Opinion ID: 1218984
Heading Depth: 2
Heading Rank: 2

Heading: FERC-Authorized Rates and the Indices

Text: The underlying issue in this appeal is whether Gallo is challenging FERC-authorized rates. If so, Gallo's claims would be barred by the Filed Rate Doctrine and EnCana would be entitled to summary judgment. This issue requires the analysis of several factors. First, because FERC no longer authorizes rates through a formal rate-filing mechanism, we must determine whether market-based rates can be FERC-authorized rates. This determination requires consideration of the significant changes in the natural gas regulatory regime from the time the Supreme Court decided Keogh and Arkla to the present. Second, Gallo paid EnCana retail rates pegged to indices that reflected the wholesale market in natural gas. We must consider whether the Filed Rate Doctrine can bar damage claims based on an index that represents market-based wholesale rates, but that is not a rate itself. We must also consider whether Gallo's damage claims can be barred by the Filed Rate Doctrine when Gallo's purchases were retail purchases, which are outside of FERC's jurisdiction. In analyzing these issues, we must be mindful that under the summary judgment standard, we view the evidence in the light most favorable to Gallo, the non-moving party. Transition from Filed Rates to Market-Based Rates. As explained above, courts originally developed the Filed Rate Doctrine in light of FERC's exclusive jurisdiction to set rates through a rate filing procedure. See Arkla, 453 U.S. at 576-77, 101 S.Ct. 2925. We briefly review the changes in FERC's natural gas jurisdiction and rate-setting procedure to provide the context for determining whether market-based rates can be FERC-authorized rates. Congress originally gave FERC rate-setting jurisdiction over certain segments of the natural gas market to address concerns about monopolization in the natural gas market. Before Congress enacted the NGA, the natural gas market consisted of three segments: producers, interstate pipelines, and local distribution companies. Producers drilled for the natural gas at the wellhead and then sold the gas to interstate pipelines. Interstate pipelines then transported the gas to various locations throughout the country where it was purchased by local distribution companies, who, in turn, sold the natural gas to consumers. As a result of their control over the transportation of natural gas, interstate pipelines developed monopoly power over both purchases of natural gas at the wellhead and sales to local distribution companies. General Motors Corp. v. Tracy, 519 U.S. 278, 283, 117 S.Ct. 811, 136 L.Ed.2d 761 (1997). In order to curb the market power of interstate pipelines, Congress passed the NGA. By its terms, the NGA is applicable to: (1) the transportation of natural gas in interstate commerce; (2) its sale in interstate commerce for resale [i.e., wholesale sales]; and (3) natural gas companies [5] engaged in such transportation or sale. Panhandle E. Pipe Line Co. v. Pub. Serv. Comm'n of Ind., 332 U.S. 507, 516, 68 S.Ct. 190, 92 L.Ed. 128 (1947) (footnote added). The NGA is expressly inapplicable to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas. 15 U.S.C. § 717(b). [6] The Supreme Court confirmed that this statutory language excluded retail sales. See Panhandle E. Pipe Line Co., 332 U.S. at 517, 68 S.Ct. 190 (The line of the statute [is] thus clear and complete. It cut[s] sharply and cleanly between sales for resale and direct sales for consumptive uses.). However, the language included sales by gas producers at the wellhead. See Phillips Petrol. Co. v. Wisconsin, 347 U.S. 672, 74 S.Ct. 794, 98 L.Ed. 1035 (1954) (interpreting the NGA definition of natural gas companies to include independent gas producers at the wellhead). As a result, during this period FERC's rate-setting jurisdiction reached sales by producers at the wellhead and sales by interstate pipelines, but not sales by local distribution companies to consumers (i.e., retail sales). See E. & J. Gallo Winery, No.2005 WL 2435900, at . FERC exercised its rate-setting jurisdiction through the statutory filed-rate mechanism previously discussed. As a result of an overburdened federal regulatory system and low price ceilings on wellhead sales imposed by FERC, there were acute shortages of natural gas during the 1970s. To ameliorate the shortages, Congress began the process of deregulating much of the natural gas industry, beginning in 1978 with the passage of the Natural Gas Policy Act (NGPA), Pub.L. No. 95-621, 92 Stat. 3352 (codified as amended at 15 U.S.C. §§ 3301-3432 (1994)). The NGPA eliminated the low price ceilings on wellhead sales, replacing them with maximum price ceilings for wellhead sales of natural gas that would encourage natural gas production. Id. In 1989, Congress passed the Natural Gas Wellhead Decontrol Act of 1989 (WDA), Pub.L. No. 101-60, 103 Stat. 157, which completely eliminated FERC's authority to set prices at the wellhead by removing first sales from FERC's rate-setting jurisdiction. [7] Despite the complexity of the statutory definition of first sales, [8] first sales are, in essence, merely sales of natural gas that are not preceded by a sale to an interstate pipeline, intrastate pipeline, local distribution company, or retail customer. In other words, sales by pipelines, local distribution companies, and their affiliates cannot be first sales unless these entities are selling gas of their own production. § 3301(21)(B). Additionally, to give effect to the North American Free Trade Agreement, on October 24, 1992, Congress amended the NGA to provide that all sales of Canadian and Mexican natural gas are also first sales. Energy Policy Act of 1992, Pub.L. No. 102-486, 106 Stat. 2866 (codified at 15 U.S.C. § 717b(b) [9] ). Congress's decision to remove FERC's authority to set prices for first sales left the determination of natural gas prices at the wellhead to market forces. See Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol, 50 Fed.Reg. 42,408, 42,412 (Oct. 18, 1985). Although the WDA's elimination of low price ceilings encouraged a more competitive market at the wellhead, pipeline companies continued to bundle their transportation service with their own natural gas sales and require customers to purchase both. Because consumers lacked the means of transporting the gas to their facilities, consumers could not benefit from the more competitive market at the wellhead. See E. & J. Gallo Winery, 2005 WL 2435900, at . To further the deregulation process started by Congress, FERC began its own process of deregulating the natural gas market by giving consumers more access to wellhead markets and by moving toward market-based rates. In 1992 FERC promulgated Order 636, which required all interstate pipelines to `unbundle' their transportation from their own natural gas sales and to provide common carriage services to buyers from other sources that wished to ship gas [in their pipelines]. General Motors, 519 U.S. at 284, 117 S.Ct. 811; see also Pipeline Service Obligations and Revisions to Regulations Governing Self-Implementing Transportation; and Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol, 57 Fed.Reg. 13,267 (April 16, 1992). As a result of Order 636 (which limited the monopoly power of the pipelines), consumers could purchase natural gas at the wellhead in an unregulated first sale and then arrange to transport the natural gas via the interstate pipelines, paying separately for the product (natural gas) and the service (transportation). In addition, FERC issued blanket sale certificates to interstate pipelines that allowed them to sell unbundled natural gas at market-based rates rather than at rates filed with FERC. 57 Fed.Reg. at 13,270. Following Order 636, FERC continued the deregulation of rates for the transactions that remained subject to its jurisdiction. After determining that no seller of natural gas could obtain market power and that market-based rates would be just and reasonable, see id. at 13,296-97; see also Regulations Governing Blanket Marketer Sales Certificates, 57 Fed.Reg. 57,952, 57,957-58 (Dec. 8, 1992), FERC issued blanket certificates for sales for resale of natural gas to all persons except interstate pipelines. [10] This resulted in the suspension of FERC's rate-filing requirements for such sales. 57 Fed.Reg. at 57,953. These blanket certificates allowed all natural-gas companies subject to FERC's jurisdiction to charge rates for gas determined by market demand and freed the blanket certificate holders from other regulation under the Natural Gas Act jurisdiction of [FERC]. 18 C.F.R. § 284.402(a). However, FERC advised the regulated natural gas industry that it would continue to monitor the operation of the market through the complaint process. 57 Fed. Reg. at 57,958. This ongoing monitoring resulted in FERC's exercising its oversight authority in 2003, when it revoked Enron's blanket market certificate. See Enron Power Mktg., Inc., 103 F.E.R.C. ¶ 61,343, ¶ 68 (2003). In further exercise of its oversight authority, FERC subsequently amended its blanket market certificates to explicitly prohibit anticompetitive behavior and other market abuses, based on FERC's determination that price manipulation had occurred in prior years. Amendments to Blanket Sales Certificates, 68 Fed.Reg. 66,323 (Nov. 26, 2003). In sum, the actions of Congress and FERC have effected a substantial deregulation of the natural gas market from the mid-1990s to the present. Since the mid-1990s, Congress has limited FERC's jurisdiction over wholesale sales to those wholesale sales (not including sales of Canadian and Mexican natural gas) that are preceded by a sale to an interstate pipeline, intrastate pipeline, local distribution company, or retail customer. See 68 Fed. Reg. at 66,324-25. A market in which retail consumers such as Gallo can participate has replaced the original wholesale market (interstate pipelines under FERC's jurisdiction buying natural gas from producers and selling it at filed rates to local distribution companies). Finally, FERC replaced filed rates with market-based rates. FERC's Authorization of Market Rates. Within this historical context, we turn to the question whether FERC's authorization of market rates for certain wholesale natural gas transactions bars damage actions based on those rates to the same extent as FERC's authorization of filed rates barred claims based on those rates. Gallo contends that only rates that have been literally filed with and approved by FERC pursuant to 15 U.S.C. § 717c(c) can bar damage claims by plaintiffs. We disagree. As we previously noted, the Filed Rate Doctrine is based on the principle that rates authorized by FERC are just and reasonable as a matter of law and accordingly cannot be the basis of a damage action. We have held that this principle can apply to market-based rates. See Pub. Util. Dist. No. 1 of Grays Harbor County Wash. v. IDACORP Inc. (Grays Harbor), 379 F.3d 641, 651 (9th Cir.2004) ([W]hile market-based rates may not have historically been the type of rate envisioned by the filed rate doctrine, we conclude that they do not fall outside of the purview of the doctrine.); PUD No. 1 of Snohomish County v. Dynegy Power Mktg, Inc. (Snohomish), 384 F.3d 756, 761 (9th cir.2004) (This court has rejected Snohomish's argument that the preemption-related doctrines at issue do not apply when market-based rates are involved.). Although historically FERC set rates through the statutory filed rate mechanism, the NGA does not require FERC to use any particular form of regulation in its quest to ensure reasonable rates. Rather, it has wide latitude to determine the most effective way to carry out its charge from Congress. See Mobil Oil Exploration and Producing Se. Inc. v. United Distribution Cos., 498 U.S. 211, 224, 111 S.Ct. 615, 112 L.Ed.2d 636 (1991) (The Court has repeatedly held that the just and reasonable standard does not compel [FERC] to use any single pricing formula. . . .). Gallo does not contend that FERC's decision to issue blanket market certificates exceeded FERC's authority under the NGA. Nor could Gallo raise such an argument in this action, because the NGA requires that such challenges be first brought before FERC. 15 U.S.C. § 717r; see e.g., Cal. ex rel. Lockyer, 383 F.3d at 1011-13. [11] Moreover, although the Supreme Court initially applied the Filed Rate Doctrine to actual filed rates, courts have held that the principles underlying this doctrine preclude challenges to a wide range of FERC actions, not just the act of literal rate filing. As the district court pointed out, the principle of barring challenges to FERC's decisions extends to such regulatory determinations as allocation of costs, penalties for violations of the tariff's provisions, and market protocols governing sales through state regulatory structures, E. & J. Gallo Winery, 2005 WL 2435900, at  n. 3 (internal citations omitted), as well as the services, classifications, charges, and practices included in the rate filing. Id. By the same token, the Filed Rate Doctrine would extend to FERC's decision to approve market-based rates. We have indicated in the electricity arena that so long as FERC continues to engage in regulatory activity and has not effectively abdicated its rate-making authority, FERC's approval of market-based rates under the FPA would have the same preclusive effect on antitrust claims and state damage actions as did FERC's approval of literally filed rates. See Grays Harbor, 379 F.3d 641; Snohomish, 384 F.3d at 760. In Grays Harbor, a public utility district argued that its action against an energy wholesaler was not barred by the Filed Rate Doctrine because the doctrine did not apply in the deregulated market where prices are negotiated between parties and the rates are not filed and approved in advance by FERC. 379 F.3d at 647-48. Using the principles underlying the Filed Rate Doctrine, we rejected this argument on several grounds. First, we held that the state law contract claims were barred by principles of field preemption because the plaintiff's requested relief seems to require the district court, at some point, to determine the fair price of the electricity that was delivered under the contract. Id. at 648. We concluded that the requested relief intrudes on an `identifiable portion' of a field that the federal government has occupied and addresses a matter that the federal government regulates. Id. We also held that conflict preemption barred state law claims: Grays Harbor's damage action created an actual conflict between federal and state law because by asking the court to set a fair price, Grays Harbor is invoking a state rule (specifically, contract law) that would interfere with the method by which the federal statute was designed to reach its goals (specifically, FERC regulation of wholesale electricity rates). Id. at 650. We next held that the federal antitrust claims would also be barred by the Filed Rate Doctrine because the relief sought by Grays Harbor would require the court to set damages by assuming a hypothetical rate, the fair value, in place of the market-based rate regime established by FERC. Id. at 651. This would violate the Filed Rate Doctrine because the FERC market-based rates were the lawful rates. Id. Finally, a failure by FERC to exercise its statutory authority to approve rates would cast doubt on the underlying premise of the Filed Rate Doctrine, i.e., that FERC-approved rates are just and reasonable as a matter of law and thus are not subject to collateral challenge. In response to Grays Harbor's claim that FERC simply did not set any rates, id., we relied on FERC's assertions that it was continuing to exercise its authority in the electricity arena. We noted FERC's statement that it continued its market oversight by granting permits to sell at market-based rates only after making a determination that the seller lacked market power and could not erect other barriers to entry. We noted that [a]ccording to FERC, these conditions assure that the market-based rates charged comply with the FPA's requirement that rates be just and reasonable. Id.; see also Snohomish, 384 F.3d at 760-61. We further noted that FERC's oversight was ongoing, that FERC imposed various reporting requirements on sellers, and that FERC has clearly stated its belief that these procedures satisfy the filed rate doctrine for market-based rates. Grays Harbor, 379 F.3d at 651 (quotation marks omitted). We concluded that market-based rates do not fall outside of the purview of the Filed Rate Doctrine. Id. Snohomish relied on Grays Harbor in concluding that FERC was doing enough regulation to justify federal preemption of state laws. 384 F.3d at 757. Because the FPA and the [NGA] are `substantially identical,' [and] there is an `established practice of citing interchangeably decisions interpreting the pertinent sections of the two statutes,' Grays Harbor, 379 F.3d at 649 n. 8 (quoting Arkla, 453 U.S. at 577 n. 7, 101 S.Ct. 2925), the Filed Rate Doctrine analysis in Grays Harbor is also applicable to market-based rates under the NGA. First, federal preemption of state damage claims applies to the natural gas arena as well as to the electricity arena. A challenge to market-based natural gas rates established pursuant to FERC's blanket market certificate would require a court to reconsider natural gas rates that FERC had already determined to be reasonable. Because Congress preempted the field by giving FERC exclusive jurisdiction over such rates, challenges to such rates are barred by field preemption, as in Grays Harbor. See id. 647-49; see also Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 305, 108 S.Ct. 1145, 99 L.Ed.2d 316 (1988) (Congress occupied the field of matters relating to wholesale sales and transportation of natural gas in interstate commerce.). Second, permitting a state court to grant an aggrieved party a refund in natural gas rates under FERC jurisdiction would create a conflict with FERC's authority to approve market-based rates, and thus is similarly preempted by conflict preemption. Grays Harbor, 379 F.3d at 649-50. Such a state-ordered refund may also conflict with the authority FERC has to order retroactive refunds if the conduct of sellers under FERC's jurisdiction violated the terms of the market-based certificates. See Cal. ex rel. Lockyer, 383 F.3d at 1016 (finding in the context of the FPA that [t]he power to order retroactive refunds when a company's non-compliance has been so egregious that it eviscerates the tariff is inherent in FERC's authority to approve a market-based tariff in the first instance.). The Filed Rate Doctrine bars federal antitrust claims in the natural gas arena just as it does in the electricity arena. Because FERC is implementing a market-based rate regime for natural gas, a court action challenging rates subject to FERC's jurisdiction under federal antitrust law would violate the scope of authority given to FERC by Congress. Finally, we can also conclude that FERC exercised its statutory authority under the NGA to approve natural gas rates, so that the underlying premise of the Filed Rate Doctrine remains applicable. Similar to its analysis in the electricity arena, FERC determined that the best way to ensure just and reasonable rates in the evolving natural gas market was to allow natural gas sales to proceed at market prices. 57 Fed.Reg. at 13,296 n. 213. As noted in our foregoing historical review, supra 1038, in order to ensure that market power was adequately mitigated in the natural gas arena, FERC reviewed the natural gas market and determined it was competitive. See 57 Fed.Reg. at 13,296-97; 57 Fed.Reg. at 57,957-58. Although FERC did not impose individualized reporting requirements on sellers of natural gas, FERC maintained ongoing oversight of the market and took corrective responses to evidence of market manipulation. See supra p. 1038. In describing its exercise of rate-making authority, FERC asserted that the Commission is instituting light-handed regulation, relying upon market forces at the wellhead or in the field to constrain unbundled pipeline sale for resale gas prices within the NGA's `just and reasonable' standard. 57 Fed.Reg. at 13,297 n. 220; see also, 57 Fed.Reg. at. 57,957-58. Because FERC has not abdicated its responsibilities but has acted, albeit with a light hand, to authorize just and reasonable rates in the natural gas arena, the Filed Rate Doctrine continues to preempt any rate-setting activities by the courts and bar federal antitrust claims under the Filed Rate Doctrine. [12] Gallo argues that Ting v. AT & T, 319 F.3d 1126 (9th Cir.2003), stands for the proposition that once a federal regulatory agency replaces filed rates with market-based rates, the filed rate doctrine and federal preemption no longer apply. Gallo's reliance on Ting is misplaced. In Ting, we held that the filed rate doctrine did not bar a plaintiff from challenging market-based telephone rates permitted by the Federal Communications Commission (FCC) under the recently amended Federal Communications Act. Id. at 1139. Although the Federal Communications Act had previously included a filed rate procedure similar to that in the FPA and NGA, Congress fundamentally altered the filed rate procedure in 1996 through statutory amendments that authorized the FCC to eliminate the rate filing requirement and rely solely on market rates. Id. at 1132. We determined that in enacting the 1996 amendment, Congress intended to replace the filing mechanism with a market-based mechanism that expressly encompassed state law. Id. at 1144. Because Congress did not intend to preempt state law, we allowed the plaintiff to pursue its state law claim. The legislative changes to the Federal Communications Act, reflected in Ting, did not occur in the energy arena. Congress has not made a similar statutory change to the NGA or FPA such that FERC is permitted to abdicate its authority and, without any oversight, leave rate setting entirely to the markets remaining within FERC's jurisdiction. We conclude, therefore, for purposes of a challenge to market-based rates for natural gas transactions under FERC's jurisdiction, the principles of the Filed Rate Doctrine are applicable. This means that the market-based rate for natural gas transactions under FERC's jurisdiction are FERC-authorized rates, and cannot be the basis of a federal antitrust or state damage action. Whether Gallo's Claims Based on Retail Rates and the Indices are Barred by the Filed Rate Doctrine. Having determined that the market-based rates for transactions within FERC's jurisdiction are FERC-authorized rates, we must consider the second question, whether Gallo's specific claims are barred. To answer this question we must consider two additional issues. First, we must consider whether the Filed Rate Doctrine can bar damage claims based on an index that represents market-based wholesale rates, but that is not a rate itself. And second, we must consider whether Gallo's damage claims that challenge FERC-authorized rates can be barred by the Filed Rate Doctrine, given that Gallo is making retail purchases which are outside FERC's jurisdiction. Whether the Filed Rate Doctrine bars damage arising from retail purchases. Now that we have determined that market-based rates can be FERC-authorized rates, our decision in County of Stanislaus v. Pac. Gas and Elec. Co., 114 F.3d 858 (9th Cir.1997), readily resolves the second issue: whether Gallo's status as a retail purchaser would allow it to challenge FERC-authorized rates. In County of Stanislaus, retail customers brought a class action against Pacific Gas & Electric Company (PG & E), PG & E's pipeline company, Pacific Gas Transportation (PGT), and PG & E's aggregator and exporter of Canadian gas, Alberta & Southern Gas Company (A & S). Among other claims, plaintiffs sought treble antitrust damages for injuries caused by the defendants' price fixing activities. Id. at 863. Specifically, the plaintiffs claimed that A & S conspired with Canadian producers to increase the price A & S paid for gas above the market rate; A & S sold the over-priced gas to PGT, which subsequently sold the gas to PG & E. Id. at 860. PG & E in turn sold to the retail purchaser plaintiffs, who sought as damages the `overcharge' that resulted from the fixed prices. Id. at 863. We held that because the price PG & E paid to PGT for gas had been approved by FERC, that price was just and reasonable. See id. at 861 & 863. Therefore, the retail plaintiffs could not claim an injury under the federal antitrust laws, because an award of treble damages is not an available remedy for a [plaintiff] claiming that the rate submitted to, and approved by, [FERC] was the product of an antitrust violation. Id. at 863 (quoting Square D, 476 U.S. at 422, 106 S.Ct. 1922) (alteration in original). We also held that plaintiffs' state claims were barred: [i]t makes no difference that plaintiffs choose to bring some of their claims under state law; on the facts of this case, the filed rate doctrine acts to bar all the challenges that plaintiffs assert. Id. at 866. In barring plaintiffs' claims, we implicitly held that retail purchasers whose damages arose from upstream FERC-approved wholesale ratesin this case, the rates charged by PGT to PG & Ecould not challenge such rates. By the same token, if Gallo's damage claims are based on upstream market-based rates within FERC's jurisdiction, such claims are likewise barred even though Gallo is a retail purchaser. Cases holding that states cannot promulgate regulations that would penalize wholesale energy or natural gas purchasers for having paid wholesale rates further support this conclusion. For example, in Nantahala Power and Light Co., 476 U.S. 953, 106 S.Ct. 2349, 90 L.Ed.2d 943, the Supreme Court determined that principles of federal preemption prevented the North Carolina Utilities Commission from (in effect) forcing Nantahala Power to sell power to retail customers at rates that would not allow it to recover its costs of purchasing wholesale power at FERC-approved rates. See also Miss. Power & Light Co. v. Miss. ex rel. Moore, 487 U.S. 354, 373, 108 S.Ct. 2428, 101 L.Ed.2d 322 (1988) (In this case as in Nantahala we hold that a `state utility commission setting retail prices must allow, as reasonable operating expenses, costs incurred as a result of paying a FERC-determined wholesale price. . . . Once FERC sets such a rate, a State may not conclude in setting retail rates that the FERC-approved wholesale rates are unreasonable.') (quoting Nantahala, 476 U.S. at 965, 966, 106 S.Ct. 2349); Entergy, 539 U.S. at 49, 123 S.Ct. 2050 ([W]e conclude that the [challenged state regulation] impermissibly `traps' costs that have been allocated in a FERC tariff.). Although these cost trapping cases (so called because the state agency tried to preclude the utility from recovering trapped wholesale costs) do not involve a retail customer attempting to bring a damage action against the utility, they support EnCana's position that wholesale sellers such as EnCana may raise the filed rate doctrine as a defense to actions putatively attacking retail rates, but having the effect of disallowing FERC-approved wholesale rates. In light of County of Stanislaus and the cost-trapping cases, Gallo cannot challenge its retail rates by claiming that FERC-authorized rates were the result of misconduct, any more than the retail purchasers in County of Stanislaus could claim they were injured by PG & E's purchases from PGT. It is irrelevant (in this case) that Gallo purchased natural gas for its own consumption, because the lesson of County of Stanislaus is that a retail purchaser cannot recover damages based on a theory that FERC-authorized rates were unfair. Therefore, we must partially disagree with the district court's conclusion that Gallo could challenge its retail rates because the court was not required to undo or second guess a determination that was specifically made by FERC. E. & J. Gallo Winery, 2005 WL 2435900, at . To the extent Gallo's challenge to the indices is a challenge to those market-based wholesale rates subject to FERC's jurisdiction that are included in the indices, Gallo's claim would be barred by the Filed Rate Doctrine. [13] Gallo contends that such a ruling could leave it without a remedy for EnCana's misconduct. This equitable consideration does not compel a different result. Any lack of remedy arises from the principle of statutory construction announced in Keogh, namely, that Gallo cannot be damaged by a FERC-approved rate even if that rate were artificially inflated. See Keogh, 260 U.S. at 163, 43 S.Ct. 47. The Supreme Court has acknowledged that [a] finding that federal law provides a shield for the challenged conduct will almost always leave the state-law violation unredressed. Arkla, 453 U.S. at 584, 101 S.Ct. 2925; see also Montana-Dakota Utilities Co. v. Nw. Public Service Co., 341 U.S. 246, 254, 71 S.Ct. 692, 95 L.Ed. 912 (1951). Whether the Filed Rate Doctrine bars damage claims based on indices. The conclusion that Gallo's damage claims are barred to the extent they challenge FERC-authorized rates leads us to the next, more complicated issue: whether the Filed Rate Doctrine bars claims based on rates reported in the indices. EnCana first argues broadly that because the indices constitute a compilation of FERC-authorized rates, the Filed Rate Doctrine bars damage actions based on rates reported in the indices. Under our analysis, EnCana's argument could prevail only if: (1) all the rates reported in the indices are FERC-authorized rates or there is some other bar to challenging such rates; or (2) the Filed Rate Doctrine bars a challenge to a compilation of both FERC-authorized rates and rates that are not under FERC's jurisdiction. With respect to the first argument, viewing the evidence in the light most favorable to Gallo, EnCana has not carried its burden of establishing that all the transactions that comprise the indices were FERC-approved transactions or otherwise shielded from challenge. The district court did not determine the exact nature of the transactions that comprise the indices upon which Gallo bases its damage claim. However, viewing the evidence in a light most favorable to Gallo, the record reflects that the indices potentially include transactions that are under FERC's jurisdiction as well as transactions outside FERC's jurisdiction. First, there is evidence in the record some index pricing inputs were misreported or wholly fictitious. Final Report, at ES-6 & III-29. Misreported rates and rates reported for fictitious transactions are not FERC-approved rates, and barring claims that such fictitious transactions damaged purchasers in the natural gas market would not further the purpose of the filed rate doctrine. See E. & J. Gallo Winery, 2005 WL 2435900, at . Moreover, as part of its investigation of the indices, FERC concluded that it has jurisdiction over most of the transactions that form the basis for the indices. Final Report at III-17 (emphasis added). This language indicates that at least some of the transactions included in the indices are not subject to FERC's jurisdiction, and thus would be subject to challenge by Gallo. In addition, FERC's description of the haphazard manner in which the indices are assembled indicates that the traders reporting their transactions did not differentiate between jurisdictional and non-jurisdictional transactions within the wholesale market. Final Report, at III-29. As discussed above, see supra 1037-39, during the time period for which Gallo seeks damages, consumers participated in the wholesale market. E. & J. Gallo Winery, No.2005 WL 2435900, at -4. These consumer transactions, which are not regulated by FERC, were potentially included in the indices. In addition, first sales transactions, either at the wellhead or via imports from Canada and Mexico, were potentially included in the indices. These first sales are also outside of FERC's jurisdiction. EnCana argues that even if first sales were reported in the indices, principles of federal preemption nevertheless bar any damage claims based on such rates. [14] EnCana relies on Transcontinental Gas Pipe Line Corp. v. State Oil and Gas Board of Mississippi, 474 U.S. 409, 106 S.Ct. 709, 88 L.Ed.2d 732 (1986), which established that in deregulating first sales in the NGPA, Congress intended to keep the field clear of state regulations of first sales. By extension, EnCana argues, principles of preemption would prevent Gallo from bringing damage claims that have the effect of reducing the purchase price of first sales. EnCana's analysis is incomplete and therefore incorrect. Our review of the NGPA and WDA leads us to conclude that Congress's removal of FERC's jurisdiction over first sales does not preempt the type of claims brought by Gallo in this action. In enacting the NGPA and the WDA, Congress is assumed to be aware of the existing context of state and federal antitrust and damage laws. United States v. Hunter, 101 F.3d 82, 85 (9th Cir.1996) ([A]s a matter of statutory construction, we presume that Congress is knowledgeable about existing law pertinent to the legislation it enacts.) (quotation marks omitted). We ordinarily do not deem Congress to preempt laws of general applicability. See Total TV v. Palmer Commc'ns, Inc., 69 F.3d 298, 302 (9th Cir.1995). Neither the NGPA nor the WDA, the two statutory enactments that removed first sales from FERC's rate-setting jurisdiction, includes language suggesting that Congress intended to displace state antitrust or damage laws by withdrawing first sales from the NGA. Congress's decision not to expressly preempt such damage claims indicates a lack of intent to do so. See id. Although Congress's withdrawal of first sales from FERC's jurisdiction does reflect Congress' intent to move toward a less regulated national natural gas market, Transcon., 474 U.S. at 423, 106 S.Ct. 709, state and federal antitrust and fair competition laws complement rather than undermine such a goal, see Total TV, 69 F.3d at 302, because they support fair competition. By enabling private parties to combat market manipulation and other anti-competitive actions, the laws under which Gallo brought its claim support Congress' determination that the supply, the demand, and the price of high-cost [first sale] gas be determined by market forces, Transcon, 474 U.S. at 422, 106 S.Ct. 709. Just as Congress's direction to FERC to determine just and reasonable rates gave rise to the inference that Congress preempted damage claims per the Filed Rate Doctrine, the withdrawal of FERC's authority to determine such rates gives rise to the opposite inference, that normal market forces, including the tug and pull of private lawsuits, will hold sway. Therefore, we conclude that Congress did not preclude plaintiffs from basing damage claims on rates associated with first sales. EnCana also argues that, even though first sales are exempted from FERC's rate-setting jurisdiction, Congress has determined that all first sales occur at rates that are just and reasonable as a matter of law. For this proposition, EnCana relies on a provision of the WDA, which states: Except as otherwise provided in this subsection, for purposes of sections 4 and 5 of the Natural Gas Act, any amount paid in any first sale of natural gas shall be deemed to be just and reasonable. 15 U.S.C. § 3431(b)(1)(A). (Sections 4 and 5 of the NGA, 15 U.S.C. §§ 717c and 717d, govern the rates that can be charged under FERC's rate-setting jurisdiction.) EnCana's interpretation of section 3431(b) is incorrect. Section 3431(a) provides that the NGA shall not apply to any natural gas solely by reason of any first sale of such natural gas. 15 U.S.C. § 3431(a)(1)(A). Because FERC's jurisdiction is limited to the scope of the NGA, this language eliminates FERC's general authority over first sales. However, Section 3431(b)(1)(A)'s general statement that any amounts paid in first sales are just and reasonable is not inconsistent with section 3431(a)'s exclusion of first sales from the NGA. Rather, Section 3431(b) can be understood as ensuring that FERC will not exercise its rate-setting jurisdiction in a way that prevents regulated entities from recovering amounts paid in first sales. In other words, after an interstate pipeline, intrastate pipeline, or local distribution company purchases natural gas in a first sale, any subsequent sale of that gas is not a first sale. To the extent FERC has rate-setting authority with respect to those subsequent sales, FERC could determine that the just and reasonable rate for such sales was lower than the rate that would be necessary for the regulated entities to recover the prices they paid for the natural gas in their first sale transactions. This would allow FERC to create its own cost-trapping scenario. Section 3431(c)(2), however, ensures that such cost-trapping will not occur, because it provides that for purposes of sections 4 and 5 of the Natural Gas Act, any amount paid in any first sale of natural gas shall be deemed to be just and reasonable. 15 U.S.C. § 3431(b)(1)(A); see also 15 U.S.C. § 3431(c)(2). This language ensures regulated entities that they can set their sales prices for natural gas in a manner that will allow them to recover the just and reasonable amounts they previously paid in first sales. However, Sections 3431(b)(1)(A) and 3431(c)(2) do not mean that first sales are just and reasonable for other purposes, particularly because other first sales are not subject to the NGA. EnCana raises the additional argument that the transactions comprising the indices were FERC-approved transactions or otherwise shielded from challenge because FERC has jurisdiction over the transportation of natural gas in interstate commerce. 15 U.S.C. § 717(b). In essence, EnCana argues that all sales of natural gas transported in interstate pipelines are subject to FERC jurisdiction and shielded from challenge by the Filed Rate Doctrine because such sales reflect interstate transportation costs. It is true that in today's natural gas marketplace [w]hen the gas sales element is severedi.e., unbundled-from the transaction, FERC retains jurisdiction over the interstate transportation component. United Distrib. Cos. v. F.E.R.C., 88 F.3d 1105, 1153 (D.C.Cir.1996) (per curiam) (emphasis omitted). However, EnCana's argument goes too far: a determination that FERC's jurisdiction covered any sale of natural gas with an interstate transportation component would extend FERC's authority over virtually all natural gas that was not produced, sold and used in a single state. Such an interpretation would conflict with 15 U.S.C. § 717(b) (providing that the NGA does not apply to sales of natural gas other than sales for resale) and 15 U.S.C. § 3431(a)(1)(A) (providing that FERC's jurisdiction does not extend to natural gas solely by reason of any first sale of such natural gas), and we therefore reject it. We agree that to the extent FERC has jurisdiction over the transportation of natural gas in interstate commerce and exercises that authority to approve interstate transportation rates, the Filed Rate Doctrine would prevent Gallo from basing damage claims on such rates. However, as previously discussed, Gallo is challenging at least some conduct that is not approved by FERC, and thus not barred by FERC's jurisdiction over interstate transportation. Having rejected EnCana's arguments that Gallo's damage claims based on the indices are barred because the indices include FERC-authorized rates or are first sales, we turn to the second argument that even if the indices are comprised of both jurisdictional and non-jurisdictional rates, we must deem the indices as a whole to be FERC-authorized rates and thus shielded from challenge by the Filed Rate Doctrine. We must also reject this argument. FERC's authority is limited to the jurisdiction specifically set by Congress. As noted in Panhandle Eastern Pipe Line Co., Congress employed unusual legislative precision to ensure that the limits of FERC's jurisdiction were clear: The omission [in the NGA] of any reference to other sales, that is, to direct sales for consumptive use, in the affirmative declaration of coverage was not inadvertent. It was deliberate. For Congress made sure its intent could not be mistaken by adding the explicit prohibition that the Act `shall not apply to any other    sale   .' (Emphasis added.) Those words plainly mean that the Act shall not apply to any sales other than sales `for resale for ultimate public consumption for domestic, commercial, industrial, or any other use.' Direct sales for consumptive use of whatever sort were excluded. 332 U.S. at 516-17, 68 S.Ct. 190. Similarly, the D.C. Circuit rejected pipeline companies' argument that FERC had jurisdiction over pipeline companies' nonjurisdictional contracts, even if such contracts would indirectly impact a pipeline company's FERC-approved rates. Am. Gas Ass'n v. F.E.R.C., 912 F.2d 1496, 1506 (D.C.Cir.1990). In the absence of FERC jurisdiction over non-jurisdictional transactions reported in the indices, the Filed Rate Doctrine does not bar damage claims based on rates arising from such transactions. [15] In sum, the answer to our question whether the Filed Rate Doctrine bars damage claims based on the indices is not a simple one. We must conclude that to the extent the indices are comprised of rates that are not FERC-authorized rates, the Filed Rate Doctrine does not bar Gallo's claim that such rates are unfair and led to unfair retail rates paid by Gallo. However, Gallo cannot challenge FERC-authorized rates that are incorporated in the indices. Because such rates are just and reasonable, damage claims based on such rates are barred by the Filed Rate Doctrine. Our conclusion may raise complexities in resolving claims such as Gallo's; however, this is dictated by our precedents.