*1 mony and confessed it was a fabrication. court held that if the affidavit were evidence, exculpatory
modified this Thus, probable support
would not cause. fact,
had been no material issue of there qualified
modification would have defeated
immunity police rather than shielded the
from suit. See id. at 582-83. specifically
The distinction was noted Eighth Circuit when it stated: “We ex-
press no a view as whether defendant
whose affidavit contained a deliberate false- qualified immunity
hood should be entitled to provide
if a corrected affidavit would still
probable stringent may A cause. more rule appropriate
be a liar when seeks the benefit Brondhaver, Bagby
of this defense.” v. (8th Cir.1996). 1096,1099 n. 2
F.3d course,
Ultimately, plaintiff in a prove 1983 case must his or her case be- jury path if
fore to that end is not
prevented by qualified immunity defense. process
That was the that we followed here,
Lippay. I process would follow that knowing and deliberate misstatements Thus, respectfully
are conceded. I dissent. RESOURCES,
SCHUYLKILL ENERGY
INC., Appellant,
PENNSYLVANIA POWER
& LIGHT COMPANY.
No. 96-1447. Appeals,
United States Court of
Third Circuit.
Argued Feb. 1997. 5,May
Decided Rehearing Petition
Sur June *5 granted court mo- district
tion to antitrust for dismiss SER’s claims upon a claim can failure state which relief granted supple- be and declined to exercise jurisdiction pendent over mental state must law claims. We decide whether SER adequately pled injury. has antitrust law, by agreement is find supplier, competitor, PP & L’s not PP & L’s L’s generation PP & curtailment injury policy type not create of the does prevent. intended antitrust laws were We will affirm.
I. Act, Under the Federal Power seq., any person et owns U.S.C. 791a who (ar- Caplan, Mary L. Huwaldt Richard operates to transmit sell facilities used or Luber, Davis, Caplan gued), L. Michelle electric interstate commerce Paoli, PA, Appellant. subject jurisdiction regulatory to the Energy Regulatory of the Federal (argued), B. MacGre- R. Stuart David Glen (“FERC”). Commission U.S.C. LLP, Square gor, Morgan, Bockius Lewis & 1978, Congress amended the Federal PA, Mahinka, Stephen Philadelphia, Paul by passing Utility Reg- Power Act the Public Powell, Morgan, A. Lewis & Bocki- Elizabeth (“PURPA”). ulatory Act Policies D.C., LLP, Washington, us of counsel: Jesse Congress passed encourage PURPA to Dillon, Pennsylvania Light A. Power & Com- *6 development energy of alternative sources Allentown, PA, Appellee. pany, for depen- an effort to reduce States’ United foreign Congress dence on oil. believed MANSMANN, and Before: STAPLETON development energy of alternative RESTANI, Judges, Judge, Circuit and Court impeded by sources was the reluctance of of International Trade.* purchase traditional to electric utilities ener- gy from energy and sell to non-traditional THE OPINION OF COURT by facilities as as well the substantial finan- MANSMANN, Judge. Circuit imposed cial facil- burdens on non-traditional by pervasive regula- ities federal and state Inc., Resources, Schuylkill Energy Mississippi, tion. FERC v. See 456 U.S. (“SER”) against filed this antitrust action 2126, 750-51, 2132-33, 72 S.Ct. L”) (“PP Pennsylvania Light & Power & Co. (1982) (citing legislative history L.Ed.2d 532 monopolizing attempting and to allegedly PURPA). monopolize provision energy of electric goal, requires retail consumers within PP L’s service To further this PURPA purchase energy area resellers affiliated with and to wholesale electric utilities electric imper- independent PP produced by power producers & L. contends that PP & L purchases SER-generat- operating missibly “qualifying cogeneration curtailed so-called 796(18)(B), §§ ed electric and SER was there- facilities.” See U.S.C. Congress pro- fore L in compete unable to PP & 824a-3. directed FERC to provision mulgate regulations governing of electric consumers in rules and sales, purchases the retail market and resellers in the whole- terms such and and state agencies Pennsylvania sale as market. such Public * Restani, Judge, Jane A. tion. Honorable United States Trade, designa- sitting by Court of International
4H (“PUC”) Utility empowered required purchase power are Commission SER’s entire net approve regulate output up the facilities megawatts price per- to 79.5 at a by See 16 contracts covered PURPA. U.S.C. kilowatt hour which either fixed within the 824a-3(f); pt. 292.1 18 C.F.R. agreement or percentage calculated as a Energy-Only Avoided Cost.”
II.2
¶22.
Complaint,
per-
Amended
PP & L is
purchase
mitted to
power produc
less than SER’s total
independent
is an
operates
energy output “only
that owns and
an anthracite coal
electric
er
when curtailed
cogeneration plant
refuse-fired
in Shenan
purchases
necessary
are
for PP L& ‘to make
doah,
plant
qualify
Pennsylvania. The
is a
repairs, changes,
inspections,
tests or
or for
PURPA,
ing facility
the Federal Pow
under
of an
potential System
reasons
actual or
Act,
regulations.
er
PUC
See U.S.C. Emergency,
Outage,
Majeure
Forced
Force
796(18);
292;
pt.
52 Pa.Code
C.F.R.
System
PP L
operating
condition which
§ 57.31.3
necessitates such disconnections or curtail-
¶31
utility chiefly
Complaint,
ments----’”
Amended
& is an electric
reliant
¶ E).
coal-burning
(quoting Agreement,
on
and nuclear
sources.
Art.
PP & L
Allentown, Pennsylvania,
L& services
may
purchases
not curtail
of SER’s electric
“
”
surrounding
regulated
PP L
areas.
& is
output
dispatch.’
‘for reasons of economic
by
the PUC.
& is a member of the
¶42
Complaint,
(quoting Agree-
Amended
Pennsylvania-New Jersey-Maryland
Inter-
¶ E).
ment,
9,Art.
(“PJM”), power pool
connection
maintained
Agreement
“system emergen-
defines
by
unincorporated
approxi-
association of
cy”
“any
System
condition on the PP & L
mately eight member electric utilities located
which,
System
opinion,
or PJM
in PP & L’s
Pennsylvania,
Jersey, Maryland,
New
De-
may disrupt service to customers or endan-
Washington,
laware
D.C. PJM member
ger
property.”
life or
companies
generation
sell excess electric
ca-
¶
¶ CC).
PJM,
(quoting Agreement,
Art.
Ac-
pacity to
which is then sold to other
SER,
companies
cording
improperly
PJM member
or to other
L has
pools.
“system emergency”
construed the term
generation emergencies”
“minimum
include
regulations promulgated
Pursuant
to the
(collective-
and “minimum
events”
PURPA,
authority
FERC under the
“MINGENS”)
ly
identified
PJM. MIN-
required
purchase
PP & L is
electric
aggregate power
GENS occur when the
de-
*7
17, 1986,
energy from SER.4 On October
by
regions
mand within the
serviced
PJM is
twenty-year
and PP
L
into
SER
& entered
expected
emergen-
to fall below its normal or
Agreement.
Power Purchase
Under
cy
generation
Agreement,
required
terms of
minimum
floor level and PJM
“SER is
L,
exclusively
pool’s
sell
to PP
L
& and
& is
cannot sell the
excess
independent
independent
1. The PUC is an
state administrative
SER asserts that
is both an
regulate public utility
facility.
commission authorized to
power producer
qualifying
and a
companies doing
Pennsylvania.
business in
See
note, however,
"independent power pro-
an
301,
Pennsyl-
§§
Pa.
Cons.Stat.Ann.
501. The
by
power sup-
"[a]n
ducer” is
definition
electric
Utility
provides
vania Public
Code
the PUC with
plier
qualifying facility....”
is
which
authority
"supervise
regulate” pub-
broad
potential
§
conflict is not
Pa.Code
57.31. This
doing
Pennsylvania.
lic utilities
business in
Id.
however,
purposes
appeal,
relevant for the
of this
501(b).
regulations,
§
PUC
their FERC
like
throughout
opinion
this
we
refer to SER
will
counterpart,
require
purchase energy
utilities to
independent power producer
as both an
and a
"qualifying
from
facilities.” 52 Pa.Code
57.34.
qualifying facility
deciding
without
whether ei-
designation
inappropriate.
ther
12(b)(6)
reviewing
2. When
a Rule
dismissal for
upon
failure to state a claim
which relief can be
granted,
accept
(and does)
we must
required
purchase
true the factual alle-
& L
is also
gations
complaint
in the
and all reasonable infer-
energy
independent power produc-
electric
ences that can be drawn
from them. Fuentes
ers other than SER.
196,
(3d
Cardiology,
South Hills
Cir.1991).
1996,
23,
January
the district
policies.
company
On
member
reduce PJM
pools or
other
juris-
primary
of
invoked the doctrine
court
purchases.
diction,
all
stay
suspending
entered a
order
MINGENS are
alleges that when
SER
of
pending the outcome
proceedings
further
PJM,
policy
L
PP & has a
by
issued
anticipated
proceeding, and denied
PUC
indepen-
energy from
reducing purchases
PP & L’s motion to dismiss
prejudice
without
high
with
power producers
dent
Complaint.
the Amended
purchases from PP &
cutting
prices first and
severely.
2, 1996,
producers
February
less
filed a motion
SER
L-owned
On
majority
stay
PP & L’s
order. On
of the
alleges that the
for reconsideration
SER
1996,
emergencies
are disin-
court heard oral
system
April
the district
declarations
actually declared for rea-
motion for recon-
argument
are
on both SER’s
genuous and
words,
In
dispatch.”
other
PP & L’s motion
and the merits of
sons of “economic
sideration
Complaint.
available for distri-
the Amended
total electric
to dismiss
when
aggregate customer
briefs
parties
to file letter
by
exceeds
court directed
bution
PJM
19, 1996,
demand,
April
curtails
disproportionately
motions.
In its
&
on these
energy generated
brief,
footnotes in
included two
purchase
of electric
letter
SER
power produc-
to amend
independent
requested
opportunity
and other
which it
SER
Complaint in lieu of dismissal.
Amended
ers.
its
a formal motion to amend
never filed
SER
PP & curtails
complains that when
SER
Complaint.
its Amended
(as it has on
energy from SER
purchases of
satisfy
occasions),
is unable to
SER
several
21, 1996,
May
court
the district
On
requirements and must
parasitic load
its own
L’s motion to dismiss SER’s
granted
electricity.
alleg-
SER also
purchase oil and
entirety.
Complaint in
After
Amended
curtailments
L’s
es that PP &
claims,
antitrust
dismissing
federal
and to incur
it to lose revenues
have caused
supple
to exercise
the district court declined
other incidental costs.
jurisdiction
state law
over SER’s
mental
1367(c)(3).
pursuant
claims
to 28 U.S.C.
III.
motion
dismissed as moot SER’s
The court
alleges
Complaint, SER
In its
timely
stay
filed this
to lift the
order. SER
antitrust violations
federal
separate
two
jurisdiction pursuant to 28
appeal.
haveWe
Act,
2 of the Sherman
PP L under Section
§ 1291.5
U.S.C.
I,
alleges a
§ 2.
In Count
15 U.S.C.
II,
monopolization.
Count
claim of
IV.
monopolize.
attempt
alleges a claim of
provides that
2 of the
Act
Section
Sherman
alleges
state-law claims
related
SER also
“[ejvery
monopolize, or at-
person who shall
negligent mis-
misrepresentation,
intentional
conspire
tempt monopolize, or combine or
contract,
representation,
breach of
persons, monopo-
any
person
other
dealing.
duty
good faith and fair
breach of
or commerce
part of the trade
lize
L moved
November
On
States,
foreign
among
or with
the several
*8
12(b)(6) to,dismiss
pursuant to Fed.R.Civ.P.
nations,
guilty of a felo-
shall be deemed
entirety.
In
Complaint in its
the Amended
ny....”
15 U.S.C.
alternative,
sought
L
to have the
PP &
the
monopolization,
claim for
To state a
stay
proceeding and
the federal
district court
“(1)
allege
possession of
jurisdiction
plaintiff must
the
a
primary
case on
refer
the
market and
monopoly power in the relevant
administrative
PUC for an
grounds to the
(2)
acquisition or maintenance of
pro-
the willful
regulatory
the
proceeding to determine
growth or
power
distinguished from
that
generation curtailment
priety of PP & L’s
court;
apply
the district
same standard as
plenary
the district
We
review over
5. We exercise
is,
granting
12(b)(6)
a dis-
"refrain from
to
we must
grant
Rule
motion
court’s
of PP & L's
relief can be
is certain that no
upon
missal unless it
a claim
which
dismiss for failure to state
could be
granted
set of facts which
Jeremy
under
granted.
v. Mount Leba
be
H.
relief can
Fuentes,
272,
Cir.1996).
Dist.,
(3d
at 201.
proved.”
946 F.2d
277
non Sch.
95 F.3d
413
prevent
development
consequence
superior
as a
of a
and that flows from that which
acumen, or
product, business
historical acci
makes
acts
inju-
defendants’
unlawful. The
Armstrong
Indus.,
ry
World
dent.” Fineman
anticompetitive
should reflect the
effect
Cir.1992)
(3d
Inc.,
171, 197
(quoting
980 F.2d
either of the
or of anticompetitive
violation
563,
Corp., 384
States v. Grinnell
U.S.
possible by
United
acts made
the violation.
570-71,
1704,
1698,
16
86
L.Ed.2d 778
S.Ct.
489,
Id. at
97
at 697
in
(emphasis
S.Ct.
(1966)).
attempted
for
To state a claim
mo
original); see
Brader v. Allegheny
also
Gen.
“(1)
plaintiff
allege
a
nopolization,
must
(3d
869,
Hosp.,
Cir.1995);
64 F.3d
875
Inter
engaged
predatory
defendant
in
has
or
Materials,
national Raw
Ltd. v. Stauffer
(2)
anticompetitive
specific
conduct with
a
Co.,
1318,
(3d
Chem.
978 F.2d
1327-28
Cir.
(3)
monopolize
dangerous
to
a
intent
and
1992).
monopoly
probability
achieving
power.”
of
alleges
that PP & L’s curtail
McQuillan,
Spectrum, Sports, Inc. v.
506 U.S.
ment of
purchases from SER and
456,
890-91,
447,
884,
122
113 S.Ct.
L.Ed.2d
independent
other
power producers harms
(1993);
Lab., Inc.
247
see also Barr
v. Abbott
competition and consumer welfare
(3d Cir.1992)
Lab.,
98,
(plaintiff
112
by keeping
artificially
L’s rate
base
“(1)
allege
specific
must
that defendant
had
high, by depriving consumers within PP &
market, (2)
monopolize
intent to
the relevant
L’s service area of
sources other
in
engaged
anti-competitive
exclusionary
than
exploited by
those owned
and/or
(3)
conduct,
possessed
and
sufficient market
(which,
turn,
reliability
& L
in
reduces the
to
power
dangerously
come
close to suc
of
provided),
electric
and
service
reduc
cess.”).
ing the
availability
consumers of
right
private
SER’s
maintain
cause of
produced
alternative,
using
environmental
damages
for
under
2
arising
action
Section of
ly pro-active energy sources.
Act
the Sherman
flows from Section of the
¶
66.6We address each
Act,
Clayton
provides
by “any
which
for suits
of
alleged injuries
these
in turn.
injured in
person who shall be
his business or
property by
anything
reason of
forbidden in
begin
allegation
15(a).
the antitrust
laws.” 15 U.S.C.
that PP
generation
policy
& L’s
curtailment
Bowl-O-Mat,
Corp.
Brunswick
v. Pueblo
keep
L
enables
& to
its rate
artifi
base
Inc.,
477,
690,
U.S.
97 S.Ct.
L.Ed.2d
cially high. SER contends that PP
L’s&
(1977),
Supreme
Court
limited the
rate base is a function of the value of “used
plaintiffs
class
Section
those who
equipment
and
capital
useful”
owned
plead
prove
injury.”
and
“antitrust
Observ-
generating, transmitting
& for
and distrib
designed
ing that the antitrust
were
laws
uting
may
electricity
public. PP
to the
“protection
competition,
competi-
not, however,
the cost of
include
electrical
tors,” the Court stated:
power purchased
independent power
[Pjlaintiffs
prove
inju-
producers
...
must
more than
like
in
rate base.7
ry causally
illegal presence
SER, during
According
periods
linked to an
of lower
demand,
prove
the market.
must
Plaintiffs
anti-
PP & L
an economic
has
incentive
injury,
say injury
trust
which is
maintain
at its own facil
(to
base)
type
preserve
high
the antitrust
were intended
ities
laws
rate
(E.D.Pa.
1996);
alleged
damages,
May
6. SER also
a list
includ-
WL
at
*3
see
revenues,
ing
electricity
Brunswick,
the loss of
sales
in-
at
429 U.S.
reduce money L producers, energy purchases cost PP & curtailment of from SER power which nothing independent power producers to L’s rate and “de PP & base. other but contribute priv[es] consumers within & L’s service case, this of circumstances Under the energy area other than those of sources PP & L what extent main- whether and to by L.” exploited owned PP & and/or high artificially rate base is not tains an ¶66. Depriving con Amended the purview the of antitrust laws. As within however, not, “energy sumers of sources” is Pennsylvania concedes, regulators —not cognizable injury. “energy An antitrust L’s rate PP & base. the market —determine “competitor,” source” is not as a the same ability change to its PP & L has no unilateral majori and fact that PP L obtains the the rates; any must or decrease rates increase ty energy energy of its from few sources to filed with the PUC and conform PUC be competition. does not indicate an absence of regulations and orders. See 66 Pa.Cons.Stat. example, For if PP & were to “own and/or Fuel, 1301, 1308; Yeager’s §§ Inc. v. Ann. sources, exploit” supply energy a diverse of Co., Pennsylvania Light 22 F.3d Power concern, satisfying expressed thus the SER’s Cir.1994) (3d 1260, (“Pennsylvania 1270 stat- question relevant of whether PP & L was regulation expressly provide for of utes PUC unlawfully monopolizing market the relevant rates____”). would remain with unanswered. Consumers “[t]he that anti & L contends in PP & L’s service area would still receive protect trust laws intended to the com product (electricity) are the same and the same petitive process by prices (none). and other which competition amount of At issue is of are the mar terms trade established unlawfully whether excluded inde regulators ketplace, how administer the pendent producers not like from the accounting that used market, in] formulas rate- [are relevant not whether consumers re Brief, making.” agree. 20. We Appellee nuclear, coal, at electricity generated by ceive allegedly L’s complaints culm, solar, about PP & or other source.9 brought high rate be before the base should
PUC,
Even
federal court on
antitrust
if we construe SER’s
to
Complaint
complaint.8
to find an
that
assertion
sense,”
Pennsylvania,
been entrusted
court
of antitrust
In
the PUC has
trust
affirmed dismissal
enforce,
Austl.,
suit);
authority
"full
...
v.
Conservation Council W.
Inc.
of
out,
orders,
regulations,
Am.,
270,
carry
F.Supp.
execute and
its
Co.
518
281
Aluminum
of
otherwise,
provisions
(where
(W.D.Pa.1981)
[the Code]
...
the
plaintiff
"attempt[s]
66
and the full intent
thereof.”
Pa.Cons.Stat.
guise
raise
issues
environmental
under
501;
(rates
"just
§
shall be
laws,"
Ann.
see id.
1301
plaintiff's
dismissed
com
antitrust
court
reasonable”).
plaint
upon
for failure to state claim
which relief
granted);
can be
see also
v. E. & I.
Gutierrez
that
L’s curtailments
SER's assertion
PP &
Co., Inc.,
645,
(9th
Winery
Gallo
604 F.2d
“unfairly
illegally
skew
evi-
allow it
dence,
Cir.1979) (affirming
dismissal of antitrust claims
concerning
capital
to which
extent
brought by
complaining
farm workers
about
equipment
presents the
PUC in
is utilized
it
reduction; plaintiffs' goals
thereby misleading
work
were unrelated
support
requests,
of rate
laws);
Brief,
determinations,”
purpose
Appellant
antitrust
Marchwinski
PUC in its rate
18-19,
(W.D.Pa.1979)
grounds
Corp.,
Tyrone
might
appropriately be
Oliver
415
generation
policy
L gets
PP & L’s
curtailment
de-
reimbursed dollar for dollar
stroys competition
provision
energy
in the
of
from its
...
power
customers
for all
which
SER____
consumers,
still not
we would
find
purchases
Therefore,
it
from
cognizable
in this
antitrust claim
ease. To
SER,
purposes,
to all
selling
intents
is
monopolization,
a claim for
state
SER must
its
public
acting
to the
with PP & L
alia,
allege,
willfully
middleman____
inter
& L
that PP
ac-
as a
agent
distribution
or
quired
monopoly power
or maintained
in the
SER, therefore,
competitor
is a
with PP &
a claim
relevant market. To state
for at-
L for
the sale of electric
to PP &
tempted monopolization,
allege,
SER must
L’s consumers
within
& L’s service
alia,
dangerous
inter
that PP
L had a
area.
probability
achieving monopoly power
of
in
¶¶
Complaint,
Amended
24-25. According to
claims,
relevant market. For both
the
we
SER, PP
& L’s
policy
curtailment
scope
consider
the
must
the
of
relevant mar-
SER,
harms
competition.
and thus harms
456-59,
Spectrum Sports,
at
ket.
506 U.S.
agree.
We do not
is not PP
SER
& L’s
SER,
According
S.Ct. at 891-92.
competitor
supplier.
is PP & L’s
SER
—it
primary relevant
in this
market
case is the
concedes that in October
it entered into
service of 1.2
customers in
retail
million
agreement
L in
with PP &
which “SER is
area,
approxi-
& L’s service
which covers
required
energy]
to sell
electric
exclu-
[its
10,000
mately
square
miles
central eastern
sively
twenty years.
to PP L”& for
¶
Amend-
Pennsylvania.
Complaint,
Amended
16.
Complaint, ¶¶20,
ed
22. Pursuant
to the
Thus,
allege
must
that PP
Agreement
enforce,
which SER now seeks to
unlawfully
monopoly power
acquired
& L
currently prohibited
SER is
competing
dangerous
a
probability
unlawfully
had
with PP & L in the relevant market. A
achieving monopoly
in
its service area.
supplier
product
of a
does not
become
this,
allege that PP
To do
SER must
& L in
competitor of
purchaser merely
because
way
compet
some
acted to
SER as a
exclude
purchaser
product
in turn sells the
to the
delivery
electricity
in
itor
to customers
allege
ultimate user. SER cannot
that PP &
In
in PP & L’s service area.
Vinci v. Waste
purported
L’s
breach
contract establishes
(9th
Inc.,
Management,
serve
for the
con-
in
on its
claim
competition
in which
face defeats
that it is PP
sumers
occurs____
market
requirement
competitor,
pro-
that
the al-
state
federal laws
leged injury
anti-competitive
competing
be related
hibit
in
SER from
the relevant
requires,
corollary,
behavior
as a
that the
independent
market.
SER concedes
injured party
in
participant
be a
the same
power producers
“normally
such
can-
malefactors____
alleged
market as the
A not, by
regulation
virtue of state
federal
competitor
plaintiff who is neither
nor a
limitations,
physical
power directly
sell
consumer
the relevant market does not
¶
consumers.”
injury.
antitrust
suffer
currently
SER does
allege
electricity directly
(internal
permitted to sell
to con-
quotations
Id. at
and citations
sumers,
omitted);
and SER concedes that “SER did
see also
Raw
International
Mate
not,
drafted,
rials,
complaint
at the time the
was
978 F.2d at
attempts
1328. SER
satisfy
ability
environmentally
have the
pleading obligation by
to deliver
contending
friendly
directly
that it is PP &
to retail
competitor
L’s
the retail
consumers.”
Trans,
Arg.
market:
Oral
at 5.10
utilities____
Georgia
public
Qualifying
See
also Greensboro
Co. v.
tition with
Lumber
facili
Co.,
(N.D.Ga.
F.Supp.
Power
ties are not
under
authorized
PURPA to sell at
1986) (“In
PURPA,
establishing
Congress
[T|hey
competitors
public
...
retail....
did
are not
utilities.''),
(11th Cir.1988).
place qualifying
compe-
aff'd,
not intend to
facilities in
*11
certainly do
exist in
and we
Pennsyl- will even
attention to the
our
directs
SER
enjoy
PP
whether
& will
Electricity
Customer
not know
Generation
vania
Act,
monopoly in
area at that
Pa. Cons.
its service
Competition
unlawful
Choice
seq., which was
signed
know is that
is
et
What we do
SER
§
time.12
Stat.Ann.
L,
compete
The Choice
with PP &
presently
1996.
unable to
December
into law on
fundamentally
by
re-
by agreement and
law. While SER
Act will
both
Competition
indus-
PP
L’s
Pennsylvania’s retail electric
itself as
&
attempts to characterize
structure
with a choice of
deregulation,
consumers
we
try by providing
competitor on the eve
cannot,
Act will
suppliers. The
generation
as a matter of
electric
conclude that SER
area.
in PP & L’s service
& L’s
permit competition
law,
PP
cur-
establish
injury
type
policy creates an
of the
tailment
too
Competition Act comes
The Choice
prevent.13
intended to
the antitrust laws were
Complaint. Com-
Amended
late for SER’s
in
phased
will be
over
access
petitive retail
noted,
Amend
As
we read SER’s
time,
competition
will not
access
and direct
primarily
Complaint to address
SER’s
ed
January
Pennsylvania until
across
exist
PP
L in the
compete
&
intention
pilot pro-
retail access
Competitive
2001.
customers
market —the 1.2 million
retail
1, 1997,
id.
April
begin until
grams did not
PP
L’s service area. SER also
within
&
2804(12),
long
§
filed its
after SER
however,
contends,
that it is
& L’s com
only
pilot programs are
Complaint, and the
pow
petitor for the wholesale distribution
“peak load.”
percent of the
to five
available
companies and other
er to PJM member
2806(B).11
§ Id.
¶
Complaint,
pools. Amended
37.14
genera-
that PP & L’s
us to find
SER asks
According
Complaint, how
to the Amended
injures
today,
policy
SER
curtailment
tion
ever,
Agreement
the Power Purchase
re
injuries will inhibit SER’s
and that
those
energy exclusively
quires
to sell its
SER
L in the future
ability
compete with
contractually pro
L.
is therefore
& SER
pursue
permit SER to
market.
cannot
We
energy
selling
from
to wholesale re
hibited
recovery under the
speculative path to
such a
than PP
L.
cannot con
sellers other
& We
Act.
Sherman
compete with PP
ceive how SER intends to
violat
predict
future & L in the wholesale market without
attempt to
We will not
Pennsylvania.
ing
very agreement which it seeks to
in
competitive retail access
here.15
enforce
not know whether SER
We do
customers;
they are retail consumers. The
argument,
conceded
sale
counsel for SER
11. At oral
case,
sug-
opportunity
wholesale market in this
as
for customers
relevant
that "the first
April
generation suppliers
gested
is the sale
in SER's Amended
choose their electric
Trans,
companies
Arg.
energy
at
and other
year____” Oral
13.
to PJM member
1st of this
power pools.
argument,
for SER conceded
12. At oral
counsel
exactly
know
what
"it’s true that we don't
Complaint clearly states
15.While
the Amended
deregulation]
[following
will look like
market
energy exclusively to PP &
that SER must sell its
Trans,
____"
Arg.
at 16.
Oral
L,
Agreement
ambig-
itself is
the Power Purchase
permit
can be read to
SER to sell
uous and
genera-
&PP
L’s
do not decide whether
We
energy
parties
provides
third
once it
79.5
policy
violate the Sher-
curtailment
would
tion
Agreement,
megawatts
Art. 3. We
to PP
L.
competitive market where no
Act in a
man
rely
plain language
on the
Amended Com-
activity.
competitive
agreement precluded
That
Agreement pre-
concluding
plaint
that the
scenario,
may
point
at some
in the
while it
arise
competing with
& L in the
cludes SER from
future,
presently
is not
before us.
text,
market. As we note in the
how-
wholesale
ever,
Agreement
prevent
does not
even if the
suggested
argument;
SER
14. At oral
counsel for
energy
selling
from
excess
wholesale
includes
market”
that the relevant "wholesale
(1)
may
compel
other PJM
market:
attach trans-
to industrial consumers who
sales
Trans,
accept energy directly
companies to
Arg.
member
at
to SER’s line. Oral
mission lines
comply
failure to
with 16
energy
from SER due
its
disagree.
at
The “sale of electric
824a(b);
(2)
a matter of undis-
"sale of
U.S.C.
is defined
statute as the
wholesale"
fact,
supply
energy
puted
its
exclusive-
any person
SER must
resale.”
electric
for
L,
824(d)
physically provide energy
ly
(emphasis supplied).
to PP & cannot
Industrial
U.S.C.
utilities,
attempted
directly
to other
and has not
purchase
consumers who
electric
(i.e.,
resale),
voluntary
with PJM
to secure
interconnections
not for
are not whole-
own use
their
however,
addition,
argues,
failure to obtain
competes
FERC
that it
with PP &
approval precludes
compelling
other L in
the wholesale
selling
market
*12
companies
accept energy
to
PJM member
energy
hoping
excess
to
& L and
that PP
directly
the wholesale market
SER
& L
energy
resells that
to other utilities.
aas matter of law. Before PJM member
ways.
SER cannot have it both
If SER is
companies may
compelled
accept
be
to
ener-
not required
sell its
energy
to
excess
to PP &
(1)
directly
gy
L,
from SER:
SER must file an
complain
SER
cannot
that
& L’s fail-
FERC;
(2)
application with
affected State
purchase
ure to
energy
that
constitutes an
notice;
utilities
commissions and
must receive
antitrust violation.
(3)
opportunity
there
an
for a
must be
hear-
12(b)(6)
reviewing a
When
Rule
dis
(4)
ing; and
FERC must find that such
missal,
accept
we must
as true the factual
necessary
appropriate
is
or
action
the
allegations
complaint
in the
all
reason
824a(b);
public
§
16
interest.
U.S.C.
.18 able inferences that can be drawn from them.
addition,
pt.
may
In
FERC
C.F.R.
not
Fuentes,
not,
when to do
would
so
1251,
F.Supp.
(MD.Pa.1994);
1254-55
Reso
ability
adequate
render
service
its cus-
Farmer,
Corp.
lution Trust
v.
823 F.Supp.
824a(b).
§
16
tomers.
U.S.C.
SER does not
302,
(ED.Pa.1993);
Párente,
305
v.
Sinchak
allege
applied
that it
to FERC or
has
that
(WD.Pa.1966).
F.Supp.
262
While
824a(b)
requirements
the other
of section
alleges
SER
Complaint
in its Amended
that
have been satisfied.
competitor
it is PP & L’s
in the retail and
allege
ability
does
that it
SER
not
has the
markets,
wholesale
those assertions are be
directly
energy
desire to
or
sell
to PJM
lied
both
remaining
allegations
factual
companies
member
other than PP & L. SER and the law.
allege
not
any
does
even
that
it has taken
Finally, SER contends that PP &
steps
voluntary
to secure
interconnection
practice
L’s curtailment
reduces the “avail
companies
PJM
with
member
other than PP
ability
power produced using
to consumers of
824a(a);
32.1(g).
L.& See id.
18 C.F.R.
alternative, environmentally pro-active ener
Indeed,
observes,
Judge Stapleton
as
“SER
¶
gy
Complaint,
sources.” Amended
66. As
alleged
sold, attempted
not
it
has
has
above, however,
allegation
discussed
this
sell,
or even
capaci-
intends
sell
excess
implicate
does not
the antitrust laws.
If PP
ty” to others in the wholesale market. Rath-
monopoly
& L did
an
hold
unlawful
in its
er,
competes
SER
that it
with PP
contends
it
generate power
service area but
decided to
selling
L in the
wholesale market
excess
“environmentally
pro-active
energy
energy to PP
L
having
& L
PP & resell
sources,”
satisfy
L& would
SER’s al
energy to
other utilities.
See
concerns,
leged
but
still
would
hold an
¶¶23,
rejection
37. As our
Likewise,
monopoly.
unlawful
since we con
argument
SER’s
identical
retail market
clude that PP
not
an
& does
hold
unlawful
clear, however,
arrangement
makes
area,
monopoly in
fact
its service
that PP
whereby
energy
to PP & L
sells
L allegedly
rely
not
does
on “environmen
parties
PP & resells the
to third
tally pro-active energy sources” does not
(retail
wholesale)
makes SER
change
gener
our conclusion
PP &
about
L’s
supplier,
competitor.
not PP L’s policy.
ation curtailment
effect,
argument
on
turns
itself.
recognize
In an effort to demonstrate the existence of
the existence of
potential competition
injury
in the
mar-
typically
wholesale
antitrust
is not
resolved
ket,
Brader,
argues
required
through
that it is not
to sell
motions
dismiss.
not,
however,
excess
to PP
typical
its
& L. SER also
at 876. This
case.
companies
plaint
rights
Agreement
clarify
member
other than
& L. We
will
under the
permit
SER to amend
such
its Amended Com-
amendment would be futile.
15(a). Nonetheless, SER contends
and R.Civ.P.
dispute between SER
fundamental
a motion for leave
failure to file
that its
interpretation of
concerns
PP & L
it should
and that
should be. excused
amend
dispute
This
Agreement.
Purchase
Power
Amended Com
to amend its
permitted
be
pursuant
to common-law
be resolved
should
47, Am. Fed’n
Council
plaint. District
reference to
and. with
principles
contract
State,
Employees, AFL-CIO
County & Mun.
Allegany
Kamine/Besicorp
PURPA Cf
Cir.1986)
(3d
Bradley,
F.2d
Corp., 908
& Elec.
Rochester Gas
L.P. v.
(amendment
merely
precluded
because
is not
(W.D.N.Y.1995);
id. at
F.Supp.
12(b)(6) dis
appeal
Rule
plaintiff elects
that violate
(“Although actions
1203-04
specificity
lack of factual
on
missal based
*13
anti-
conceivably violate the
could
PURPA
complaint).17
to amend
than seek leave
rather
well, they
not the same
are
as
trust
laws
.
not
Unfortunately,
appeal SER does
on
necessarily flow from
not
thing,
one does
op
do with a second
indicate what it would
other.”).16
law and contract
both
Since
the
look,
Complaint.
its
portunity to amend
L,
with PP &
prevent
competing
from
SER
therefore,
Footnote 1
letter brief.
to SER’s
policy can-
’
curtailment
PP & L’s
provides:
of the brief
has
competition. SER
to harm
not be said
all of these infer-
1.
that
SER believes
injuries
type
the
the
allege
failed to
competition with
[regarding present
ences
prevent, and
designed to
laws were
antitrust
power to resellers
PP
L in the sale of
properly dismissed Counts
court
the district
utilities, and future com-
municipal
such
Complaint. Given
II
the Amended
I and
deregulated
market]
in
retail
are
petition
a
antitrust
federal
of SER’s
disposition
our
language of its
implicit in the
of the
claims,
the decision
also affirm
we will
PP & L’s
suggestion
that
as well as
supple-
chilling
decline to exercise
court to
will have a
ef-
predatory
district
conduct
entry
law
into the relevant
upon
state
fect
the future
jurisdiction over SER’s
mental
electricity genera-
potential
new
market
claims.
competitors to PP & L. Should
tion
oth-
that these assertions or
court decide
V.
in this letter must be ex-
ers discussed
that the district
contends
also
SER
the court to consid-
pressly pled, SER asks
by
affording
its discretion
court abused
request
to amend the
this
as a
er
letter
further
to amend
opportunity
SER
Complaint appropriately.
above, on
Complaint. As noted
Amended
1996).
19,
Brief,
(April
2 n. 1
Letter
at
SER
1996,
heard oral
15,
court
April
the district
Footnote
states:
for recon
motion
argument on both SER’s
could be resolved
this fact issue
While
stay
and the
court’s
order
of the
sideration
discovery,
leave to
through
SER now seeks
to dismiss the
L’s motion
merits of PP &
the Plant’s
Complaint to recite
amend the
parties to
complaint. The court directed
generate
5.5
capacity to
at
least
actual
motions.
briefs on these
file letter
par-
megawatts,
potential sale to third
for
brief,
19, 1996,
ties,
pres-
letter
SER
of the amount which
April
excess
In its
by
L.
ently provides
contract
to
suggested its de-
footnotes
included two
Complaint.
Thus,
sug-
the Amended
to amend
letter brief
sire
at 6 n. 2.
SER’s
Id.
motion to amend
amend its Amended Com-
gests
filed a formal
a desire to
never
SER
(1)
allegations regarding
plaint
Fed.
to detail
Complaint. See
Amended
further its
stay prevented SER
allegations
that the
Kamine/Besicorp
that a
17. SER’s assertion
involved
filing
to amend the
power
a motion for leave
monopsony
as the
from
utility
public
used its
(1)
Complaint
the fact that
is belied
with-
Amended
buyer wholesale electric
exclusive
elapsed
the time
qualifying
months
between
a
almost three
utility's
area to drive
service
in the
to dismiss and the time
by demanding predatory
PP & L filed its motion
facility out of business
order;
(2)
stay
SER filed
the court entered its
F.Supp.
district court
price.
at 1203. The
during the
with the court
utility’s monopsony
several letter briefs
that the
determined
(3)
stay;
did not seek leave from the
SER
consumer
pose
to increased
did not
a threat
permission
stay
to file a
for leave
facility's
for
motion
prices
qualifying
demand
and that the
Thus,
whether we
we will focus on
utility’s
amend.
payments
avoided
in excess of the
to seek leave
SER’s failure
Id.
should excuse
supported
antitrust laws.
cost was not
Complaint.
amend its
at 1203-05.
PURPA,
present ability
compete
Agreement,
with PP & Purchase
Pennsylva-
SER’s
(2)
market,
regulations.
nia
future
We also do not
L in the wholesale
SER’s
decide
practices
whether
will violate the
ability
compete
with PP & in the retail
antitrust laws in the future.
(8)
We are
market,
limited
& L’s efforts
thwart
deciding
that,
can plead
whether SER
at
present
competitive
and future
under-
filed,
Complaint
the time the Amended
was
takings.
unlawfully
& was
monopolizing or at-
If further amendment of the Amended
tempting monopolize
the markets for the
Complaint will not result
a determination
provision
of electric
to retail consum-
newly
complaint
amended
is suffi
ers or wholesale resellers. SER cannot meet
cient withstand
renewed motion under
Agree-
this burden. The Power Purchase
12(b)(6),
permit
we
Rule
need not
the amend
prevent
ment
the law
compet-
Dykes
ment.
See
v. Southeastern Pa.
ing
L in
the relevant markets.
(3d
Auth.,
Transp.
68 F.3d
1572 n. 7
cannot, therefore,
plead
inju-
antitrust
—
Cir.1995),
denied,
-,
cert.
U.S.
ry. We will affirm
judgment
of the
(1996);
VI.
market,
competitive
a
Without
could
gener-
do not decide whether PP L’s
competitor,
We
not have
L’s
been
policy
injury.
ation curtailment
the
violates
Power
there cannot have been antitrust
ceedings
referring
juris-
primary
do not decide whether the district court
case
the
on
should have construed the two footnotes
a
grounds
to
diction
the PUC for an administrative
amend,
therefore,
we,
to
motion for leave
do
proceeding
regulatory propriety
to determine the
decide
district
not
whether the
court abused its
policies.
of
L’s
curtailment
See
grant
failing
discretion in
to
a
such motion.
Co.,
United States v. Western Pac. R.R.
352 U.S.
Inc.,
(3d
Miklavic v. USAir
F.3d
59, 63-64,
161, 165,
77 S.Ct.
ment to PP proposed amendment for resale.
others only clarify complaint would SER’s
to the Agree the Power Purchase
interpretation of pro capable of allege that SER is
ment and Thus, megawatts. 79.5 ducing more than of America UNITED STATES permitted, the were even if the amendment allega v. be devoid complaint would still competed, or has even has tion that SER CASIANO, Rivera Jose Jose a/k/a & L compete, with PP plan a formulated Casiano, Appellant. Jose market. designated wholesale in some allegation that it is a com conclusory of America UNITED STATES market petitor L the wholesale with PP & Even on entirely context. without factual Alfredo DeJESUS. dismiss, court need district motion bald unsubstantiated conclusions credit 96-1256, 96-1380. Nos. Legal Washington Founda See assertions. Foundation, 993 Appeals, Bar tion v. Massachusetts United States Court *15 (1st Cir.1993); Mil Wright & Third Circuit. F.2d ler, Procedure: Civil Practice and Federal Argued Nov. (1989). In the at absence 2d anticipated past May com description of or some Decided L in a petition between SER market, infer there no basis for
wholesale for, of, potential anti
ring the existence injury.
trust reasons, judg- I affirm the would
For these court.
ment of the district SLOVITER, Judge,
Present Chief MANSMANN,
BECKER, STAPLETON, SCIRICA, COWEN,
GREENBERG,
NYGAARD,ALITO, ROTH, LEWIS, and RESTANI,
McKEE, Judges, Circuit International Trade.*
Judge, Court of REHEARING PETITION FOR
SUR 2, 1997
June rehearing by appel- filed petition having case been
lant in the above entitled judges participated
submitted to the who and to all other this court decision of regu- judges of the circuit in
available circuit service, judge con-
lar and no who active * rehearing original panel. Judge before the vote limited to Restani's was