Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/558bv.pdf
Page Number: 338.0

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

177 

Stevens, J., dissenting 

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For the reasons stated, the judgment of the Court of Appeals 
for the D. C. Circuit is reversed to the extent that it rejects 
the  application  of  Mobile-Sierra  to  noncontracting  parties, 
and the  case is remanded for  further proceedings consistent 
with this opinion. 

It is so ordered. 

Justice Stevens, dissenting. 
The  opinion  that  the  Court  announces  today  is  the  third 
chapter in a story about how a reasonable principle, extended 
beyond its foundation, becomes bad law. 

In  the  ﬁrst  chapter  the  Court  wisely  and  correctly  held 
that a seller who is a party to a long-term contract to provide 
energy  to  a  wholesaler  could  not  unilaterally  repudiate  its 
contract obligations in response to changes in market condi­
tions  by  simply  ﬁling  a  new  rate  schedule  with  the  regula­
tory commission.  Only if the rate was so low that the seller 
might  be  unable  to  stay  in  business,  thereby  impairing  the 
public interest, could the seller be excused from performing 
its  contract.  That  is  what  the  Court  held  in  United  Gas 
Pipe  Line  Co.  v.  Mobile  Gas  Service  Corp.,  350  U. S.  332 
(1956),  and  FPC  v.  Sierra  Paciﬁc  Power  Co.,  350  U. S.  348 
(1956). 

In  the  second  chapter  the  Court  unwisely  and  incorrectly 
held that the same rule should apply to a buyer who had been 
forced  by  unprecedented  market  conditions  to  enter  into  a 
long-term contract to buy energy at abnormally high prices. 
The Court held the Federal Energy Regulatory Commission 
(FERC)  could  not  set  aside  such  a  contract  as  unjust  and 
unreasonable, even though it saddled consumers with a duty 
to pay prices that would be considered unjust and unreason­
able  under  normal  market  conditions,  unless  the  purchaser 
could also prove that “the contract seriously harms the pub­
lic interest.”  Morgan Stanley Capital Group Inc. v.  Public 
Util. Dist. No. 1 of Snohomish Cty., 554 U. S. 527, 530 (2008).