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Resisting Corporate Corruption, 3rd Edition by Stephen V. Arbogast

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Case 6Court Date Coming in California?

The lawsuits are coming. That much is clear. What is not clear is whether this kind of opinion should be committed to print, even under Attorney-Client privilege.

MARK HAEDICKE COULD SCARCELY BELIEVE WHAT HE WAS READING. Some weeks earlier he had contacted an Enron attorney, Christian Yoder, out on the West Coast. Haedicke’s instructions were for Yoder to begin preparing for law suits connected with Enron’s California electricity trading activities. Haedicke, chief counsel for Enron’s North American Wholesale business and his litigation chief, Richard Sanders, had agreed that the risk of law suits was growing. Sanders had urged Haedicke to see what could be done to head off litigation and to prepare for what could not be avoided. Haedicke had then called Yoder and asked him to identify expert attorneys who were up-to-date on California electricity trading issues.

Now, one month later, Sanders had brought Haedicke a written opinion from a Portland law firm, Stoel Rives (SR). Haedicke was shocked by its contents. The memo detailed various transactions which portrayed Enron, to put it politely, in a very unflattering light. Haedicke was particularly struck by the following passage:

“By knowingly increasing the congestion costs, Enron is effectively increasing the costs to all market participants.”1

Haedicke didn’t know which aspect was more shocking, the content describing what others would see as Enron’s manipulation of California’s electricity ...

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