F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

I N R E : W E S T E R

N S T A T E S W H O L E S A L E N A T U R

A L G A S A N T I T R U S T L I T I G

A T I O N ,

L E A R J E T , I N C .; T O P E K

A U N I F I E D S C H O O L D I S T R

I C T 501, Plaintiffs-Appellants

,

v

.

O N E O K , I

N C

. ; O N E O K E N E R

G Y M A R K E T I N G & T R

A D I N G C O ., L .P.; T H E W I L L I A M S C O M P A N I E S , I N C .; W I L L I A M S M E R

C H A N T S E R V I C E S C O M P A N Y , I N C .; W I L L I A M S E N E R G Y M A R K E T I N G & T R

A D I N G C O M P A

N Y ; A M E R I C A N E L E C T R

I C P O W E R C O M P A N Y , I N C .; AEP E N E R

G Y S E R V I C E S , I N C .; D U K

E E N E R G Y C O R P O R A T I O N ; D U K

E E N E R G Y T R A D I N G A N D M A R

K E T I N G , L L C; D Y N E G Y M A R K E T I N G A N D T R A D E ; E L P A S O C O R

P O R A T I O N ; E L P A S O M E R C H A N T E N E R

G Y , L

. P.; CMS E N E R G Y C O R P O R A T I O N ; CMS M A R K E T I N G S E R V I C E S & T R

A D I N G C O M P A N Y ; CMS F I E L D S E R

V I C E S ; R E L I A N T E N E R

G Y , I N C .; R E L I A

N T N o. 11-16786

D .C. Nos. 2:03-cv-01431- PMP-PAL 2:06-cv-00233- PMP-PALI

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 2

E N E R G Y S E R V I C E S , I N C .; C O R

A L E N E R G Y R E S O U R

C E S , L

. P.; X C E L E N E R G Y , I N C .; E P R

I M E , I N C ., Defendants-Appellees

.

I N R E : W E S T E R

N S T A T E S W H O L E S A L E N A T U R

A L G A S A N T I T R U S T L I T I G

A T I O N ,

H E A R T L A N D R E G I O N

A L M E D I C A L C E N T E R ; P R

I M E T A N N I N G C O R P .; N O R T H W E S T M I S S O U R

I S T A T E U N I V E R S I T Y , Plaintiffs-Appellants

,

v

.

O N E O K , I

N C

. ; O N E O K E N E R

G Y M A R K E T I N G & T R

A D I N G C O ., L .P.; T H E W I L L I A M S C O M P A N I E S , I N C .; W I L L I A M S M E R

C H A N T S E R V I C E S C O M P A N Y , I N C .; W I L L I A M S E N E R G Y M A R K E T I N G & T R

A D I N G C O M P A

N Y ; A M E R I C A N E L E C T R

I C P O W E R C O M P A N Y , I N C .; AEP E N E R

G Y S E R V I C E S , I N C .; D U K

E E N E R G Y C O R P O R A T I O N ; D U K

E E N E R G Y T R A D I N G A N D M A R

K E T I N G , L L C; D Y N E G Y M A R K E T I N G A N D T R A D E ; E L P A S O C O R

P O R A T I O N ; E L P A S O M E R C H A N T E N E R

G Y , L

. P.; CMS N o. 11-16798

D .C. Nos. 2:03-cv-01431- PMP-PAL 2:07-cv-00987- PMP-PALI

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 3

E N E R G Y C O R P O R A T I O N ; CMS M A R K E T I N G S E R V I C E S & T R

A D I N G C O M P A N Y ; CMS F I E L D S E R

V I C E S ; R E L I A N T E N E R

G Y , I N C .; R E L I A

N T E N E R G Y S E R V I C E S , I N C .; C O R

A L E N E R G Y R E S O U R

C E S , L

. P.; X C E L E N E R G Y , I N C .; E P R

I M E , I N C ., Defendants-Appellees

.

I N R E : W E S T E R

N S T A T E S W H O L E S A L E N A T U R

A L G A S A N T I T R U S T L I T I G

A T I O N ,

B R E C K E N R I D G E B R E W E R Y O F C O L O R A D O , L L C; B B D A C Q U I S I T I O N C O ., Plaintiffs-Appellants

,

v

.

X C E L E N E R

G Y , I N C .; E P R

I M E , I N C ., Defendants-Appellees

. N o. 11-16799

D .C. Nos. 2:03-cv-01431- PMP-PAL 2:06-cv-01351- PMP-PALI

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 4

I N R E : W E S T E R

N S T A T E S W H O L E S A L E N A T U R

A L G A S A N T I T R U S T L I T I G

A T I O N ,

R E O R G A N I Z E D F L I
, I

N C

. , Plaintiff-Appellant

,

v

.

O N E O K , I

N C

. ; O N E O K E N E R

G Y M A R K E T I N G & T R

A D I N G C O ., L .P.; T H E W I L L I A M S C O M P A N I E S , I N C .; W I L L I A M S M E R

C H A N T S E R V I C E S C O M P A N Y , I N C .; W I L L I A M S E N E R G Y M A R K E T I N G & T R

A D I N G C O M P A

N Y ; A M E R I C A N E L E C T R

I C P O W E R C O M P A N Y , I N C .; AEP E N E R

G Y S E R V I C E S , I N C .; D U K

E E N E R G Y C O R P O R A T I O N ; D U K

E E N E R G Y T R A D I N G A N D M A R

K E T I N G , L L C; D Y N E G Y M A R K E T I N G A N D T R A D E ; E L P A S O C O R

P O R A T I O N ; E L P A S O M E R C H A N T E N E R

G Y , L

. P.; CMS E N E R G Y C O R P O R A T I O N ; CMS M A R K E T I N G S E R V I C E S & T R

A D I N G C O M P A N Y ; CMS F I E L D S E R

V I C E S ; R E L I A N T E N E R

G Y , I N C .; R E L I A

N T E N E R G Y S E R V I C E S , I N C .; C O R

A L E N E R G Y R E S O U R

C E S , L

. P.; X C E L E N E R G Y , I N C .; E P R

I M E , I N C ., Defendants-Appellees

. N o. 11-16802

D .C. Nos. 2:03-cv-01431- PMP-PAL 2:05-cv-01331- PMP-PALI

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 5

I N R E : W E S T E R

N S T A T E S W H O L E S A L E N A T U R

A L G A S A N T I T R U S T L I T I G

A T I O N ,

S I N C L A I R O I L C O R

P O R A T I O N , Plaintiff-Appellant

,

v

.

O N E O K E N E R

G Y S E R V I C E S C O M P A N Y , L .P., Defendant-Appellee

. N o. 11-16818

D .C. Nos. 2:03-cv-01431- PMP-PAL 2:06-cv-00282- PMP-PAL

I N R E : W E S T E R

N S T A T E S W H O L E S A L E N A T U R

A L G A S A N T I T R U S T L I T I G

A T I O N ,

S I N C L A I R O I L C O R

P O R A T I O N , Plaintiff-Appellant

,

v

.

E P R I M E , I N C .; X C E L E N E R

G Y , I N C ., Defendants-Appellees

. N o. 11-16821

D .C. Nos. 2:03-cv-01431- PMP-PAL 2:06-cv-00267- PMP-PALI

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 6

I N R E : W E S T E R

N S T A T E S W H O L E S A L E N A T U R

A L G A S A N T I T R U S T L I T I G

A T I O N ,

A R A N D E L L C O R

P O R A T I O N ; M E R R I C K ’ S I N C .; S A R G E N T O F O O D S I N C .; L A D I S H C O ., I

N C .; C A R

T H A G E C O L L E G E ; B R

I G G S & S T R

A T T O N C O R P O R A T I O N , Plaintiffs-Appellants

,

v

.

X C E L E N E R

G Y , I N C .; N O R

T H E R N S T A T E S P O W

E R C O M P A

N Y ; E P R I M E , I N C .; A M E R

I C A N E L E C T R

I C P O W E R C O M P A N Y , I N C .; AEP E N E R

G Y S E R V I C E S , I N C .; CMS E N E R

G Y C O R P O R A T I O N ; CMS F I E L D S E R V I C E S ; CMS M A R

K E T I N G S E R V I C E S & T R

A D I N G C O M P A

N Y ; C O R A L E N E R

G Y R E S O U R

C E S , L .P.; D U K E E N E R G Y C A R O L I N A S , L L C; D U K E E N E R G Y T R A D I N G A N D M A R K E T I N G L L C; D Y

N E G Y I L L I N O I S I N C .; D MT G.P. L .L

. C.; D Y N E G Y GP I N C .; E L P A S O C O R

P O R A T I O N ; E L P A S O M E R

C H A N T E N E R

G Y , L .P.; O N E O K , I

N C

. ; O N E O K E N E R

G Y M A R K E T I N G & T R

A D I N G C O ., L .P.; RRI E N E R

G Y , I N C

. , F KA R E L I A

N T E N E R G Y , I N C .; RRI E N E R

G Y N o. 11-16869

D .C. Nos. 2:03-cv-01431- PMP-PAL 2:07-cv-01019- PMP-PALI

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 7

S E R V I C E S , I N C ., F KA Reliant Energ y Services, I

nc.; T H E W I L L I A M S C O M P A N I E S , I N C .; W I L L I A M S P O W

E R C O M P A N Y , I N C .; W I L L I A M S E N E R G Y M A R K E T I N G & T R

A D I N G C O M P A

N Y ; W I L L I A M S M E R

C H A N T S E R V I C E S C O M P A N Y , I N C ., Defendants-Appellees

.

I N R E : W E S T E R

N S T A T E S W H O L E S A L E N A T U R

A L G A S A N T I T R U S T L I T I G

A T I O N ,

N E W P A G E W I S C O N S I

N S Y S T E M , I

N C ., Plaintiff-Appellant

,

v

.

CMS E N E R

G Y C O R P O R A T I O N ; CMS M A R K E T I N G S E R V I C E S & T R

A D I N G C O M P A N Y ; CMS F I E L D S E R

V I C E S ; X C E L E N E R

G Y , I N C .; N O R

T H E R N S T A T E S P O W

E R C O M P A

N Y ; E P R I M E , I N C .; C O R

A L E N E R

G Y R E S O U R

C E S , L

. P.; D U K

E E N E R G Y T R A D I N G A N D M A R K E T I N G L L C; D Y

N E G Y I L L I N O I S I N C .; D MT G.P. L .L

. C.; D Y N E G Y GP I N C .; D Y N E G Y M A R K E T I N G A N D T R A D E ; E L P A S O C O R

P O R A T I O N ; E L P A S O M E R

C H A N T E N E R

G Y , L .P.; O N E O K , I

N C

. ; O N E O K E N E R

G Y N o. 11-16876

D .C. Nos. 2:03-cv-01431- PMP-PAL 2:09-cv-00915- PMP-PALI

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 8

M A R K E T I N G & T R

A D I N G C O ., L .P.; RRI E N E R

G Y S E R V I C E S , I N C ., F KA Reliant Energ y Services, I nc.; T H E W I L L I A M S C O M P A

N I E S , I N C .; W I L L I A M S P O W

E R C O M P A

N Y , I N C

. ; W I L L I A M S E N E R

G Y M A R K E T I N G & T R A D I N G C O M P A

N Y ; W I L L I A

M S M E R C H A N T S E R V I C E S C O M P A

N Y , I N C ., Defendants-Appellees

.

I N R E : W E S T E R

N S T A T E S W H O L E S A L E N A T U R

A L G A S A N T I T R U S T L I T I G

A T I O N ,

A R A N D E L L C O R

P O R A T I O N ; M E R R I C K ’ S I N C .; S A R G E N T O F O O D S I N C .; L A D I S H C O ., I

N C .; C A R

T H A G E C O L L E G E ; B R

I G G S & S T R

A T T O N C O R P O R A T I O N , Plaintiffs-Appellants

,

v

.

CMS E N E R

G Y C O R P O R A T I O N ; CMS M A R K E T I N G S E R V I C E S & T R

A D I N G C O M P A N Y ; CMS F I E L D S E R

V I C E S , Defendants-Appellees

. N o. 11-16880

D .C. Nos. 2:03-cv-01431- PMP-PAL 2:09-cv-01103- PMP-PAL

OPI NI ONI

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 9

A ppeal from the United States District Court for the District of Nevada Philip M. Pro, District J udg e, Presiding

Arg ued and Submitted October 19, 2012—San F rancisco, California

F iled April 10, 2013

B efore: Carlos T. B e a and Paul J

. W a tford, Circuit J udg es, and W illliam K. Sessions, District J u d g e. *

Opinion by

J udg e B ea

SUMMARY * *

Energy Law

The panel reversed in part, a n d af f i rmed in part, the distric t court’s o rders in cases consolidated into a multidistrict litig ation proceeding

, and aris i n g out of the
energ y crisis of 2000-2002.

Pla i ntiffs, retail buy ers of natural g as, alleg ed that defe n d a nts, natural g as traders, manipulated the price o f natural g as by reporting false i n f o rmation to p rice indices

* T h e Ho n o rab l e W illiam K. Sessio n s, III, D istrict J u d g e f o r th e U .S. District Co u

rt f o r th e District o f

Verm o n t , sittin g b y

d esig n atio n

.

** T h is su m m ary co n stitu

t es n o p ar t o f t h e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.I

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 10

published by trade publications and e ng ag ing in wash sales. The di s t rict court entered summary judg ment ag ainst plaintiffs in most of the cases, f inding that state law antitrust claims were preempted by the Natural Gas Act.

The panel held that the Natural Gas Act does not preempt the plaintiffs’ state antitrust claims, and reversed the
summary judg ment e ntered in f a vor of the defendants. The panel also h eld that the 2003 enactment o f the F ederal E n erg y Reg ulatory Commission’s Code of Conduct d id not affect the panel’s c onclusion that the N atural Gas Act doe s n o t g rant F ERC jurisdiction o v er claims a rising out of false price reporting and o ther anticompetitive b ehavior associated with nonjurisdictional sales. T h e pan el further held that the district court did not abuse its discretion in deny ing either o f the two motions for leave to amend complaints. The panel reversed in part the district court’s o rders dismissing the AEP defendants from the W isconsin Arandell and Missouri H e a r t l a nd suits, and affirmed all the other orders at issue in these appeals.

COUNSEL

J ennifer Gille B acon (arg ued), W i l l i am E. Quirk, a nd Greg ory M. B entz , Polsinelli Shug hart PC, Kansas City

, Missouri, for Appellants L earjet, I n c., et al., H eart l a n d Reg ional Medical C e n t e r, et al., B r eckenridg e B rewery o f Colorado, L L C, et al., Reorg a niz ed F L I
, I nc., and Sinclair Oil Corporation.

Robert L

. Geg ios, Alex ander T. Pendleton, and W illiam E. F ischer, K o hner, Mann & Kailas, S.C., Milwaukee, W isconsin, for W isconsin Plaintiffs-Appellants.I

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 11

Mark E. H a ddad (arg

ued), Michelle B

. Goodman, and Nitin Reddy

, Sidley Austin L L P, L os Ang e le s , California, for Defendants-Appellees CMS E n erg y Corp., CMS E n erg y Resources Manag ement Co., and Cantera Gas Company

.

Michael J

. Kass and Doug las R. Tribble, Pillsbury W inthrop Shaw Pittman L L P, San F rancisco, Ca lifornia, for Defendan t s-Appellees Dy neg y Marketing & T rade, Dy neg y I llinois, I nc., DMT G.P. L .L .C., and Dy neg y GP I n c.

J oshua D. L ichtman, F ulbrigh t & J aworski L .L .P., L os Ang eles, California, and Rox ann a A

. M a n u e l

, Q u i nn E m anuel Urquh art & Sullivan, L L P, for D efendant-Appellee Coral Energ y Resources, L

. P.

J oel B

. Kleinman, Adam Proujan s k i, and L isa M. Kaas, Dickstein Shapiro L L P, Washing ton , D.C., for DefendantsAppellees Duke Energ y T r ading and Mar k eting

, L

. L .C. a nd Duke Energy

Carolinas, L L C.

Robert B

. W o linsky

, H og an L ovells U S L L P, Washing ton, D.C., and Steven J

. Routh, Orrick, H e r ring ton & Sutcliffe, L .L .P., W ashing ton, D.C., for Defendants-Appell e e s American Elect r i c Power Company
, I nc. and AEP E n erg y Services, I

nc.

B rent A. B enoit and Stacy W illiams, L ocke L ord B issell & L iddell L L P
, Houston, Tex as, for Defendants-Appellees El Paso Corporation, El Paso Merchant En e r gy , L .P., a nd El Paso Marketing , L .P.I

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 12

Amelia A. F og lema n , Oliver S. Howard, and Craig A

. F itz g erald, G able Gotwals, A Profess ional Corporation, Tulsa, Oklahoma, for Defendants-Appellees O NEOK, I n c., ONEOK Energ

y Services Company

L .P.

J

. Greg ory Copeland and Mark R. Robeck, B aker B otts L L P, Houston, Tex as, for Defendant-Appellee Reliant E n erg y Services, I

nc.

Gray don D ean L uthey

, J r. and Sarah J ane Gillett, Hall, E still, Hardwick, Gable, Golden & N elson, P.C., Tulsa, Oklahoma, for Defendants-Appellees The W illiams Companies, I n c., W illiams Merchant Services Company
, I nc., W illiams Power Company
, I nc ., and Williams Energ y Marketing & Trading Company

.

Michael J o h n Mig uel, K & L Gates L L P, L os Ang eles, California, for Defendants-Appellees Xcel Energ y , I nc., e prime, inc., e prime Energ y Marketing

, I nc., and Northern States Power Company

.

OP INION

B EA, Circuit J udg e:

These cases a

r i se out of the e n erg y crisis of 2000–2002. Plaintiffs (retail buy ers of natural g as) alleg e that Defendants (natural g as traders) manipulated the price of natur a l ga s b y reporting false information to price indices published b y tradeI

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 13

publications and eng ag ing in wash sales. 1 Plaintiffs broug ht various clai m s i n state and federal court beg inning in 2005, and all cases were eventually c o nsolidated into the underly ing multidistrict litig ation p r o c eeding

. I n J uly 2011, the district
court entered summary judg ment ag ainst Plaintiffs in most o f
t h e cases, 2 finding that their state law antitrust claims were preempted by the Natural G a s A c t , 15 U.S.C. § 717 et seq. (“NGA”). Plaintiffs appeal the district court’s order g ranting
summary judg ment, as well as orders deny ing as untimely Plaintiffs’ motions to ame n d t heir complaints, orders dismissing the AEP Defendants from two cases for lack o f personal jurisdiction, and an order g ranting partial summary judg ment to Defendant Duke Energ y Trading and Marketing

, L L C.

W e have jurisdiction pursu ant to 28 U.S.C. § 1291. W e

reverse the district c ourt’s order g ranting summary judg ment to the Def

e n d ants, reverse in part the district court’s orders dismissing the AEP D efendants from the W isconsin Arandell and Missouri Heartland suits, and affir m a l l o f the other orders at issue in this appeal. W e r emand to the district court for further proceeding s consistent with this opinion.

1 W ash sales are p rearran g ed s al e s in w h ich trad ers ex ecu te a trad e on

an electro n ic trad in g p latf o rm , an d t

h en im m ed i ately o f

f set th at t rad e b y

ex ecu tin g an eq u al an d o p p o site trad e.

2 T h e d i s trict co u rt’ s j u dg m en t is f in al in all cases ex cep t S in cla ir v. EPrime
, No

. 1 1

- 1 6 8 2 1
, an d S in cl a i r v. On eo k

, No

. 11

- 1 6 8 1 8

. T h e P lain tif f s’ co m p lain ts in th e S in cla ir cases co n t ain f ed eral claim s th at w ere

n o t p reem

p ted

, b u t th e District Co u r t d e c l a red th at th ere w as “ n o j u st

reaso n f o r d elay ,” m ak i n g th e p reem ptio n ru l in g s in S in cla ir v. E

- P r i m e

an d S i n cla ir v. O n eo k f

in al an d ap p ealab le p u rsu an t to Fed eral Ru le of Civ il P ro ced u re 5 4 (b ).I

N R E : W E S T E R

N S T A T E S A

N T I T R U S T L I T I G

. 14

I. F acts and Regulatory F ram ew ork

A. Energy Crisis of

2000–2002

A brief recitation o f the b a c k ground of this litig ation, a s well as a description of the reg ulatory framework g overning this case, is us e f

u l t o set the stag e for our holding

. These

cases arise out of claims that the Defendants violated antitrust laws b y manipulating the natural g as market and s e l l i ng natural g as a t artificially inflated prices, leading to the energ y crisis of 2000–2002. Th e F ederal Energ y Reg ulatory C o m m i s s i o n ( “ F E RC”) conducted a fact-finding i n v e s t i g a t i o n of the energ y c risis, and concluded that “[ s] pot g as p rices rose to ex traordinary levels, fac i l itating the unprecedented price increas e i n the electricity market.” T his market distortion stemmed in part from e fforts of energ y trading companies to manipulate price indices compiled by trade publications.

The n atural g as industry relied on two trade publications, Gas Daily and Inside F E RC
, which p ub l i s hed the most widely -used p rice indices. Gas Daily p u b l i s hed a daily g a s price index

, while Inside FERC published a monthly g a s price index

. Gas Daily relied on telephone interviews with natural
g as market participants (traders, e nd users, 3 and producers) to collect pricing data. I

nside F E RC collected p r i ci ng data throug h standardiz ed s p r eadsheets, which traders filled out and emailed to Inside FERC. B uy ers and seller s r e l i e d on these indices as reference points to d etermine t h e market price for natural g a s transactions. I n short

, the prices for actual transactions were pegge d t o price indices that were subject to manipulation by energ y traders.

3 T h e term

“ en d u sers” ref

ers t o in d u s trial, co m

m ercial, an d resid en tial

co n su m ers o f g as, su ch as th e P lain tif

f s in th is case.I

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After the e nerg y crisis of 2000–2002, a number of energ y trading c ompanies admitted that their employ e es provided false pricing data to G as Daily and Inside FERC

. Government investig atio n s revealed that the companies h ad few

, i f any , internal controls in place to ensure the accuracy of the data reported to the trade publications. A 2003 F E RC report described the process as follows:

Traders from a ll companies describe a ty p ical trading day as h ectic, pressure packed, a nd frenetic. One o f their many tasks was to report trading data to the Trade Press; th i s was viewed as bothersome but necessary

. O ften it

was a job g iven to the newest employ ee. Many c ompanies report p a ssing around a f orm and using a spreadsheet on a shared drive.

. . . The re was nothing to stop a trader f rom chang ing the numbers someone el se h ad entered. I n other c ases, traders t o ok an oral “sur vey ” to g et a sense o f where the market

was trading

. Sometimes they represented it to the Trade Press as an a c tual survey , but in other c ases they made up trades to averag e out to a number that was consistent with this “survey .”

I n addition to reporting f

alse data to the price indices, traders also manipulated the market by eng ag ing in “wash sales,” o r prearrang ed s a l e s in which traders “ag reed to ex e cute a buy

or a sell on an electronic trading pla t f o r m

. . . and then to immediately reverse or offset the first trade b y b i laterally

ex e c uting over the telephone an e qual a nd opposite b u y o r sell.”I

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B. Overview of

Natural G as Regulation

W h ether Plaintiffs’ state law antitrust claims a re cog niz able depends, for one thing

, on whether the fiel d o f natural g as r e gulation has been preempted by federal
reg ulation. This court’s preemption analy sis is g o verned b y the framework o f natural g as reg ulation, a nd m o r e important ly

, the distinction between categ ories of sales that fall within F ERC’s jurisd i c t i o n ( “ j u r i s dictional sales”) and the categ ories of sales that fall ou t s i d e of F ERC’s jurisdiction (“non-jurisdictional sales”).

I ndividual states were orig inally responsible for the
reg ulation of the production, sale, and transportation o f natural g as. Howev e r , as the v olume of g as sold a nd transported along interstat e p ipelines increased, state reg ulations became reg arded by Cong r ess as ineffective. See Panhandle Eastern Pipe Line Co. v. P u b

. Serv. Comm’n of Ind.

, 332 U.S. 507, 5 15 (1947). I n 1 93 8
, Cong ress enacted the Natural Gas Act (“NGA”) in response to the demand for federal reg

ulation and to curb the market power of interstate pipelines. Id. a t 516; see a lso E. & J. Gallo W inery v. Encana Corp.
, 503 F

. 3d 1027, 1036 (9th Cir. 2007). F ERC i s t he
ag ency charg ed w ith the administra t ion of the NGA, and its jurisdiction is laid out in Section 1(b) of the Act as follows:

The provisions of this c h apter shall apply to the transportati on of natural g as in interstate commerce, to the sale in interstate commerce of natural g as for resale for u ltimate public consumption for domestic, commercial, industrial, or a

ny o ther use, and to natural-g a s companies eng ag ed in such transportat i o n o r sale, and to the impor t a t i on o r ex portation o fI

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n a tural g as in foreig n c ommerce and t o p e rsons eng ag ed in such importation o r

ex p ortation, b ut shall not a p ply to any other transportation o r sale of natural g as or to the l o c a l distribution of natural g as or to th e facilities used for such d i s tribution or to the production or g a theringof natural g as.

15 U. S

. C. § 717(b). Put simply

, the NGA applies to: (1) transportation of natural gas in interstate commerce, (2) natural ga s sales in interstate commerce for r e sale (i.e., wholesale sales), and (3) n a tural g as comp a n i e s 4 e ng ag ed in such transportation or sale. The N GA does not apply to retail sales (i.e., direct sales for consumptive use). S ee Panhandle Eastern Pipe Line Co.
, 332 U

. S

. at 517 (“The line of the
st a t u t e [ is] thus clear and complete. I t cut[ s] sharply a nd cleanly between sales for resale and direct sales for consumptive uses.”).

Si n ce the p assag e of the NGA, Cong ress has removed other categ ories o f s a l es from the scope of F ERC’s jurisdiction as part of a g eneral e f f o r t to reduce federal
reg ulation of the natural g as indus t r y

. I n 1989, Cong ress passed the Natural G as W ellhead Decontrol Act of 1989, Pub. L

. No. 101-60, which removed “first sales” 5 f ro m F ERC’s

4 A “ n atu ral- g as co m

p an y ” is d ef

in ed as “ a p erso n en g ag ed in th e tran sp o rtatio n o f n atu ral g as in in terstate co m m erce, o r t h e sale in in terstate co m

m erce o f su ch g as f

o r resale.” 1 5 U.S.C. § 7 1 7 a(6 ).

5 T h e statu to ry d ef

in itio n o f “ f

irst sales” is q u ite co m

p lex

, s ee 1 5 U.S.C. 3 3 0 1 (2 1 ), b u t as th i s co u rt stated in Ga llo

, “ f

irst sales ar e , i n e s s en ce,

m erely sales o f n atu ral g as th at are n ot p reced ed b y a sale to an in terstate p i p e l i n e, in trastate p i p elin e, lo cal d i strib u tio n co m p an y , o r retail cu st o m e r

. In o th er w o rd s , sales b y p ip elin es, lo cal d i strib u tio n co m p an i es, an d th eirI

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jurisdiction, therefore completely eliminating F ERC ’s authority to set prices at the wellhead. I n 1992, to g ive effect
to the N orth American F r ee Trade Ag reement, C o n gress amended the NGA to p rovide that all natural g as sales from Canadian and Mex ican sellers to buy ers in the United States

are also first sales, and therefore not subject to F ERC’s jurisdiction. S

ee Energ y Policy Act o f 1 992, Pub. L

. No. 102- 486 (codified at 15 U.S.C. § 717b(b)).

The final aspect of the natural g as reg ulatory scheme relevant to this appeal is F ERC’s practice of issuing “blanket marketing certificates.” 6 F ollowing cong ressional efforts to reduce federal reg ulation of the industry

, F ERC beg an its o wn dereg ulation p r o c e ss. I n 1992, F ERC promulg ated Order 636, which “required a ll interstate p ipelines to ‘unbundle’ 7

af f iliates can n o t b e f

irst sales u n less th ese en t ities are sellin g g as o f th eir

o w n p ro d u ctio n .” Ga llo , 5 0 3 F.3 d at 1 0 37

.

6 Un d er b lan k et certif

icates issu ed p u rsu an t to S ectio n 7 (c) o f th e NGA
,
“ a n atu ral g as co m

p an y m ay u n d ertak e a restricted ar r a y o f ro u tin e activ ities w ith o u t t h e n eed to o btain a case- sp ecif ic certif icate f o r each in d iv i d u al p ro

j ect.” See B L

A NK E T C E RT I F I CA T E S , F E D E R A L E NE RG Y R E G U L A T ORY C OMMI SSI ON (last v isited o n March 2 5
, 2 0 1 3 ), h ttp ://w w w .f erc.g o v /in d u stries/g as/in d u s

- act/b lan k

- cert.asp

. A co m p an y

w ith a b lan k et certif

icate m ay “ co n stru ct, m o dif y , acq u ire, o p erate, a n d ab an d o n a lim ited set o f n atu ral g as f acilities, an d o f

f er a lim ited set o f

serv ices, p ro v id ed each activ i ty co m p lies w i th co n strain ts o n co sts an d

en v iro n m en tal im

p acts set f

o rth in th e Co m

m i ssio n ' s reg u latio n s.” Id

.

7 “ P rio r to th e early 1 98 0 s , m o st n atu ral g a s w as so ld at or n ear th e

w ellh e a d to th e in trastate o r in terstate p ip elin e in th e f ield

. . . . T h e p ip elin e p u rch asers ty

pically p ro v id ed a b u n d l ed serv ice w h ich in clu ded th e g ath erin g , pro cessin g , sto rag e an d tran s m issio n o f th e g as t o m ark et.” J u d ith M. Matlo ck

, Fed era l Oil a n d Ga s Pip elin e Reg u la ti o n : An Overview
, R OCK

Y M OUNT A I

N M I NE R A L L A W F O UND

. P a p e r N o

. 4 (Feb

. 2 3

– 2 4 , 2 0 1 1 ).I

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their transportation from their own natural g as sales.” General Motors Corp. v

. Tracy
, 519 U.S. 278, 284 ( 1 997); Pipeline Service Obliga t ions a nd Revisions to Reg ulations G o v e r n i n g S e l f

- I m p l e m e n t i n g T r a

n s p ortation; and Reg ula

t i o n of Natural Gas Pipelines After Partial W ellhead Decon trol, 57 F e d. Re g. 1 3
, 2 6 7 ( Apr. 16, 1992). F ERC also issued blanket sale c ertificates to interstate pipelin e s t hat allowed them to offer “unbundled” natural g a s at market-based rates,

r a ther than a t rates filed with F ERC. See 57 F ed

. R e g. at 1 3
, 2 70. F ERC continued its own dereg ulation process b y issuing blanket sales certificates for all other resales o f natural g as. See R e g u lations Governing B lanket Marketer Sales Certificates, 57 F ed. Reg

. 57,952; 57,957–58 (Dec. 8, 1992). These blanket certif i c a t es had the effect of allowing

a l l natural g a s companies subject to F ERC’s jurisdicti o n t o charg e market-based rates, as opposed to rates filed with a nd approved by

F ERC.

II. P rocedural History

B e g inning in 2001, a series of class action lawsuits were filed around the country a nd were eventua l ly consolidated into a multi-district litig ation in the District of Nevada. Two of the earliest cases, Texas-Ohio Energy, Inc. v. A EP Energy Services, Inc.
, et al. (“ Texas-Ohio ”) and Abelman v. AEP Energy Services, Inc., et al. (“ Abelman ”) a lleg ed both Sherman Act and pa r al l e l state antitrust claims. See In re W e s t ern States W

holesale Natural Gas Antitrust Litig.
, 368 F

. Supp. 2d 1110 (D. N ev. 2005); In re W e ste r n S t a t e

s W holesale Natural Gas Antitrust Litig.
, 408 F

. Supp. 2d 1055 (D. Nev. 2005). The core alleg a tions in Texas- O h i o a nd Abelman – that the defendant e nerg y c ompanies conspired to manipulate the price indices – w ere similar to the alleg ations in the present case.I

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The defendants in Texas-Ohio a n d Abelman m o v ed to dismiss the complaints in those cases on the g rounds that all claims w ere barred b y the filed-rate doctrin e 8 and that the state-law claims were p reempted by the NGA. I n 2005, four months before the first of the present cases was filed, the District Court g ranted summary judg ment to the Texas-Ohio and Abelman d efendants. I t held that b e cause t h e plaintiffs asked for actual damag es, a n y judg ment by the court would necessari l y decide whether the privately -published price indices (which the court conc luded were effectively F ERCapproved rates) were reasonable. Since the price indices used
to set the rates were F ERC-approved, the feder a l a n d state law c laims were barred by the filed-rate doct r i n e

. TexasOhio , 368 F . Supp. 2d at 1116; Abelman , 408 F . Supp. 2d at 1069.

Shortly after the judg ments in Texas-Ohio and Abelman

, plaintiffs in Farmland

, 9 Learjet
, B reckenridge

, Arandell

, a nd Heartland beg an filing suits a lleg ing state antitrust claims in Colorado, Kansas, Missouri, and W isconsin state courts. Plaintiffs in Sinclair v. E -Prime and Sinclair v. O n eok

8 T h e f iled

- rate d o ctrin e “ is a j u d icial creatio n th at arises f ro m d ecisio n s in terp retin g f

ed eral statu tes th at g iv e fe d eral ag en cies ex clu siv e j u risd ictio n to s et rates f

o r sp ecif ied u tilities” an d b ars “ ch allen g es u n der
state l aw an d f

ed eral an titru st law s to rates set b y f ed eral ag en cies.” E. & J. Ga l lo W

i n e r y v

. En ca n a Co rp

. , 5 0 3 F.3 d 10 2 7
, 1 03 3 (9 th Cir. 2 0 0 7 ). S ee a l so Arka n sa s Lo u isi a n a G a s Co m p a n y v. Ha ll

, 4 5 3 U.S. 5 7 1
, 5 7 7 (1 9 8 1) (statin g th at b ecau se t h e Natu ral Gas A ct req u ired sellers o f n atu ral
g as in in terstat e c o m

m erce to f

ile th eir rates w ith FERC f or FERC’ s ap p ro v al, “ [n ]o co u rt m ay su b stitu t e its o w n j u d g m en t o n reaso n ab len ess f o r th e j u d g m en t

o f th e Co m m issio n ”).

9 A s a resu lt o f b an k

ru p tcy p ro ceed in g s, th e n am e o f th e P lain tif f in th is

case h as ch an g ed t o “ Reo rg an ized FL I, In c.” Fo r th e sak e of sim p licity

w e ref er to th is P lain tif

f as “ Farm lan d ” in th is o p in io n

.I

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broug ht suit in fede r a l court, alleg ing various state a nd f e deral causes of action. The state cases were removed t o federal court on g rounds o f diversity of citiz enship and all

cases were consolidated into the present multidist r i ct litig ation.

Defendants in the present case filed a number of motions for summary judg ment, alleg ing that the Plaintiffs ’ c laims

were barred b y t he filed-rate doctrine, or that their state claims were p r e e m p ted by the NGA. I n 2006, the District Court g ranted the D e fe ndants’ motion to dismiss in Farmland

, finding t h a t the N GA preempted the Plaintiffs’ claims u nder Kansas a

ntitrust statutes. The District Court reasoned tha t b e cause the Defendants possessed b lanket marketing certificates that subjected Defen d a n t s and their conduct to F ERC’s jurisdic t i o n under the NGA, F E RC h ad

ex c lusive jurisdiction o ver the alleg ed anti-competitive misconduct at issue. I n J uly 2 007, the D i s t ri c t Court

r e c o n s i dered a

nd vacated its prior ruling g ranting Defendants’ motion to dismiss after Plaintiffs clarified that they did not concede the factu a l question of whether Defendants possessed blanket marketing certificates.

I n September 2 007, this court issued its decision in E. & J. Gallo W

inery v

. Encana Corp.
, holding that the filed-rate doctrine does not bar state or federal antitrust claims a rising
out o f manipulation o f the price indices becaus e the challeng ed price indices w ere compiled using tr ansactions outside of F ERC’s jurisdiction as w ell a s transactions within F ERC’s jurisdiction. 503 F .3d at 1048.

I n November 2007, Defendants filed a ne w m otion for
summary judg ment in in all o f the present cases, arg uing that Plaintiffs’ state claims were preempted by the NGA. I n MayI

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2008, the District Court denied the motion, rely ing in part on this court’s decision in Gallo.

I n J uly 2008, D e f

e ndants filed a motion for reconsideration of the D ist rict Court’s May 2008 order,
arg uing that F ERC had jurisdiction during the relevant time period to reg u la t e “a n y practice” a f fecting a rate subject to the jurisdiction o f t he Commission (i.e., a “jurisdictional rate”). I n N ovember 2009, the District Court held that because the same price indices a r e used to set the prices in transactions falling within a nd o utside F ERC’s jurisdiction,
any manipulation of these indices falls with i n F ERC’s

e x c l u sive jurisdiction under Section 5(a) o f the NGA. Section 5(a) provides:

[ W henever F E RC finds] that any rate, charg e , or classification

. . . [ o r] rule, regulation, practice, or contract a ffect i ng such rate,

c h a r g e , o r c l a s s i

f i c a t i o n i s u n

j u s t , unreasonable, unduly discriminatory

, o r preferential, the Commission shall determine the just and reasonable rate, charg e , classification, rule, r eg ulation, practice, o r contract to be thereafter observed or in force, and shall fix the same by

order.

15 U.S.C. § 717d (em p h a ses added). The District Court reasoned that pursuant to Section 5(a) of the NGA, F ERC has jurisdiction t o reg u late any “practice” by a jurisdictional seller that affects a jurisdictional r a t e

. T he court ordered Defendants to r e-file their motion for summary judg ment, a nd in J uly 2011, the court g r anted the Defendants’ motion for

s u m m a r y judg ment as applied to a ll Plaintiffs. This a ppeal followed.I

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III. The Natural G as Act and P reem ption

A. Standard of

Review

Thi s c o u rt reviews a district court’s g rant of summary judg ment de novo

. S

ee Lee v. Gregory
, 363 F .3d 931, 932 (9th Cir. 2004). Summary judg ment is appropriate only where the “pleading s, depositions, answers to interrog atories,

an d admissions on file, tog e ther w ith the affidavits, if any , show that there is no g enuine issue as to any material fact a nd that the moving party is entitled to a judg ment as a matter o f law.” Rosenbaum v

. W

ashoe Cnty
., 663 F .3d 1071, 1075 (9th Cir. 2011) (citing Celotex Corp. v. Catrett
, 477 U.S. 317, 322 (1986); F e d. R. Civ. P. 56(c)). “Viewing the evidence in the lig ht most favorable to the non-mo ving party ,” this court “must determine whether the re a r e a n y g enuine issues o f material fact and w hether the d istrict court correctly a pplied the relevant substantive law.” Devereaux v. A bbey

, 263 F .3d 1070, 1 074 (9th Cir. 2001). This court also reviews a district court’s decisions reg a

rding preemption de novo

. See W histler I n vestments, Inc. v. Depository Trust & Clearing Cor p

. , 539 F .3d 1159, 1163 (9th Cir. 2008).

B. P reem ption

The “touchstone in every pre-emption case” is ex pressed
cong ressional intent. W

yeth v

. Levine
, 555 U

. S

. 5 5 5, 565 (2 009). The Supreme Court recently emphasiz ed that in preemption cases, courts shou l d “ start with the assumption that the historic police powers o f the States were n o t t o be
supers e ded by the F ederal Act unless that was the clear a nd manifest purpose of Congr e ss.” Id

. I n the present c ase, the presumption ag ainst preemption applies with particular forceI

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in lig ht of Cong ress’s deliberate efforts to preserve traditional areas of state reg

ulation of the natural g as industry

.

The question presented by this appeal is as follows: does Section 5(a ) o f the NGA, which provides F ERC with jurisdiction over any “ p ractice” a ffecting jurisdictional rates, preempt state antitr u s t claims arising out o f price manipulation a ssociated with transactions falling outside o f F ERC’s ju r isdiction? W e conclude that such an ex pansive reading of Section 5 (a) conflicts with Cong r ess’s ex press intent to delineate carefully the sc o p e of federal jurisdiction throug h the ex press jurisdictional provisions of Section 1(b) of the Act. Our analy sis is g u ided by several c ircuit court decisions counseling in favor of a n arrow reading o f Section 5(a). As a result, we h old that the NGA does not preempt the Pl aintiffs’ state antitrust claims, and reverse the district court’s order g ranting summary judg ment to the Defendants.

1. W hen Cong ress enacted the NGA in 1938, it ex pressly limited federal jurisdiction o ver natural g as t o “ t h e sale in interstate commerce of natural g as fo r r e s a le.” 1 5 U .S.C. § 717(b). An early Supreme Court case interpreting the scope of the NGA described Cong r ess’s intent as follows:

The omission of an y r e ference to other sales, that is, to direct sales for consumptive use, in the affirmative declaration of cove rag e was not inadvertent. I t was d elib erate. F o r Cong r ess made sure its intent c ould not be mistaken by adding the ex plicit proh i b ition that the Act “shall not a p p l y to a ny other

. . . sale.”I

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Panhand l e Eastern Pipe Line Co. v. Pub. Serv. Comm’n of Ind.

, 332 U.S. 507, 5 16 (1947). A later Supreme Court d ecision further emphasiz ed Cong ress’s intent to limit t h e reach of the NGA:

W h en it e nacted the NGA, Cong ress carefully divided up reg ulatory power over the natural
g as industry

. I t did not e nvisag e federal
reg ulation of the entire natural g a s field to the limit of c onstitutional power. R a ther it contemplated the ex ercise of federal power a s specified in the Act.

Nw. Cent. Pipeline Corp. v. State Corp. Comm’n of Kan
., 489 U .S. 493, 510 (1989). S i n c e the passag e of the NGA, Cong r ess has further demonstrated its intent to limit the scope of federal reg ulation by enacting statutes removing first sales from F ERC’ s jurisdiction. See Natural Gas Wellhead Decontrol Act of 1989, Pub. L . No. 101-60, 103 Stat. 157. 1 0

2. This court’s decision in Gallo provides further support fo r o u r holding that the NGA does not preempt all state antitrust claims. The claims i n G a llo were essentially the

same as the Plaintiffs ’ c l a i m s in the present case. E. & J

. Ga llo W inery alleg e d that EnCana Corp., a natural g a s supplier, conspired to inflate t h e p r i c e of natural g as b y manipulating the prices reported to p rivate indices published by natural g as t rade publications and the ex ecution of wash

10 In 1 9 7 8 Co n g ress en acted t h e Natu ral G as P o licy A ct (“ NGP A ”), P u b

. L

. No

. 9 5

- 62 1 , 9 2 Stat. 3 3 5 2, w h ich elim in ated th e lo w p rice ceilin g s on

w e l l h e a d s ales. Ho w ev er, th e Natu ral Gas W ellh ead Deco n tro l A ct of 1 9 8 9 (“ W DA ”) co m

p letely elim in ated FERC’ s au th o rity to s et p rices at th e w ellh ead

.I

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trades. G a l l o , 5 0 3 F .3d at 1 030–32. Gallo’s complaint consisted of f

e d e r a l and state antitrust actions, as w e ll a s state-law d amag es claims. Id. at 1032. Encana Corp. moved for summary judg ment, c laimi n g that the filed-rate doctrine barred all of Gallo’s federal claims, and federal preemption principles barred Gallo’s state claims. Id. a t 1032. The district court d enied EnCana’s summar y j udg ment motion, and this court affirmed the district court. Id. at 1030.

W e noted in Gall o t h at althoug h F ERC did not set the
rates charg ed by the natura l ga s companies, it did eng ag e in market oversig ht by g ranting blanket market certificates a fter determining that the seller lacked market power. Id. at 1041. As a result of F ERC’s market oversig ht, the c ourt found “that the market-based rate for n atural g as transactions u nder FERC’s jurisdiction are F ERC-author i z e d rates, and cannot be the basis of a federal a ntitrust or state damag e action” because of the filed-rate doctrine. Id. at 1 0 4 3 (e mphasis added).

Although t his court found that the filed-rate doctrine barred claims b ased on F ERC-auth o riz e d rates, it disting uished claims based on F ERC-authoriz ed rates from claims based on the rates reported in the price indices. Id. at 1045. I t stated that the record reflected that “the indices potentially include transactions that are under F ERC’s jurisdiction as well a s t r a nsactions outside F ERC’s jurisdiction.” Id. There were two relevant categ ories of nonF ERC-auth o r iz ed rates included in the challeng ed price indices:

F irst, there is e v idence in the record some index pricing inputs were misreported o r wholly fictitious. Mis reported rates and ratesI

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reported for fictitious transactions are not F ERC-approved rates, and barring claims that

s u c h f i c t i t i o u s t r a n s a c t i o n s d a m a g e d purchasers in t h e natural g as market would
not f urth e r t h e purpose of the filed rate doctrine.

Moreover, as part o f its investig ation o f the indices, F ERC concluded that it “ h a s jurisdiction over most of the transactions that form the basis for the indices.”

. . . This lang uag e indicates that at least some of the transactions included in the indices are not subject to F ERC’s jurisdiction, and thus would be subject to challeng e by Gallo.

Id. a t 1045 (internal citations omitted). The n onjurisdictional transactions included i n the price indices included first sales at the wellhead or via imports from Canada or Mex ico. Id.

W e e x plained in depth why the re m oval of c ertain
transac t ions from F E RC’s jurisdiction meant that c laims arising out of those transa c t i o n s were not preempted by the NG A

. I d

. at 1046. Most importantly

, we assumed that Cong r ess was aware of t h e ex isting contex t of state a nd federal a ntitrust law when it e nacted the W ellhead Decontrol Act and other statutes limiting F ERC’s jurisdiction. Id. State and f ederal antitrust laws co m plement Cong ress’s intent to

move to a less reg ulated mar ket, because such laws support fair competition. Id. (“B y enabling private parties to c ombat

mar k e t manipulation and o ther anti-competitive actions, the laws under w hich Gallo b roug h t its claim support Cong ress’s determination that the supply

, the demand, and the price o fI

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h i gh

- c ost first sale g as be d etermined by market f orces.” ) (intern al quotations omitted). F or these reasons, we concluded that “Cong r e s s d id not p reclude plaintiffs from basing damag e claims on rate s a s s ociated with f irst sales.” Id. Our reasoning in Gallo applies with equal force to the question presented by this case: federal p reemption doctrines do not preclude state law c laims arising out of t ransactions outside of F ERC’s jurisdiction.

C. The NG A’s Jurisdictional Lim itations

The district court in the present case acknowledg ed this court’s holding i n G allo

, but disting uished that case on the
g rounds that “ G a llo did not address whether F ERC’s

ex c lusive jurisdiction o ver natural g as companies a nd t h e ir practices which affect jurisdictional rate s preempts state jurisdiction over the same subject matter.” I t reasoned that Defendants’ status as F ERC-reg u lated entities, combined with F ERC’s authority under Section 5(a) of the NG A to reg ulate “any rule, reg ulation, practice, or contract” affecting

a j u r i s d ictional rate, conferred ex clusive jurisdict i o n o n F E R C to reg u late the conduct at issue in this case.

The district c o u r t read the word “ p ractices” in Section 5(a) of the NGA to preempt impliedly the application of state laws to the same transactions (first sales and retail sales) that Cong r ess ex pressly ex empted from the scope of FE RC’s jurisdiction in Section 1(b) of the Act. However, this r eading

runs a foul of the c anon o f statutory construction that statutory provisions should n ot be read in isolation, and the meaning o f

a statutory provision must be consistent with the structure o f the statute of which it is a part. See, e.g. , W aggoner v

. G o nzales

, 488 F .3d 632, 636 (5th Cir. 2007) (“W h e n interpreti n g s t a tutes

. . . each part or section of a statuteI

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s h o u l d be construed in connection with every o ther p art o r section to p r o d u c e a harmonious whole.”). T h e district court’s r eading is also inconsistent with case law interpreting the provisions of Section 5 (a) of the NGA narrowly to comport with the jurisdictional limitations establish e d b y Section 1 (b) of the Act. W h ile the Ninth Circuit has n ot h ad the o p p o r tunity to define the scope of Section 5(a), the Supreme Court and other circuits have read S e ction 5(a) narrowly to define the scope of F ERC’s jurisdicti o n within the limitations imposed by Section 1(b).

1. I n Northwest Central Pipeline C o r p

. v

. State Corporation Commission of Kansas
, the Supreme C ourt relied on the jurisdictional limitations established in Section 1(b) of the N GA to uph o l d a state reg ulation on the production of g as. 489 U.S. 4 9 3
, 4 9 6 ( 1989). The State Corpora t e Commission of K ansas ( KCC) had adopted a reg ulation g overning the timing of na t u r a l g as production from the Kansas-Hug oton field. Id. The reg ulation provided that the rig ht to ex tract assig ned a mounts of g as from the field would be lost if pipelines delay ed production for too long

. Id.
at 497. Northwest Central Pipeline C o r p oration challeng ed
t h e reg u lation, arg uing that it was preempted by fe d e ra l
reg ulation o f the interstate g as industry because the reg ulation

ex e r ted pressure on pipelines to i n c rease their purchases from the Hugo t o n field a

nd therefore affected the pipelines’
cost structures. Id. at 497, 507 (noting tha t No r t h west Central arg ued that “the federal reg ulatory scheme pre-empts state reg ula t i ons that may have e ither a direct or indirect effect on matters within federal control”).

The Supreme Court rejected Northwest Central’s
arg ument, relying on the fact that Section 1(b) of the NGA “ex p r e ssly ca r v e [ d] out a r eg u latory role for the States” a ndI

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provided that states would retain jurisdiction over the production of natural g as. Id. at 507. I t also re j e c t e d the pipeline’s claim that federal reg ulations pr eempted all state reg ulations that may af f e c t rates within federal c ontrol, stating :

T o find field p re-emption of Kansas ’
reg ulation merely because purchasers’ costs and hence rates mig ht be affected would be larg e ly to nullify that part o f NGA § 1(b) that leaves to th e States control o ver production, for there c a n be little if any reg ulation o f
p r o duction that mig ht not have at least a n i ncremental affect on the c osts of purchas e rs in some market and contractual situation.

Id. at 514.

I n American Gas Association v. Federal Energy Regulatory Commission
, the D.C. Circuit ex amined F ERC’s refusal to use its authority under Se c t i o n 5 of the NGA to modify “ take-o r

- p ay ” contracts 1 1 between natural g a s producers and pipelines. 912 F .2d 1496, 1503 (D.C. C i r. 1990). A “ major premise” o f F ERC’ s re fusal to act was its conclusi o n that its Section 5 power did not reach nonjurisdic t i o nal c ontracts. Id. at 1505. The court concluded, “As we read the Natural Gas Act, the Commission

11 Certain c o n t

racts en tered in to b y p ro du cers an d p ip elin es b etw een 1 9 7 7

– 1 9 8 2 co n tain ed “ tak e- o r- p ay ” clau ses req u irin g th e p ip elin es eith er to p u rch ase a sp ecif

ied p ercen tag e o f th e p ro d u cer’ s d eliv erab l e g as o r to

m ak e “ p re- p ay

m en t s” f o r th at p ercen tag e. S

ee Asso cia ted G a s Distrib s. v. FERC , 8 2 4 F.2 d 9 8 1 , 1 0 2 1 (D.C. Cir. 1 9 8 7 ).I

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was absolutely rig ht: Cong ress clearly limited its § 5 powers to jurisdictional contracts.” Id.

The p etitioners in American Gas Association had offered

an arg ument similar to the one offered by the Defendants in the present case: they isolated the phrase “contract aff e c ting such rates” and a

rgu e d t h at F ERC had jurisdiction to assess the ju s tness and reasonableness of the provisions of a ny contract that would likely i n fluence a pipeline’s end-ofpipelines prices. Id. F ERC, on t h e o ther h a nd, interpreted “contract a ffecting such rates” as being limited to contracts involving a jurisdicti o n a l seller and d irectly g overning the
rate in a juri s d i ctional sale. Id. at 1 506. T he D.C. Circuit
ag reed w ith FE RC, stating that “ p e titioners’ theory is, more g enerally

, an ox y

m o r on – Commission jurisdiction over nonjurisdictional contracts.” Id. The court also noted that the petitio n e rs’ ex p ansive reading of Section 5 had no “conceptual core” because under their interpretation, Section 5 would reach “pipelines’ contracts for every o t h e r possible factor of production – even leg al services.” Id. at 1507.

W e find the analy sis o f these c ases persuasive, and a pply them h ere. I nterpreting the jurisdictional provision in Section 5(a) broadly to find F ERC jurisdiction o ver price manipulation associated with nonj u risdictional sales would risk nullify ing the jurisdictional p r ovisions of Section 1(b), which reserve to the states r eg ulatory a uthority over nonjurisdictional sales, such as f irst sales at the wellhead o r from sellers in Canada and Mex ico. Under the broad r eading of Section 5(a) that Defenda n ts p ropose, there is no “conceptual core” delineating transactions falling within F ERC’s jurisdiction and transa ctions outside of F ERC’s jurisdiction. There would be nothing stopping a future court from f inding that first sales themselves (which are ex e mptedI

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from F ERC’s jurisdiction pursuant to Section 1(b) of the Act)

are “prac t i c e s” affecting jurisdictional rates that f all within the jurisdictional provision in Section 5 (a)

. W e reject this broad reading and h old t hat the district court erred in

c o n cluding that F ERC h ad jurisdiction over the report i n g practices associated with nonjur i s d ictional sales under Section 5(a).

2. A n o t h er D .C. Circuit c ase, California Independent System Operator Corporation v. Federal Energy R e gulatory Commission
, does not address the interplay b e t w e e n the jurisdictional limits o utlined in Section 1(b) and t he jurisdictional provision in Section 5 ( a), but it d oes provide further support f

o r a n arrow interpretation of the word “practi c es” in Section 5(a). 372 F .3d 395 (D.C. Cir. 2004). The California I ndependent Sy stem Operator Corporation (CAI SO) was a non-profit entity c r eated by the state o f California to operate electric g rid facilities in California. Id.
at 397. B y statute, CAI SO was oblig ated to follow c ertain procedures for selecting a board of directors composed

ex c lusively of California residents. Id. After the energ y crisis of 2000, F ERC directed CAI SO t o u t i l iz e a different selection method for its b o a r d o f directors. Id. at 397–98. F ERC claimed that it h a d a uthority to issue such a directive

un d e r Section 2 06 of the F ederal Power Act, 1 2 which
prov i d ed, “W henever the Commission [ shall find] that any

12 T h e l an g u ag e at issu e f ro m th e Fed eral P o w er A ct in C A I S O is id en tical to th e lan g u ag e at issu e f ro m t h e NGA in

th e p resen t case. T h e Su p rem e Co u rt n o ted in Arka n sa s L o u isia n a Ga s Co mp a n y v. Ha ll th at th e relev an t p ro v isio n s o f t

h e Fed eral P o w er A ct an d th e Natu ral Gas A ct “ are in all m aterial resp ects su bstan t ially

id en tical,” an d th eref

ore t h e Co u rt’ s estab lish ed p ractice is to “ cit[e] in terch an g eab ly d ecisio n s in terp retin g th e p ertin en t sectio n s o f th e t w o statu t es.” 4 53 U.S. 5 71
, 57 7 n .7 (1 9 8 1) (in t ern al q u o tatio n s o m itted ).I

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rule, reg ulation, practice, or contract affecting such rate, charg e, o r classifica t ion is unjust, unreasonable, unduly discriminatory o r preferential,” the Commission shall determine the just and r e as onable practice to be observed the r e a fter. Id. at 399 (quoting 16 U.S.C. § 824e(a)). Specifically

, F ERC claimed that the c omposition and method of selection of a utility company ’ s g overning board was a “practice

. . . affecting [ a] rate,” and that because F ERC h ad found that CAI SO’s selection method was discrim i n a tory , F ERC had authority to d ete rm i ne a just and reasonable practice. Id.

The D.C. Circuit beg an its analy sis with the “p lain lang uag e” of the statutory tex t. Id. at 400. I t found that the word “practices” is a word of sufficiently diverse meaning s that the proper method for determining Cong ressional intent

w a s t o apply the canon of statutory construction “ n oscitu r a sociis. ” 1 3 The c ourt looked at the word “practices” in contex t, finding that Section 5(a) comes into pl a y only after the Commission has a hearing a nd determines that a “rate, charg e, or classification” employ ed by a reg ulated u tility in

a jurisdictional transaction is unjust or unreasonable. Id. Therefore, the court found that b y using the word “practice,” Cong r ess had intended to empower F ERC to “ effect a reformation o f some ‘practice’ in a more traditional sense o f actions habitually b eing taken by a utility in connection with

a rate found to b e u n

just or unreasonable.” Id. The court

no t ed that the implications of a broader reading of the word “practices” would be “stag g ering ” b ecause F ERC would have

13 No scitu r a so ciis m ean s th at “a w o r d i s k n o w n b y th e co m

pan y i t k eep s,” a nd th is can o n is ap p lied “ w h ere a w o rd is cap ab le of m an y

m ean in g s in o rd er to av o id th e g iv i n g o f u n in ten d ed b read th t o th e A cts of Co n g ress.” Ja recki v. G.D. S ea rle & Co

. , 3 6 7 U.S. 3 0 3 , 3 0 7 (1 9 6 1 ).I

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jurisdiction over a plethora of activities, such as the methods of contra c t ing for services, labor, or office space, a s long a s F ERC found that such “practices” affected the jurisdictional
rates. We ag r ee with the D.C. Circuit’s approach to reading the word “practices” nar r owly as to not ex pand unduly the scope of F ERC’s jurisdiction.

3. Defendants rely on Mississippi Power & Light Co. v

. Mississippi ex rel. Moore
, 4 87 U.S. 354 (1988) (“ MP& L ” ) for the proposition that “F ERC’s jur i s d i c t ion over a practice o r contrac t a f

fecting a jurisdictional r ate preempts state law from be i ng used to reg ulate that p ractice or contract.” Mississippi Power & Light involved a F ERC order requiring four utility companies to purchase a p articu l a r s hare of a nuclear power plant’s output at r ates F ERC determined to be just and reasonable. Mississippi Power & Light Co.
, 4 8 7 U.S.
at 364. One of the utility c o mpanies, Mi s s i ssippi Power & L ig ht, filed a

n a pplication with the Mississippi Public Service Commission (“MPSC”) seeking a substantial increase in its retail rates to recoup the costs of purchasing a portion of the nuclear p ower plant’s output. Id. a t 3 6 5

. The Mississippi Supreme Court eventually ruled that the MPSC was required, in acco r d ance with state law, to review the prudence o f incurring costs associated with purchasing the nuclear power plant’s output. Id. at 367.

The Supreme Court r e v ersed. The Court stated that F ERC’s ex c lusive jurisdiction o v er wholesale rates also encompassed “ power allocations that a ffect wholesale r ates.” Id. at 3 71. B ecause the “prudence inquiry ” mandated by

the Mississippi Supreme Court r equired the state commission to review the p r u d e nce o f the F ERC o rder determining the allocation of costs associated with t h e n u clear power plant, the inquiry w as preempted by F ERC’s ex clusive jurisdiction.I

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Id. T h e C o urt concluded, “F ERC-mandated allocations o f
power are bi n d ing on the States, and States must treat those allocations as fair and reasonable w hen determining retail rates.” Id. at 371.

W e do not find Defendants’ reliance on Mis s i s s ippi Pow e r & L ight Co. to be persuasive. Mississippi Power & Light Co. stands f

o r t he proposition that states cannot use their jurisdiction over retai l r ates to second-g uess or r eview F ERC-authoriz ed rates that may affect retail rates. See Gallo

, 503 F .3d at 1044 (rely

ing on Mississippi Power & Light Co. to “support EnCana’s position that wholesale sellers such as EnCana may raise the f i l e d rate doctrine as a defense to actions putatively a ttacking retail rates, but having the effect of d isallowing F E RC-approved wholesale rates.”). However, Mississippi Power & Light Co. does not support Defendants’ broad reading of the phrase “practic e

. . . affecting [ jurisdictional] rates.” I n Mississippi Powe r & Light Co.
, F ERC had used its jurisdiction over practi c e s affecting wholesale rates to determine an equitable allocation o f nuclear power costs. D efendants attempt to analog iz e the power allocations at issue in Mississippi Power & Light Co.

w i t h t h e m a r k e t m a n i p u l a t i o n a s s o c i a t e d w i t h nonjurisdictional tran s a c tions at issue in the present c ase. However, that analog y cannot b e squ a r e d with the Gallo court’s h olding that the NGA does not preempt state antitrust challeng es to rates and practices associated with s u ch nonjurisdictional sales.

D. F ERC’s Regulatory Authority

One final issue dividing t h e p a r t ies in this appeal is the

ex tent to which F E RC had authority to reg ulate the m a rk et manipulation that g ave rise to the energ y crisis in 2000–2001.I

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The Defendants point to the Code of Conduct promulg ated b y F ERC in 2 0 0 3 as evidence that F ERC had reg ulatory authority over the anticompetitive conduct at issue, including the false price reporting and wash sales. F ERC promulg ated the Code o f Conduct b y amen d i n g the blanket market

c e r tificates g overning jurisdictional sellers. See Amen d m e n t s to B lanket Sales Certificates, 68 F ed. Reg . 66,323 (Nov. 26, 2003). T he Commission stated that the need for the Code o f C o nduct “ was informed by the ty pes o f behavior t h at occurred in the W estern markets during 2 000 and 2001.” Id. ¶ 2. The Code prohibited jurisdictional seller s 1 4 “ from
eng ag ing in actions without a leg itimate b usiness p urpose that manip u late or attempt to manipulate market conditions, including wash trades and collusion.” Id. ¶ 4

. T h e Code further p r o v ides that jurisdictional sellers are required to provide complete and accurate transactiona l information to publishers of g as price indices. I d. ¶ 5.

W h i l e D efendants rely on the p romulg ation of the Code of Conduct as evidence that F E RC had j u r i s d i c tion over the market manipulation at issue, there are two sig nificant flaws in their arg ument. F irst, two y e a rs after the promulg a tion of the Code, Cong ress enacted the Energ y Policy Act of 2005 (“EPA”), 1 5 w h i ch prohibits market manipulation a nd

14 Sectio n III.A o f th e Co m m issio n ’ s f

in al o rd er is titled “ A

p p licatio n of Co d e o f Co n d u ct to J u risd ictio n al Sellers,” an d p arag rap h s 1 4

– 2 2 d iscu ss th e sco p e o f

FERC’ s j u

risd ictio n o v er th e n atu ral g as in d u stry

.

15 T h e EP A

p ro v id es, in relev an t

p art:

It s h all b e u n law f

u l f o r an y en tity

, directly o r in d i rectly

, to u se or em

p lo y , in co n n ectio n w ith th e p u r c h a s e or

s a l e o f n atu ral g as o r t h e p u rch ase o r sale o f
tran sp o rtatio n serv ices su b j ect to th e j u

risd ictio n o f th eI

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authoriz es F ERC to promulg ate r u l es and reg u lations to protect n atural g as ratepayers

. There is a canon o f statutory interpretation that counsels ag a inst reading acts of Cong ress to be superfluous. See A merican Nat’l Red Cross v. S.G.
, 505 U.S. 247, 2 63 (1992). This canon sug g e sts that Cong ress enacted the relevant p rovision of the EPA because F ERC did
not already have r eg ulatory authority over the anticompetitive conduct at issue.

The second flaw in Defendants’ arg ument is more relevant to our jurisdictional analy sis. Even if F ERC did have t h e statutory authority to promulg a te the 2003 Code o f Conduct a

nd to ma k e i t applicable to “first sales” and other nonjurisdict i onal sales, a c lose r eading of the Code reveals that F ERC limited the application of the Code to sales within its jurisdiction. F ERC acknowledg ed that because of acts dereg ulating f irst sales of natural g as, such sales were outside the scope of F ERC’s jurisdiction. A m e n dments to B lanket Sales Certificates, 68 F ed. Reg

. 66,323 ¶ 14 (Nov. 26, 2003). F E R C f u rther noted that some commenters had raised “concerns reg arding the p otential a dverse effect of imposing th e p roposed code o f conduct only on the portion of the natural g as market u nder the Commission’s jurisdiction,” id. ¶ 16, and re s ponded by stating

, “The f act that the Commission does not reg ulate the e n tire natural g as market does not compel the Commission to refrain fro m ex ercising its authority over that p o rtion o f t h e g as market which is

Co m m i ssio n , an y m an ip u lativ e o r d ecep tiv e d ev ice or

co n t riv an ce.

. . . in co n trav e n t io n o f su ch ru les an d
reg u l atio n s as th e Co m m issio n m ay p rescrib e as

n ecessary in th e p u b lic in t erest o r f

o r th e p ro tectio n

o f

n atu ral g as ratep ay ers.

P u b . L . No . 1 0 9

- 5 8 tit. III, § 3 1 5 (co d if ied at 1 5 U.S.C. § 7 1 7c- 1 ).I

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within its jurisdiction to prevent the manipulation of prices.” Id. ¶ 21. T he discussion of jurisdictional limitations within
t he Code of Conduct itself sug g ests that the Code d o es n o t support the D efendants’ a

rg ument that F E RC had jurisdiction

over the anticompetitive behavior r elated to nonjurisdictional sales. F o r these reasons, the 2003 enactment of the Code o f Con d u ct d o es not a ffect our conclusion that the NGA does
not g rant F ERC jurisdiction over claims ar i sing out of false price r eporting and other a n ticompetitive behavior associated with nonjurisdictional sales.

IV. T h e District C ourt’s Orders Denying P laintif f s Leave to Am end

The Farmland

, Breckenridge

, L e arjet
, and H eartland Plaintiffs appeal the distri ct c o u rt’s October 29, 2010, order deny ing them leave to amend their complaints to add federal antitrust claims. Their motions for l ea v e to amend their complaints were filed nine months after the March 2, 2009, scheduling deadline to amend pleading s. T h e Breckenridge Plaintiffs also a

ppeal the district court’s April 21, 2008, order deny ing them leave to amend their co m p l a i nt to add a state law treble damag es remedy

.

W e r eview a d istrict court’s d ecisi o n d e ny ing leave to

amen d p l e a ding s for abuse of discretion. See Johnson v

. Mammoth R ecreations, Inc.
, 975 F .2d 604, 607 (9th C ir. 1992). W e hold that in the present case, the district court did
not a buse its discretion in deny ing either of the two motions for leave to a mend complaints, and therefore affirm both the Octobe r 2 9
, 2 0 1 0
, o r d er deny ing the Farmland

, Breckenridge

, Learjet
, and Heartland Plaintiffs leave to amend their complaints to add f

ederal antitrust claims, as well as the April 21, 2008, order deny ing the Breckenridge Plaintiffs leave toI

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amend t h e i r complaint to add a state law treble damag e s claim.

A. October 29, 2010, Order

W e summariz e briefly the procedural history of this case t o provide contex t f

or our decision to affirm the d i s t r i ct court’s October 29, 2010, order.

On April 8, 2005
, the d istrict court g ranted summary judg ment to the defendants in the Texas-Ohio and Abelman

cases on the g round that the plaintiffs’ claims in those cases

were barred b y the filed-rate doctrine. See I n r e W estern S t a t es W holesale Natural Gas Antitrust Litig.
, 368 F

. Sup p

. 2d 1110 (D. N ev. 2005), rev ’ d b y 243 F ed. App’x 328 (9th Cir. 2007) a

nd In re W

estern S tates W holesale Natural Gas Antitrust Litig.
, 408 F

. Supp. 2 d 1055 (D. Nev. 2 0 05), rev’d by 248 F ed. App’x 8 2 1 ( 9th Cir. 2007). F our months later, the first of these present actions was fil e d

. I n September 2007, this court issu ed its decision in Gallo a nd simultaneously reversed Texas-Ohio and Abelman

, holding that the f

iled-rate doctrine does no t b a r state or federal antitrust c laims arising out o f t h e alleg ations that energ y traders mani pulated the price index

. See E. & J. Gallo W inery v. E ncana Corp.
, 503 F .3d 1 0 2 7 ( 9 t h Cir. 2007); I n

re W estern States W

holesale Natural Gas A n tit r ust Litig.
, 243 F e d. A pp’x 3 28 ( 9th Cir. 2007) (reversing Texas-Ohio ); In re W estern S tates W holesale Natural Gas Antitrust Litig.
, 248 F ed. App’x 821 (9th Cir. 2 007) (reversing Abelman ). I n November 2 007, Defendants in the present case fil e d a new motion f or summary judg ment, and in May 2008, the District Cou rt denied the motion, r ely ing in part on Gallo

. I n J uly 2008, D efendants asked the District Court to reconsider its May 2008 order deny ing their p r e e mption-based motion forI

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summary judg ment. F inally , in November 2009 the District Court ag reed to reconsider its May 2008 order.

The deadline to amend pleading s in this case was March 2, 2 009. On December 15, 2 0 09 (approx imately one month after the District Court ag reed to reconsider its Ma y 2008 order deny ing summary judg ment), Plaintiffs filed motions to modify the scheduling o rder a n d for leave to amend their complaints to a dd claims under the federal Sherman Antitrust Act.

The district court denied the Plaintiffs’ motions to amend their p leading s, noting that when a party see k s t o am end a p leading after the pretrial scheduling o rder’s deadline f o r amending the pleading s h as ex pired

, t h e moving party must satisfy the “g ood c ause” standard of F eder a l R ule of Civil Procedure 1 6 (b)(4), which p rovides that “[ a] schedule may be modified only for g ood cause and with the judg e’s consent,” rather than the liberal standard of F e d e r al Rule of Civil Procedure 15(a). 1 6 “Unlike Rule 1 5(a)’s l i beral amendment policy which focuses on the bad faith of the party seeking to interpose an amendment and the prejudice to the o p p o s i ng party , Rule 16(b)’s ‘ g o od cause’ standard primarily considers the d ilig ence of the party seeking the a mendment.” Johnson

, 975 F .2d at 609. W hile a c ourt may take int o account any prejudice to t h e party opposing modification of the scheduling order, “ t h e focus o f the [ Rule 16(b)] inquiry is

16 F ed

. R. Civ

. P

. 1 5 (a) p ro v id es th at a p arty m ay am en d its p lead in g s

o n ce as a m atter o f

co u rse w ith in certain d ead lin es, an d th at in “ all o th er

c a ses, a party m ay am en d its p lead in g on ly w ith th e op p o sin g par t y ’s

w ritten co n s en t o r t he co u rt’ s leav e. Th e co u rt sh o u ld freely g ive lea ve wh en ju stice so req u ires .” (em p h asis ad d ed ).I

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upon the moving party ’s reasons for seeking modification

. . . [ i] f that party

was not dilig ent, the inquiry should end.” Id.

The d istrict court in t h e present c ase noted, “The g ood

c a u se standard ty

pically will not be met w here the pa r t y seeking to modify the scheduling order has been aware of the facts and theories supporting amendment since the inception of the action.” The district court fo und that Plaintiffs were not dilig ent in seeking the amendment to add federal Sherman A n titrust Act claims, because they had known since 2 0 0 7 (after this court held in Gallo that federal antitrust c laims

were not barred by t h e f iled-rate doctrine) that federal antitrust claims may

be viable.

W e hold that the district court did n ot abuse its discretion in concluding that the Plaintiffs w ere not dilig ent in seeking
to a mend their complaints to add f ederal antitrust claims. Our analy sis is g uided by this court’s de c i s i o n in Johnson v

. Mammoth Recreations, Inc
., 975 F .2d 604 (9th Cir. 1992). I n Johnson

, D airl J ohnson was injured whi l e s k iing at Mammoth Mountain ski r esort. Id. at 606. He filed a d i v ersity action
ag ainst the ski lift manufacturer and Mammoth Recreations, I nc., a holding company that owned a majority of the stock in Mammoth Mountain Ski Area, I nc., the entity that actually owned and o perated the ski resort. Id. The district c ourt filed

a scheduling order which established a cut

- o f f date o f October 1 7, 1 989, for joining additional parties. Id. F our months aft e r this deadline passed, J ohnson moved to join Mammoth Mountain Ski Area, I nc., claim i n g t h at he was

unaware o f the e x i s t ence o f Mammoth Mountain Ski Area, I nc., and it s corporate relationship with Mammoth Recreations, I nc. I

d. a t 607. The c ourt found that J ohnson h a d failed to demonstrate g ood c ause for his belated motion
to amend, sinc e “Mammoth Recreation’s answer to theI

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complaint and respon se to interrog atories amply indicated that Mammoth Recreations did n ot own and ope r a t e the ski resort, and thus any theory of liability pre d i c a t ed upon that fact would f

ai l

. ” Id. at 609. A s in Johnson

, the Plaintiffs here have failed to demonstrate g ood cause for their untimely motion to amend, a

nd thus, the district court did not abuse its discretion in deny i n g that motion. W e therefore affirm the district court’s O c t o b er 29, 2010, order deny ing Plaintiffs leave to a m e n d their complaints to add federal antitrust claims.

B. April 21, 2008, Order

On March 4, 2008, the Heartland Plaintiffs filed a motion for leave to amend their complaint to add a t r e b le damag e s claim under the Colorado sta t e antitrust statute. Previously

, their c omplaint had soug ht only a full refund. The distr ict
court denied the motion, stating

, “Plaintiffs have b een a ware of the a vailability o f an actual damag es claim under the Colorado antitrust statutes since the inception of the case, but chose to plead under the full refund p r o vision only

. ” The district c ourt found that Plaintiffs’ f ailure to seek leave to a dd

an actual damag es cla i m w as ex plicable during the time between the district court’s 2005 ruling in Texas-Ohio a nd Abelman that such claims were b arre d b y the filed-rate doctrine and this court’s decision in Gallo holding that such claims were not barred. However, this court decided Gallo in September 2007, and Plaintiffs did not move to amend their complaint to add an actual damag e s cl a i m u ntil March 4, 2008.

The district court considered it relevant that Plaintiffs h ad requested leave to amend t o add an additional defendant on October 12, 2007, b ut did not make a request to add the trebleI

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damag es claim at that time. The court denied the Plaintiffs’ March 4, 2008, motion for leave to amend to a d d a t reble damag es claims, finding that Plaintiffs u nd uly delay ed

am e ndment by waiting “until after this Court g ranted
summary judg ment on the f ull c onsideration claim, several months after Gallo

, to seek leave to amend to add a new theory of liabil ity of which Plaintiffs h ave been aware since the inception of this suit.”

Althoug h F ederal Rule of Civil Procedure 15(a) provides that leave to amend “shall be freely g iven when j ustice so requires,” it “ is not to b e g r anted automatically .” Jackson v. Bank of Hawaii
, 902 F .2d 1385, 1387 ( 9th Cir. 1 9 9 0 ). This
court c onsiders the following five factors to assess whether to g rant leave to amend: “(1) bad f aith, (2) undue delay

, (3) prejudice to the opposing p arty , (4) futility of a mendment; and (5) whether plaintiff has previously a m e n d ed his complaint.” Allen v. City of Beverly Hills

, 911 F .2d 3 67, 373 (9th Cir. 1990).

The d istrict court in the present case relied heavily on the fifth factor. I t noted that a “d i s t ri c t court’s discretion [ whether to g rant leave to amend] is ‘particularly b road’ in deciding subse q u en t motions to amend where the court previously g r a

nted leave to amend.” This court’s decision in Royal Insurance Company of America v. Southwest Marine

, 194 F .3d 1009 (9th Cir. 1999) is instructive. Roy al I nsurance Company sued Southwest for breach of contract, breach o f warranty , and neg lig e n ce a f ter Southwest alleg ed l y c aused $900,000 of dama ge t o a boat insured by Roy al I nsurance. Id. at 1013. Roy al I nsurance amended its complaint twice –

once to correct minor deficiencies in the orig inal complaint, and once to a ssert additional claims ag ainst Southwest. Id. at 1013 n.1. H ow ever, the d istrict court d enied Roy alI

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I nsurance’s motion fo r leave to file a third amended complaint to assert further claims a g a i nst Southwest, which Roy al filed after the district court g ranted summary judg ment in favor of Southwest. Id. at 1013.

On a ppeal, this court stated, “L ate amendments to assert

new theories are not reviewed favorably when the fa c t s a nd the theory h a ve been known to the party seeking amendment since the inception of the cause of a c t i o n

. ” Id. at 1016–17 (internal quotation marks omitted). W e r elied on the fact that Roy al I nsurance had knowledg e o f the relevant facts from the inception of the lawsuit, a nd also the fact th a t Roy al h ad twice before amended its complaint, to hold that the district
court d id not abuse its d iscretion by deny ing Roy al’s motion for leave to file a third amended c o mplaint. Id. at 1017 (“Considering that Roy al ha d twice b efore amended its complaint and moved to a mend a third time only after the district court dismissed its claims on summary judg ment, the district court did not abuse its discretion by deny ing Roy a l’s motion to amend.”).

I n the present case, we find that the district court did not abuse its discretion in deny ing the Heartl a n d Plaintiffs’ motion for leave to amend to add a treble damag es state law claim. We therefore a f

firm the district court’s order deny ing that motion.I

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V. Dism issal of the AEP D ef e ndants f

rom the A randell and Heartland

Law suits

The d istrict court ente r e d separate orders dismissing the AEP Defendants 1 7 f

rom the A randell suit filed in W isconsin
state cour t a n d dismissing the AEP Defendants from the Heartland suit filed in Missouri state court pr o m pted by the AEP Defendants’ motions to dismiss for lac k o f p ersonal jurisdict i o n pursuant to F ederal Rule of Civil Procedure 12(b)(2). T h i s court reviews de novo a district court’s determination that it does not h ave personal jurisdiction over

a defendant. S

ee Schwarzenegger v. Fred Martin Motor Co.
, 374 F .3d 797, 800 (9th Cir. 2004).

A. F acts

The operative facts alleg ed in each case are substantially similar. The Arandell Plaintiffs f il e d a class action in W isconsin pursuant to the W isconsin A n t i t rust Act, W isconsin Statutes ch. 133, broug ht by a n d o n b ehalf of a class c onsisting of all Wisconsin in d u s t r ial and commercial purchasers of n at u ral g as f or consumption in W isconsin bet w e e n J anuary 1, 2000 a nd October 21, 2002. Their complaint alleg ed that during the relevant time period, the Defendants conspired to restrain trade or commerce relating to natural g a s.

The H eartland Plaintiffs filed a class action i n Missouri pursuant to the Missouri A nti trust L aws, Missouri Statutes § 416.010 et seq

. , b r o u gh t by and on behalf of a class consisting o f all Missouri industrial a nd commercial

17 T h e “ A EP Def

en d an ts” a r e Am e r i can Electric P ow er Co m p an y (“ A EP ”) an d its su

b sid iary , A EP En erg y

Serv ices, In c (“ A EP ES”).I

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purchasers of natural g as for consumption in Missou r i between J anuary 1, 2 0 00 and Octo b e r 21, 2002. Their complaint alleg ed that during the relevant time period, the Defendants conspired to restrain trade or commerce relating to natural g a s.

None of the following b asic facts about AEP’s corporate structure are in dispute. A EP is a New York corporation with its principal place of business in Columbus, Ohio. D uring the relevant time period in each c ase, AEP wholly owned a nd controlled its subsidiary

, AEP Energ y Services, I nc. ( AEPES), an Ohio c o rporation with a principal place o f business in Columbus, Ohio. AEP is a holding company that derives its income from dividends on its subsidiaries’ stocks; the AEP Defendants have no office, bank accounts, property , or employ ees in either W isc o n sin or Missouri; the AEP Defendants have not qualified to d o b usiness in either W isconsin o r Missouri and have not a p pointed a reg istered
ag ent for service of process in either of those states; the AEP Defendants have not paid tax es, manufac t u red products, o r performed services in either W isconsin o r Missouri; and the AEP Defendants have n ot directed advertising specifically at W isconsin or Missouri resid ents.

I n the Arandell case, the Plaintiffs c laim specific personal jurisdiction 1 8 over the A EP Defendants because their actions pursuant to the alleg ed conspir a c y “were intended to have, and did have, a direct, substantial, and reasonably foreseeable effect on com m erce in W isconsin during the Relevant Time Period.” Plaint i ff

s alleg ed that personal jurisdiction e x isted

over AEP based on the activitie s o f i t s corporate affiliates,

18 T h e Ara n d

ell P l a i n tif

f s d o n o t arg u e th at th e d i strict co u rt co u ld

ex ercise g en eral p erso n al j u risd i ctio n o v er A EP o r A EP ES.I

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namely AEPES, which entered into a long -term “natural g a s supply a g reement w ith Wisconsin Elec t ric Power Company during the Relevant Time Period, and sold natur al ga s to W isconsin Electric Power Company pursuant t o t hat
ag reement.”

The district court fo und that f rom 1 998–2003, AEPES entered into natural g as supply ag r eements w ith v arious W isconsin companies, and that trade confirmations evince

numerous sales made to companies with W isconsin addresses throug hout 2001–2003. A EP acted as a g uarantor for AEPES during the relevant time period to facilitat e A EPES’s business, including issuing g uarantees on AEPES’s behalf to several W i s consin-based e n tities. However, AEPES has

never e n t ered into a contract or delivered g as to any o f the named plaintiffs in the case.

The Heartland case p resents substantially similar facts. The H eartland Plaintiffs c laim specif i c p e r s o n al jurisdiction 1 9

over the AEP Defendants because their a c t i o n s pursuant to the alleg e d conspiracy “were intended to have, and did have,

a direct, substantial, and reason a b l y foreseeable effect on

commerce in Missouri during the Relevant Time Period.” Plaintiffs a lleg e t h a t p e rsonal jurisdiction ex isted over AEP based on the activities o f its corporate affiliates, namely AEPES, which sold n a tural g as to Missouri entities during the relevant time period. The Plaintiffs also alleg e that one o f the
pr imary Missouri entities that AEP traded with, Aquila Merchant Services, was “an a c tive member of the conspiracy to manipulate natural g as prices.”

19 T h e Hea r tla n d P la i n t i ffs d o n ot arg u e th at th e d istrict co u rt co u ld

ex ercise g en eral p erso n al j u risd i ctio n o v er A EP o r A EP ES.I

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The district court f

ound that f

rom 1997–2001
, AEPES entered into n atural g as supply ag reements with v arious Missouri companies. F rom 2000–2002, A EPES sold billions of dollars worth of natural g as to Missouri-based entities. AEP acted as a g uarantor for AEPES during the relevant time
p e r i o d to facilitate AEP Energ y Services’s business, inc l u d i n g issuing g uarantees on AEPE S ’ s b ehalf to several Missouribased e ntities. However, AEPES has never entered into a contract with either of the named Plaintiffs in this case.

B. Analysis

W h en a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff b ears the b urden of d emonstrating that the court has jurisdiction. Harris Ru t s ky & Co. Ins. Servs., Inc. v. B ell & Clements Ltd.

, 328 F .3d 1122, 1128–29 (9th Cir. 2003). However, the p laintiff must make “ only a prima f a cie showing of jurisdictional facts to withstand the motion to dismiss.” Doe v. Unocal Corp.
, 248 F .3d 9 1 5, 922 (9th Cir. 2001). F or the purposes of deci d ing w hether a prima f acie showing has been made, “t h e c o urt r esolves all disputed facts in favor of the plaintiff.” Pebble Beach Co. v

. Caddy , 453 F .3d 1151, 1154 (9th Cir. 2006).

Pe rs onal jurisdiction o ver a nonresident defendant is
p r o per if permitted by a state’s long -arm statute 2 0 a nd if t h e

2 0 T h e W isco n sin Su

p rem e Co u rt h as h eld th at W isco n sin ’ s l o n g -a r m statu te, W i s. Stat. § 8 0 1

. 0 5
, allo w s f o r th e ex ercise o f j u risd ictio n to th e f u ll ex ten t allo w ed b y th e d u e p ro cess clau s e. S ee Ra s mu ssen v. Gen era l Mo to r s Co rp ., 8 0 3 N.W .2 d 6 23
, 6 3 0 (W is. 2 0 1 1) (statin g th at “ § 8 0 1 .0 5

w as in ten d ed to p ro v id e f o r th e ex ercise o f j u risd ictio n o v er n on resid en t d ef en d an t s t o th e f

u ll ex ten t co n sisten t

w ith th e req u isites o f d u e p ro cess

o f law ”) (in tern al citatio n s o m itted )

. T h e “ j u risd ictio n al in q u iries u n der
state l aw an d f

ed eral d u e p ro cess m erg e in to o n e an aly sis” w h en , as h ere,I

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e x e rcise of that jurisdiction d oes not violate federal d u e p r o c ess. Fireman’s Fund Ins. Co. v. Nat’l Bank of Coops

. , 103 F .3d 8 8 8, 8 93 ( 9 t h C ir. 1996). F or the ex ercise o f jurisdiction to satisfy due process, a nonresident defendant, if
not present in the forum, must have “minimum contacts” with the forum such that th e a s s ertion of jurisdiction “does not offend traditional notions of f air play and substantial justice.” Int’l S hoe Co. v

. W

ashin g t o n , 326 U.S. 310, 316 (1945) (i n t er nal q

uotation marks omitted). A federal district court may ex ercise either g eneral or specific personal jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v

. H all

, 466 U.S. 408, 414–15 (1984). T o establish g eneral jurisdiction, the plaintiff must demonstrate that the defendant has sufficient contacts to “c o n s t itute the kind of continuous and sy stematic g eneral b usiness c o ntacts that approx imate phy sical presence.” Glenco r e Grain Rotterdam B .V. v

. Shivnath Rai Harnarain Co.
, 284 F .3d 1 1 14, 1124 (9th Cir. 2002) (internal quotation marks o mitted). However, because the Plaintiffs do not claim that the d i s t r i c t court could

ex e r cise g eneral jurisdiction in either W isconsin or Missouri

o v e r the A EP Defendants in this case, the only relev a n t question on appeal is whether the d istrict court could ex ercise specific personal jurisdiction over the AEP Defendants.

th e s tate’ s lo n g

- arm s tatu t e is “ co ex ten siv e w ith f ed eral d u e p ro cess req u irem en ts.” Ro th v. G a rcia Ma r q u ez , 9 4 2 F.2 d 6 1 7
, 6 2 0 (9 th Cir. 1 9 9 1 ). In Misso u ri, h o w ev e r , t h e Misso u ri Su p rem e Co u rt h as h eld th at th ere are t w o sep arate in q u i ries: “ o n e in q u iry to estab l ish if a d ef en d an t’ s

co n d u ct w a s co v ered b y th e l o n g

- arm statu te, an d a seco n d in q u i ry to

an aly ze w

h eth er th e ex ercise o f j u ri s d i ctio n co m p o rts w ith d u e p ro cess req u irem en ts.” Myers v. C a sin o Qu een , In c. , 6 8 9 F.3 d 9 0 4
, 90 9 (8 th Cir. 2 0 1 2 ) (citin g Brya n t v. S

m ith In terio r Desig n Grp

. , In c. , 3 1 0 S.W .3 d 2 2 7
, 2 3 1 (Mo . 2 0 1 0 )).I

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This court uses the following three-part t e s t t o analy z e whether a party ’s “minimum contacts” meet the due process standard for the ex ercise of specific personal jurisdiction:

(1) The non-resident defendant m u st p u r p o s e f u l l y d i r e c t h i s a c t i v i t i e s o r consummate some transaction w ith the forum

o r resident thereof; or perform some act by which he purposefully avails himself of the privileg e of conducting activities in the f orum, thereby invoking the benefits and protections of its law s ; (2) the claim must be one which arises out of o r r el a tes to the defendant' s forum-related activiti e s ; and (3) the ex e rcise of jurisdiction must comport wi t h fair play

an d substantial justice, i.e. it must be reasonable

Schwarzenegger

, 374 F .3d at 802. “I f any of th e t h r ee requirements is not satisfied, jurisdiction in the forum would deprive the defendant of due process of law.” O meluk v

. Langsten Slip & Batbyggeri A/S

, 52 F. 3 d 2 6 7, 270 (9th Cir. 1995). W hile all three req u i r ements must be met, this court has stated that in its consideration of the first two prong s, “[ a] strong showing on one ax is w ill p ermit a lesser showing on the o ther.” Y

ahoo! Inc. v. La Ligue Contre L e Racisme Et L’Antisemitisme
, 433 F .3d 1199, 1210 (9th Cir. 2 006) (en banc). T h at means that a sing le forum state contact can support jurisdiction if the cause o f a c tion arises out of that particular purposeful contact of the d efendant with the forum
state. Id. (citing Lake v

. Lake

, 817 F .2d 1416, 1421 (9th Cir. 1987)). The district c ourt in the A randell and Hea r t l a n d

cases focused its analy si s o n the alleg ations that AEPES made sales to W isconsin- and M i ssouri-based entities a ndI

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found that the Plaintiffs had not met their burden of proving the second r equirement for specific jurisdiction. 2 1 This court has referred to the second prong of the spec i f ic jurisdiction
test as a “b u t f

o r ” test. See Shute v. Carnival Cruise Lines
, 8 9 7 F .2d 377, 385 (9th Cir. 1988), rev’d on other gro u n d s , Carnival Cruise Lines, Inc. v

. Shute

, 4 99 U.S. 585 (1991 ). 2 2 Under the “but for” test, “a lawsuit arises out of a defendant’s
contacts with the forum state if a direct nex us e x ists b etween those contacts and the cause of action.” Fireman’s Fund Ins. Co.
, 103 F .3d at 894. The d istrict court found that there was

no causal nex us between A EP D efendants’ activities in the forum states (selling natural g as to non-Plaintiff third parties) and the harm alleg edly suffered by the Plaintiffs (buy ing g a s at inflated prices from third party sellers).

W e need not decide whether personal jurisdiction could be g rounded o n the AEP Defendants’ sales o f n a t u ral g as in the f orum states to third parties. The Arandell and H eartland Plaintiffs a lso predicated their antitrust clai m s on the AEP Defendants’ manipulation of the price indices pursuant to a conspiracy to inflate natural g as p rices

. The district court conducted the personal jurisdiction analy s i s based on the

21 T h e d istrict co u rt assu

m ed

, w ith o u t ex p ressly d ecid in g , th at A EP ES’ s sales to W isco n sin

- an d Misso u ri- b ased en tities an d d eliv ery o f n atu ral g as to th e f o ru m w ere su f

f icien t to satisf

y t h e “p urp o sef

u l av ailm en t” p ro n g

o f th e sp ecif

ic j u risd ictio n in q u i ry

. B ecau se it f o u n d th at P lain tif

f s f ailed
to sh o w th at th eir claim s aro se o u t of A EP ES’ s co n tacts w ith W i sco n sin

an d Misso u ri, i t d id n o t ad d ress th e th ird p ro n g o f th e sp ecif ic j u risd ictio n in q u iry (w h eth er th e ex ercise o f

j u risd ictio n w o u ld b e reaso n ab le).

2 2 S ee Do e v. America n Na t’l Red Cro ss , 1 1 2 F.3 d 1 0 48
, 1 0 5 1 n .7 (9 th Cir. 1 99 7 ) (n o tin g th at ev en af ter th e Su p rem e Co u rt’ s d ecisio n in S h u te ,
“ t h e ‘ b u t f o r’ test is still e m

p l o y e d in d eterm in i n g w h eth er a p lain tif

f ’ s in j u ries aro se o u t o f

th e d ef en dan t’ s f oru m

- related activ ities.”).I

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natural g as sales only

. W e find that the d istrict court erred in failing to analy

ze w hether Plaintiffs’ alleg ations o f anticompetitive behavi o r d irected at the forum states a re sufficient to support t h e ex ercise of specific personal jurisdiction.

There is no question that the Plaintiffs’ state antitrust claims arise out o f the AEP Defendants’ collusive manipulation o f the g as p rice indices. 2 3 I n other words, their claims “arise[ ] out o f or relate[ ] to” the Defendants’ alleg ed forum-r elated activities. Schwarzenegger

, 374 F .3d at 802. The second p rong o f the test for specific personal jurisdiction is therefore satisfied. The k ey issue in thi s analy sis is therefore whether the AE P Defendants’ price manipulation satisfies the first prong of the specific personal juri s d i c tion inquiry

, i.e., whether “[ t] he non-resident d e fendant

. . . purposefully direct[ ed] his a c tivities or consummat[ ed] some transaction with the forum o r resident thereof; or perform[ ed]

some act by which he purposefully avail [ e d ] himself of the privileg e of conducting activities in the f orum, thereby invoking the benefits and protections of its l a w s

. ” Id

. This first p rong is satisfied by showing either p urposeful availment

or purposeful direction, w hich are two distinct concepts. See W ashington Shoe Co. v. A-Z Sporting Goods, Inc. , 704 F .3d 668, 672 (9th Cir. 2012).

23 Fo r ex am

p le, th e Ara n d

ell P lain tif

f s alleg e, “ T h e a c t io n s o f th e d ef en d an t s resu l ted in th e p lain tif f s p ay in g in f

lated p rices f

o r n atu ral g as d u rin g th e Relev an t T im e P erio d

. Du rin g th e Relev an t T im e P erio d

, n a tu ral g as p rices in W isco n sin m o re t h an d ou b led

. T h e p lain tiffs p a i d h ig h er p rices f

o r n a t u ral g as t

h an th ey o t

h erw ise w o u ld h av e p aid if th e d ef en d an t s’ co n sp iracy

h ad n ot ex i sted .”I

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“Purposeful direc t i on” requires that the defendant alleg edly must have “(1) c o mmitted a n i n tentional act, (2) ex pressly aimed at the forum state, (3) c ausing harm that the defendant knows is likely to be suffered in the forum state.” W ashington Shoe

, 7 0 4 F .3d at 6 73 (quoting Mavrix Photo, Inc. v. Brand Techs, Inc.
, 647 F .3d 1218, 122 8 (9th Cir. 2011)). T his test for “purposeful direction” is based on the Supreme Court’s test in Ca l d e r v. Jones
, 465 U.S. 783 (1984). 2 4

The facts alleg ed in these causes o f a ction present a compelling case for finding that t h e A E P Defendants “purposefully directed” their a nticompetitive behavior at the forum states

. The first two prong s of the “purposeful direction” test ask whether there was a n “intentional a ct” 2 5

24 T h e p lain tif

f in Ca ld er w as an en t ertain er w

h o l iv ed an d w o rk ed in Calif o rn ia. 4 6 5 U.S. at 78 5

. Sh e b ro u g h t su it in Calif o rn ia state co u rt ag ain st th e N atio n al En q u irer af ter th e tab lo id p u

b lish ed a sto ry

alleg in g th at th e plain tif

f h ad an alco h ol p ro b lem

. Id

. at 7 8 4
, 7 8 8 n .9

. T h e article

w as w ritten in Flo rid a, an d th e Natio n al En q u irer w as pu b lish ed in Flo rid a

w ith a larg e circu latio n in C alif o rn ia. Id

. at 78 5

. T he C a l i f orn ia co u rts

“ co n clu ded th at a v alid b asis f or j u risd ictio n ex isted o n t h e th eo ry th at [th e d ef en d an t s] in t en d ed to , an d d id

, cau se to rtio u s i n j u ry to [th e p lain tif

f ] in Calif o rn ia.” Id

. at 7 8 7

. T he Su p rem e Co u

rt af f irm ed

, h old in g th at j u risd ictio n

in Calif o rn ia w as p ro p er b ecau se th e d ef en d an t s ’ in ten tio n al

co n d u ct in Flo rid a w a s c a l c u lated to cau se in j u ry to th e p lain tif

f in Calif o rn ia. Id . at 7 91

.

25 T h is co u

rt h as recen tly d ef

in ed “i n ten tio n al act” as “ an ex tern al

m an if estatio n o f th e acto r’ s in ten t to p erf orm an actu al, p h y sical act i n th e real w o rld

, n o t in clu d in g an y o f its actu al o r in ten d ed resu lts.” W a sh in g t o n S

h o e , 7 0 4 F.3 d at 6 7 4

.I

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that was “ ex pressly a imed at the forum state.” 2 6 Here, t he pleading s contain alleg ations of “intentional acts” in the form of anticompetitive behavior e x pressly aimed at t he forum
states. The W isconsin A randell Plaintiffs alleg ed, for

ex a mple, that AEP “either directly or indirectly throug h o ne of its controlled affil i a t es, eng a g ed in the practice o f wash sales, a nd manipula t e d market indices throug h the reporting of false trading information,” a c tions which were “intended
to have, and d i d have, a d irect, substantial and reasonably foreseeable effect on commerce in W isconsin.” B y alleg ing
acts “intended to have” an effect in W isconsin, the Plaintiffs
went bey ond a lleg ing acts with a “mere foreseeable effect” in the forum. See Pebble B e ach

, 453 F .3d 1156 (citing Bancroft & Masters, Inc. v. A u

gusta Nat’l Inc.
, 223 F. 3 d 1082, 1087 (9th Cir. 2000)). They alleg ed intentional acts by th e A E P Defendants that w ere “directed at the forum state” itself. Id. at 1158.

The A randell Plaintiffs further a lleg ed that AEP’s officers

or directors made ag reements “which tended to advance o r control the market p rices of natural g as that its affiliates sold in the U nited States o r in Wisconsin” and that these officers

or d irectors made “strateg i c m a r k e t i ng policies and decisions” to report prices to natural g as price indices “that affected the market prices of natural g as.” The policies and d ecisions, alle ged the A randell Plaintiffs, were “implemented on an operational level by a f

fili a t es , such as [ AEPES] .” The Arandell Plaintiffs also claimed that a l l D e f e n d a n t s (including

26 “ W e h av e rep eated ly sta t e d th at th e ‘ ex p ress aim in g ’ req u irem en t is satisf ied

, an d sp ecif

ic j u risd ictio n ex i sts, w

h en th e d ef

en d an t is alleg ed to h av e en g ag ed in w r o n g f u l co n d u ct t arg eted at a p lain tif f w h o m th e d ef en d an t k n o w s to b e a resid en t o f

th e f o ru m state.” W

a sh in g t o n S

h o e , 7 0 4 F.3 d at 6 75 (in tern al q u o tatio n m ark s o m itted ).I

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the AEP Defendants) “ w o r k ed tog ether to fraudulently increase the retail p rice of natur al g as p aid by commercial entities in W isconsin.” This c onspiracy was alleg edly carried out throug h u nlawful acts that were “ordered and performed b y t h e i r o fficers, director s , a g e n t s , e m p l o y e es o r representatives while act i v e l y eng ag ed in the manag ement, direction, control or transaction of defendants ’ b u siness o r affairs.” Fo r e x ample, the Plaintiffs alleg ed that “American Elect r i c Power Company a nd AEP Energ y Services, I nc. traders were instructed by their superiors to adjust the prices and v olumes of trades they had made a n d, in som e ca s e s , to report trades that never occurred.” T he “purpose and e ffect” of this was to “collusively and artificially inflate the price o f natural g as paid by commercial entities in W isconsin.” These alleg ed facts, take n as true, establish that the AEP Defendants’ p rice manipulation was “ex pressly aimed” at W isconsin, because the A EP Defendants knew and intended that the c onsequences of their price man i p u lation would be felt in W isconsin. Ibrahim v. D ep’t of Homeland Sec.
, 538 F .3d 1250, 1258 (9th Cir. 2008).

The third prong of the “purposeful direction” test a sks whether the intentional acts c aused harm that the defendant knows is likely to be suffered in t he forum state. I n the present case, the Arandell Plaintiffs further alleg ed that e ach defendant “committed one or more acts o r omissions outside of W isconsin, which caused an i njury to person or property within W is c o n s i n.” Such injury included increases in the price o f g a s, which was specifically alleg ed in the complaint

– for ex ample, the Plainti f fs alleg ed that the city g a te price for natural g as in W isconsin n early quadrupled in the span o f
a y ear, while the price f

or commercial consumers more than d o u b l e d. The harm was mag nified by increased price volatility

, w hich “caused commercial e ntities in W isconsin toI

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i n c ur g r eater e x p enses associated w ith hedg ing n atural g a s costs,” further injuring the Plaintiffs by “deprivi n g them o f the rig ht and abi l ity to make risk manag ement, resource allocation and other financial decisions relating to natural g as, in a full and free competitive market.”

I n this case, the a m o u nt of harm in W isconsin, a nd the specif icity with which it was alleg ed, is sufficient to satisfy th e third prong of the “purposeful direction” test. Our case law does not require that the “brunt” of the harm b e suffered in the forum state; as long as “ a jurisdictionall y sufficient
amount of harm is suffered in the f orum state, i t does not matte r t h a t e ven more harm mig ht h ave been suffered in another state.” L a Ligue
, 433 F .3d at 1207. F or these
reasons, we f

ind that the Arandell Plaintif f s h a v e alleg ed sufficient fac t s t o support the e x ercise of specific personal jurisdiction over the AEP Defendants on the theo ry that the A E P D e f e n d a n t s “ p u r p o s e f u l l y d i r e c t e d ” t h e i r anticompetitive conduct at the forum state of W isconsin.

The district court did not a ddress the t h i r d p r o ng of the personal juris d i c tion inquiry

, whether the ex ercise o f jurisdiction would “comport w ith f a ir play and substantial justice” – in other words, whether the ex ercise of jurisdiction would b e reasonable. Schwarzenegge r , 3 7 4 F .3d at 802. Once the Plaintiffs have shown that the ex ercise of personal jurisdiction satis f

i e s t he first two prong s of the personal jurisdiction test, the burden shifts to the defendant to make a “compelling case” that the ex ercise of jurisdiction would be unreasonable. Burger King Corp. v. Rudzewicz

, 471 U.S. 462, 476-77 (1985). This court considers the f ollowing seven fac tors in determining whether the ex ercise of jurisdiction would be reasonable:I

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(1) the ex tent of the defenda n t ’s purposeful interjection into the forum state, ( 2 ) t he burden on the defendant in defending in the forum, (3) the e x tent o f t h e conflict with the sovereig nty of the defendant’s state, (4) the forum state’s interest in a djudica t i n g the dispute

, (5) the most efficient judicial

reso l u t ion of the controversy , (6) the i m portance o f the f

orum to the plaintiff’s interest in convenient and effective relief, a nd (7) the ex istence of an alternative forum.

B a n c r o ft

, 223 F .3d at 1088. W e find that the AEP Defendants have n o t made a “compelling case” based upon any of these factors that the ex ercise of personal jurisdiction in W isconsin would be unreasonable.

F or these reasons, we reverse the di s t r i ct court’s order dismissing the AEP D efendants from the W isconsin Arandell

case for l ac k o f personal jurisdiction. The Missouri Heartland Plaintiffs alleg e d similar f a c ts as the W isconsin Arandell Plaintiffs, and therefo re our a naly sis applies with equal force to the Heartland c a se. W e note, however, that the Heartland Plaintiff

s a p peal the district court’s dismissal o f AEPES for lack of personal jurisdiction, but do not challeng e t he district court’s d ismissal of AEP, the parent company

. 2 7 The Heartland Plaintiffs th u s appear to have waived any arg ument for personal jurisdiction over AEP and we reverse the district c ourt’s order in H ea rtland dismissing the AEP

27 T h e Hea rtla nd P lain tif f s’ op en i n g b r i e f states, “ th e Hea rtla n d
p lain tif f s are ap pealin g th e District C o u rt’ s d ism issal o f o n e d ef en d an t – A EP En erg y S e rv ices, In c.

– f ro m th at case f

o r l ack o f p erso n al j u risd ictio n .”I

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Defendants for lack of jurisdiction in H eartland as to AEPES only

.

VI. Orde r G ranting Duke Energy Trading a nd M a r k e t i n g ’ s M o t i o n f o r P artial Sum m a ry Judgm ent

Several Plaintiffs in Arand e l l C o rp. v. Xcel Energy, Inc. appeal the district court’s o r d er g ranting Defendant Duke Energ y Trading and Marketing

, L L C’s (“DETM”) motion for partial summary judg ment based on the distric t court’s in t e r p r etation of W isconsin Statutes § 133.14. 2 8 This court reviews de novo a district c o u rt’s interpretation of state law. See Hauk v. J

.P. Morgan Chase Bank USA
, 552 F .3d 1114, 1118 (9th Cir. 2009).

Several W isconsin corporations (Arandell Corp., Merrick’s, I nc., Safety -Kleen Sy stems , I nc., and Sarg e nto F oods) b roug ht suit ag ainst natural g as sellers i n W isconsin
state court, alleg ing two causes of action under W isconsin
state law. Count One arose u n der W i sconsin Statutes § 133.14, w hich voids c ontra c t s to which a n antitrust conspirator is a party and allows recovery of pay ments made pursuant to such a contract. Count Two soug ht t r e b l e damag es under W isconsin Statutes § 133.18, which provides that “any person” injured, directly or indirectly

, by a violation of the Wisconsin Antitrust Act may recover treble d amag es.

28 T h e P lain tif

f s h av e f iled a Mo tio n to Certif

y Qu est i o n o f W i sco n sin State L aw t o th e W isco n sin Su p rem e Co u rt. B ecau s e w e f i n d th at th e p lain tex t o f W isco n sin

Statu tes § 1 3 3 .1 4 is clear, w e d o n o t b eliev e th at certif icatio n is n ecessary as a “ m ean s to o b tain au t h o r i t a t iv e an sw ers to

u n clear q u estio n s o f state law ,” an d w e th eref o re d en y th e m o tio n

. To ner

v. Led erle La b s., Div. o

f Amer. Cya n a mid Co

. , 7 7 9 F.2 d 1 4 29
, 1 4 32 (9 th Cir. 1 9 8 6 ).I

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All b ut one of the named Defendants moved to dismiss o r for summary judg ment on Count One of Plaintiffs’ Amended Complaint. They arg ued that the Plaintiffs lacked standing to

as s e rt a claim ag ainst them under W isconsin Statutes § 133.14 because none of th e n amed Plaintiffs purchased natural g as directly from any of t he moving d e fendants. W isconsin Statutes § 133.14 p r ovides:

All contracts o r ag reements mad e b y any person while a member of any combination o r conspiracy prohibited by [ § ] 133.03, a nd which c ontract or ag reement is founded upon, i s the r esult of, g r ows out of or is connecte d with any v iolation of such section, either dir e c t ly or indirectly

, shall be void and no recovery thereon or benefit therefrom may be had by or for such person. Any payment made
upon, under or pursuant to such c o n tract or agreement to or for the benefit of any person may be recovered from any pers o n who received or b e n efitted from such payment in

an action by the p a r ty m aking any such payment o r the heirs, personal representative or assigns of the party

.

W is. Stat. § 1 33.14 (emphasis added). I n interpreting a state statute, a federal court applies the relevant state’s r u l e s o f statutory construction. See In re Lieberman

, 245 F .3d 1090, 1092 (9th Cir. 2001). I n W isconsin, t o d e termine the meaning of a statutory provision, courts b e gi n w ith the statute’s p lain lan gu ag e, “taking into consideration the
contex t in which the provision under consideration is used,” and f urthermore, “[ s] tatutory

lang u ag e is g iven its common,I

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ordinary

, and accepted meaning .” Burbank Grease Servs., LLC v. Sokolowsi , 717 N.W

. 2d 781, 788 (W is. 2006).

W e ag ree with the d istrict court’s conclusion that the statutory tex t at issue is unambig uous. Section 133.03 makes illeg al every contract, combination, o r conspiracy in restraint of trade or commerce. See W is. Stat. § 133.03(1). The first
sentence of Section 133. 1 4 t h erefore provides that any contract made by a member of a n antitrust conspiracy is void, and no conspirator who is a p a r ty to that contract may r ecover

or benefit therefrom. The second sentence of Section 133.14 permits the party making a pay ment “upon, under or pursuant to such contract” to recover tho s e pay ments. There is no provision authoriz ing recovery by indirect purchasers or other non-parties to the voided contract. 2 9

P l a i n t i f f s a rg ue that the W isconsin leg islature intended f o r the W isconsin Antitrust Act to b e interpreted as broadly a s p ossible. F or ex ample, they quote W isconsin Statutes § 133.01, which provides, “I t is the intent of the legi s l a t u re that this chapter be interpreted in a m a n n e r w hich g ives the
most liberal construction to a chieve the aim of competition.” However, evidence that the leg islature intended the Act to be applied broadly cannot overcome the p lain t ex t of Section 1 3 3

. 1 4
, which does n o t provide for recovery for indirect purchasers or other non-parties to the contract.

29 T h i s is i n c o n t r a s t to Sectio n 1 3 3 .1 8
, w h ich d o es p erm it in d i rect p u rch asers to reco v er t

reb le d am ag es. S

ee W is. Stat. § 1 3 3 .1 8 (p ro v id in g , in relev an t part, th at “ an y p erso n i n j u red

, directly o r in d irectly

, b y reaso n

o f an y th in g p ro h ib ited b u y th is ch ap t er m ay su e th eref or an d sh all reco v er th reef o ld th e d am ag es su s tain ed b y th e p erso n ”) (em

p h asis ad d ed ).I

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After the district court held on F e b r uary 19, 2008, that “the party seeking the recovery [ under Section 133.14] must have been a party to the v oid c ontract, or at least have made
pay ments based on the contractual oblig ation set forth in the conspirator’s c ontract,” Plaintiffs Sarg ento, Merrick’s, a nd L adish admitted that they had no direct p urchase ag reements wit h D ETM. Therefore, the d istrict court concluded, “No
g enuine i s s u e of material fact r emains that Sarg ento, Merrick’s, and L adish did n ot purchase n atural g as directly o r throug h an ag ent from D ETM,” a nd g r anted sum m a r y judg ment on Count One of Plaintiffs’ Amended Complaint a s to t h es e three Plaintiffs. B ecause we ag ree with the district court’s conclusio n t h at the plain tex t of W isconsin Statutes § 133.14 a llows recovery o nly by p laintiffs who w ere dire ct purchas e rs under the voided contract, we affirm the district court’s order g

ranting partial summary

judg ment to DETM.

VII. Conclusion

W e REVERSE the district court’s order g ranting
summary judg ment to D e f endants on preemption g rounds, REVERSE in part the district court’s orders dismissing the AEP Defendants from the W isconsin Arandell and Missouri Heartland suits, and A F F IRM all other orders at issue in this appeal. W e REMAND to the d i s t r ict court for f urther proceeding s consistent with this opin ion. 3 0

REVERSED IN P ART, AF F IRMED IN P ART, AND REMANDED.

30 T h e p arties sh all b ear th eir o w n co sts o n ap p eal.