CINCINNATI (Legal Newsline) – An appeals court has backed a trial judge’s decision to get a notable case involving alleged bribery in the Ohio legislature going.
The U.S. Court of Appeals for the Sixth Circuit on Dec. 16 refused to accept the interlocutory order of what is known as the Special Litigation Committee of FirstEnergy, which is accused of sending $60 million to then-Ohio House Speaker Larry Householder in exchange for legislation that would bail out the company’s failing nuclear power plants.
The SLC, formed by the company, wanted a stay of discovery while it conducted its own investigation, but Columbus federal judge Algenon Marbley rejected that request. He had 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.
“The SLC is unable to point to a statutory right to the requested stay of proceedings," Marbley wrote.
Private Securities Litigation Reform Act provides for a mandatory stay of discovery pending the disposition of a motion to dismiss in a private securities action,” the Sixth Circuit said.
“This provision does not apply here, however, because the SLC moved for a stay after dismissal was denied. Rather, as the district court explained, an SLC’s motion to stay proceedings in a derivative action should generally be granted, but this decision is left to the discretion of the trial court.”
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.