Oneok, Inc. v. Learjet, Inc.
135 S. Ct. 1591
SCOTUS2015Background
- Respondents (large gas consumers) bought gas directly from interstate pipelines and sued those pipelines under state antitrust laws, alleging pipelines manipulated price indices that set gas-contract prices.
- The pipelines’ conduct allegedly raised both federally regulated wholesale (jurisdictional) prices and state-regulated retail (nonjurisdictional) prices.
- Pipelines removed the suits to federal court and sought summary judgment arguing the Natural Gas Act (NGA) pre-empts state-law claims because FERC has exclusive reach over matters affecting wholesale rates.
- District Court granted summary judgment for pipelines; Ninth Circuit reversed, holding state antitrust claims aimed at retail-price injuries are not field-preempted even if wholesale prices were affected.
- Supreme Court granted certiorari to resolve whether the NGA pre-empts state antitrust suits challenging practices that affect both wholesale and retail prices.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Natural Gas Act field-preempts state antitrust suits attacking pipelines’ index manipulation | Respondents: state antitrust laws govern marketplace conduct and may remedy retail overcharges; such suits target retail-stage harms within state authority | Petitioners: NGA occupies the field of matters affecting wholesale sales; FERC regulates practices affecting wholesale rates, so state suits are pre-empted | The NGA does not uniformly pre-empt these state antitrust claims; suits aimed at retail harms fall outside the pre-empted field |
| Whether dual effects (wholesale and retail) of challenged conduct mandate pre-emption | Respondents: dual effects do not convert traditionally state-regulated retail remedies into federal matters | Petitioners: because conduct affected wholesale rates (a federal field), pre-emption should follow | Court: dual effects are insufficient; focus on the target/aim of the state law—here retail harms—so no field pre-emption |
| Whether prior decisions (e.g., Schneidewind) require pre-emption of general state laws like antitrust statutes | Respondents: Schneidewind preserved traditional state regulation (e.g., blue-sky, antitrust) and is distinguishable | Petitioners: Schneidewind and other precedents show FERC’s domain includes practices affecting wholesale rates | Court: Schneidewind permits nonpreemption for generally applicable state laws; antitrust is akin to traditional state regulation and does not automatically yield to field pre-emption |
| Whether courts should defer to FERC if it deems the field pre-empted | Respondents: no specific FERC determination establishes field pre-emption of state antitrust claims | Petitioners/Solicitor General: FERC expertise favors deference | Court: no specific FERC determination exists here, so deference is not triggered; leaves any FERC pre-emption determination for future consideration |
Key Cases Cited
- Schneidewind v. ANR Pipeline Co., 485 U.S. 293 (1988) (NGA does not pre-empt all state regulation; preserves traditional state authority)
- Northern Natural Gas Co. v. State Corporation Comm’n of Kan., 372 U.S. 84 (1963) (distinguishes measures aimed at interstate purchasers/wholesale sales from those aimed at production/retail)
- Northwest Central Pipeline Corp. v. State Corporation Comm’n of Kan., 489 U.S. 493 (1989) (upheld state regulation of production-timing despite possible effects on wholesale prices)
- Panhandle Eastern Pipe Line Co. v. Public Serv. Comm’n of Ind., 332 U.S. 507 (1947) (NGA drafted to preserve state regulatory authority)
- Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354 (1988) (state inquiry into FERC-approved wholesale purchases pre-empted; conflict pre-emption analysis)
- FPC v. Louisiana Power & Light Co., 406 U.S. 621 (1972) (federal authority to direct curtailments during shortages; conflict-preemption context)
- California v. ARC America Corp., 490 U.S. 93 (1989) (discusses conflict pre-emption and preservation of state common-law remedies)
- Interstate Natural Gas Co. v. FPC, 331 U.S. 682 (1947) (early NGA pre-emption precedents informing division of federal/state authority)
- Public Util. Comm’n of Ohio v. United Fuel Gas Co., 317 U.S. 456 (1943) (recognition of federal exclusivity over certain wholesale regulation)
- Exxon Corp. v. Eagerton, 462 U.S. 176 (1983) (state law regulating producers’ pass-through of taxes pre-empted when it invades FERC authority)