Antitrust Law Daily Wrap Up, ANTITRUST NEWS: High Court Will Not Consider Filed Rate Doctrine in Price Discrimination Case Against Energy Provider, (Jan 14, 2013)

By Jeffrey May, J.D.

Electricity service provider Duke Energy was unable to convince the U.S. Supreme Court to review a decision of the U.S. Court of Appeals in Cincinnati (681 F.3d 788, 2012-1 Trade Cases ¶77,913) reviving a Robinson-Patman Act price discrimination claim against the firm over its objections based on the filed rate doctrine. The Court today denied Duke’s petition for certiorari, which was filed on October 15, 2012 (Duke Energy International, Inc. v. Williams, Dkt. 12-477).

The case was brought by Ohio customers against Duke for providing “indirect rebates” to large consumers in exchange for their withdrawal of objections to a rate-stabilization plan under review by the Public Utilities Commission of Ohio (PUCO). The complaining customers alleged that they would have had to pay substantially more for electricity than their competitors due to the rebates.

The district court found that the filed rate doctrine, which precludes a challenge to the reasonableness of the rates of common carriers if the rates have been approved by an appropriate regulatory agency, denied the court federal question subject matter jurisdiction. The district court also found that PUCO had exclusive jurisdiction over state law claims.

The appellate court reversed the dismissal. The filed rate doctrine was inapplicable, according to the appellate court, because the customers’ claims did not concern the particular rate set by the PUCO, but rather payments made outside of the rate scheme.

The appellate court also ruled that the district court’s federal question subject matter jurisdiction was sufficient to allow supplemental jurisdiction over state law claims. The district court had concluded that it lacked jurisdiction over the state law claims because, sitting in diversity as an Ohio court, PUCO had exclusive jurisdiction. The appellate court did not, however, reach the question of whether the district court sitting in diversity would have jurisdiction over plaintiffs' state law claims.

In addition, the appellate court held that the plaintiffs adequately alleged injury and competitive disadvantage sufficient to survive a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss with respect to their Robinson-Patman Act claim.

In its petition for review, Duke Energy questioned whether the Sixth Circuit erred in holding that it was not required to apply Ohio's exclusive jurisdiction doctrine to the state claims because state law cannot limit federal jurisdiction. It also questioned the court's interpretation of the filed rate doctrine.

Specifically, Duke Energy asked whether the appellate court's decision conflicted with Supreme Court precedent and the decisions of other circuits holding that: (1) when state claims are barred in state court, they are barred in federal court under the Erie doctrine; and (2) the filed rate doctrine bars (i) claims challenging a regulated utility's rates or practices as reasonable or discriminatory and (ii) claims that would effectively allow the plaintiff to pay a lower rate than the filed rate.

Joseph R. Guerra (Sidley Austin LLP) for petitioner. Paul M. De Marco (Markovits, Stock & De Marco) for respondents.

News: Antitrust