Oneok, Inc. et al. v. Learjet, Inc. et al.

PETITIONER: Oneok, Inc. et al.
RESPONDENT: Learjet, Inc. et al.
LOCATION: United States District Court for the District of Nevada

DOCKET NO.: 13-271
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 575 US (2015)
GRANTED: Jul 01, 2014
ARGUED: Jan 12, 2015
DECIDED: Apr 21, 2015

Anthony A. Yang - Assistant to the Solicitor General, Department of Justice, for the United States as amicus curiae, for the petitioners
Jeffrey L. Fisher - for the respondents
Neal Kumar Katyal - for the petitioners
Stephen R. McAllister - for Kansas, et al., as amici curiae, for the respondents

Facts of the case

Learjet, Inc. and other retail buyers of natural gas (Learjet) sued Oneok, Inc. and other energy trading companies (Oneok) for artificially increasing energy prices during the 2000–2002 energy crisis in violation of several states' antitrust laws. Learjet claimed that Oneok reported false data and engaged in "wash sales," which are prearranged sales in which traders execute a trade on an electronic trading platform, and then immediately offset that trade by executing an equal and opposite trade. Oneok moved to dismiss Learjet's claims and argued that the claims were pre-empted by the federal Natural Gas Act (NGA). The Natural Gas Act regulates interstate, wholesale natural gas trade, but it does not apply to retail sales of natural gas. The district court granted Oneok's motion to dismiss and held that Learjet's claims were pre-empted by the NGA because Oneok's actions affected wholesale prices as well as retail prices. The U.S. Court of Appeals for the Ninth Circuit reversed and held that, because Learjet suffered harm in retail transactions, which the NGA does not regulate, Learjet's claims were not pre-empted.


Does the Natural Gas Act pre-empt state-law claims challenging industry practices that directly affect the wholesale natural gas market when those claims are asserted by litigants who purchased gas in retail transactions?

Media for Oneok, Inc. et al. v. Learjet, Inc. et al.

Audio Transcription for Oral Argument - January 12, 2015 in Oneok, Inc. et al. v. Learjet, Inc. et al.

Audio Transcription for Opinion Announcement - April 21, 2015 in Oneok, Inc. et al. v. Learjet, Inc. et al.

Stephen G. Breyer:

Justice Breyer has the opinion of the Court this morning in case 13-271, Oneok v. Learjet.

Many years ago Justice Jackson, I think in Hope Natural Gas, wrote, the wealth of Midas and the wit of man cannot produce a natural gas field.

Congress, however, can authorize the regulation of the price of natural gas coming from the field and it has done so.

Indeed, Congress has delegated to the Federal Energy Regulatory Commission, the power to regulate interstate wholesale natural gas prices, and this Court has said that in doing so, “Congress occupied the field of matters relating to wholesale sales and transportation of natural gas in interstate commerce.

Thus the states while free to regulate the retail prices of natural gas cannot regulate wholesale prices.”

The question before us concerns State efforts to regulate interstate pipeline behavior that affects both, wholesale and retail natural gas prices.

In particular, a group of retail pipeline customers has sued a group of pipelines under state antitrust laws, which they say forbid certain anticompetitive price reporting behavior in which the pipelines engaged and which FERC itself has forbidden.

The pipelines argue that the states cannot forbid this behavior because it falls within the field that Congress reserved exclusively to the Federal Commission.

The Court of Appeals for the Ninth Circuit rejected that argument and so do we.

The State Law claims at issue are directed at retail prices, a matter firmly on the State's side of the wholesale retail dividing line.

The objective of the State antitrust laws is broad, covering business in general and not just natural gas and states have long provided remedies against unfair business practices.

These factors and others discussed in our opinion support our finding of no field preemption.

So we affirm the Ninth Circuit.

Justice Thomas has filed an opinion concurring in part and concurring in the judgment.

Justice Scalia has filed a dissenting opinion in which the Chief Justice joins.