Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Nevada’s Petition for Review of State Supreme Court Decision in Natural Gas Price Fixing Case Denied, (Jun 24, 2013)

By Jeffrey May, J.D.

A Nevada Supreme Court decision (128 Nev.Adv.Rep. 46), rejecting a state antitrust suit against Reliant Energy and others for conspiring with the now-defunct Enron Corporation to drive up the price of natural gas will not be disturbed by the U.S. Supreme Court. The U.S. Supreme Court today denied Nevada's petition for certiorari (Nevada v. Reliant Energy, Inc., Dkt. 12-980).

The case arose out of an energy crisis in 2000 and 2001, when gas and electricity prices skyrocketed in Nevada and other western states. The state brought an action alleging that energy companies conspired to drive up prices, by engaging in rapid bursts of purchasing natural gas followed by rapid bursts of selling the same gas. This purportedly resulted in considerable profits for the energy companies and significantly higher prices for natural gas consumers. The state supreme court ultimately ruled that the state's single claim under the Nevada Unfair Trade Practices Act was preempted by federal law.

In its petition, the state contended that the state supreme court’s decision conflicted with two federal appellate court decisions holding that federal natural gas legislation and regulation was not preemptive of state antitrust law. The state cited E. & J. Gallo Winery v. EnCana Corp. (9th Cir. 2007) 503 F3d 1027, 2007-2 Trade Cases ¶75,872; and State of Ill. ex rel. Burris v. Panhandle Eastern Pipeline Co. (7th Cir. 1991) 935 F.2d 1469, 1991-1 Trade Cases ¶69,455, as conflicting precedents.

The state also questioned whether it was error for the Nevada Supreme Court to base its “field preemption” conclusion on the U.S. Supreme Court's 1986 decision in Transcontinental Gas Pipe Line Corp. v. State Oil & Gas Bd. of Mississippi, 474 U.S. 409, without regard to subsequent limitations of that decision in the Court’s 1988 decision in Puerto Rico Department of Consumer Affairs v. Isla Petroleum Corp., 485 U.S. 495, and subsequent changes in the relevant statutory and regulatory framework enacted by Congress and the Federal Energy Regulatory Commission.

Attorneys: Catherine Cortez Masto, Nevada Attorney General, for State of Nevada. Aaron M. Streett (Baker Botts L.L.P.) for Reliant Energy, Inc.

Companies: Reliant Energy, Inc.

News: Antitrust NevadaNews