Court Opinion

ID: 4564066
Source: CourtListenerOpinion
Date Created: 2020-09-09 20:00:10.61201+00
Date Added: 2024-06-11T12:24:58.771522
License: Public Domain

United States Court of Appeals
                        For the First Circuit

No. 19-1678

              PNE ENERGY SUPPLY LLC, on behalf of itself
                  and all others similarly situated,

                        Plaintiff, Appellant,

                                  v.

    EVERSOURCE ENERGY, a Massachusetts Voluntary Association;
             AVANGRID, INC., a New York Corporation,

                        Defendants, Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
               FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. Denise J. Casper, U.S. District Judge]

                                Before

                    Thompson, Lipez, and Kayatta,
                           Circuit Judges.

     Austin B. Cohen, Keith J. Verrier, Levin Sedran & Berman LLP,
Anthony Tarricone, and Kreindler & Kreindler LLP on brief for
appellant.
     Mark A. Gottlieb, Public Health Advocacy Institute, Sandeep
Vaheesan, Open Markets Institute, Paula S. Bliss, and Bernheim
Dolinsky Kelley LLC on brief for Open Markets Institute, amicus
curiae.
     Douglas G. Green, Shannen W. Coffin, Mark C. Savignac, Steptoe
& Johnson LLP, John D. Donovan, Jr., Chong S. Park, and Ropes &
Gray LLP on joint brief for appellee Eversource Energy.
     Richard P. Bress, Marguerite M. Sullivan, Caroline A. Flynn,
and Latham & Watkins LLP on joint brief for appellee Avangrid,
Inc.
September 9, 2020
             KAYATTA, Circuit Judge.        In 2017, a group of economists

working with the Environmental Defense Fund published a report

alleging that the defendants in this case were able to increase

electricity prices in New England about 20% on average, totaling

$3.6 billion in surcharges over three years between 2013 and 2016,

by buying up and refusing to release excess transmission capacity

in the Algonquin pipeline.         See Levi Marks et al., Vertical Market

Power in Interconnected Natural Gas and Electricity Markets 4

(2017),     https://www.edf.org/sites/default/files/vertical-market-

power.pdf. In response, a group of electricity end consumers filed

suit in November 2017 alleging violations of state and federal

antitrust and unfair competition law.           See Breiding v. Eversource

Energy, 344 F. Supp. 3d 433, 444 (D. Mass. 2018), aff'd, 939 F.3d

47   (1st    Cir.    2019).      After   the   defendants    challenged   the

electricity consumers' standing to sue under the federal antitrust

laws for manipulation in gas transmission markets, PNE Energy

Supply LLC, a wholesale energy purchaser, filed this lawsuit on

behalf of itself and other similarly situated energy purchasers,

also challenging the defendants' alleged manipulation of natural

gas pipeline capacity.          Last fall, we affirmed the dismissal of

the electricity consumers' suit. Breiding, 939 F.3d at 57. Rather

than   taking   up    the     defendants'   challenge   to   the   electricity

consumers' antitrust standing, we held that the antitrust claims

failed on their merits because the defendants' challenged conduct,

                                     - 3 -
in neither using nor releasing reserved pipeline capacity, all

occurred pursuant to a tariff approved by the Federal Energy

Regulatory Commission.         Id. at 52–56.     We now consider in this

second case whether any differences between the two cases warrant

a different outcome.          For the following reasons, we find that

Breiding controls. We therefore affirm the dismissal of this case.

                                      I.

                                      A.

              To provide context regarding the relevant energy market

and actors at issue in this case, we begin by repeating verbatim

the description we provided in Breiding, 939 F.3d at 49–51:

                                 *    *      *

              "Wellhead" sales comprise the first step in the chain of

market   transactions     that    readies    extracted   natural   gas   for

consumption in the form of retail electricity.            At this initial

stage, natural gas producers sell natural gas to direct purchasers

through gas futures contracts, in which the producer agrees to

sell a specific quantity of natural gas at some fixed time in the

future   to    the   direct   purchaser.     Load-distribution     companies

(LDCs) -- those entities that locally distribute natural gas,

primarily to retail consumers who use the gas for heating and

cooking -- have a relatively predictable need for natural gas and,

                                     - 4 -
thus, often make use of this type of contract.1           Consumers with

more variable demand for natural gas, such as power generators,

often purchase gas on the secondary wholesale "spot market."            The

spot market for natural gas allows direct purchasers that find

themselves with rights to excess, unneeded natural gas to resell

those rights in the immediate or near future.

               The Federal Energy Regulatory Commission (FERC) is the

agency charged with implementing and executing the Natural Gas Act

(NGA), "a comprehensive scheme of federal regulation of 'all

wholesales of natural gas in interstate commerce.'"          N. Nat. Gas

Co. v. State Corp. Comm'n, 372 U.S. 84, 91 (1963) (quoting Phillips

Petroleum Co. v. Wisconsin, 347 U.S. 672, 682 (1954)); see also 15

U.S.C. § 717c(a) (tasking FERC with ensuring that rates charged

for sales of natural gas within FERC's jurisdiction are "just and

reasonable").         Notwithstanding   the   comprehensiveness   of   this

regulatory scheme, Congress also exempted wellhead sales from

FERC's regulatory jurisdiction.         See 15 U.S.C. § 3431(a)(1)(A).

Accordingly, market forces dictate the wellhead price of natural

gas.       Id. § 3431(b)(1)(A) ("[A]ny amount paid in any first sale of

natural gas shall be deemed to be just and reasonable.").              And

while the NGA grants FERC regulatory authority over "sale[s] . . .

       1The defendants nevertheless point out that LDCs operating
in New England do face some variability in demand for natural gas
due to rapidly changing weather conditions in the region.

                                   - 5 -
for resale" in the spot market for natural gas, see 15 U.S.C.

§ 717(b),    FERC    has    issued     a    "blanket       certificate       of    public

convenience    and    necessity"       that       allows    such     transactions        to

proceed at market rates, see 18 C.F.R. § 284.402.

            Direct       purchasers    of       natural    gas     also    pay    for   the

transmission of natural gas from the wellhead.                      The Algonquin Gas

pipeline serves as the primary interstate artery through which

natural gas is transported in New England.                       Direct purchasers in

New England must reserve transmission capacity -- that is, the

physical space in the pipeline needed to transport the natural gas

purchased    from    the    producer       --    along     the    Algonquin      pipeline

commensurate with their transportation needs.                             FERC also has

"exclusive jurisdiction over the transportation . . . of natural

gas   in   interstate      commerce    for       resale"     and    is     charged      with

"determin[ing]       a     'just      and       reasonable'        rate      for     [its]

transportation."         Schneidewind v. ANR Pipeline Co., 485 U.S. 293,

300–01 (1988). Pursuant to this exclusive authority, FERC requires

interstate pipeline operators like Algonquin to allow LDCs to

purchase capacity using "no-notice" contracts.                     See Order No. 636,

57 Fed. Reg. 13,267 (Apr. 16, 1992).                Such contracts allow LDCs to

adjust capacity reservations downward or upward (up to their daily

"firm entitlements") at any time without incurring penalties.                            Id.

at 13,286.       Importantly, FERC regulations allow, but do not

require, LDCs to resell unneeded transportation capacity to other

                                       - 6 -
natural gas purchasers when they downwardly adjust their capacity

reservations.     See 18 C.F.R. § 284.8; Tenn. Gas Pipeline Co., 102

FERC ¶ 61,075, 61,119 (2003) ("[N]othing requires a shipper to

release its capacity: it does so by choice.").

            In the wholesale market for electricity, load-serving

entities (LSEs) that sell and deliver electricity to consumers for

retail consumption purchase electricity from power generators.

The Federal Power Act (FPA) charges FERC with regulating these

wholesale sales2 of electricity in interstate commerce and ensuring

that rates in that market are "just and reasonable."                 See 16 U.S.C.

§§ 824(b)(1),     824d(a).        In    executing    that     charge,   FERC    has

delegated     authority      to    nonprofit       organizations,       including

independent    system     operators      (ISOs),    to   manage      auctions   for

wholesale electricity in the various regional markets across the

country.    Hughes v. Talen Energy Mktg., LLC, 136 S. Ct. 1288, 1292

(2016).     ISO   New   England        (ISO-NE)    oversees    the    markets   for

wholesale electricity in the New England region and administers

two auctions for wholesale electricity that are relevant to this

appeal: a same-day auction and a next-day auction to satisfy LSEs'

short-term and near-term demand for electricity. In both auctions,

ISO-NE accepts orders from LSEs designating the amount of energy

they need at a given time.              Power generators then submit bids

     2  A "[s]ale of electric energy at wholesale" is a "sale of
electric energy to any person for resale." 16 U.S.C. § 824(d).

                                        - 7 -
indicating the amount of electricity they can produce at those

times and the price they are willing to charge for it.                          ISO-NE

accepts   those     bids   from     lowest         to    highest   until    demand   is

satisfied.       The price of the last accepted bid is the "clearing

price," which sets the price paid to all the generators whose bids

were accepted.

            Approximately      half       of      New    England's   electricity     is

generated from natural gas power plants.                    As a result, bids from

natural gas generators usually set the clearing price for wholesale

electricity, which then drives the retail prices charged by LSEs

to retail consumers.          FERC does not oversee the retail sale of

electricity.       See FERC v. Elec. Power Supply Ass'n, 136 S. Ct.

760, 766 (2016) ("[T]he law places beyond FERC's power, and leaves

to the States alone, the regulation of 'any other sale' -- most

notably, any retail sale -- of electricity."                       (citing 16 U.S.C.

§ 824(b))).

                                    *         *      *

                                          B.

            In    Breiding,    we       held      that   the   filed-rate     doctrine

insulated    from    challenge      in    a       private   antitrust      lawsuit   the

defendants' alleged use of no-notice contracts to restrict supply

in the Algonquin pipeline transmission capacity market.                       939 F.3d

at 52–56.    "The filed-rate doctrine is 'a set of rules that . . .

revolve[s] around the notion that . . . utility filings with the

                                         - 8 -
regulatory        agency       prevail    over     . . .    other     claims    seeking

different rates or terms than those reflected in the filings with

the agency.'"          Id. at 52 (second and third omissions in original)

(quoting Town of Norwood v. FERC, 217 F.3d 24, 28 (1st Cir. 2000)).

It    is   "a    form    of    deference     and    preemption,       which    precludes

interference with the rate setting authority of an administrative

agency, like FERC."            Id. (quoting Wah Chang v. Duke Energy Trading

& Mktg., LLC, 507 F.3d 1222, 1225 (9th Cir. 2007)).                       Significant

here, it applies not only to traditional service rates but also to

"ancillary conditions and terms included in [a FERC-approved]

tariff."        Id. (alteration in original) (quoting Town of Norwood v.

New Eng. Power Co., 202 F.3d 408, 416 (1st Cir. 2000)).

                While the district court in Breiding determined that it

was FERC's seal of approval on the downstream (relative to the

defendants' alleged failure to release excess capacity) ISO-NE

market     prices       that    insulated     the       defendants'    behavior     from

challenge under the antitrust laws in a district court, see id. at

51–53, we questioned that reasoning and explicitly did not endorse

it, see id. at 53–56.            Relying on our previous decision in Town of

Norwood, 202 F.3d 408, we confirmed that upstream anticompetitive

activity        that    indirectly       affects    a    downstream,    FERC-approved

tariff is not categorically protected by the filed-rate doctrine

applicable to the downstream activity.                   See Breiding, 939 F.3d at

53.    We instead turned our attention to the activity that was

                                           - 9 -
alleged    to   have   been   anticompetitive     and   asked   whether   that

behavior itself had been sanctioned by FERC, id. at 53–55, focusing

on a description of the conduct provided by plaintiffs there as

follows:

            (1) "Eversource and Avangrid possess a large
            number of 'no-notice' contracts for natural
            gas transmission capacity along the Algonquin
            Pipeline"; and (2) "Eversource and Avangrid
            regularly reserved more pipeline capacity than
            they knew they needed and then, at the last
            minute,    cancelled    portions    of   their
            reservations"    without   "releas[ing]   that
            capacity, so that others could take advantage
            of it."

Id.   at   54   (alteration     in    original)   (quoting      the   Breiding

complaint).     Reviewing the regulations at issue, we saw that "FERC

requires operators of interstate natural gas pipelines like the

Algonquin Gas pipeline to provide '"no-notice" transportation

service' to ensure that LDCs are able to meet unexpected demand."

Id. (citing Order No. 636, 57 Fed. Reg. at 13,286).              Accordingly,

the Algonquin tariff allows an LDC to

            increase its deliveries up to the [Maximum
            Daily Delivery Obligation] at any Primary
            Point(s) of Delivery, up to the [Maximum
            Hourly Transportation Quantity] during any
            Hour,   and   up    to   the  [Maximum   Daily
            Transportation Quantity], or to decrease its
            deliveries.      Provided that all of the
            operational conditions specified in Section 5
            of   this   rate   schedule  (the   "Section 5
            Conditions") are met, Algonquin shall consent
            to such increase or decrease in deliveries,
            thereby nullifying any daily scheduling or
            hourly scheduling penalty that would otherwise

                                     - 10 -
           be applicable pursuant to Section 23 of the
           General Terms and Conditions.

Id. (alterations in original) (quoting Algonquin Gas Transmission,

LLC Tariff, pt. 5, Rate Schedule AFT-E, § 4.3).   Similarly, an LDC

"may release all or a part of its capacity under an Existing

Service Agreement," but nothing requires it to do so. Id. (quoting

Algonquin Gas Transmission, LLC Tariff, pt. 6, Capacity Release,

§ 14.2).

           Putting these allegations and the tariff together, we

determined that

           neither defendant is alleged to have engaged
           in any conduct other than that allowed by
           Algonquin's     detailed    and     reasonably
           comprehensive FERC-approved tariff. FERC, in
           conformity with its broader regulatory scheme,
           expressly    declined    to   require   direct
           purchasers to release excess capacity in
           recognition of the fact that direct purchasers
           facing variable demand for natural gas might
           need to retain that capacity to ensure
           reliability.

Id. (citing Order No. 636, 57 Fed. Reg. at 13,269).   Because FERC

expressly required that LDCs be allowed to purchase excess capacity

and not release it, at their discretion, we determined that "[t]he

filed-rate doctrine prohibit[ed] us from questioning that reasoned

judgment."   Id. at 55.

                              - 11 -
                                           II.

                                           A.

               The question before us is simply whether Breiding's

logic also applies to this lawsuit.                We begin our analysis with

the most obvious difference between Breiding and this case:                           the

plaintiffs.       On issues of antitrust standing, see, e.g., Lorenzo

v. Qualcomm Inc., 603 F. Supp. 2d 1291, 1300–01 (S.D. Cal. 2009),

including        the     application        of    federal        direct     purchaser

requirements, see Ill. Brick Co. v. Illinois, 431 U.S. 720, 728–

29 (1977), the different positions occupied in the chain of sales

that    link    plaintiffs      to   the    alleged    wrongdoers         can    make   a

difference.            But   because   Breiding       did    not    rest        on   such

considerations, the parties' differing status similarly makes no

difference to the outcome here.

                                           B.

               We consider next the challenged conduct.              Examination of

PNE's   complaint        confirms    that    it   seeks     to    impose    antitrust

liability for the exact same conduct at issue in Breiding:                            The

alleged overscheduling and withholding of transmission capacity

under defendants' contracts with Algonquin pursuant to Algonquin's

FERC-approved tariff.          Mining its own complaint for tidbits and

inferences that do not appear to have been featured in Breiding,

PNE nevertheless contends that we can fairly view the defendants'

                                       - 12 -
conduct as something more than what we considered in Breiding for

two reasons.

            First, PNE argues that the challenged activity took the

form of a "refus[al] to deal" in the so-called short-term secondary

capacity market, a market not alleged in Breiding and not regulated

by   the   FERC   tariff.   Second,     it   argues   that    the   defendants

manipulated a price index, the Algonquin Citygate Price, which

manipulation PNE contends differs from failing to release excess

capacity.    We address each of these arguments in turn.

                                       1.

            PNE contends that Breiding does not control because

Breiding    focused    "solely    on    Defendants'     use    of   no-notice

contracts," while PNE focuses on what defendants "refused" to do

in the short-term "Secondary Capacity Market."            Instead of simply

failing to release the excess transportation capacity to the

primary capacity market, PNE argues, the defendants could have

sold their extra capacity in this secondary market, either by

itself or bundled with any excess natural gas to be transported.

But the     claim in   Breiding was precisely that the defendants

"reserved excess capacity . . . without using or reselling it."

Breiding, 939 F.3d at 49 (emphasis added).            "[R]efusing to sell,"

as PNE chooses to label the behavior, is just another way of saying

"without . . . reselling."       And the Breiding plaintiffs claimed as

well the same target of the alleged refusal to sell:                 increased

                                  - 13 -
wholesale natural gas prices, which in turn resulted in higher

electricity prices.    Id.        In both cases, the pivotal challenged

conduct was the alleged over-reserving of and then failure to

release gas transportation rights exercised under the defendants'

contracts with the Algonquin pipeline, the terms of which were

specifically allowed by FERC.           Because we found the balancing of

competition and reliability of natural gas supply, given the

market's limited transmission capacity, to be within the "bull's-

eye of FERC's regulatory aims," id. at 55, we saw no reason to

allow a jury in a private antitrust action to second-guess FERC's

approach.

            Specifically,    as    we    noted   in   Breiding,   release   of

capacity into this secondary market is expressly regulated by FERC

through 18 C.F.R. § 284.8, which contains a detailed set of

requirements for how and when a shipper may, "by choice," release

capacity, including bidding requirements and other contractual and

regulatory guarantees.       See 939 F.3d at 50 (quoting Tenn. Gas

Pipeline Co., 102 FERC ¶ 61,075, 61,119 (2003)).            In other words,

how and under what terms a shipper is to release any capacity falls

precisely within FERC's regulatory purview.            As we discuss below,

see infra Part II.D., FERC has issued an order determining that

market-based rates for short-term capacity releases are just and

reasonable. Promotion of a More Efficient Capacity Release Market,

123 FERC ¶ 61,286, ¶ 31 (June 19, 2008) (noting further that FERC

                                    - 14 -
is "not relying solely on competition to ensure just and reasonable

prices" but is rather "maintaining the rate cap on pipeline

services that will provide the same protection for capacity release

transactions     as     it   now   does   for    pipeline   negotiated      rate

transactions").        Such an order does not transfer from FERC to the

federal courts oversight of whether this market is functioning in

a manner that makes for just and reasonable rates.

           PNE argues that, because "no rate limitation applies"

under the regulations to certain capacity releases at issue here,

these transactions fall outside of FERC's purview.             See 18 C.F.R.

§ 284.8(b)(2).        But this provision was added as part of FERC's

determination that it would use market rates to satisfy the

requirement     that    capacity    release     transactions   are   just    and

reasonable.     See Promotion of a More Efficient Capacity Release

Market, 73 Fed. Reg. 72,692-01, at 72,963 (Dec. 1, 2008) (noting

that, "in order to enhance the efficiency and effectiveness of the

secondary capacity release market," FERC lifted "the maximum rate

ceiling on secondary capacity releases of one year or less").                 In

other words, unlike wellhead sales, for example, releases of

capacity still fall within FERC's jurisdiction, and a market-based

system is simply the mechanism that FERC has opted to use to secure

just and reasonable rates.          It does not follow, therefore, that

this   market   is     "unregulated."      To    the   contrary,   noting    its

continued "[o]versight" of capacity releases, FERC stated it "will

                                     - 15 -
entertain complaints and respond to specific allegations of market

power on a case-by-case basis if necessary.                     Furthermore, the

Commission directs staff to monitor the capacity release program

. . . using all available information."                  Promotion of a More

Efficient Capacity Release Market, 123 FERC at ¶ 56.                       And it will

"require[] informational postings of capacity release transactions

[to] provide transparency and facilitate the filing of complaints

if circumstances warrant."          Id. ¶ 31.

            Reframing       and   seeking     to    supplement       the    foregoing

"refusal" to deal theory as distinguishing this case from Breiding,

PNE also argues that the Breiding plaintiffs made no allegations

regarding    other    possible     economic        activity    in    the     secondary

capacity    market,    instead     "focusing       solely"    on    the     "no-notice

contracts"    in     the    primary      capacity     market.         The    Breiding

plaintiffs,    PNE     contends,      did    not     mention       everything      else

defendants    did     not    do   that      restricted    supply      in     the    gas

transmission market:         "[E]nter[] into bilateral agreements where

they sold their excess capacity without releasing it, or bundle[]

their capacity with gas and s[ell] it on the spot market; or . . .

s[ell] gas that they had stored locally without requiring pipeline

access."

                                      - 16 -
            The allegations in the complaint that PNE claims support

this theory are sparse at best,3 but taking them as true and drawing

reasonable inferences in PNE's favor, we find no rescue for PNE's

claim.    Two of these economic activities allegedly eschewed by

defendants actually hinged on reselling capacity on the pipeline,

so fail for the reasons already stated.                 The last allegedly

eschewed activity -- not selling locally stored gas -- fares no

better.      The complaint contains no allegations that any such

hoarding of physical gas has meaningful anticompetitive effects

independent    of   any   transmission    capacity     constraints.      PNE's

allegations center on the theory that whatever excess gas exists

in the New England energy market cannot be utilized because the

Algonquin    pipeline     often   sits   underfilled    due   to   defendants'

failure to release capacity.        There is no claim that gas for which

unreserved transmission capacity exists is being withheld from the

market.     Nor is there any claim that defendants have market power

in the physical natural gas market.            Indeed, no party to whom

defendants have allegedly refused to sell any such gas has joined

the complaint in this case.

     3  The extent of such allegations is that "[t]he relevant
natural gas market is the 'secondary capacity market' which
includes the spot market for the sale of natural gas and the
related 'excess capacity release' market for gas transmission
services (i.e., incorporating the excess capacity release market
and other short-term capacity transactions, whether bundled with
the physical commodity or not)."

                                    - 17 -
                                     2.

            PNE next argues that the defendants manipulated the

Algonquin Citygate Price index and that such manipulation somehow

makes the filed-rate doctrine inapplicable.          But the manipulation

described in the complaint centers on the defendants' refusal to

promptly release or sell transmission capacity, which purportedly

drove up the average price of natural gas, thereby also increasing

the index price.       As PNE describes the relationship, "by over-

scheduling and withholding their excess capacity, [defendants]

could drive up natural gas generators' input costs."               In other

words, "[d]efendants knew that by driving up the price of natural

gas in the unregulated spot market they drove up the Algonquin

Citygate Price and the corresponding bids submitted by gas-powered

generators in the electricity auction."           This is but another way

of saying that defendants drove up prices by not releasing pipeline

capacity.

                                     C.

            Taking a different tack, PNE argues that the tariff

itself includes a clause that allows PNE to bring an antitrust

claim to enforce the tariff.       The clause in question, Section 17,

states   only   that    "all   terms      and   provisions   contained   or

incorporated [in this tariff], and the respective obligations of

the parties thereunder, are subject to valid laws, orders, rules

and   regulations      of   duly    constituted      authorities     having

                                   - 18 -
jurisdiction."    We see nothing in this language granting PNE any

right to enforce the tariff.         PNE cites only a case under the

Federal Communications Act (FCA), which contains a clause allowing

private parties to recover damages from common carriers who violate

the FCA.   See Brown v. MCI WorldCom Network Servs., Inc., 277 F.3d

1166, 1169–72 (9th Cir. 2002) (construing 47 U.S.C. §§ 206-207).

PNE   ignores   more   pertinent   authority   to   the   contrary.   See

California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 852 (9th

Cir.) (holding that "substantive provisions of the tariff" are "an

area reserved exclusively to FERC, both to enforce and to seek

remedy"), opinion amended on denial of reh'g, 387 F.3d 966 (9th

Cir. 2004); see also Pub. Util. Dist. No. 1 v. Dynegy Power Mktg.,

Inc., 384 F.3d 756, 762 (9th Cir. 2004) (same, citing Lockyer).

Compare 47 U.S.C. § 207 ("Any person claiming to be damaged by any

common carrier subject to the provisions of [the FCA] . . . may

bring suit for the recovery of the damages for which such common

carrier may be liable under the provisions of this chapter, in any

district    court      of   the      United    States      of   competent

jurisdiction . . . ."), with 15 U.S.C. § 717s ("Whenever it shall

appear to [FERC] that any person is engaged or about to engage in

any acts or practices which constitute or will constitute a

violation of the provisions of this chapter, or of any rule,

regulation, or order thereunder, it may in its discretion bring an

action in the proper district court . . . to enjoin such acts or

                                   - 19 -
practices . . . ."),   15 U.S.C.   § 717l   (noting that government

parties may bring complaints to FERC),        and 15 U.S.C.   § 717m

(granting FERC power to investigate violations of the NGA).     With

respect to criminal antitrust enforcement, for example, the NGA

specifically states that FERC "may transmit such evidence as may

be available concerning such acts or practices or concerning

apparent violations of the Federal antitrust laws to the Attorney

General, who, in his discretion, may institute the necessary

criminal proceedings."   Id. § 717s(a).

          Nor does PNE explain how this clause grants jurisdiction

to review tariff terms, rather than confirming that the tariff

does not eliminate the obligation to comply with the many laws

whose application does not run afoul of the filed-rate doctrine.

Moreover, this clause is not some unique feature of this particular

tariff.   Its usage has dated back at least to the 1950s and has

been referenced in several FERC rulings.       See, e.g., Tenn. Gas

Pipeline Co., 60 FERC ¶ 61,261 (1992); United Gas Pipe Line Co.,

47 FERC ¶ 61,285 (1989); San Diego Gas & Elec. Co., 42 FERC ¶ 63,011

(1988); Columbia Gas Transmission Corp., 25 FERC ¶ 61,460 (1983).

See generally Pan Am. Petroleum Corp. v. Cities Serv. Gas Co., 182

F. Supp. 439, 441 (D. Kan. 1958).      We find it unlikely that FERC

has been inadvertently invalidating through a backdoor its own

                              - 20 -
exclusive   power     to    enforce     the     NGA's    and     Code   of   Federal

Regulations' prohibitions or the terms of its approved tariffs.4

                                         D.

            PNE finally suggests that we revisit our conclusion in

Breiding that the filed-rate doctrine applies to the defendants'

capacity-reserving decisions, see 939 F.3d at 55–56, in light of

the fact that FERC does not affirmatively approve those precise

decisions, see id. at 50.         PNE relies for this argument on Keogh

v. Chicago & Northwestern Railway Co., 260 U.S. 156 (1922), and

Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571 (1981), and this

suggestion is cogently set forth in detail in the amicus brief

filed by the Open Markets Institute.             In a nutshell, this argument

points out that, by defaulting to the market-based rates in lieu

of   cost-of-service         rate-making,         FERC     has       eliminated     a

justification   for    the     filed-rate       doctrine       and   increased    the

importance of ensuring that the pertinent markets are functioning

properly.       See        generally     Alfred     E.     Kahn,        Deregulatory

Schizophrenia, 75 Calif. L. Rev. 1059 (1987).                  And as California's

experience in its 2000 and 2001 energy crisis demonstrated, there

     4  As we noted in Breiding, FERC did conduct an investigation
and determined that the no-notice contracts had not been
anticompetitively abused. See 939 F.3d at 55 (citing News Release:
FERC Staff Inquiry Finds No Withholding of Pipeline Capacity in
New England Markets, Fed. Energy Regulatory Comm'n (Feb. 27, 2018),
https://www.ca1.uscourts.gov/sites/ca1/files/citations/18-1995_
BreidingvEversourceCitedURL.pdf).

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is substantial evidence that FERC has been slow to recognize market

defects that create opportunities to exploit market power.            See,

e.g., Morgan Stanley Capital Grp. Inc. v. Pub. Util. Dist. No. 1

of Snohomish Cnty., 554 U.S. 527, 553–55 (2008) (remanding to FERC,

which had conducted only a summary analysis, for a more searching

review as to whether alleged market manipulation had undermined

the market factors that justify the use of the Mobile-Sierra

presumption and might have led to supracompetitive prices).            In

this   instance,   too,   FERC's     brief    and   conclusory   statement

regarding its own investigation of the charges in this suit, see

supra note 4, leaves one less-than-assured that FERC has been

rigorous and thorough in filling the arguable enforcement gap

created by the filed-rate doctrine.

          At base, though, a market-based rate or tariff term

allowed by FERC under its rate-setting authority is still a rate

approved by FERC, albeit with a rate-setting measure (the market)

other than cost-of-service to achieve the requisite assurance that

the rate is just and reasonable.            See E. & J. Gallo Winery v.

EnCana Corp., 503 F.3d 1027, 1035–43 (9th Cir. 2007) (discussing

the transition from cost-of-service rate-making to market-based

rates in the natural gas market and finding the doctrine applicable

to market-based rates because the same underlying rationale of

deference and preemption applies to both rate-setting mechanisms).

So at the core of its argument, PNE contends that FERC's use of

                                   - 22 -
this alternative tool for disciplining the behavior of FERC-

regulated entities renders these entities essentially not FERC-

regulated, such that rates deemed just and reasonable by FERC may

nevertheless be punished as unreasonable in private civil damage

actions. Given that Congress allowed the use of market-based rates

without   eliminating    the   filed-rate        doctrine,   see    15   U.S.C.

§ 717c(a),   (c)    (instructing    FERC    to    declare    only   "just   and

reasonable" rates lawful); Mobil Oil Expl. & Producing Se. Inc. v.

United Distrib. Cos., 498 U.S. 211, 224 (1991) ("[T]he just and

reasonable standard does not compel the Commission to use any

single pricing formula in general or vintaging in particular."),

and given that Congress in the wake of the California energy crisis

enacted remedial legislation that also contained no such provision

limiting the doctrine's applicability or, as in the FCA, allowing

enforcement in federal district courts, see Energy Policy Act of

2005, Pub. L. No. 109–58, 119 Stat. 594, we see no license to

embark on such a substantial change of course from that marked out

by precedent.      None of this is to say that FERC has necessarily

been diligent in ensuring that the markets it allows to set rates

are themselves always properly functioning, a prerequisite for the

assumption that the rates produced are just and reasonable.                 See

Mont. Consumer Counsel v. FERC, 659 F.3d 910, 919 (9th Cir. 2011)

(citing La. Energy & Power Auth. v. FERC, 141 F.3d 364, 365 (D.C.

Cir. 1998)) (noting that "it is not unreasonable for FERC to

                                   - 23 -
presume that rates will be just and reasonable" where "sellers do

not have market power or the ability to manipulate the market

(alone or in conjunction with others)").    Rather, it is to say

that complaints to this effect need be raised with FERC and

Congress, not with a jury, at least as we understand the law to

now be.

                               III.

          For the foregoing reasons, we affirm the decision of the

district court dismissing the complaint for failure to state a

claim.5

     5  "[T]he filed-rate doctrine applies with equal force to
state-law challenges." Breiding, 939 F.3d at 56. PNE raises no
argument to the contrary.

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