Heating Up The Gas Wars

[March 29th, 2006] The battle between Oregon's largest natural-gas supplier and its biggest customer continues to burn over one of the lawyers in the case.

In U.S. District Court this week, federal Magistrate Paul Papak ruled that Georgia-Pacific, whose three Oregon plants buy more of NW Natural's product than any other company in the state, must wait a bit longer to get its hands on internal NW Natural documents.

At issue in the court fight between GP and NW Natural: why the price for a year's worth of gas GP thought it had bought suddenly skyrocketed last October (see "Gas Wars," WW, Feb. 8, 2006).

NW Natural has already set aside nearly $3 million to settle similar claims from 18 other industrial customers.

The delay in the larger court dispute arises because Papak must still rule on GP's motion to disqualify NW Natural's lead counsel, David Markowitz, a high-profile litigator whom OHSU also recently hired to represent it in the tram debate.

The two sides in the gas battle have traded scads of affidavits regarding NW Natural's claim that Markowitz's firm was representing GP at the same time it agreed to represent the gas company against GP. GP argues that such representation is a conflict of interest for Markowitz; he denies any conflict exists.

Papak says he agreed to allow NW Natural more time to produce documents, because he wants to resolve whether Markowitz can be involved in the case before any more work gets done on it.

The judge's ruling comes after the Oregon State Bar, prompted by earlier stories in WW and The Oregonian, wrote to Markowitz asking for an explanation.

"It is my responsibility to investigate this matter to determine whether your conduct complies with the provisions of ORS Chapter 9 and the Oregon Rules of Professional Conduct," Mary Cooper, the bar's assistant disciplinary counsel, wrote Feb. 28.

Markowitz replied in a March 21 letter, "We possess no knowledge or information from GP, confidential or public, that would put GP at a disadvantage in the NW Natural Case. However, upon reflection, we do feel and wish to acknowledge to the Bar, that we could have handled the matter better."

Papak will hear oral arguments on the motion to disqualify on April 7 and is expected to rule shortly afterward.