A recent district court order highlights the importance of maintaining a strong compliance program with effective compliance controls and practices, while highlighting the risk of employee misconduct for the enterprise itself. Specifically, on December 20, a California district court denied a motion to dismiss a FERC complaint that seeks to enforce a penalty against a company and one of its traders. In addition to finding that FERC’s claims were not time barred, the court also found that the employer can be held liable for the trader’s actions even though the trader withheld information from the company regarding the trading activity at issue. However, in a win for the company, the court limited the civil penalties that may be sought in a complaint to the proposed penalty set forth in FERC’s order to show cause. This limits FERC’s ability to penalize a defendant for choosing to contest a proposed sanction in district court.
FERC, CFTC, and State Energy Law Developments
A natural gas trader pleaded guilty in federal district court last week to conspiring to commit commodities fraud and wire fraud in an insider trading scheme over natural gas futures. His co-conspirator had pleaded guilty last July to conspiracy to commit wire fraud and to violate various provisions of the Commodity Exchange Act and the Commodity Futures Trading Commission’s (CFTC) anti-manipulation rule.
The US Supreme Court granted certification on February 3 to review the US Court of Appeals for the Third Circuit’s decision in In re PennEast Pipeline Co. in order to resolve an important question: Does the Natural Gas Act (NGA) delegate authority to exercise the federal government’s eminent domain power to condemn land in which a state claims an interest when FERC grants a certificate of public convenience and necessity for an interstate pipeline project?
It’s been a difficult several days for the oil industry. First, the Biden administration revoked the border-crossing permit for the Keystone XL pipeline on January 20. Another executive order, among other things, directed the secretary of the US Department of the Interior to pause oil and natural gas leases on public lands and offshore waters pending a review of leasing practices.
Our colleagues in the environmental practice explain the DC Circuit’s recent decision vacating the Environmental Protection Agency’s Affordable Clean Energy (ACE) rule and discuss the implications for the Clean Power Plan.
On July 10, the US Court of Appeals for the DC Circuit found that the Federal Energy Regulatory Commission was well within its rights to prevent states from prohibiting energy storage resources from participating in wholesale (i.e., sales for resale) energy markets. The court’s order is the latest judicial affirmation of FERC’s authority to regulate activities on wide portions of the electric grid, including facilities reserved to state regulators, if those activities affect wholesale rates.
The US Court of Appeals for the Fourth Circuit resolved a question of first impression on February 11 on when the statute of limitations period commences for civil enforcement claims brought by the Federal Energy Regulatory Commission (FERC) under the Federal Power Act (FPA or the Act) when the alleged violator opts for adjudication in federal district court instead of an administrative proceeding.
A declaratory order issued by the Federal Energy Regulatory Commission (the Commission) on January 30 in Docket No. RP20-41-000 grants pipeline developers greater certainty in planning and siting construction. The order was issued after a split 2-1 vote.
On June 24, the US Supreme Court issued its opinion in Food Marketing Institute v. Argus Leader Media, expanding the scope of information protected under Exemption 4 of the Freedom of Information Act (FOIA).
On June 14, the US Court of Appeals for the DC Circuit vacated and remanded two challenged orders and directed FERC to explain or reconsider whether data made available after a challenged rate increase becomes effective (i.e., post–rate increase information) should be considered.