Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/558bv.pdf
Page Number: 340

Cite as: 558 U. S. 165 (2010) 

179 

Stevens, J., dissenting 

(Stevens,  J.,  dissenting).  Instead,  “the  statement  in  Per­
mian  Basin  about  ‘unequivocal  public  necessity,’  390  U. S., 
at  822,  speaks  to  the  difﬁculty  of  establishing  injury  to  the 
public  interest  in  the  context  of  a  low-rate  challenge,”  i. e., 
one  brought  by  sellers  of  electricity.  Id.,  at  562.  It  does 
not establish a new standard that applies as well to a “high­
rate challenge” brought by purchasers.  Ibid. 

But even accepting Morgan Stanley as the law, the Court 
unwisely  goes  further  today.  In  this  third  chapter  of  the 
Mobile-Sierra story, the Court applies a rule—one designed 
initially to protect the enforceability of freely negotiated con­
tracts  against  parties  who  seek  a  release  from  their  obliga­
tions—to impose a special burden on third parties exercising 
their  statutory  right  to  object  to  unjust  and  unreasonable 
rates.  This  application  of  the  rule  represents  a  quantum 
leap  from  the  modest  origin  set  forth  in  the  ﬁrst  chapter  of 
this  tale.  As  the  Court  of  Appeals  correctly  concluded  in 
the  opinion  that  the  Court  sets  aside  today:  “This  case  is 
clearly  outside  the  scope  of  the  Mobile-Sierra  doctrine.” 
Maine  Pub.  Util.  Comm’n  v.  FERC,  520  F.  3d  464,  477 
(CADC 2008) (per curiam). 

As  the  D.  C.  Circuit  noted,2  “[c]ourts  have  rarely  men­
tioned the Mobile-Sierra doctrine without reiterating that it 
is premised on the existence of a voluntary contract between 
the  parties.”  Ibid.  But,  the  Court  asks,  “if  FERC  itself 
must  presume  just  and  reasonable  a  contract  rate  resulting 
from  fair,  arm’s-length  negotiations,  how  can  it  be  main­
tained  that  noncontracting  parties  nevertheless  may  escape 
that presumption?”  Ante, at 174–175.  This Court’s under­

2 Because  the  D.  C.  Circuit’s  opinion  was  written  before  this  Court’s 
decision  in  Morgan  Stanley,  that  court’s  purported  error  in  describing 
the  Mobile-Sierra  doctrine  as  an  “exception”  to  the  just-and-reasonable 
standard, 520 F. 3d, at  477, is understandable.  As that court recognized, 
and  the  majority  does  not  change  today,  the  Mobile-Sierra  standard  in 
fact  “makes  it  harder  for  [respondents]  to  successfully  challenge  rates.” 
520 F. 3d, at 478.