COLUMBUS, Ohio (Legal Newsline) - A power company caught in an alleged bribery scheme with an Ohio lawmaker wants litigation stayed while it conducts an investigation, but a federal judge recently ruled that lawyers will be able to move on with discovery.
Shareholders of FirstEnergy sued the company after allegations it sent $60 million to then-Ohio House Speaker Larry Householder in exchange for legislation that would bail out the company’s failing nuclear power plants.
Columbus federal judge Algenon Marbley already rejected FirstEnergy’s motion to dismiss the litigation, which is led by lawyers at Bernstein Litowitz and Saxena White on behalf of plaintiffs including the Employees Retirement System of the City of St. Louis.
In response to the accusations, FirstEnergy formed a Special Litigation Committee, which asked for a stay of discovery for six months while the SLC evaluated the claims.
“(T)he Court recognizes numerous ‘special circumstances’ that caution against a further stay,” Marbley wrote. “None of these necessarily is dispositive; but in combination, they reveal that this is not the ordinary case in which the SLC should receive a stay.”
Marbley wrote there are indications of a delay in establishing the SLC, which wasn’t authorized by the company until June 2021 – 10 months after litigation started.
“Part of this delay is attributable to finding new independent board members, as the existing board members all were implicated in the various complaints and thus could not serve on an SLC,” Marbley wrote.
“Those new board members joined FirstEnergy in March and June 2021. But had the SLC been formed even six months earlier—around the time the consolidated Complaint was filed in this action—the stay FirstEnergy now seeks would not have been necessary.”
Discovery has been halted long enough, Marbley wrote, considering the automatic stay that started in February 2021 and lasted until he rejected the motion to dismiss.
“(D)iscovery is proceeding in the parallel cases,” Marbley added. “FirstEnergy turned over voluminous documents to the government in connection with the deferred prosecution agreement – many of which are now being produced in response to discovery requests in the RICO class action.”
Litigation followed the FBI’s July complaint against Householder and two FirstEnergy lobbyists.
Householder has pleaded not guilty to the alleged bribery scheme, which involved $60 million in payments.
It started in 2016, when FirstEnergy told investors it was seeking “legislative solutions” to the financial problems at two of its aging nuclear plants in Northern Ohio.
Householder was running for a House seat he previously held. He resigned in 2004 after bribery allegations arose. But his district’s voters picked him to retake the seat and he took office in 2017.
FirstEnergy flew Householder to D.C. for the presidential inauguration and allegedly began making quarterly payments of $250,000 to Householder’s PAC, Generation Now.
FirstEnergy and its subsidiaries put tens of millions of dollars into entities controlled by Generation Now as Householder mounted a campaign to be named House Speaker, it is alleged.
Once speaker, Householder helped HB6 get passed, which charged ratepayers a monthly surcharge. It was essentially a $1.3 billion bailout.
The FBI called it a “sophisticated criminal conspiracy to enact legislation.” Voters were given a ballot initiative to overturn the bailout, and First Energy spent $38 million to defeat it.