Opinion ID: 185540
Heading Depth: 2
Heading Rank: 1

Heading: Jurisdiction and Ripeness

Text: 28 FERC initially argues that judicial review is precluded in this case, because Wabash is not an aggrieved party, the case is not ripe, and Wabash failed to raise many of its arguments below, as required by § 313 of the Federal Power Act. We conclude that Wabash is aggrieved and the case is ripe, but that many of Wabash's claims have been forfeited because they were not properly raised with FERC in the first instance. 29 1. Standing The Federal Power Act provides that [a]ny party to a proceeding ... aggrieved by an order issued by the Commission in such proceeding may obtain a review of such order by filing suit within 60 days. 16 U.S.C. § 825l(b). Under FERC regulations, Wabash, as an intervenor, was a party to the AEP-CSW merger application proceeding. See 18 C.F.R. § 385.214 (1999). Parties are aggrieved under the Federal Power Act if they satisfy both the constitutional and prudential requirements for standing. Louisiana Energy & Power Auth. v. FERC, 141 F.3d 364, 366 (D.C. Cir. 1998) (quoting Bennett v. Spear, 520 U.S. 154, 167 (1997)). In this case, as a competitor crying foul, Wabash satisfies prudential standing requirements. Louisiana Energy, 141 F.3d at 366-67 (stating as a competitor and customer [petitioner] comes within the zone of interests of the Federal Power Act and hence has prudential standing). 30 FERC nonetheless argues that Wabash fails to satisfy the standing requirements imposed by Article III of the Constitution. 31 This irreducible constitutional minimum of standing requires: (1) that the plaintiff have suffered an injury in fact--an invasion of a judicially cognizable interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) that there be a causal connection between the injury and the conduct complained of--the injury must be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court; and (3) that it be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. 32 Bennett, 520 U.S. at 167 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). FERC contends in particular that Wabash lacks standing because the harm that it alleges is based only on injuries that might arise from New AEP's exercise of market power in the future. In other words, according to FERC, the injuries asserted by Wabash are merely speculative. We disagree. 33 Parties suffer cognizable injury under Article III when an agency lift[s] regulatory restrictions on their competitors or otherwise allow[s] increased competition. Louisiana Energy, 141 F.3d at 367. Wabash asserts that it will be injured by New AEP's market power which FERC has allowed by approving a merger with inadequate conditions. This claim satisfies the injury prong of Article III standing. See Associated Gas Distribs. v. FERC, 899 F.2d 1250, 1259 (D.C. Cir. 1990) (finding standing when the challenged action authorizes allegedly illegal transactions that have the clear and immediate potential to compete with the petitioners' own sales). Wabash likewise meets the remaining two prongs of the constitutional standing inquiry. Its competitive injury is fairly traceable to FERC's decision to approve the merger. See America's Cmty. Bankers v. FDIC, 200 F.3d 822, 827 (D.C. Cir. 2000). And a favorable decision by this court could result in a remand to FERC which, in turn, might impose conditions that more severely limit New AEP's exercise of market power. This possibility, even though far from certain, satisfies the redressability requirement. Northeast Energy Assocs. v. FERC, 158 F.3d 150, 154 (D.C. Cir. 1998). Wabash, therefore, has Article III standing to seek judicial review. 34 2. Ripeness Ripeness requires the evaluation of the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration. Whitman v. Am. Trucking Ass'ns, Inc., 121 S. Ct. 903, 915 (2001) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967)). A case is ripe when it presents a concrete legal dispute and no further factual development is essential to clarify the issues and there is no doubt whatever that the challenged agency practice has crystallized sufficiently for purposes of judicial review. Rio Grande Pipeline Co. v FERC, 178 F.3d 533, 540 (D.C. Cir. 1999) (citations and internal quotation marks omitted). This dispute meets these criteria. 35 Wabash seeks review of a specific agency decision to allow the merger of AEP and CSW. FERC made its decision after a lengthy hearing before an ALJ in which Wabash and numerous other intervenors put on extensive evidence challenging the merger. It does not matter that the merger occurs at a time when the regulatory regime is changing. What matters is that the decision approving the merger is final and the standards for assessing the Commission's judgment are clear and easy to apply. 36 3. Wabash's Failure to Present Certain Claims to FERC in the First Instance 37 Petitioners seeking review of a FERC order must first petition for rehearing of those orders and must themselves raise in that petition all of the objections urged on appeal. Platte River Whooping Crane v. FERC, 876 F.2d 109, 113 (D.C. Cir. 1989) (citing 16 U.S.C. § 825l(b) and ASARCO, Inc. v. FERC, 777 F.2d 764, 774 (D.C. Cir. 1985)). Section 825l(b) commands that [n]o objection to the order of the Commission shall be considered ... [unless] urged before the Commission in the application for rehearing. 16 U.S.C. § 825l(b). This is an unusually strict requirement that will not be ignored by the courts. Asarco, 777 F.2d at 774. And [n]either FERC nor this court has authority to waive these statutory requirements. Platte River Whooping Crane, 876 F.2d at 113. Therefore, the failure of FERC to challenge a petitioner's objection on the ground that it was not raised below does not remove this court's independent obligation to determine whether, in fact, the argument is properly before us. 38 Many of the objections raised by Wabash in its petition for review were not raised in the first instance in an application for rehearing to FERC. The court therefore has no jurisdiction to consider these objections. In particular, Wabash did not seek rehearing on its claims that FERC failed to make essential findings of fact, adequately explain its decision, define the relevant markets, account for potential competition between AEP and CSW, and defer approval of all mergers until RTO performance could be evaluated. 39 There is one claim that has been raised by Wabash that may be considered by the court even though it was not raised below. Wabash contends that FERC's merger was inconsistent with a subsequently released staff report. Though not raised in the application for rehearing by Wabash, this argument may be properly considered by this court because the Federal Power Act allows consideration of arguments raised for the first time on appeal if there is reasonable ground for failure to raise objections in the request for rehearing. 16 U.S.C. § 825l(b). Because this report was issued on November 1, 2000, several months after Wabash's rehearing request, this court has jurisdiction to review this challenge by Wabash. 40 Finally, there is one argument raised by Wabash on appeal that is hard to characterize. In its petition for rehearing to FERC, Wabash argued that, although the Commission had expressly recogniz[ed] that the merger increased Applicants' ability to foreclose competitors by strategic manipulation of generation, the merger conditions did not address this significant threat to the public interest. Request for Rehearing, reprinted in J.A. 374. On appeal, Wabash argues that FERC completely ignored ... crucial evidence of New AEP's ability to manipulate 'imperfections' in the pertinent markets to their advantage. Petitioner's Br. at 37. How one assesses these two claims depends upon how one construes the reference to crucial evidence. Wabash's two claims are not inconsistent if Wabash's argument to the court is meant to claim that FERC failed adequately to address a recognized threat to the public interest because it failed to consider crucial evidence. The claims are inconsistent, however, if Wabash's argument to this court is meant to say that FERC completely ignored the fact that the merger increased Applicants' ability to foreclose competitors by strategic manipulation of generation. We give Wabash the benefit of the doubt and accept the issue as raised, because the first construction seems more plausible. We must therefore address on the merits the staff report claim, the crucial evidence claim, and two other claims Wabash raised in its petition for rehearing.