Oneok, Inc. v. Learjet, Inc.

Whether the Natural Gas Act, which defines Federal Energy Regulation Commission (“FERC”) jurisdiction over natural gas, preempts state antitrust claims arising from transactions beyond FERC jurisdiction.

This is the consolidation of multistate litigation by Respondents alleging Petitioners contravened states’ antitrust laws by fixing the prices of retail natural gas sales. The district court granted summary judgment for Petitioners on the grounds that the Natural Gas Act (“NGA”) granted the Federal Energy Regulation Commission (“FERC”) jurisdiction over any “practice” affecting rates subject to FERC regulation, equating privately-published price indices to FERC-approved rates, extending FERC jurisdiction to preempt states’ antitrust laws over non-jurisdictional transactions. The Ninth Circuit reversed, and the Supreme Court granted certiorari.

The Ninth Circuit began with the presumption against preemption, looking at Wyeth v. Levine, 555 U.S. 555, 565 (2009). It held that NGA Section 1(b) defines and limits FERC jurisdiction, and therefore Section 5(a) is limited within the scope of Section 1(b). Furthermore, the Supreme Court recognized Section 1(b) granted states jurisdiction over some transactions in Northwest Central Pipeline Corp. v. State Corporation Commission of Kansas, 489 U.S. 493, 496 (1989). Contrary to the district court, the Ninth Circuit distinguished non-jurisdictional rates, following the D.C. Circuit’s narrow interpretation that Section 5(a) “practice[s]” covered regulated transactions, but not retail sales.