From Antitrust Law Daily, July 3, 2013

Filed rate doctrine barred Louisiana Unfair Trade Practices Act claim against natural gas transporter

By Jody Coultas, J.D.

A Louisiana Unfair Trade Practices Act claim brought by natural gas producer Medco Energi US, LLC against Sea Robin Pipeline Company, a natural gas transporter, was barred by the filed rate doctrine, according to the U.S. Court of Appeals in New Orleans (Medco Energi US, LLC v. Sea Robin Pipeline Company, July 2, 2013, per curiam).

Sea Robin transports natural gas via pipeline for producers like Medco. Transporters must file tariffs with the Federal Energy Regulatory Commission (FERC) stating all rates and charges for any transportation or sale, and the classifications, practices, and regulations affecting the rates and charges, and can only charge what FERC determines is just and reasonable. While repairing its pipeline due to damage caused by Hurricane Ike, Medco and all other producers in an area were unable to transport gas. FERC allowed Sea Robin to impose a surcharge that would allow recovery of its restoration costs over the course of 21.4 years. Medco claimed that Sea Robin materially misrepresented how long it would take to complete the repairs.

Under the filed rate doctrine, any filed rate approved by the governing regulatory agency is per se reasonable and unassailable in judicial proceedings brought by ratepayers.

Allowing Medco to recover damages for its claims would conflict with the filed rate, according to the court. The issue before the court was whether the claim implicated the parties’ rights and liabilities under the rate when the claim did not attempt to challenge a filed rate. Medco only paid for interruptible service subject to the provisions of the tariff. Allowing recovery for damages incurred when it could not use Sea Robin’s pipeline would conflict with the interruptible rate and the provisions of the tariff. Medco contracted for interruptible service with no guaranteed use of the pipeline. Therefore, it could not recover for alleged misrepresentation or misquotation that conflicted with the tariff. Medco’s argument that the filed rate doctrine only applied when discriminatory business practices were an issue was dismissed, as was the argument that the claims were not barred because they were not based on a breach of duty arising from the filed tariff.

The case is No. 12-30791

Attorneys: Paul Matthew Jones (Liskow & Lewis) for Medco Energi US, LLC. James K. Ordeneaux (Plauche Maselli Parkerson, L.L.P.) for Sea Robin Pipeline Company.

Companies: Medco Energi US, LLC; Sea Robin Pipeline Co.

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