IN BRIEF: FirstEnergy shareholders can see records in bribery row - judge

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  • Suit over FirstEnergy's alleged $60 million nuclear plant bribery scandal
  • Suing shareholder wanted documents already provided as part of other litigation and federal investigations

(Reuters) - FirstEnergy Corp shareholders can access documents related to other lawsuits and investigations the electric utility company has faced in connection with a bribery scandal, an Ohio federal judge has ruled.

Chief Judge Algenon Marbley held on Monday that FirstEnergy shareholders, led by the Los Angeles County Employees Retirement Association, can see documents related to litigation over the bribery scheme, including deposition testimony, as well as documents given to and received from the government.

Darren Robbins of Robbins Geller Rudman & Dowd, the plaintiffs’ lead counsel, said in a statement Tuesday that the Ohio judge’s ruling “is an important win for shareholders seeking to shed light on what has been described as one of the most pervasive political bribery schemes in American history.”

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An attorney for FirstEnergy did not immediately respond to requests to comment Tuesday. A representative for the company declined to comment on ongoing litigation.

In 2020, then Ohio House speaker Larry Householder and four others were arrested and charged for racketeering and bribery, according to court documents. The case is ongoing. Householder later pleaded not guilty, while two others pleaded guilty to racketeering charges.

FirstEnergy and its affiliates allegedly paid politicians and lobbyists more than $60 million over three years to lobby for passage of a bill that outlined a $1.3 billion bailout for its struggling nuclear plants. The company has denied any wrongdoing.

FirstEnergy investor Diane Owens filed a proposed class action against the company over losses investors faced when news of the scandal broke and the company’s share price plummeted. Her suit was later consolidated with similar cases, including those that named the investment banks that underwrote two of the company’s debt offerings.

Because the consolidated suit is facing several motions to dismiss, discovery was automatically stayed. The retirement fund manager filed to have the stay partially lifted in April so it could access documents that had already been provided as part of other investigations and suits related to the scandal. The plaintiff said in its request that not receiving the documents could pose a disadvantage to the shareholders’ case.

Marbley said he was granting the retirement fund manager’s motion to allow partial discovery for its case because it demonstrated that it “faces unique undue prejudice without having access to documents that have already been produced in other proceedings.”

The case is In re FirstEnergy Corp Securities, U.S. District Court for the Southern District of Ohio, Eastern Division, No. 2:20-cv-03785.

For Los Angeles County Employees Retirement Association: Darren Robbins of Robbins Geller Rudman & Dowd; and Joseph Murray of Murray Murphy Moul + Basil

For FirstEnergy: Geoffrey Ritts of Jones Day

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Sierra Jackson reports on legal matters in major mergers and acquisitions, including deal work, litigation and regulatory changes.