Old Dominion Electric v. PJM Interconnection, LLCOld Dominion Electric v. PJM Interconnection, LLC
Affirmed by published opinion. Judge King wrote the opinion, in which Judge Motz and Judge Harris joined.
ARGUED: Joseph Michael Rainsbury, MILES & STOCKBRIDGE PC, Richmond, Virginia, for Appellant. Lucas M. Walker, MOLOLAMKEN, LLP, Washington, D.C., for Appellee. ON BRIEF: Thomas M. Wolf, MILES & STOCKBRIDGE PC, Richmond, Virginia, for Appellant. Robert M. Rolfe, Brian A. Wright, HUNTON ANDREWS KURTH LLP, Richmond, Virginia; Jeffrey A. Lamken, Washington, D.C., Jennifer E. Fischell, MOLOLAMKEN LLP, New York, New York, for Appellee.
KING, Circuit Judge:
In this appeal, plaintiff Old Dominion Electric Cooperative challenges the district court‘s dismissal of its state law claims seeking nearly $15 million in damages from defendant PJM Interconnection, LLC. Following a severe cold weather outbreak in January 2014, Old Dominion unsuccessfully sought to recover certain electricity generation costs from PJM in an administrative proceeding before the Federal Energy Regulatory Commission (“FERC“). Old Dominion subsequently instituted the underlying litigation in Virginia state court, pursuing four putative state law claims against PJM which seek the same relief unsuccessfully claimed before FERC.
PJM timely removed the state court proceedings to the Eastern District of Virginia, pursuant to
On March 31, 2020, the district court denied Old Dominion‘s remand motion and dismissed each of its claims with prejudice. See Old Dominion Elec. Coop. v. PJM Interconnection, LLC, No. 3:19-cv-00233 (E.D. Va. Mar. 31, 2020), ECF No. 26 (the “Dismissal Opinion“). In so ruling, the court determined that, consistent with our 2004 decision in Bryan v. BellSouth Communications, Inc., 377 F.3d 424 (4th Cir. 2004), Old Dominion‘s putative state law claims effectively challenge the terms of PJM‘s federal tariff. As such, and in accord with the principles enunciated by the Supreme Court in Gunn v. Minton, 568 U.S. 251 (2013), and Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308 (2005), the court ruled that the claims present a substantial
I.
A.
Old Dominion is a nonprofit electric utility that serves customers in Virginia, Maryland, and Delaware. It generates and markets wholesale electric power, in part from the operation of three natural-gas-fired power plants in Virginia and Maryland. PJM, on the other hand, is not a utility but is instead a “regional transmission organization,” an entity that operates the electrical grid in a defined geographic area and in accord with extensive regulatory oversight by FERC. PJM is charged with supervising the transmission of electricity in its market region, which consists of 13 states and the District of Columbia. In fulfilling that responsibility, PJM controls the transmission facilities owned by its member utilities — including Old Dominion. See
PJM‘s relationship with each of its member utilities is governed by FERC‘s regulatory framework. The Federal Power Act vests FERC with exclusive regulatory authority over “the transmission of electric energy in interstate commerce and the sale of such energy at wholesale in interstate commerce,” directing FERC to ensure that all “rates and charges made, demanded, or received by any public utility for or in connection with the transmission or sale of electric energy” be “just and reasonable.” See
PJM‘s FERC-approved tariffs include (1) its Open Access Transmission Tariff (the “PJM Tariff,” or simply “the Tariff“) and (2) its Amended and Restated Operating Agreement (the “Operating Agreement“). The PJM Tariff prescribes rules controlling PJM‘s management of the mid-Atlantic energy market and, as relevant in this appeal, fixes the price at which power generators may offer their energy production to PJM in standard electricity auctions — specifically at $1000 per megawatt-hour. See J.A. 127.1 The Operating Agreement, to which participating utilities like Old Dominion subscribe, reflects the terms of the Tariff. The Operating Agreement further affords PJM expansive powers
The standards established and imposed by the PJM Tariff and Operating Agreement became particularly significant during the January 2014 “polar vortex,” a weather disturbance that brought uncharacteristically frigid temperatures to much of the eastern United States. See J.A. 25. The polar vortex prompted abrupt increases in consumer demand for electricity, which, in turn, required utilities and transmission organizations like Old Dominion and PJM to take swift actions to ensure that reliable supplies of power were available for use in heating homes and businesses. As temperatures plummeted, PJM directed its member utilities to prepare for increases in their electric generation output. With respect to Old Dominion, PJM issued specific instructions for the utility to purchase sufficient quantities of natural gas to begin operating its Virginia and Maryland power plants at full capacity. Old Dominion maintains that — at that time — PJM also represented to Old Dominion‘s agents that the company would “make [Old Dominion] whole for its fuel and other costs associated with purchasing the natural gas.” Id. at 26; see also Br. of Appellant 5.
When PJM issued its directives to Old Dominion, the price of natural gas had spiked above its pre-polar vortex levels due to the weather-related strains on energy production resources. Once paired with the costs of operating the Virginia and Maryland facilities, the heightened gas purchase price forced Old Dominion‘s net costs for electricity generation to approximately $1200 per megawatt-hour — well north of the $1000 maximum rate fixed by the PJM Tariff. In compliance with PJM‘s orders, Old Dominion nevertheless purchased the needed fuel at the inflated price. After it did so, however, PJM repeatedly cancelled its operation requests or scaled them back in duration because of overestimates of consumer demand for power. The weather-driven market conditions compelled Old Dominion to sell generation capacity to PJM at a substantial loss, and Old Dominion ultimately incurred an aggregate sum of $14,925,669.58 in costs that exceeded the rate that it could legally charge PJM under the Tariff. In the disputes that followed, neither party contested that those losses — sustained because Old Dominion‘s sales exceeded PJM‘s tariffed rate — were unrecoverable under the express terms of the Tariff.
B.
Old Dominion first sought relief from the excess incurred costs by way of a June 2014 administrative proceeding before FERC. See Old Dominion Elec. Coop., 151 FERC ¶ 61,207 (2015). Relying on its facility operation expenses and the excessive costs of natural gas purchased but not burned, the utility petitioned FERC for the full amount of its excess costs and damages — again, $14,925,669.58. Old Dominion did not dispute that its January sales to PJM fell within the scope of the Tariff and Operating Agreement provisions
PJM intervened in the proceeding and, in consideration of its desire to fairly compensate Old Dominion, actually supported the utility‘s waiver request. FERC nevertheless denied relief, concluding that the filed-rate doctrine and the corresponding rule against retroactive ratemaking — a rule that prohibits the agency from adjusting tariffed rates retroactively absent limited and inapplicable exceptions — prohibited granting any waiver of the PJM Tariff‘s established rates. Old Dominion sought a rehearing of FERC‘s denial order, but FERC also denied that request. See Old Dominion Elec. Coop., 154 FERC ¶ 61,155 (2016). FERC explained that the above-mentioned equitable concerns did not grant it any authority to waive the filed-rate doctrine and that doctrine‘s bar on compensating Old Dominion above the Tariff‘s $1000 rate cap. Additionally, the agency determined that no outside contract providing for recovery of the emergency-related losses had been made between the parties, and that, in any event, FERC-approved rates cannot be modified or superseded by way of informal private agreements.
Although appellate relief was sought by Old Dominion in 2018, the D.C. Circuit denied its petition for review of FERC‘s adverse decisions. In so ruling, the court of appeals observed that the “emphatic rules against retroactively changing filed rates” disarmed Old Dominion‘s arguments supporting a waiver of the PJM Tariff‘s rate cap. See Old Dominion, 892 F.3d at 1231. The court also approved of FERC‘s determination that it lacked discretion to waive filed rates “for good cause or for any other equitable considerations.” Id. at 1230. Although Old Dominion sought review in the Supreme Court of the adverse ruling by the court of appeals, the Court promptly denied its petition for a writ of certiorari. See Old Dominion Elec. Coop. v. FERC, 139 S. Ct. 794 (2019).2
C.
On January 5, 2017, Old Dominion filed this civil action against PJM in the Henrico County Circuit Court in Virginia.3 In alleging a breach of several purported private contracts, the operative Amended Complaint sets forth the same factual contentions at issue in the FERC proceedings,
PJM removed Old Dominion‘s state court lawsuit to the Eastern District of Virginia in April 2019. By its Notice of Removal, PJM maintained that, as required by
federal question jurisdiction. More specifically, PJM asserted that Old Dominion‘s state law tort and contract claims “arise under” federal law, as contemplated by
By its Dismissal Opinion and Final Order of March 31, 2020, the district court denied Old Dominion‘s motion to remand and granted PJM‘s motion to dismiss the Amended Complaint. Addressing the question of subject matter jurisdiction, the Dismissal Opinion first explained that Old Dominion‘s four claims could “arise under” federal law in either of two ways: under the “complete preemption” doctrine, or otherwise under the “substantial federal question” doctrine. See Dismissal Opinion 13. Finding the former to be inapplicable, the court concluded that, by effectively challenging the terms of the FERC-filed PJM Tariff, Old Dominion‘s claims “necessarily raise” a substantial federal question. Id. at 27-28. Because it possessed subject matter jurisdiction over the claims, the court went on to conclude that the filed-rate doctrine proscribed it from awarding relief that would, in effect, alter the Tariff‘s rate cap as applied to Old Dominion. Accordingly, the court dismissed with prejudice each of the four claims alleged in the Amended Complaint.
In its Dismissal Opinion, the district court focused its analysis on our decision in Bryan v. BellSouth Communications, Inc., 377 F.3d 424 (4th Cir. 2004), which concerned the removal to federal court of a putative state law claim in North Carolina that challenged allegedly unfair telephone service rates charged by BellSouth. The rates charged by BellSouth and other telecommunications carriers were controlled by the Federal Communications Commission (the “FCC“) through filed tariffs. We concluded in Bryan that the plaintiff‘s claim — which, by requesting damages, effectively sought a refund of some portion of BellSouth‘s service rate and thereby contested the terms of the carrier‘s federal
The Dismissal Opinion deemed Bryan as controlling here, and further determined that exercising federal jurisdiction was appropriate under the Supreme Court‘s Gunn-Grable framework, which must be employed in assessing whether a claim rooted in state law nonetheless poses a “substantial federal question.” See Gunn v. Minton, 568 U.S. 251, 258 (2013) (citing Grable & Sons Metal Prods., Inc. v. Darue Eng‘g & Mfg., 545 U.S. 308, 313-14 (2005)). The district court thus ruled that, by demanding the same relief sought before FERC — relief unambiguously barred by the terms of the PJM Tariff — Old Dominion‘s claims necessarily raise a substantial federal question suitable for adjudication in federal court. Old Dominion has timely noted this appeal from the dismissal of its claims with prejudice, and we possess jurisdiction pursuant to
II.
We review de novo a district court‘s determination that it possessed subject matter jurisdiction over a plaintiff‘s claims. See Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). PJM removed Old Dominion‘s state court proceedings to the district court pursuant to
In determining whether a claim “arises under” the laws of the United States, courts abide by the “well-pleaded complaint rule,” assessing whether the plaintiff‘s cause of action — as stated on the face of the complaint — has some basis in federal law. See Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804, 807-08 (1986). The “vast majority” of such claims are those directly created by federal law, and a defense or counterclaim that raises a federal question is not an adequate basis for
Although the substantial federal question doctrine has long been recognized in the federal courts, the Supreme Court brought clarity to what it called an “unruly doctrine” through the Gunn-Grable framework.5 See Gunn v. Minton, 568 U.S. 251, 258 (2013) (citing Grable & Sons Metal Prods., Inc. v. Darue Eng‘g & Mfg., 545 U.S. 308, 313-14 (2005)). Gunn-Grable provides for a four-part test, explaining that
federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.
Id. Since the Court‘s decision in Gunn in 2013, that four-part test has been the principal means for assessing whether resolution of a state law claim requires consideration of federal law, such that federal question jurisdiction is appropriate. See, e.g., Pressl v. Appalachian Power Co., 842 F.3d 299, 303 (4th Cir. 2016).
[W]hen, as here, state law creates the plaintiff‘s cause of action, the lower federal courts possess jurisdiction to hear “only those cases in which a well-pleaded complaint establishes . . . that the plaintiff‘s right to relief necessarily depends on resolution of a substantial question of federal law.”
See 377 F.3d 424, 428-29 (4th Cir. 2004) (quoting Franchise Tax Bd., 463 U.S. at 27-28). We ruled therein that a federally filed and approved regulatory tariff “carries the force of federal law” and that “a claim that seeks to alter the terms of the relationship . . . set forth in a filed tariff therefore presents a federal question.” Id. at 429. In similar fashion, a claim seeking to have a court fix a special, reasonable tariffed rate unique to the plaintiff “effectively challenges” the relevant filed tariff in contravention of the filed-rate doctrine and likewise raises a substantial federal question. Id. at 429-30. In such a situation, the filed-rate doctrine — which strictly directs that “the rate of the carrier duly filed is the only lawful charge,” and bars the courts from permitting such inequity among ratepayers — compels a dismissal of the plaintiff‘s claim. Id. (quoting Louisville & Nashville R.R. v. Maxwell, 237 U.S. 94, 97 (1915)).
III.
On appeal, Old Dominion maintains that the district court did not possess federal question jurisdiction over its state law claims against PJM, and that the court‘s dismissal of those claims was accordingly erroneous. More specifically, Old Dominion contends that the PJM Tariff is merely a defense to its state claims, rather than being integral to the claims’ demands for relief. In light of our Bryan decision and our application of the Gunn-Grable framework, however, we are satisfied that the district court possessed jurisdiction under the substantial federal question doctrine. Consistent with Bryan, the Dismissal Opinion correctly determined that Old Dominion‘s claims effectively challenge the terms of the PJM Tariff, and that, by extension, the filed-rate doctrine obliged the district court to dismiss the putative state claims in the Amended Complaint. We are satisfied that Bryan controls the resolution of this dispute because, as in that case, Old Dominion‘s asserted right to relief necessitates recourse to the Tariff that controls the utility‘s relationship with PJM, thereby presenting a substantial federal question.
Nor are we persuaded that Bryan has somehow been weakened or undermined by subsequent decisions of this Court, or by the Supreme Court‘s Gunn-Grable test. The Fourth Circuit decisions relied on by Old Dominion as having eroded Bryan‘s rulings are entirely consistent with Bryan‘s treatment of the substantial federal question doctrine.6 The Gunn-Grable framework, meanwhile, is likewise consistent with Bryan‘s standard, and our application of Gunn-Grable in this case
A.
1.
The crux of this appeal concerns the applicability of Bryan to the facts of this case and whether Old Dominion‘s claims may fairly be said to necessarily raise a substantial federal question. PJM deems Bryan to be dispositive, while Old Dominion considers that decision to be watered down at best, if not impliedly overruled by the Supreme Court. As explained below, we agree with the district court that Bryan remains “binding case law,” is factually comparable to this case, and compels the decision we reach today. See Dismissal Opinion 21.
The Bryan decision resolved a question concerning the removal to federal court of a North Carolina state law challenge to service rates charged by BellSouth, a major telecommunications firm later acquired by AT&T. Seeking to represent a class of BellSouth customers, plaintiff Bryan alleged that the carrier‘s “Federal Universal Service Charge,” a fee assessed to recoup BellSouth‘s required payments to a federal telecommunications fund, was an excessive charge that contravened North Carolina‘s unfair trade practices law. See 377 F.3d 424, 426 (4th Cir. 2004). BellSouth removed the state court litigation to the Middle District of North Carolina, contending that Bryan‘s complaint necessarily raised federal legal questions. BellSouth explained that the fee contested by Bryan was definitively established alongside other service rates in its “Schedule of Charges,” a tariff filed with and approved by the FCC. Id.
Following BellSouth‘s removal to federal court, plaintiff Bryan filed an amended complaint alleging three state law claims: (1) a claim alleging that BellSouth had engaged in unfair trade practices by failing to disclose how it calculated the service fee and that the fee was in excess of what was paid into the federal fund; (2) an unjust enrichment claim, maintaining that the fee was excessive and unlawful; and (3) a claim alleging a breach of the covenant of good faith and fair dealing that stemmed from BellSouth‘s charging an excessive fee. The amended complaint generally sought damages in excess of $10,000 for each member of the putative class. Bryan moved for a remand to state court, while BellSouth moved to dismiss the amended complaint pursuant to the filed-rate doctrine. In disposing of those motions, the district court first determined that removal was proper because the plaintiff directly alleged that the amount of the federally tariffed fee was excessive. The court then dismissed Bryan‘s second and third claims, but remanded her first claim alleging unfair trade practices, ruling that the unfair trade practices claim did not present a federal question. BellSouth appealed the order remanding and denying dismissal of that claim, maintaining that it also challenged the FCC tariff and therefore arose under federal law.
On appeal, we vacated and remanded. Our decision concluded that the unfair trade practices claim “effectively challenge[d]” BellSouth‘s filed rate, that it therefore presented a federal question, and that the district court erred in remanding the claim and should have dismissed it under the filed-rate doctrine. See Bryan, 377 F.3d at 430. Relying on the Supreme Court‘s 1983 decision in
Ultimately, we determined in our Bryan decision that, although the unfair trade practices claim underlying the appeal did not directly challenge BellSouth‘s tariffed rate, it had the legal effect of requesting a court to fix a reasonable rate particular to the plaintiff, thereby presenting a substantial federal question. Because that claim alleged that BellSouth‘s rate was deceptive and sought damages in that regard, we found that “the only plausible reading” of the claim was that plaintiff Bryan effectively sought a refund of some portion of BellSouth‘s tariffed fee. See Bryan, 377 F.3d at 432. As a result, awarding the requested damages would have violated the filed-rate doctrine. We therefore concluded that the district court possessed federal question jurisdiction over the North Carolina unfair trade practices claim and should have dismissed it.
2.
a.
Old Dominion‘s putative state law claims are of course facially different from the North Carolina claim at issue in Bryan, principally alleging the existence of an outside contract instead of unfair trade practices. That distinction aside, however, the utility‘s four claims in its Amended Complaint fit squarely within the map of our analysis in Bryan. In fact, although Old Dominion‘s claims present an “effective challenge” to the PJM Tariff, the claims pursued by Old Dominion set up an even more direct challenge to that tariff than was the situation in Bryan.7
The Bryan decision controls in this appeal because, as was the situation therein, the type of relief sought here is incontrovertibly barred by the governing regulatory tariff.8 That is, determining
the entirety of Old Dominion’s relationship with PJM. In Bryan, the refund sought by the plaintiff was barred and forbidden by BellSouth’s FCC tariff. Here, the reimbursement for electricity generation costs sought by Old Dominion’s Amended Complaint is similarly precluded by the PJM tariff. In both situations, the plaintiff seeks a special tariffed rate unique to it, which federal law plainly disallows. Because no court can award the damages that Old Dominion seeks without finding some way around the terms of the PJM Tariff, “the plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal law.” See Bryan, 377 F.3d at 430 (quoting Franchise Tax Bd., 463 U.S. at 28).9
More specifically, a straightforward assessment of Old Dominion’s various claims reveals that they seek to “alter the terms of the relationship” set forth in the federally filed PJM Tariff. See Bryan, 377 F.3d at 429. As we explained in Bryan, such an objective necessarily presents a federal question. Under both the Tariff and Operating Agreement, Old Dominion’s relationship with PJM is structured such that when the utility sells its power generation capacity to PJM, it may not charge more than $1000 per megawatt-hour. The parties do not dispute here — nor did they in the proceedings before FERC and the D.C. Circuit — that the losses incurred from Old Dominion’s generating electricity at a cost of roughly $1200 per megawatt-hour are not compensable under the PJM Tariff. In petitioning FERC for a waiver of the Tariff, Old Dominion alleged that it sustained $14,925,669.58 in losses — precisely the sum demanded in each of its four state law claims against PJM. There can be no good faith contention that the relief that Old Dominion now seeks is different in character than it was during the utility’s administrative proceedings. The damages sought are for the costs incurred during the 2014 polar vortex — that is, costs “in connection with the transmission or sale of electric energy subject to the jurisdiction of [FERC].” See
By extension, awarding the relief that Old Dominion now seeks would require “entering a judgment that would serve to alter the rate paid by [the] plaintiff,” as the damages demanded exceed the sum authorized by law under the PJM Tariff’s rate cap. See Bryan, 377 F.3d at 429 (quoting Hill v. BellSouth Telecomms., Inc., 364 F.3d 1308, 1316 (11th Cir. 2004)). That is, Old Dominion requests a court to stand in the shoes of FERC and set a reasonable tariffed rate specifically for purposes of compensating it for its polar vortex-related losses. We made plain in our Bryan decision that such a maneuver promotes discrimination among ratepayers and impinges upon the ratemaking jurisdiction of federal agencies, in contravention of the filed-rate doctrine’s simple mandate that “the rate of the carrier duly filed is the only lawful charge.” Id. (quoting Louisville & Nashville R.R. v. Maxwell, 237 U.S. 94, 97 (1915)). Bryan explained that any claim “hav[ing] the effect of imposing different rates upon different customers” invokes the filed-rate doctrine, poses a substantial question of federal law under that doctrine, and must be dismissed pursuant thereto. Id. at 430. Again, Bryan compels our conclusion that the district court possessed federal question jurisdiction and properly dismissed Old Dominion’s putative state law claims as posing an “effective challenge” to the PJM Tariff.10
b.
Under Bryan, it is evident that the substance of each of Old Dominion’s four claims necessarily invokes a substantial federal question.11 The PJM Tariff, then, cannot be construed simply as a defense to the claims’ allegations when the Tariff is vital to the relief that they seek. Old Dominion maintains that, if anything, the Tariff only extinguishes its right to relief. We find that characterization to be premature, however, as determining that
Old Dominion roots its effort to cast the PJM Tariff as a preemptive affirmative defense in our decision in Burrell v. Bayer Corp., 918 F.3d 372 (4th Cir. 2019). Those comparative efforts, however, are unavailing. The Burrell decision did not concern any dispute over a regulatory tariff, nor did it involve Bryan’s controlling principle that an effective challenge to a filed tariff poses a substantial federal question. Burrell involved a removal to federal court of state law negligence and product liability claims relating to a defective birth-control device. The district court ruled that it possessed federal question jurisdiction because the plaintiffs’ complaint was “replete with” explicit allegations that the defendant had violated Food and Drug Administration (“FDA”) regulations, thus “necessarily raising” substantial questions of federal law. Id. at 379. Having concluded that it retained jurisdiction over the plaintiffs’ claims, the court granted the defendant’s motion to dismiss on preemption grounds.
We explained on appeal, however, that the statutory provision granting the FDA regulatory authority over the birth-control device contained a preemption provision barring state remedies for violations of common-law duties unless the alleged wrongs “parallel[ed] federal regulatory requirements.” See Burrell, 918 F.3d at 377 (internal quotation marks omitted). Accordingly, the plaintiffs were obliged to plead the regulatory violations in order to fend off a preemption defense. We thus concluded that the only “federal questions” involved in Burrell operated as defenses to the plaintiffs’ claims and that, because jurisdiction does not lie under
Although Burrell’s resolution turned on an application of the substantial federal question doctrine, that decision bears little factual resemblance to the dispute now before us. The Burrell plaintiffs’ right to the relief they sought could be established without any resort to federal law; it was only the case that, after such right was established, federal law posed the possibility of cutting off the plaintiffs’ ability to recover. That is not the situation here. In this case, there is not merely a “lurking question of federal law in the form of the affirmative defense of preemption.” See Burrell, 918 F.3d at 382 (internal quotation marks omitted). Instead, the federal law embodied in the PJM Tariff is part and parcel of each of Old Dominion’s claims. The utility simply cannot prove that PJM owes it nearly $15 million “in connection with the transmission or sale of electric energy,” see
c.
In these circumstances, we are persuaded that the Bryan decision permits only one resolution of this appeal. The nature of Old Dominion’s claims places them squarely within the scope of the PJM Tariff, such that the utility’s right to relief is inextricably intertwined with federal law. Critically, that fact does not change by virtue of Old Dominion having artfully clothed its inherently federal claims “in state garb.” See Travelers Indem. Co. v. Sarkisian, 794 F.2d 754, 758 (2d Cir. 1986). Just as in Bryan, Old Dominion seeks with its putative state claims to alter the terms of its
B.
1.
Old Dominion alternatively asserts that, irrespective of how it may bear on this appeal, the Bryan decision “has not withstood the test of time.” See Br. of Appellant 28. According to Old Dominion, Bryan lacks “continuing precedential force” in view of this Court’s subsequent decisions and the Supreme Court’s formulation of the Gunn-Grable standard. See Reply Br. of Appellant 29. With respect to our precedent, Old Dominion specifically maintains that we have weakened or eliminated Bryan’s “effective challenge” standard in explaining federal preemption defenses in Burrell and Pinney v. Nokia, Inc., 402 F.3d 430 (4th Cir. 2005), a predecessor to Burrell that similarly found that federal regulatory defenses to state law tort claims did not provide a district court federal question jurisdiction.
Old Dominion’s arguments in this regard are unconvincing, as Burrell and Pinney are not inconsistent with Bryan. Those decisions bore no relation to Bryan’s assessment of veiled challenges to regulatory tariffs and did not question or undermine Bryan’s interpretation of the substantial federal question doctrine. Moreover, the PJM Tariff does not operate as a defense of the sort considered in Burrell and Pinney. And multiple decisions of our sister circuits are in accord with Bryan’s determination that challenges to federal tariffs present questions of federal law. See, e.g., Cahnmann v. Sprint Corp., 133 F.3d 484, 488-89 (7th Cir. 1998); Ne. Rural Elec. Membership Corp. v. Wabash Power Ass’n, Inc., 707 F.3d 883, 891-92, 893 n.5 (7th Cir. 2013); Hill v. BellSouth Telecomms., Inc., 364 F.3d 1308, 1315-17 (11th Cir. 2004); Marcus v. AT&T Corp., 138 F.3d 46, 56 (2d Cir. 1998).
Moving beyond Burrell and Pinney, Old Dominion argues that the Supreme Court’s decisions in Gunn v. Minton, 568 U.S. 251 (2013), and Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308 (2005), impliedly overruled Bryan by seeking to “refine” the “unruly” substantial federal question doctrine as it existed at the time of Bryan’s decision. See Reply Br. of Appellant 29 (quoting Flying Pigs, LLC v. RRAJ Franchising, LLC, 757 F.3d 177, 182 (4th Cir. 2014)). We agree with the district court, however, that Bryan’s explicit standard “closely tracks the Gunn-Grable framework,” and that the latter did no harm to the former. See Dismissal Opinion 15 n.11.
Gunn-Grable principally inquires whether a “state-law claim necessarily raise[s] a stated federal issue, actually disputed and substantial,” reflecting the well-established standard of the substantial federal question doctrine. See Gunn, 568 U.S. at 258 (quoting Grable, 545 U.S. at 314). Bryan’s own characterization of that doctrine was drawn from the Supreme Court’s decision in Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1 (1983), which itself informed the Court’s development of the Gunn-Grable test. See Grable, 545 U.S. at 312-14
2.
Although the district court grounded its jurisdictional determination in Bryan’s standard, it appropriately conducted an independent assessment of the Gunn-Grable framework. And we perceive no error in the court’s explicit conclusion that the same result obtains when the Supreme Court’s standard is applied to the facts here. The Gunn-Grable test provides that there is federal question jurisdiction over a state law claim where the claim presents a federal issue that is (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court “without disrupting Congress’s intended division of labor between state and federal courts.” See Gunn, 568 U.S. at 258. Each of those four factors is readily established in this appeal.
As explained at length above, Old Dominion’s putative state claims “necessarily raise” a federal issue by seeking relief made unavailable by a federally filed regulatory tariff. The utility’s Amended Complaint explains that the requested damages of $14,925,669.58 reflect costs incurred during Old Dominion’s operations during the polar vortex in January 2014. Those costs are not compensable under the PJM Tariff’s rate cap. By suing PJM for the expenses anyway, Old Dominion effectively challenges the enforceability of PJM’s federal tariff and seeks to amend its terms.
The federal issue at hand is, of course, also “actually disputed” — the parties disagree whether the PJM Tariff precludes Old Dominion’s ability to recover. With regard to whether the issue is adequately “substantial,” the Supreme Court in Gunn explained that that inquiry looks to “the importance of the issue to the federal system as a whole” and “the broader significance of the . . . question for the Federal Government.” See 568 U.S. at 260. Here, Old Dominion seeks to have a state court circumvent FERC’s exclusive authority to regulate electric utilities and the interstate electricity transmission market, and we are satisfied that a maneuver of that nature poses an issue of “substantial” significance to the federal government.
Lastly, Old Dominion’s claims may appropriately be resolved in federal court for much the same reason: they seek to obtain an excuse from strict compliance with federal regulatory rules. Such an endeavor is most appropriately pursued in the federal administrative setting, as previously pursued here. PJM’s removal of Old Dominion’s claims to federal court did not “disrupt[] Congress’s intended division of labor between state and federal courts” in any way — if anything, the removal could best be said to have righted that intended division. See Gunn, 568 U.S. at 258. Accordingly, Gunn-Grable is not only compatible with our decision in Bryan, but likewise directs that
C.
In sum, Bryan and Gunn-Grable make it clear that Old Dominion’s claims necessarily present a substantial question of federal law. In these circumstances, Old Dominion’s claims make no bones about seeking relief precluded by the PJM Tariff, asking a state court to fix a reasonable tariffed rate applicable only to the utility’s 2014 losses, and effectively challenging the terms and enforceability of the Tariff’s rate cap. Given those efforts, the district court aptly recognized that the substantial federal question doctrine and the filed-rate doctrine work in tandem to render Old Dominion’s claims nonviable. We decline Old Dominion’s invitation to turn a blind eye to that reality, and instead resolve that the district court was properly vested with federal question jurisdiction and correctly dismissed Old Dominion’s claims.
IV.
Pursuant to the foregoing, the judgment of the district court denying remand and dismissing Old Dominion’s claims with prejudice is affirmed.
AFFIRMED