Southern Union Lawsuit Against Southwest Gas Dismissed

U.S. District Court Judge Roslyn O. Silver issued an order last week dismissing federal and Arizona Racketeer Influence and Corrupt Organizations (RICO) allegations made by Southern Union Co. against Southwest Gas Corp. The court also dismissed federal and state RICO allegations that Southern Union brought against Southwest's Chairman Thomas Hartley, CEO Michael Maffie and Edward Zub, executive vice president/consumer resources and energy services.

In a May 21 ruling by the District of Arizona court in Phoenix, Silver denied Southern Union's request for reconsideration of the court's Dec. 15, 2000 decision to dismiss RICO claims made by Southern Union against Southwest Gas. In December, the court also dismissed RICO claims against ONEOK Inc., Arizona Corporation Commissioner James Irvin and several other individuals.

"We are extremely pleased that the court has dismissed all of Southern Union's federal and state RICO claims against Southwest and its officers and directors," said Hartley. "For months, Southern Union has overstated through press releases and in briefings the substance of its allegations and its alleged damages. Southwest believes that Southern Union's remaining claims are equally without merit and are subject to court dismissal."

Southern Union had attempted to buy Southwest Gas in 1999, and last year, the Austin, TX-based company sued ONEOK, Southwest Gas and others in Arizona federal district court for damages exceeding $750 million, alleging fraud and violations of RICO. In January 2000, ONEOK called off its planned merger with Southwest Gas and it in turn was sued by Southwest Gas (see NGI, Jan. 31, 2000).

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