Natural Gas Sales: Filed Rate Doctrine Antitrust: Index Price Manipulation Court Jurisdiction, Procedure and Review: Federal Preemption

摘要

Gallo is a wine producer that purchases natural gas during the June 2000 through December 2001 period from Encana. While the gas purchase contract does not specify how the price is to be determined, the practice of the parties was to peg the price to indices published in the Natural Gas Intelligence (NGI) and Gas Daily. The FERC issues a report diat diere was widespread manipulation in born the wholesale electricity and natural gas markets during mat period which included providing false and/or misleading data to NGI and Gas Daily. This type of information was not regulated by FERC and was essentially left to the traders and participants in the marketplace to self-regulate. Gallo argues mat Encana participated in the index price manipulation dirough the use of wash trades where two parties simultaneously buy and sell the same quantity of natural gas at the same price. It files this action asserting various violations of the Sherman Act as well as California antitrust and unfair competition laws. Encana moves for summary judgment arguing mat Gallo is requiring the court to come up with a hypotfietical fair rate for natural gas which courts are barred from doing under the filed rate doctrine and federal preemption. The district court denies Encana's motion but certifies its order for interlocutory appeal. Held: affirmed. The filed rate doctrine and associated principles of federal preemption preclude challenges under state and federal antitrust law to rates set by federal agencies. The doctrine is a judicial construct based on the grant of powers to federal agencies to set rates. The doctrine began with railroad regulation under the Interstate Commerce Act and has been extended to the Natural Gas Act. If a rate is approved by a federal agency, a court may not award damages under me antitrust acts or other statutes that are measured by what a purchaser may have spent had it not been for the payment of me regulated price. When FERC or the FPC direcdy regulated prices, the application of the doctrine to suits challenging such prices was clear. Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571 [70 O.&G.R. 119] (1981). In tihs case, the court must determine whetfier Gallo is challenging FERC-audiorized rates. The filed rate doctrine initially applied where a party literally filed a rate with the administrative agency and had it approved. But FERC has lost mat price or ratemakuig audiority by virtue of various federal statutes that take away its power to regulate "first sales" of natural gas. After FERC issued Order 636 unbundling pipeline services into separate transportation and purchase arenas, it determined diat market-based rates would be "just and reasonable." Thus, diere was no longer a need to file a request for a particular sale, instead it would be governed by blanket certificates. The fact diat rates are now market-based and no longer individually approved by the agency does not eliminate the filed rate doctrine. The requirement diat rates be just and reasonable, even if market-based, makes the case for the continuation of the filed rate doctrine. Having concluded that Encana can use the filed rate doctrine as an affirmative defense, the Ninth Circuit then has to determine whether the doctrine should apply where you have damages arising from retail, rather than wholesale, natural gas sales. The court concludes that the type of sale is irrelevant to the application of the filed rate doctrine so that to the extent Gallo is claiming damagesbased on the retail sale of natural gas, those claims are barred by the filed rate doctrine. But as to the damage claims based on the alleged manipulation of the price indices, the court finds that there are questions of fact that must be resolved before determining whether the filed rate doctrine applies. Not all rates or prices filed with the indices are necessarily FERC-authorized rates. In addition, if the indices are used to determine prices outside of the FERC authority then the filed r