Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Personal jurisdiction over energy companies raised in Supreme Court petition, (Jul 14, 2014)

By Jeffrey May, J.D.

An energy company is questioning a Ninth Circuit panel's analysis to determine that specific personal jurisdiction existed over the out-of-state firm for allegedly conspiring with 20 other companies to manipulate natural gas prices in violation of state antitrust laws. AEP Energy Services filed a petition for certiorari with the U.S. Supreme Court on June 30, seeking review of a decision of the U.S. Court of Appeals in San Francisco (AEP Energy Services v. Heartland Regional Medical Center, Dkt. No. 14-1).

AEP Energy Services has asked the Court to correct the panel's “misguided” standard for personal jurisdiction and to resolve an “entrenched” split among the circuits on this issue. According to the petitioner, the Ninth Circuit panel departed from the approach taken by the vast majority of courts that jurisdiction exists only when the forum qualifies as the focal point of the conduct, with the brunt of the harm felt there. The panel did not require a showing that the forum was specially targeted or that any injury was centered there, it was argued.

Specifically, the petitioner asked: (1) whether due process permits a court to exercise specific personal jurisdiction over non-consenting, out-of-state defendants based on the plaintiffs' bare allegation that the defendants engaged in a nationwide conspiracy outside the forum that had an intended effect inside the forum (as well as presumably in every other state); and (2) whether due process permits a court to exercise specific personal jurisdiction over non-consenting, out-of-state defendants when the defendants' limited forum conduct bears no causal relationship to the plaintiffs' claim.

The complaints against AEP Energy Services were brought in Missouri and Wisconsin and later consolidated in multidistrict litigation. The district court had held that Missouri and Wisconsin lacked personal jurisdiction over AEP Energy Services and its subsidiary. On appeal, the Ninth Circuit ruled that the nexus requirement was satisfied because the claims arose out of the alleged collusive manipulation of gas price indices in which the petitioner purportedly participated.

“As applied to a nationwide conspiracy, the Ninth Circuit's rule permits each and every state to exercise jurisdiction without any requirement that a particular forum be singled out or specially targeted,” the petitioner warned.

The day after the petition was filed, the High Court agreed to review the appellate court's decision to consider whether the state law antitrust claims were preempted by the Natural Gas Act (NGA). The petitioners noted that, in the event the earlier petition was granted, this later petition should be held for appropriate disposition pending resolution of that matter. If the Ninth Circuit's preemption ruling was reversed, there would be no need to consider the personal jurisdiction issued raised in this second petition.

Attorneys: Jessica L. Ellsworth (Hogan Lovells US LLP) for AEP Energy Services.

Companies: AEP Energy Services

News: Antitrust