Utility Consumers’ Action Network

120 Cal. App. 4th 644 (July 12, 2004), 2004 Cal. App. LEXIS 1102

The Court of Appeal (Fourth District, Division 1) affirmed a Commission decision entering into a settlement of a suit in federal court related to statutory provisions governing the restructuring of the electricity markets in California. Citing Edison v. Peevey, 31 Cal. 4th 781 (2003), the Court held that, barring some express statute to the contrary, the Commission possessed the inherent power to enter into a settlement. The Court also held that Article III, Section 3.5 of the State Constitution did not bar the settlement because the settlement itself did not abrogate18 the state statute lying at the heart of the suit (Section 332.1) but merely construed it. Even though the Court did not agree completely with the Commission’s construction, it found that the terms of the settlement did not violate the statute as construed by the Court. In this matter, the Court appears to have followed a course akin to the traditional Chevron analysis employed by federal courts reviewing federal agency decisions.19 The Court looked first to whether the plain language of the statute resolved the issue of its construction before deciding whether to defer to the agency (Commission) construction. Since the Court affirmed the Commission’s order even without deferring to the Commission, the question of whether the Court formally eschewed Greyhound deference (see Paras. 24 and 68, infra) is largely academic.

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