ohio and the distinction between the two cases is that in the woman fairhaven case we represent a class of bre tell direct purchasers a california class of everybody who was a retail end user direct purchaser that that class is defined to include not only people who are retail and obviously they would opt out of it includes everybody who is in that position and so my arguments are really the sane in terms of the jurisdiction or not jurisdiction and so forth as were made earlier by c leave to amend and we have a number of allegations in our complaint about the way this market actually operates which are really at odds to the description that the defendants gave both to the district court in to this court and then you've heard earlier this morning about the way that it does operate and it seems to me that that the truth or not of those allegations about how this market actually operates are really fundamental  propositions that even if you have a market based regime and you can extend the file rate doctrine to a situation then it with a market based regime that there still needs to be functioning in the correct manner otherwise you really got nothing and there has been no case that i am aware of certainly that has ever extended the filed rate doctrine to a situation like this where there has been close to  agency review of anything and where the agency itself as says it has no power or authority to review these gas sales and that it's not going to do it that way that on the facts of this case upholding that has the same representation is that these companies made before for during the energy crisis and this day there were consumer groups and others who went to  legal constraints on the commission's regulatory authority over natural gas sales limit as a practical matter the extent to which the commission could regulate gas prices a limited number of gas sellers affiliated marketers are very good waited while the vast remainder are not first sales and gas were deregulated by statute long ago and the conditions residual regulatory power over a gas sales price this is now limited to the commission sales to resale authority similarly the commission has no statutory power to set retroactive rates nor can it order retroactive refunds that's what you can i kind of said here is what helped pass us i just want sons for its current gas sales jurisdiction is limited to a small regulations implementing that act natural gas prices have been effectively be controlled therefore the commission declines to take the requested action the instant complains perk was telling these people and they would say exactly the same thing if people who came there with with gas purchases that were outside of first jurisdiction fair to say we have no power to do anything sorry now what is the void then that can fill the gap between  presumption that should be against extending it to areas there is an equal presumption on on the flip side of that that the any trust laws should not be limited and should not be restricted particularly in time just just maybe one more point to where i sit and wait there's been a lot of confusion that has been engendered i think perhaps by the initial decision of the judicial panel in multi district litigation whoever decided to do it to call contracts and the retail price sales that were made to the class members in the state and that index may include some transactions that are with within first jurisdiction theoretically and then moreover the point about how do you prove damages in this case is just like any other any trust case for price fixing damages are what the price would have been to these class members in a competitive market and the that there are other factors out there if there are at all which are not appropriate to consider in calculating those damages is no different than an m c i versus a t n t and other cases going back to the continental or morning your your honour's play carper on behalf of texas ohio the reason we split the argument is texas ohio is positioned in a in a bit of a variant setting because it is  merchant reseller that block gas on the spot market at the california border or in california for resale in california now much of the arguments that have been made by the retail purchasers gallo the the other plaintiffs in our case and nevada power apply equally with respect to resellers such as texas ohio to the extent that their purchases were non jurisdictional sales as as defined by the statutory authority given defer just like the non jurisdictional purchases by any such as retail end users now argued in this case which again is on a motion to dismiss and it was on the original complaint that we filed back in november of two thousand and three that some portion of the purchase in the complaint of your purchases were first no we did not your honor and you know i don't think there's a pleading requirement that we need to do so as we get into discovery in the case it's going to be their burden to develop the evidence to establish those defenses now now and some of those sales conceivably could have been void involved foreign natural gas as well so in that context even though texas ohio is a reseller it is in the same position  as the other plaintiffs in these cases now you know these areas where the jurisdiction was withdrawn from firk all of those withdrawals of the jurisdiction applied to equally t resales as well as to end users retail purchasers  now i wanted to so i guess the bottom line with respect to texas ohio is that the complaint here should only do be dismissed under the file rate doctrine as it was by that you accept the proposition and this may be looking down the road of the case survived the use of the proposition with regard to the purchases made by your client that were not first sales the transactions  for sure stiction transactions that it ends there that your client doesn't have a claim that i can pursue in this form or those purchases we have asserted your honor that well first off that they first got to come forward and make that showing and and it's a real open question as to the question because if we get persuaded to draw a line there that's a line that has implications for the remainder of the case i want to be sure i know what your position is with regard to that line we never assert those sales there were no rates filed there was no there was no oversight by ferg following the wellhead deregulation act following the order five forty seven where the for basically said just you know your you all have blanket certificates there's really no distinction factually between those transactions and the non jurisdictional sales and there's no way to distinguish between the two and i think it was impartial recognition of that for the term and that it was it was simply going to allow market forces to exist there and that's why it's so important for and i trust protections to apply because that's the way we protect that market situation and that sort of brings us to the notion of preemption which was not there their jurisdiction is complete or extensive and exclusive in the end the answer to that is it is not there is a lot of additional regulation that occurs good afternoon your honor i guess in the first person gets to say that my name is joel klein and i represent the duke energy defendants the duke energy defendants in this court in the lower court and in any other court in which you get sued about these matters are not for sellers burke is still ruled and in order which is in both sets of our briefs in texas ohio and it's my privilege to certainly afternoon to speak on behalf of the other defendants who are still in these cases who are also not for sellers i speak for reliance you have the reliant order reliant is a pipeline affiliate it is by statute a non for seller i speak on behalf of some price for those who live in california simpers affiliated with a local gas distribution company they are a non first seller i speak on behalf of the op paso pipeline defendants who were added in the second amended complaint in the ableman case they are by allegation in the complaint non first sellers this case texas ohio and the other case able men are not about first sales and it is not because the plaintiffs neglected to allege it it's because as a matter of law it is not so but this case is about is gas transportation regulated until this day without amendment under the natural gas act both cases are identical both complaints make the same allegations i assume that the able in one was copied from the earlier file texas ohio let's talk about the california border market where the price of natural gas is based in part on the basis differential paragraph thirty eight in texas ohio one o nine enable it goes on to explain that large industrial users buy bundled natural gas paragraph forty eight in texas ohio paragraph one twenty enablement it begins to charge unlawful conduct this action arises from the defendant's conspiracy to manipulate the spot price and basis differential of natural gas with respect to the california market texas ohio forty one ableman one thirteen and then at the beginning of the charging section of their complaints both sets of planks of stella's that beginning in at least one nine hundred ninety nine defendants and their  compete in the pricing and sale of bundled natural gas in california and in the pricing and sale of interstate natural gas transportation contracts in california texas ohio seventy three able men men fifty one it may be that in this year pacific case as mr cook told you their case is not about transportation this case is if you would i like to spend a moment with the statute because it will make clear that we are in this these cases clearly within ferk jurisdiction section one b which i don't believe anyone this morning has actually read to you concerns transactions to which provisions of this chapter are political if your honour's wish to read with me it is in the first page of the statutory appendix in the apple lease brief in texas ohio the provisions of this chapter shall apply to first transportation of natural gas and interstate commerce second to the sale of interstate gas interstate commerce of natural gas for resale and third to the importation or exportation of natural gas and foreign commerce and i missed the fourth which is critically important here and that is to natural gas companies engaged in such transportation or sale every defendant in this case is engaged in is a natural gas company in gauged in sales for wholesale no one denies it and many of them like duke unlike reliant are engaged in transportation by dint of their affiliate ship which transportation companies if we turn from the statute to answer the question are we in an old law zone or is there an opportunity to go to for i think the most useful way to approach it is to compare this with lockyer vs for some quality california vs for the case in which the california attorney general actually went to far on a complaint and which this court held you can get a remedy there something that none of these pla he filed in compliance with first regulation three eighty five three eighty five applies to complaints both under the power act and under the gas attack he alleged that the prices that prevailed in the california day the nature of his complaint he claimed that jurisdictional sellers in the electricity markets have violated their tariffs by manipulating the market in our case we are as i certificate authority tariffs if you lay them along each other that the individual market based rate authority tariff the companies filed reads virtually identical to section two forty eight point four  two the blanket marketing certificate authority that ferguson issued they both allow transactions at negotiated prices in that case the claim was manipulation for power clearly under f in this case it would be about the basis differential as they've complained in their complaints and these two cases this case is about the fact that california in two thousand or one suffered gas prices at the border which were not readily associated with the prices that prevailed in the basin and the difference is basis now this court ruled in lockyer versus fir the general lockyer had stated a giving retrospective financial relief i have not heard anyone who's argued here this morning tell you why notwithstanding these similarities there was a gap there were  so i would submit that the only conclusion in these cases that would be consistent with this court's decision in lockyer vs fir and indeed perhaps even with the court's decisions last december in the is there a financial remedy available the answer is without prejudging the merits of their complaints in the conduct that they claim but the defendants committed ferk made clear in two thousand and three that it's then existing gas act power gave that the ability to order to scorch mitten other remedies and this court held under the same provisions of the power act that a financial remedy was available in lockyer versus first this court observed because it also had before it in part i think this new home is versus dynasty case the private damages cases that part of the reason why first has has to have that power is because there is no way to plead a private damages case in a situation like this that does not run afoul of file great doctor and the only way to reconcile that statement with this the question of what people have said before both her and parties in those proceedings which include my client it needs to be made clear that first has never said it has no remediation power over jurisdictional entities like those who are defendants in the cases in front of judge crowe in fact and the national association of gas consumers case addressed by prior counsel in an earlier case for cal to the contrary it acknowledged that it has jurisdiction over entities who are defendants in these cases and it said as explained in the enron marketing case that its jurisdiction over the conduct of the entities who are not first sellers who are jurisdictional sellers like these defendants authorizes it to take action because manipulative conduct violates inherent conduct rules that underlie blanket marketing certificate authority that given this circuit's jurisprudence in the power field is hardly remarkable because in the power field you have in your opinions recognized that while the ira so in p x tariffs did not expressly prohibit fact boy that's star get shorty any of those things this court has held that those come those types of conduct are prohibited by the implicit requirements of the iso in i think of those who've argued for the plaintiffs this morning and i think it is a fallacy which is implicit in judge issues approach to this problem and i should say at this point that we certainly appreciate judge e c s view that when it comes to wholesalers like texas ohio the fact that they're wholesalers makes all the difference and indeed they are writing to his colleague judge pros opinion would agree with that inso far as texas ohio is concerned but the problem with the perspective that you've been offered is that the perspective you've been offered is to look at the situation solely of the plaintiff and ask what kinds of purchases did they make it's erroneous because the file great doctrine doesn't ask about the purchaser the final great doctrine asks about the jurisdiction of the agency and there's no question that as to the jurisdiction sellers the agency has jurisdiction over our conduct that matters in this case for a raise that may not be readily apparent what constitutes a roundtrip trade which has no legitimate purchase purpose from what constitutes a trade of equal or offsetting positions which would be entirely legitimate and in conformance with our obligations under f regulation is no small easy matter we had a hearing about eight months ago where plaintiff's lawyer got up and said these defendants were sleeving these defendants were doing basis swaps but if you go back to order six forty four for used exactly those two kinds of arrangements as illustrations of transactions which have a legitimate business purpose under the natural gas act  is true in so far as reporting to the industries are concerned as mr feldman sad how you do it it's not something as to which burke has written precisely they have been precise on your record keeping and indeed the record keeping is the only part of the regulations which are in effect new but if you don't allow the agency which supervises the conduct to decide what conduct is unlawful and what is not you run the severe risk in and i trust cases like this that with an impassioned jury talking about sleeving basis swaps you could buyers might have with respecting our interest expense and i was not if your honor please speaking to preemption a lot be pleased to do so the fact of the matter is in so far as the sellers are concerned we've been subject to this is off balance the state regulation continue to apply here in fact that's the point of transcontinental pipeline case well and just to clarify what is it that prevents the kind of the plaintiffs change your question a little bit the reason why these purchasers cannot bring state law claims is because of the conduct that they're challenging is firk regulated conduct  complained that the bonneville power agency and a number of other defendants had operated their companion high transmission networks in a way which violated duties conduct duties to him and the court in that case affirm the filed rate dismissal on the grounds that a court can't speculate on what conduct folk would say was proper or improper in connection with operations in the first regulated electricity transmission market or proposition is no different and indeed it is even more so here it's a question of what kinds of transactions as i submit firk would hold that many if not much of this conduct was entirely lawful on these jurisdictional sellers to be hath and if you don't enforce the filed rate doctrine you will be permitting perhaps a judgement for alleged and i trust injury for acting in a way which firk finds entirely appropriate in an area which is subject to their exclusive jurisdiction my client may be the paradigm already held in an order that our alleged wash sales are subject to exclusive for jurisdiction but if you don't enforce the filed rate and what you will be saying is it doesn't matter  investigation and reached its conclusions we're going to let juries in the federal district here go off and do it by themselves that's not withstanding the fact that the damages that they want  transportation charges and if you go back if you go back to order six thirty seven in two thousand you will see that ferk is all over the basis differential issues and markets and it's deed took started taking regulatory steps both before the two thousand order in order for fifty seven as well as thereafter and so if at the end of the day what the court does is return to one b and ask itself are there provisions here with the plaintiff which are within first jurisdiction whether it is because we are natural gas companies subject to their jurisdiction whether it's because in so far as texas ohio is concerned the case is about sales for resale if to all the other cases you hold it's because those cases are focused or at least include among their damages basis differential if for any year one or more of those reasons this quirk concludes after looking at their complaint that that's what these cases whether or not these transactions involve first sales is a question of fact i heard the representation by counsel that they are not i would suggest that the appropriate remedy if that is indeed their position is that they should have brought a summary judgment motion and establish that fact they have not done so and i would suggest that the fact that they are subject to the jurisdiction of f affiliate of a pipeline or a local distribution company doesn't automatically mean that all of their transactions cannot are not for sales that that's not what the statute says that's not how sales are to find they have to in fact first in the energy c k said that first sales were all sales in the chain from the producer to the ultimate consumer are first sales unless the gas is purchased by an interstate pipeline and intrastate pipeline or a local distribution company so their status is not enough there has to be a purchase and there the second point i wanted to relief from further and referenced a lot of cases judge issues opinion the j p morgan case by judge pro the amendments to the blanket sales certificates were six forty four only apply to sales for resale in interstate commerce if they are within the jurisdiction of work and in the final rule order sixty seventy which prohibited energy market jurisdictional transaction says there's a first sale or retail sale is not subject to the new regulations that's all counsel for the argument and lead thank counsel generally this morning for perhaps voluminous but very well written briefs and articulate arguments the case is just heard texas ohio an able man our gas are submitted and