Bill shielding NortWestern from lawsuit sparks intense lobbying

By HELENA (AP) - A measure that would shield NorthWestern Energy from a $3 billion lawsuit by Montana Power Co. shareholders has sparked intense lobbying here as supporters and critics prepare to follow the bill to the state House.

John Fitzpatrick, a NorthWestern lobbyist, said he views efforts to pass Senate Bill 458 as a kind of trial for the company, with state lawmakers as jury.

''We're going to a form of court,'' Fitzpatrick told The Great Falls Tribune. ''We're taking this to a jury of 150 citizens from across the state.''

The measure, sponsored by Sen. Walter McNutt, R-Sidney, has been approved by the Senate. The bill's first hearing with the House Business and Labor Committee is scheduled for Tuesday.

The bill was requested by the utility that serves 295,000 Montana electrical customers and would prevent NorthWestern from being ordered to pay damages in the case filed in 2001 by stockholders of the former Montana Power.

Opponents of SB458 say the courts should be left to decide the case, and say the measure is an unconstitutional attempt to intervene.

''This is an end-run maneuver ... to have the Legislature overrule the court,'' said Roger Sullivan, a Kalispell attorney representing the shareholders.

But Fitzpatrick and his company argue that NorthWestern had nothing to do with the decisions that harmed Montana Power.

NorthWestern says that if it isn't shielded from liability, the suit could force the already troubled company into bankruptcy and drive up rates for its Montana utility customers.

''For us, this is a fairly fundamental thing: Liability should go with the people who caused injury,'' he said. ''NorthWestern never caused any injury.''

NorthWestern bought the remains of Montana Power - its electrical and natural gas transmission systems - a year ago, completing MPC's two-year transition from the utility business into a telecommunications company.

The former MPC stockholders claim they were illegally denied the right to vote on the sale of several company holdings that eventually led to loss of their multimillion-dollar investments in the utility as the stock price plummeted.

Stock once worth more than $60 in Montana Power's heyday has been trading, as Touch America stock, at less than a dollar since last summer. Late last month, the stock was removed from the New York Stock Exchange. It most recently traded at 12 cents a share over the counter on Friday.

Lawyers for the stockholders have hired Susan Good, a former chairwoman of the Montana Republican Party and former policy director at the state Public Service Commission, as their lobbyist.

Good and her employers argue that SB458 essentially would steal ''property'' from the former shareholders, robbing them of the right to pursue a legal successor to Montana Power. If the Legislature approves the bill, the state of Montana could be liable for a property ''takings,'' they say.

NorthWestern is facing its own financial woes. Its stock value has dropped from about $23 a share a year ago to $2.23 a share Friday. NorthWestern also is reporting $900 million in losses for 2002, and it has substantial debt.

Fitzpatrick said the last thing that NorthWestern, its customers and 1,100 Montana employees need is an expensive, unfair lawsuit. Any adverse ruling from the suit could force the company into bankruptcy and drive up costs for customers, he said.

Opponents of SB458 say they have no intention of bankrupting NorthWestern, but say it knew it assumed MPC's liabilities when it bought the company's assets.

''I was at the PSC when (the purchase) occurred,'' Good said. ''I had conversations with NorthWestern about this very issue: 'Why do you want to buy this (company) when this lawsuit is hanging out there?' And they said, 'We can handle it.'''

Last week, lobbyists for NorthWestern began taking House Business and Labor Committee members out to dinner in Helena to discuss the bill - including Rep. Joe McKenney, R-Great Falls, who is chairman of the committee.

McKenney says it's not unusual for lobbyists to meet with lawmakers over dinner or in other informal settings to discuss bills, and said he's meeting Monday evening with shareholder representatives.

''Whether you have 10 lobbyists or one lobbyist, it doesn't really matter. What matters is we're getting the facts that we need to make a decision,'' McKenney said.

However, Sullivan said it's ''absurd'' to equate the lobbying efforts of NorthWestern with those of four relatively small Montana law firms.