Supreme Court’s Holding in Oneok v. Learjet Could Lead to New Risks for Market Participants

By Joseph Bial, Gregory Lawrence, Gregory Mocek, Paul Pantano, Charles F. (Rick) Rule, Daniel Howley, Thomas Millar, and Natalie Mitchell

On April 21, 2015, the Supreme Court decided Oneok v. Learjet, holding that “Respondents’ state-law antitrust claims are not within the field of matters pre-empted by the Natural Gas Act” even though the claimed violations “affected . . . federally regulated wholesale natural gas prices.” This is an important decision for market participants for several reasons:

First, the decision could expose entities accused of market manipulation under the Natural Gas Act (“NGA”) to the risk of possible follow on litigation by private plaintiffs who are trying to stretch the bounds of Oneok’s applicability, based on antitrust claims.  However, the majority appears to foresee additional argument regarding conflict preemption on remand the outcome of which could foreclose this possibility.  Class action litigation alleging violations of either the NGA or the Federal Power Act (“FPA”) have not been successful in the past because (1) the statutes do not provide for private rights of action; and (2) the NGA (and the FPA) was understood to preempt state law claims.  Antitrust compliance programs may be tested in the wake of this ruling where plaintiff law firms attempt to examine the energy space more closely and mine state antitrust laws for potential suits.

Second, despite the Court’s effort to narrow the scope of its decision, some litigants may seek to extend the precedent to circumstances involving follow-on civil antitrust litigation tied to other FERC jurisdictional products, including electricity products and markets governed by the FPA.

Third, Oneok is likely to be featured in future demand response litigation, whether it is before the Court on a grant of certiorari or in other forums.  read more

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