US Justices Weigh Antitrust Lawsuits Related to Energy Crisis

The U.S. Supreme Court on Monday wrestled with the question of whether a federal law governing the natural gas market would allow energy companies to evade state antitrust claims made over the western U.S. energy crisis between 2000 and 2002.

 

The court appeared divided during oral arguments in the case, with the liberal justices voicing some support for the industrial and commercial users of natural gas who filed the lawsuits.

 

Several energy companies, including American Electric Power Company Inc, Dynegy Inc and ONEOK Inc, were accused of manipulating published price indexes that led to a spike in gas prices. The resulting energy crisis included rolling blackouts in California.

 

The energy companies have asked the Supreme Court to rule that state antitrust law claims lodged are superseded by a federal law called the Natural Gas Act. That law grants the Federal Energy Regulatory Commission authority to regulate certain aspects of the natural gas market including wholesale prices.

 

The plaintiffs argue that the Natural Gas Act did not trump their antitrust claims because their case involves retail prices.

 

Justice Elena Kagan, one of the liberal justices, said even if the federal agency did have jurisdiction, that does not necessarily mean that certain claims could not be made under state law.

 

"I don't really see a reason in this kind of case why you would exclude the state entirely," Kagan said.

 

Justices on the conservative wing of the court seemed more sympathetic to the energy companies.

 

"The essence of the conspiracy that you are complaining about ... are actions that come within the jurisdiction of the commission," Justice Antonin Scalia told Jeffrey Fisher, the lawyer representing the plaintiffs.

 

In an October 2012 ruling, the 9th U.S. Circuit Court of Appeals agreed with the plaintiffs and found that Congress did not intend to extend FERC's jurisdiction to retail transactions.

 

A ruling is due by the end of June.

 

The case is ONEOK Inc v. Learjet Inc, U.S. Supreme Court, No. 13-271.