In Utility Choice v. TXU Corp., 2005 WL 3307524 (S.D. Tex. Dec. 6, 2005), two retail electric providers brought suit in federal court against several major power producers in the Texas energy market, including power generators and retail electric providers in the bilateral contract market and centralized spot markets operated by a clearinghouse.  Plaintiffs alleged that the defendants had driven up wholesale electricity prices through their manipulation of the energy market, and that this was a violation of federal and state antitrust laws, federal RICO laws, and a number of other state laws.  Plaintiffs sought damages and equitable relief.

Defendants moved to dismiss the entire complaint on the basis of the "filed rate doctrine," which dates back to the 1922 Supreme Court decision in Keogh v. Chicago Northwestern Ry. Co., 260 U.S. 156 (1922) and precludes challenges to rates filed with administrative bodies such as FERC.  The rates at issue in Utility Choice are rates that were filed with a state regulatory agency, and not the federal regulatory agency; however, because the case involved federal claims, the federal filed rate doctrine applied.  Defendants argued that the filed rate doctrine barred plaintiffs’ claims because those claims were based upon allegations that the filed rate was too high, unfair or unlawful.  The Plaintiffs sought to distinguish their complaint because defendants’ rates were not "filed" in the same manner as were rates filed with FERC.

The District Court noted that the Fifth Circuit had previously held that "the filed rate doctrine bars claims for damages stemming from rates approved by the [Public Utility Commission of Texas ("PUCT")] in the Texas energy market."  Id.  In Tex. Commercial Energy v. TXU Energy, Inc., the Fifth Circuit affirmed the dismissal of antitrust and other claims, rejecting the argument that the filed rate doctrine did not apply to the spot market segment of the Texas energy market, where offers to sell and purchase energy are matched by a clearinghouse.   413 F.3d 503, 509-10 (5th Cir. 2005).  The Fifth Circuit analyzed the role of the PUCT with regard to the spot market, and found that, "PUCT’s oversight over the market is sufficient to conclude that the [spot market] energy rates are ‘filed’ within the meaning of the filed rate doctrine."  Id. at 510.  The District Court in Utility Choice noted that the Fifth Circuit "ostensibly accepted the analogous body of case law wherein the filed rate doctrine has been held to bar claims for damages relating to rates in markets governed by FERC."  The District Court accepted this analysis.  2005 WL 3307524 at *2.

Plaintiffs argued that their claims were not precluded as a result of the Fifth Circuit’s decision, suggesting that the Fifth Circuit left open a number of avenues through which the Court could find that the filed rate doctrine does not bar their claims for damages.  Id. at *3.  The District Court rejected plaintiffs’ arguments, among others, that the filed rate doctrine does not bar their claims because, "the lack of a substitute mechanism for recovery makes the filed rate doctrine inapplicable."  Plaintiffs relied on the Supreme Court’s decision in Keogh v. Chicago Northwestern Ry. Co., 260 U.S. at 162, for their argument that an alternative damages mechanism is necessary for the filed rate doctrine to apply.  The District Court pointed out, however, that "Keogh does not state that an alternative damages mechanism is required, but rather indicates that the plaintiff in that case could have recovered damages through agency proceedings."  2005 WL 3307524 at *3.  The District Court further noted that "subsequent decisions indicate that an alternative damages mechanism is not required for claims to be barred by the filed rate doctrine."  Id.

The District Court then turned to the question, which it considered to be one of first impression in the Texas energy market, of whether claims for equitable relief are also barred by the filed rate doctrine.  The Court found that "[c]ase law from other circuits indicates that although equitable relief is available even where claims for damages are barred by the filed rate doctrine, such equitable relief is available with respect to only a very narrow range of activity."  Id. at *5.  The District Court rejected the argument that the filed rate doctrine does not bar equitable relief in this case because equitable relief would "require the court to engage in continued oversight of the Texas energy market," and would, "unduly infringe upon the rate setting authority held by the PUCT."  The Court explained that "plaintiffs are asking the Court to do what the PUCT is authorized and empowered to do, which would affect market rates and infringe upon the powers of the PUCT."  Id. at *6.  The Court, therefore, refused to grant the equitable relief Plaintiffs requested.  In so doing, the Court discussed Judge Whaley’s opinion in In re California Wholesale Electricity Antitrust Litigation, 244 F. Supp. 2d 1072 (S.D. Cal. 2003), a case where plaintiffs sought equitable relief, and the Court refused to grant it, "recogniz[ing] that [i]ssuance of the injunction sought by Plaintiff would impose judicial oversight of all Defendants' actions, thereby effectively changing the rules established by FERC for participating in these markets. The filed rate doctrine bars this result."  2005 WL 3307524 at *5 (citing In re California Wholesale Electricity Antitrust Litigation, 244 F. Supp. 2d at 1078.)