The original complaint charges that Idacorp and certain of its and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between February 1, 2002 and June 4, 2002, about the Company's financial outlook, thereby artificially inflating the price of Idacorp stock. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company failed to appreciate what the negative impact of lower volatility and reduced pricing spreads in the Western wholesale energy market would have on its marketing subsidiary, Idacorp Energy; (2) that the Company was forced to limit its origination activities to shorter-term transactions due to increasing regulatory uncertainty and continued deterioration of credit-worthy counter parties; (3) that the Company failed to discount for the fact that Idaho Power may not recover from the lingering effects from last year's regional drought; and (4) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and their earnings projections.
The complaint further alleges that on June 4, 2002, Idacorp, citing stagnant wholesale energy markets and the continued pressure of drought lowered its 2002 earnings guidance to a range between $1.35 and $1.70 per share. News of this shocked the market, shares of Idacorp plunged down $5.80 per share or 17.26% to close at $27.80 per share on June 4, 2002.
On August 31, 2004, the Honorable Edward J. Lodge consolidated the action, appointed lead plaintiff and approved selection of lead and liaison counsel. On October 29, 2004, the lead plaintiff filed a Consolidated Complaint. The defendants responded by filing a motions to dismiss the Consolidated Complaint.
According to a press release dated April 3, 2006, two 2004 shareholder lawsuits against Idacorp and four executives were dismissed by a federal judge, who agreed with a September 2005 finding by a magistrate judge that plaintiffs did not show a connection between the company's alleged material misrepresentations and their financial losses, as required by a 2005 US Supreme Court decision. In the September proposed recommendation, Magistrate Judge Mikel Williams, of US District Court for the District of Idaho, also concluded it would be futile to allow the plaintiffs to file an amended complaint, because it was unlikely they would be able to cure their pleading deficiencies. On March 29, District Judge Edward Lodge agreed, but nevertheless allowed the plaintiffs until May 1 to file an amended complaint only on the "loss causation" issue (Powell vs. Idacorp et al, Case 04-CV-00249, and Shorthouse et al vs. Idacorp et al, Case 04-CV-0322). Williams determined that the plaintiffs did not satisfactorily plead loss causation (i.e., a causal connection between the alleged misrepresentations and their losses), as required by the April 19, 2005 US Supreme Court decision in Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 125 S. Ct. 1627).
On May 1, 2006, the plaintiff filed a First Amended Consolidated Complaint for Violation of the Federal Securities Laws against all defendants. Later, on May 21, 2007 the judge dismissed the case with prejudice. Plaintiffs filed an appeal on June 19, 2007, to the US Court of Appeals. On October 9, 2007, the appellant voluntarily dismissed his appeal with prejudice.