712 F. App'x 3
D.C. Cir.2018Background
- Entergy Arkansas participated in a multi-party system operating agreement that required cost-sharing among Entergy subsidiaries; FERC ordered so-called “bandwidth payments” for divergences in costs in 2005.
- Entergy Arkansas delayed making some 2005 bandwidth payments due to separate litigation and then lawfully withdrew from the operating agreement before completing all payments.
- FERC initially issued orders in 2011 and corrected orders in February 2014 concluding Entergy Arkansas owed bandwidth payments for the 2005 period; APSC did not seek rehearing of those February 2014 orders.
- In April 2014 Entergy submitted a revised compliance filing recalculating Entergy Arkansas’s liability; APSC then argued (for the first time before FERC) that withdrawal extinguished the 2005 payment obligation.
- FERC denied APSC’s rehearing request; APSC petitioned this court for review challenging FERC’s determination that withdrawal did not eliminate previously incurred bandwidth obligations.
- The court considered jurisdiction, ripeness/finality, and the merits of whether withdrawal terminated accrued contractual obligations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction — whether APSC’s challenge is an untimely collateral attack | APSC: need not have raised withdrawal issue in February 2014 orders; timely raised in challenge to April 2014 compliance filing | FERC: APSC should have sought rehearing of earlier orders; later challenge is collateral and untimely | Court: APSC’s challenge is not an untimely collateral attack because earlier orders did not give sufficient notice on the withdrawal issue |
| Ripeness/finality — whether FERC’s decision is reviewable now | APSC: the issue is ripe and final because FERC resolved liability | FERC: decision lacks finality/ripeness for judicial review | Court: FERC’s determination consummated agency decisionmaking and is final and ripe |
| Merits — effect of withdrawal on accrued payment obligations | APSC: withdrawal extinguished obligation to make previously incurred bandwidth payments | FERC/Entergy: accrued obligations survive withdrawal; liability persists | Court: Withdrawal does not extinguish accrued contractual obligations; Entergy Arkansas remains liable |
| Applicable contract-law principle | APSC: (implicit) withdrawal terminates further obligations including those contested | FERC: established contract law and precedent hold accrued rights survive termination | Court: Agrees with FERC; background contract law (e.g., UCC and precedent) supports survival of accrued obligations |
Key Cases Cited
- La. Pub. Serv. Comm’n v. FERC, 866 F.3d 426 (D.C. Cir.) (background on Entergy bandwidth orders)
- City of Nephi v. FERC, 147 F.3d 929 (D.C. Cir. 1998) (timeliness/rehearing doctrine)
- Southern Co. Servs., Inc. v. FERC, 416 F.3d 39 (D.C. Cir. 2005) (sufficient-notice test for collateral attack)
- Dominion Res., Inc. v. FERC, 286 F.3d 586 (D.C. Cir. 2002) (same)
- Ctr. for Auto Safety v. Nat’l Highway Traffic Safety Admin., 452 F.3d 798 (D.C. Cir. 2006) (finality/consummation of agency decisionmaking)
- Bennett v. Spear, 520 U.S. 154 (1997) (finality/competent-review standards)
- Northern Ind. Pub. Serv. Co. v. FERC, 954 F.2d 736 (D.C. Cir. 1992) (ripeness for review of contract interpretation issues)
- Millennium Petrochemicals, Inc. v. Brown & Root Holdings, Inc., 390 F.3d 336 (5th Cir. 2004) (termination does not extinguish accrued obligations)