UPDATE 3-U.S. top court allows antitrust claims over natural gas prices

Tue Apr 21, 2015 2:29pm EDT
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(Adds plaintiffs' reaction, paragraph 6)

By Lawrence Hurley

WASHINGTON, April 21 (Reuters) - The U.S. Supreme Court on Tuesday ruled that a federal law governing the natural gas market does not shield energy companies from state antitrust claims made over the western U.S. energy crisis between 2000 and 2002.

The 7-2 ruling was a loss for several energy companies, including American Electric Power Company Inc, Dynegy Inc and ONEOK Inc, which were accused of manipulating published price indexes that led to a spike in gas prices. The resulting energy crisis included rolling blackouts in California.

The ruling means the case can now proceed in lower courts, although it made it clear there could still be some conflicts between state and federal law that could require further litigation.

The energy companies asked the Supreme Court to rule that state antitrust law claims were trumped by a federal law, the Natural Gas Act. The law grants the Federal Energy Regulatory Commission (FERC) authority to regulate certain aspects of the natural gas market including wholesale prices.

The plaintiffs are industrial and commercial users of natural gas, including engine maker Briggs & Stratton Corp and Bombardier Inc's Learjet Inc.

Lawyers for the plaintiffs said in a statement the ruling was a "vigorous affirmation" of states' rights and "preserves the essential character" of the Natural Gas Act.

After the energy crisis, the plaintiffs filed multiple lawsuits against various energy companies, accusing them of violating state antitrust laws. The cases were consolidated before a federal judge in Nevada.   Continued...