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COMMONWEALTH EDISON CO. v. WESTINGHOUSE ELEC. CO.

February 27, 1991

COMMONWEALTH EDISON COMPANY, an Illinois corporation, Plaintiff,
v.
WESTINGHOUSE ELECTRIC COMPANY, et al., Defendants


Charles P. Kocoras, United States District Judge.


The opinion of the court was delivered by: KOCORAS

CHARLES P. KOCORAS, UNITED STATES DISTRICT JUDGE

 This matter comes before the court on Plaintiff Commonwealth Edison Company's ("Edison") motion to remand this case to state court. For the following reasons, the motion is granted.

 BACKGROUND

 The following are the facts as alleged by Edison, and for purposes of this motion these facts are taken as true. In 1967 and 1971 Edison contracted with Westinghouse Electric Company ("Westinghouse") to buy twenty four steam generators for three of Edison's nuclear generating stations, Zion, Byron, and Braidwood. Westinghouse represented to Edison that these steam generators would operate at specified energy output levels for forty years. In reliance on these representations, Edison paid hundreds of millions of dollars for the generators.

 When Westinghouse sold Edison each of the generators, it was aware that one of the components of the generator, the Inconel 600 alloy heat exchanger tubing ("Inconel 600 tubing"), was incapable of lasting 40 years in an operating nuclear power plant environment. The most serious threat to the integrity of the Inconel 600 tubing was pure water stress corrosion cracking.

 Edison alleges that Westinghouse actively concealed this knowledge from Edison and the rest of the nuclear power industry throughout the contract negotiation, construction, licensing, and start-up of the Edison nuclear generating plants in Zion, Byron, and Braidwood.

 Edison further asserts that when problems began to appear with the Inconel 600 tubing, Westinghouse continued to deceive Edison and the rest of the nuclear power industry by offering different remedial and preventative measures as permanent cures for the tubing defect. All these measures were ineffective remedies, and some were not even directed at the serious threat of pure water stress corrosion cracking.

 Edison alleges that even when problems with Edison's operating plants finally forced Westinghouse to admit in 1985 that Inconel 600 tubing is susceptible to pure water stress corrosion cracking, Westinghouse insisted that the susceptibility of the tubing was a recently discovered phenomenon. However, Edison contends that its receipt in April 1990 of secret Westinghouse memoranda, written in the 1960s and early 1970s, revealed that Westinghouse had deceived Edison for over 20 years.

 Count I of Edison's complaint alleges common law fraud against Westinghouse and four Westinghouse employees. Count II alleges that Westinghouse violated the Illinois Consumer Fraud and Deceptive Business Practices Act, Ill. Rev. Stat. ch. 121 1/2 §§ 261-72. Finally, Counts III and IV allege that Westinghouse violated the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962.

 On or about October 15, 1990, Edison filed suit in the Circuit Court of Cook County, Illinois. However, Westinghouse filed a motion to have the case removed to federal court on November 9, 1990, pursuant to 28 U.S.C. § 1441. Westinghouse asserted that the federal courts had original jurisdiction over the case pursuant to 28 U.S.C. § 1331 as the RICO claims "arise under the Constitution, law or treaties of the United States." 28 U.S.C. § 1331.

 Now, Edison moves, pursuant to 28 U.S.C. § 1447(c), to remand this case to the Circuit Court of Cook County.

 DISCUSSION

 In support of its motion, Edison contends that (1) this court does not have diversity jurisdiction over this case, (2) there is no federal claim against the Illinois defendants, and the RICO statute does not support this court's assertion of pendent party jurisdiction over the Illinois defendants, (3) without diversity or federal question jurisdiction, the defendants cannot remove this case under 28 U.S.C. §§ 1441(a) or (b), which permit removal only if the case is within a court's original jurisdiction, and (4) the defendants cannot remove this case under 28 U.S.C. § ...


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