Prevailing on Behalf of an Electric Utility Client in Litigation with $2 Billion at Stake

OPPORTUNITY

Our client is one of four co-owners of Units 1 and 2 of the Plant Vogtle nuclear power plant located in Burke County, Georgia. Around 2007, the co-owners agreed to construct Units 3 and 4 (“Additional Units”). Through a series of agreements, our client sold to certain “Offtakers” entitlement to a certain amount of power generated from the first twenty years of commercial operation of the Additional Units. As part of the contracts, the Offtakers were required to pay for a portion of the construction costs. After a decade of construction, and as a result of apparent scheming by new leadership, one Offtaker declared that it wanted to void its contract with our client. The counterparty and its counsel concocted a litany of novel legal theories to challenge the validity of the contract. Faced with this legal challenge, which sought to invalidate a contract worth more than $2 billion and would have disastrous consequences for our client and the construction of the Additional Units, our client turned to Seyfarth.

SOLUTION

Seyfarth’s commercial litigation group managed a morass of procedural and substantive issues to devise a successful litigation strategy. After the counterparty filed suit in Florida state court (its home jurisdiction), Seyfarth orchestrated a series of procedural motions to have the case removed to federal court and then transferred to the Northern District of Georgia. Once in our client’s home court, Seyfarth (working with co-counsel and our client) devised the winning argument and moved for judgment on the pleadings to defeat the heart of the opposing party’s case. We also filed counterclaims, which created settlement leverage and an avenue to potentially recuperate our client’s attorneys’ fees.

RESULT

Our client’s key argument prevailed at the earliest stage of the case, defeating the heart of the opposing party’s arguments. The opposing party had no choice but to concede and settle the parties’ remaining claims. Our client then negotiated a very favorable settlement, turning a potentially devastating lawsuit into a positive outcome.