Lawyer by day, hacker by night, proud Navy veteran, writer, promoter of civility in political discourse, Philadelphia and Penn State sports fanatic, practicing philomath, bibliophile, enigmatologist, and last but certainly not least, Dad and Husband.
This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.
Background: Learjet and other retail buyers of natural gas sued Oneok and other natural gas traders for state and federal anti-trust claims, alleging that they manipulated the price of natural gas by reporting false information to price indices published by trade publications. The district court ruled for the defendants, finding that the state law anti-trust claims were pre-empted by the Natural Gas Act, 15 U.S.C. § 717et seq. (NGA). The Ninth Circuitreversed, finding that Congress had carefully divided up the regulatory power over the natural gas industry. It did not envisage federal regulation of the entire natural gas field to the limit of constitutional power. Rather, it contemplated the exercise of federal power only as specified in the NGA. Congress has previously limited the jurisdiction of the Federal Energy Regulatory Commission (FERC), and in this case the panel determined that the state law anti-trust claims arose out of transactions outside of FERC's jurisdiction. As a result, the NGA did not preclude these claims.
Issue: The question before the Court is whether the Natural Gas Act, which occupies the field as to matters within its scope, preempts state-law claims challenging industry practices that directly affect the wholesale natural gas market when those claims are asserted by litigants who purchased gas in retail transactions.
Holding: In a 7-2 decision, the Supreme Court ruled that Respondents’ state-law antitrust claims are not within the field of matters pre-empted by the Natural Gas Act.