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California Dep't of Water v. Powerex Corp.

ELR Citation: 38 ELR 20185
Nos. No. 06-15285, (9th Cir., 07/22/2008)

The Ninth Circuit held that a Canadian corporation that markets and distributes electric power in the United States is a "foreign state" within the meaning of the Foreign Sovereign Immunities Act of 1976 and, therefore, is entitled to a federal bench trial in a case alleging it had "manipulated the California energy markets through Enron-style gaming and trading strategies." An entity is an organ of a foreign state (or political subdivision thereof) if it "engages in a public activity on behalf of the foreign government." When viewed holistically, the corporation can be seen as a wholly owned, second-tier subsidiary of British Columbia, created pursuant to an order of the Province. As such, it is a foreign state and subject to federal jurisdiction.