Klamath Off-Project Water Users, Inc. v. PacifiCorp

Half a century ago, plaintiffs entered into an agreement for the purchase of electric power from an electric utility, the predecessor to defendant PacifiCorp. The agreement included no expiration clause. Fifty years later, PacifiCorp sought from the Oregon Public Utility Commission (PUC) approval of an increase in the rate for power sold to plaintiffs. When the PUC granted the request, plaintiffs sued PacifiCorp for breach of contract, and breach of implied duty of good faith and fair dealing under the common law and the Uniform Commercial Code (UCC), former ORS 71.2030 (2007), renumbered as ORS 71.3040 (2009). Their theory was that the contract guaranteed the sale of electricity at the stated price in perpetuity. PacifiCorp moved to dismiss the complaint for failure to state ultimate facts sufficient to constitute a claim. ORCP 21 A(8). The trial court granted the motion on the ground that plaintiffs claims are barred by issue preclusion, given the PUCs approval of the rate increase. We affirm, albeit on alternative grounds. We conclude that, on the facts as pleaded, plaintiffs claims fail as a matter of law because nothing in the agreement even arguably forecloses PacifiCorp from seeking a rate increase.