving the address of a lawyer who represents you is not sufficient); (3) that you purchased natural gas or electricity in California during the period September 1, 1996 through January 6, 2006; and (4) each ground for comment or objection and any supporting papers you desire the Court to consider. Please note that the filing of an objection will not extend the time within which a Class member may file a request for exclusion from the settlement. The statement must be filed with:
Clerk of the San Diego Superior Court
Attention: Natural Gas Cases
Hall of Justice
330 West Broadway
Room 241
San Diego, California 92101
Copies of your statement must also be sent by first-class mail, postmarked not later than April 13, 2006, to:
Walter J. Lack
Engstrom, Lipscomb & Lack, LLP
10100 Santa Monica, Blvd. LA 90067- 4107
and
Robert Berry
Gibson, Dunn & Crutcher, LLP
333 South Grand
Los Angeles, CA 90071
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