Wah Chang v. Duke Energy Trading & Marketing, LLC
507 F.3d 1222
9th Cir.
2007
Check Treatment
Docket

*1 supervised Brown, the conditions of re- (including See release. supervised lease) is AFFIRMED. condi- financial disclosure 137(affirming convicted defendant imposed on tion “given this because trafficking part

drug personal character- defendant’s

particular financial disclosure history,

istics and monitoring— effective is an

requirement and because deterring

and hence —device” finances will defendant’s]

“monitoring [the from ‘fur- public protect ... serve In CHANG, of TDY a division WAH ”); defendant’ United crimes of ther corpo dustries, Inc., a California Melendez-Santana, v. States ration, Plaintiff-Appellant, Cir.2003) (1st dis- (affirming financial similarly on a imposed closure condition AND MAR ENERGY TRADING it is to DUKE related defendant situated KETING, LLC, li a Delaware limited of the defendant characteristics ability company; Reliant Ser conduct), overruled future criminal deters Inc., corporation; Padilla, a Delaware vices by U.S. v. grounds other on (Califor Energy Marketing Cir.2005) (en banc); (1st Transalta corporation, nia), Inc., De a Delaware Behler, States fendants-Appellees. Cir.1999) disclosure (affirming financial un- “the district court condition because Indus Chang, a division of TDY money greed were derstood Inc., corpora tries, a California drug distribu- defendant’s] heart of[the tion, Plaintiff-Appellant, monitoring and believed tion offenses financial situation would [the defendant’s] any return to former detecting his

aid Washington Corporation, cor a Avista distribution”). Therefore drug lifestyle of INC., Energy, poration; a Avista plainly err did not the district court Washington corporation; Avista Pow imposing this condition. LLC, Washington liabili a limited er Dynegy

ty company; Power Market III. Conclusion corporation; ing, Inc., El a Texas Company, a Texas cor Electric Paso and Plascencia-Alvarado Garcia poration; an Idaho IDACORP that was within to a term sentenced Company, corporation; Idaho to in their Rule range they agreed corporation; En an IDACORP Idaho 11(c)(1)(C) was not plea agreement, which L.P., part ergy, limited a Delaware Conse- contingent upon guidelines. nership; Electric Portland General jurisdiction under we do not have quently, corporation; Company, Oregon 3742(a)(1) (a)(2) §§ or review 18 U.S.C. Corporation, a British Co Powerex su- challenges to sentences. Torres’ their Puget Energy, corporation; lumbia condition, as drug testing pervised release corporation; Washington Pug Inc., court, improper, construed Inc., Washington Energy, et Sound is the financial disclosure condition. nor Sempra Energy, a Cali corporation; Sempra Energy corporation; ap- fornia Garcia’s and Plascencia-Alvarado’s Resources, corporation; a California Torres’ peals are DISMISSED. sentence *2 Sempra Energy Trading, a Delaware

corporation; Compa Williams Power

ny Inc., corporation, De Delaware

fendants-Appellees.

Nos. 05-55369. States of Appeals, Court

Ninth Circuit. Finklea, Edward A. Cable Huston Bene- Argued April and Submitted 2007. Haagensen Lloyd, LLP, Portland, dict & Filed Nov. OR; Williams, Richard H. Lane Powell PC, Portland, OR, for plaintiff-appel- lant. Erspamer,

Gordon P. Morrison & LLP, Creek, CA, Foerster Walnut for de- fendants-appellees Energy Transalta Mar- (U.S.), keting Inc., Transalta Energy (California), Inc., IDACORP, Marketing Inc., Company, Idaho Power and IDA- L.P.; Energy Jacobson, CORP David M. LLP, Seattle, WA, Dorsey Whitney & for defendants-appellees Corporation, Avista Energy, Power, Avista and Avista LLC; Kleinman, Dickstein, B. Joel Shapi- ro, Oshinsky, DC, Morin & Washington, for defendant-appellee Energy Duke L.L.C.; Trading and Marketing, Michael Kass, Pillsbury J. Winthrop Shaw Pitt- LLP, Francisco, CA, man San for defen- dant-appellee Dynegy Marketing, Inc.; Heitz, Kenneth R. Irell & Manella LLP, CA, Angeles, Los for defendant-ap- El pellee Paso Electric Company; Steven Wilker, LLP, Portland, M. Torp, Tonkon OR, defendant-appellee for Portland Gen- Company; eral Electric M. Andrew Edi- son, Giuliani, LLP, Houston, Bracewell & TX, for defendant-appellee Powerex Boeder, Corp.; Coie, Thomas L. Perkins LLP, Seattle, WA, defendants-appel- for Puget Energy, Puget lees Inc. and Sound Inc.; Houlihan, Energy, Terry Bing- J. McCutchen, Francisco, CA, ham San for defendant-appellee Reliant Energy Ser- vices, Inc.; Weaver, Michael J. Latham & Watkins, LLP, CA, Diego, San for defen- dants-appellees Sempra Energy, Sempra BACKGROUND Energy Resources, Sempra Shohet, DLA Jeffrey M. Trading Corp.; purchased Chang,1 pled by As LLP, San Gray Cary U.S. retail Oregon plant Rudnick Piper its for defendant-appellee CA, purchaser Diego, PaeifiCorp, Inc. market. Under *3 Company spot Power in the wholesale Williams contract, Chang’s rates purchase market spot to the wholesale indexed were so California-Oregon border price at in that market changes price Chang. on to Wah passed crisis, the energy During 2000-2001 electricity increased of wholesale PREGERSON, Before: HARRY too Wah substantially,2 and so did and F. FERNANDEZ FERDINAND for the that the reason It costs. asserts RYMER, Judges. Circuit PAMELA ANN artificially in- that were was rates change through Energy by Companies creased FERNANDEZ; by Judge Opinion ma- fraudulent and anticompetitive their Judge PREGERSON. by Dissent markets, which the wholesale nipulation of customers, who Chang, like Wah affected FERNANDEZ, Judge: Circuit in the Pacific Northwest power purchased TDY Indus- a division of course, question the rates Of market. ap- tries, Inc., corporation, California a law, a of tariffs were, of result as matter of its court’s dismissal peals district Energy Regula- by the Federal approved and Trading Energy Duke actions its market-based under tory Commission L.L.C., Corporation, Avista Marketing, described setting approach. We have (all companies other a multitude of prior approach our nature of that Com- to as hereafter referred See, e.g., Pub. territory. forays into this complaints Chang, whose panies). County v. 1 Snohomish Dist. No. Util. of arise out of the crisis 756, 760-61 Mktg., 384 F.3d Dynegy Power damages seeks recover (9th at 1012- Cir.2004); Loclcyer, 383 F.3d actually the rate was difference between say legal effect is 13. Suffice it a retail electricity, which charged any other tariff effect of as the same rate, and See, upon e.g., rate based Snohomish Coun set rate would 1 it claims fair Dist. No. the rate that Pub. Util. ty, 384 F.3d at IDA manipulation v. it not for Grays have been were Harbor Wash. (9th Inc., 641, Cir. Energy Companies F.3d 650-52 the market CORP 379 Be 2004); who 375 F.3d at 852-53. actions of those Dynegy, others. Like that, the district dismissed it, actions cause come have before appealed. these actions. Wah must fail. We affirm. of that crisis have the nature 2. We outlined dismissed district court 1. Because the history repeat need not previously, and Rule Chang's complaints pursuant to Federal FERC, Lockyer rel. v. ex here. See 12(b)(1), factu- California material Civil all Procedure Cir.2004), 1006, (9th certs. F.3d 1009-10 383 complaint are taken as allegations in the al - 2972, -, denied, U.S. S.Ct. States, United true. See Whisnant -, (2007), - U.S. L.Ed.2d 719 Cir.2005); 1177, (9th United States (2007); 2972, ex 168 L.Ed.2d California E420, Mercedes One 1997 Lockyer Dynegy, rel. Cir.1999) curiam). (per n. 1 (9th Cir.2004). 836-37 JURISDICTION AND STANDARD assume a rate charged would be other

OF REVIEW than adopted by the rate the federal agency question. ap- jurisdiction pursuant have We to 28 plies charged by railroads, to rates natu- § U.S.C. gas companies, ral and other interstate We review a district court’s deci operators over whom agencies federal a complaint sion to dismiss for lack of exclusive to set rates. More subject jurisdiction matter pursuant here, Supreme relevant Court has 12(b)(1) Federal Rule of Civil Procedure extended the doctrine to the Federal de novo. See Assoc. Am. Med. Colls. v. Act and to electricity rates. States, .2000). Cir *4 As further developed, prohibited doctrine has just not a state DISCUSSION (or a federal court applying state problems While the arising out of the law) setting from a rate different from 2000-2001 crisis were serious and FERC, that by chosen but also from scandalous, even we have often discussed assuming hypothetical a rate different Moreover, them at length. we have ana- from that actually set lyzed the market-based approach and Agency Transmission N. Cal. v. Sierra have, effectively, said that the claims of Co., Pac. Power 295 F.3d 929-30 those who have come before us must be Cir.2002) (TANC) (citations omitted); see Thus, presented to FERC. we have turned Hall, also Ark. La. Gas Co. v. 453 U.S. away purchasers they when 571, 578-579, 2925, 2931, 101 S.Ct. have attempted to a bring direct federal (1981) L.Ed.2d 856 (speculation on what against action position sellers “might Commission prohibit- have done” is the Energy Companies. Grays See Har- ed). And, as we have explained, the doc- bor, 646-52; at F.3d Dynegy, 375 F.3d trine applies to the market-based tariffs at 849-53. We have done so on the basis question here, and rates in if they even doctrines, of a number of including the not set way. traditional See filed rate doctrine. County, Snohomish 384 F.3d at That doctrine is a Lockyer, 1012-13; form of defer Grays 383 F.3d at Har- bor, preemption, 650-51; ence and precludes which in at Dynegy, 375 F.3d terference with setting authority the rate at 852-53.

of an agency, administrative like FERC. The filed rate doctrine’s fortification Dynegy, See 852-53. It is a far against direct impenetrable. attack is It reaching doctrine. explained: As we have away turns both federal and state antitrust basic,

At its most the filed rate doc- actions;3 away it turns Racketeer Influ- provides law, trine that state and some enced and Corrupt Organization Act ac- law), federal law (e.g. may tions; antitrust away actions;5 it turns state tort be used to invalidate a filed rate nor to away and it even attempts turns state Square Niagara 3. See D Co. v. previously Frontier 4. We have not addressed RICO as Tariff Bureau, Inc., 409, 422, However, 476 U.S. agree such. we with the Second 1922, 1929-30, (1986); Keogh 90 L.Ed.2d 413 Appeals Circuit Court of that those actions are Co., 156, 162, Ry. v. Chi. & Nw. 260 U.S. City Taxpayers’ barred. See Sun Ass'n v. Citi 47, 49, (1922); Co., (2d S.Ct. 67 L.Ed. 183 Utils. 45 F.3d zens Cir. 1995) Stanislaus Pac. Gas & Elec. (holding that the filed rate doctrine 1997). action); Cir. precludes Wegoland a RICO Ltd. v. have should Companies commandeer power to sovereign assert they did short, instead away charged it turns contracts.6 inevitably drag Chang would charge. Wah neces- Chang’s, which attempts like what a determination courts into the FERC the claim that aon sarily hinge is That would, proper. fair and rate would be high and too approved cannot do. See au- tariff what precisely therefore, undermine (holding that TANC, at 930 of direct court medium through the thority from rate different set a Energy Companies.7 can neither courts actions a different nor assume by FERC set its actions But, argues rate). hypothetical be have considered others from differ reinforce attempts to whole directly purchase it did cause fortress on the faltering attack cus Rather, a retail it was power. sale opin- various rushing snippets distinction asthenic That tomer. up troops are ions, those but customer’s not have retail we do If best. example, For to them. assigned task one, we do all fours on case for antitrust exception Chang points legs, with three standing on case ignores but by competitors,8 actions ground. off a millimeter just fourth excep- not extended that we have fact di where a situation considered We have *5 customer,9 it which third-party tion to commercial) (residential and rect retail the And, Chang argues, it is. Wah admits its it and utility sued of a customers prevent to designed originally doctrine subsidiary for pipeline regulated FERC customers,10 among discrimination County violations. antitrust alleged of here, but, danger no perceives it which We deter Stanislaus, at 114 F.3d 860. obscured, is not perception if its own even claims the customers’ that all of mined exceedingly fact that ignores it agency federal that a “a rate challenged preserva- for the strong prop doctrine at and filed.” Id. reviewed has [FERC] regulatory the exclusive role tion therefore, were, barred claims 866. The would actions Wah agencies.11 at 867. Id. doctrine. by the Still, Chang role. Wah undermine to the amount same claims Wah right of separate not have a says, it will Chang cannot may, it thing. Try as if not have damages does it action what amounts it seeks fact that avoid the remedy is not one,12 damage aof but lack rates what courts determine having Servs., Natural Cir.1994) Mgmt. Inc. Wash. 17, (2d 8. See Cost 22 Corp., F.3d NYNEX 27 Cir.1996). 937, (9th Co., Co., F.3d 945-48 (same); 99 S. Gas see also Taffet (en Cir.1992) 1485-86, (11th 1483, Co., banc) (same); Bell Tel. 866; Inc. v. Nw. H.J. Stanislaus, see 114 F.3d at 9. Cir.1992) (same). 485, (8th 954 F.2d (clarifying also, Mgmt., at 945 99 F.3d Cost competitors, cus- speaking about it is 852-53; at Dynegy, 375 F.3d 5. See tomers). TANC, 932-33. 295 F.3d at 163, Mktg., Trading L.L.C. at 49- Energy & 43 S.Ct. Keogh, 260 U.S. 6. See Duke 10. See Cir.2001). 1042, Davis, Del., 1056-59 267 F.3d Covad Comms. Inc. v. Verizon Cir.2004). attacking Chang is not We note that Wah 7. PacifiCorp; it seeks with it had contract Del., 1086. 11. Verizon only. Companies against damages (an Harbor, at 652-53 Grays Cf. at 49 Keogh, U.S. at See 12. might be sustain- a contract attempt to reform separate right). (alluding possible available). able, damages are not but action,17 speculate will not just determinative.13 We it has as barred the similar (or possible about other brought by remedies actions other victims of the involving) Chang those from whom Wah Perhaps crisis. actually purchased electricity. Chang can to obtain hope relief for some alleged damages, but it cannot real- Chang point does to a case allowing ize that hope litigation. in this protests relief where sham filed an agency delay requests in order to AFFIRMED. plaintiff,14 but neither PREGERSON, Circuit Judge, adopted ultimately agency nor its dissenting:

own procedures question.15 were in That case Chang nothing; avails Wah it is far require These cases us to decide wheth- removed from rate claims made here. er the filed rate doctrine bars the claims of retail electricity consumers who do not Finally, ululates about directly challenge FERC’s established oversight, FERC’s lax but laxness does I Because believe should establish, indicate, much less that Wah extend doctrine, the reach of this flawed I directly can turn courts for dissent. D, Square rate relief. U.S. at See 1929-30; Lockyer, 106 S.Ct. at 383 F.3d at majority holds that permit To to do so would make bars claims of suppressed by

the vices rate doc- retail of electricity. consumer The filed trine recrudescent. doctrine, a doctrine of agency defer- ence, fine, prohibits points courts invalidating none these added over- comes, undermines, seriously or even the FERC-established rates. ex California fact *6 that what Wah rel. Chang Lockyer Dynegy, seeks v. 375 F.3d (9th Cir.2004). Energy Companies the ais deviation in its Pursuant to this doctrine, favor from FERC-accepted the required wholesale we have those who con- power that Chang, Wah its own test a filed to first bring rate their claims hypothesis, up being charged See, wound before e.g., Pub. Util. Dist. with.16 1No. County Dynegy, Snohomish of (9th Cir.2004); 384 F.3d Califor- CONCLUSION FERC, Lockyer nia ex rel. 383 F.3d (9th Cir.2004). case,

There may well have been shadow of this however, wrongdoing brooding directly over the Pacific the plaintiff is not con- market, rate, Northwest wholesale testing but a filed and it clear is not that Chang Wah cannot succeed in this jurisdiction forum. FERC has to hear Wah The filed rate doctrine bars its rate-based claims. Stanislaus,

13. See Winery at 862- 16. We are aware well of E. & J. Gallo of (9th Corp., v. Encana see also Montana-Dakota Co. v. Cir. Utils. Nw. However, 2007). 246, 254-55, that does affect our Pub. Serv. 341 U.S. because, analysis acknowledges, as 692, 697, Gallo (1951); Lockyer, 95 L.Ed. 912 gas FERC’s over the control natural market is F.3d at 1016. quite different from its control the elec over tricity market. Clipper Exxpress Rocky Mountain Motor Bureau, Inc., 1240, 1250-51, Tariff 17. Because we hold that the filed doc- 1982). Cir. case, disposes trine completely of do not address the issues of field and conflict 15. Id. at 1266-67. preemption. the Defen- as a result of prices energy

I. manipulations.1 illegal market dants’ manufacturer a chemical Wah asking the court Chang is not Wah contracted with Oregon, plant awith should the filed rates what calculate utility, to local its PacifiCorp, acknowledg- seeking but instead is been Under plant. electricity for provide ac- fraudulent the Defendants’ that ment the agreement, terms of manipulations market and anti-trust tions market spot indexed electricity was con- Chang’s retail adversely affected Wah California-Oregon prices Although Wah PacifiCorp. tract with Cal- Jones by the Dow border, reported as resulting from injury alleges Chang Electricity Price Border ifornia-Oregon actions, arise out its claims Defendants’ Index”). (“Dow Wah COB Jones Index Chang Wah contract between a retail en- the Defendants that alleges Chang con- not from wholesale PacifiCorp, and artificially illegal practices gaged any Chang tract between Pa- throughout electricity prices raised Chang’s claims Thus, Wah Defendants.2 delivery at the Northwest, including cific purview directly under not fall do Jones COB by the Dow considered points Chang Index. review of judicial seeking a purchase Chang did Chang rate, nor is Wah filed validity of the Defendants, does Wah nor the filed what asking the court establish Instead, Wah rates. any filed challenge have been. should (1) ille- Defendants’ Chang alleges in- artificially manipulations gal market II. (2) rates, filed rates these filed creased aris- cases (3) to FERC deferred Index, haveWe Dow Jones COB influenced the energy crisis the 2000-2001 ing out of PacifiCorp tied contract evaluation eases involved In- where Jones COB Dow prices to the filed FERC-established (4) paid higher dex, and thus illegal practices affected Winery v. Defendants’ & J. aware E. Gallo am 1. I also rates, COB Cir.2007). influencing Jones the Dow in turn Corp., 503 F.3d Encana *7 reason, and FERC’s because & J. presented E. Gallo Index. For in issues of the One gas is different reported in the natural market rates all the control was whether market, by I authorized over gas indices were its control from natural analysis of in-depth does not control agree court conducted E. & J. Gallo that The 1978, Policy Pub.L. Act Gas Natural of this case. outcome (codified 95-621, as amend- Stat. 3352 No. present case (1994)), and the majority suggests that the §§ U.S.C. 2. The at 15 ed Stanislaus, County Pub.L. No. by ofAct Decontrol is controlled Wellhead Cir.1997), that cer- in which to determine 103 Stat. FERC-author- reported were not cus- barred rates the filed tain held that Thus, plaintiff, public court held that utili- claims ized. tomers’ antitrust gas, natural purchaser present subsidiary. The pipeline retail ty and damages bringing claims to from Although plain- distinguishable. barred is case derived rates they were based on that extent also retail Stanislaus were in tiffs subject to were not that directly transactions they from utility, public of a consumers jurisdiction. By FERC's con- Id. challenged a filed rate. trast, injured be- alleges Chang it was Wah Here, It is presented is different. the issue PacifiCorp was with contract its retail cause in- Index Dow Jones COB whether the Index, not to a COB to the Dow Jones indexed were not that reports of market cluded FERC; specific rate. is whether the issue authorized jurisdiction in such is It tary remedy situations clear. based on the difference be- clear, however, ju- that FERC has tween the Dow Jones COB rate and an risdiction over Wah claims. existing alternate uncorrupted rate under which Wah Chang could purchased have (“FPA”),

Under Federal Act power. Wah Chang contends that if it had jurisdiction FERC has over facilities en not executed the retail contract gaged tying “the transmission of electric ener prices gy Index, to the Dow in interstate commerce Jones COB the sale it [ ] of electric energy purchased would have interstate from Pacifi- 824(b)(1).3 § commerce.” 16 U.S.C. Corp How under a default retail tariff estab- “[rjetail ever, sales of lished Oregon Public Utilities Coun- wholesale intrastate sales are within (“OPUC”). Thus, cil the District Court jurisdiction exclusive of the States.” Duke could calculate Wah damages Davis, Trading & Mktg., L.L.C. based on the difference between the rates 1042, 1056 Cix.2001). Chang Wah paid under the retail contract with PacifiCorp and Chang the rates it purchased power Wah for its would paid chemical under manufacturing facility the OPUC from Paci- default retail fiCorp, its local tariff. utility. electric This This trans- method of computing damages was a retail purchase, action intrastate not would not require the District Court to a wholesale interstate transaction subject calculate what the appropriate rate should regulatory oversight. Wah have been absent the Defendants illegal Chang did not contract with the Defen- conduct.5

dants and does not seek a refund of filed Therefore, it is not clear that IV. FERC could entertain Chang’s claim sum, Wah Chang’s position relief.4 as a When out- FERC does not have sider to jurisdiction the chain claim, over a of transactions flowing the rationale for important doctrine does not FERC rates is apply. in three First, respects. because Chang did III. not contract any Defendants, majority argues granting is not clear Chang pursue could Chang relief will necessarily require the its claim Second, before FERC. to determine what the filed rate Wah Chang is not a regulat- customer of a Maj. should have been. Op. 1225-26. entity, ed an award of relief to Wah Chang But, there is no need to do that to calcu- does not raise the specter discrim- late damages this case. ination among competing customers. example, Third, For suggests that because Wah pur- did not *8 the District Court could calculate a mone- power chase Defendants, from the it does government 3. regulate The federal could judicial re- take proceedings. notice of those Therefore, tail sales and wholesale intrastate sales under we cannot determine whether expansive power. Commerce Clause agreed Con- any FERC has to hear of Wah do, however, gress has not chosen to but has claims. limited FERC’s reach to interstate transmis- sion and wholesale interstate example potential 5.This is but one of a dam- transactions. age calculation a district court could consider on remand. damage also asserts Although argue the Defendants that Wah consequential claims based on damages, cal- Chang intervened proceed- FERC related culation of which necessarily would not in- ings, majority request denied a that we volve any examination of from, a benefit seek, would not rate. aof filed refund directly participate Chang did by FERC regulated

in transactions a filed invalidate seek

does the ma- Nonetheless, FERC.

approved doctrine filed invokes

jority authority to on impinging

avoid sales. interstate

regulate claims that Wah agree

I do not to review require a

would by

approved original point: important other

One is to doctrine

purpose in the compete those who all

ensure products their transfer market and

same same rate. at the charged are rail prevent extended has been

doctrine in in the discrimination Co. v. Utils. See Mont-Dakota

dustry. U.S. Serv.

Nw. Pub. (1951). The L.Ed. not to

purpose illegal anti engaging companies

protect practices. manipulative

trust dis- court’s the district

I would reverse proceed- further remand

missal and

ings. LAURSON, Petitioner- Joseph

Eric

Appellant, A.V.C.F.; At LEYBA, Warden

Ron Col

torney of the State General

orado, Respondents-Appellees. 07-1177.

No. Appeals, Court States

Tenth Circuit.

Oct.