Learjet, Inc. v. Oneok, Inc.
715 F.3d 716
| 9th Cir. | 2013Background
- Cases arise from the 2000–2002 energy crisis; retail gas buyers allege price manipulation by reporting false data to price indices and wash trading by traders.
- Plaintiffs’ claims were consolidated in a multidistrict litigation in Nevada; district court granted summary judgment finding state antitrust claims preempted by NGA.
- NGA regulates interstate transportation and wholesale sales; it excludes retail sales and local distribution; Congress later removed first sales from FERC jurisdiction.
- Gallo Winery v. Encana Corp. held that NGA preemption does not bar state or federal antitrust claims arising from nonjurisdictional price-index manipulation.
- FERC’s 2003 Code of Conduct and the EPA (2005) are discussed to assess scope of FERC jurisdiction over nonjurisdictional sales and conduct.
- On appeal, the Ninth Circuit reversed in part: NGA does not preempt state antitrust claims; reversed dismissal of AEP defendants for certain state suits; and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does NGA preempt state antitrust claims arising from nonjurisdictional sales? | Plaintiffs argue NGA preempts state antitrust claims. | Defendants contend NGA preempts state claims broadly under Section 5(a). | NGA does not preempt state antitrust claims. |
| Does Section 5(a) of the NGA expand FERC jurisdiction to nonjurisdictional price manipulation? | Argument for broad jurisdiction under Section 5(a). | Argument for broad reading of 'practices' affecting rates to cover nonjurisdictional sales. | Narrow reading of Section 5(a); does not expand to preempt state antitrust claims for nonjurisdictional sales. |
| Did the district court err in dismissing AEP Defendants for personal jurisdiction in Arandell and Heartland? | AEP defendants transact through affiliates causing forum-state effects. | Defendants lack sufficient contacts with Wisconsin/Missouri; not subject to jurisdiction. | Reversed; there is specific personal jurisdiction over AEP Defendants in Arandell and Heartland. |
| Did the district court abuse its discretion in denying leave to amend to add federal antitrust claims? | Plaintiffs should be allowed to amend after Gallo to add federal claims. | Untimely amendments prejudicial and not diligent. | No abuse of discretion; denial upheld. |
Key Cases Cited
- E. & J. Gallo Winery v. Encana Corp., 503 F.3d 1027 (9th Cir. 2007) (Gallo held filed-rate doctrine does not bar claims arising from nonjurisdictional price-index manipulation)
- Northwest Central Pipeline Corp. v. State Corporation Commission of Kan., 489 U.S. 493 (1989) (limits NGA § 5 to preserve state regulation under § 1(b))
- California Independent System Operator Corp. v. Federal Energy Regulatory Commission, 372 F.3d 395 (D.C. Cir. 2004) (narrow reading of 'practices' in NGA § 5(a))
- Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354 (1988) (preemption of state prudence review where FERC determines wholesale rates)
- Panhandle Eastern Pipe Line Co. v. Pub. Serv. Comm’n of Ind., 332 U.S. 507 (1947) (Congress restricted NGA to first sales; explicit exclusion of other sales)
- Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571 (1981) (statutory structure of NGA; states preserve production regulation)