AG Schmidt: Kansas to back consumers in U.S. Supreme Court natural gas price-fixing case

By Kansas Attorney General
January 07, 2015

The State of Kansas next week will ask the U.S. Supreme Court to preserve state authority to protect consumers from antitrust violations that increase the retail price of natural gas, Kansas Attorney General Derek Schmidt said today.

The U.S. Supreme Court granted Kansas’ request to participate in oral argument in the case, even though the state is not a party, because the outcome could determine whether Kansas and other states’ consumer protection laws are preempted by a federal law on the transportation and sale of natural gas. Solicitor General Stephen McAllister will argue on behalf of Kansas and the amici states in the case to be heard January 12 at the Court.

“We’re making sure Kansas consumers have a voice in the courtroom,” Schmidt said. “I’m encouraged that the Supreme Court granted us time for oral argument, and we will vigorously defend Kansas consumer-protection laws from the federal administration’s power-grab. We think 75 years of state authority to protect consumers from natural gas price-fixing at the retail level should be left intact.”

In November, Schmidt led a bipartisan group of 21 state attorneys general in filing an amicus curiae brief asking the Supreme Court to allow continued enforcement of state anti-price fixing laws against retail sellers of natural gas who illegally rig prices. The federal government, which is opposite Kansas in this lawsuit, is arguing that state antitrust laws are preempted by the federal Natural Gas Act. The defendants and the federal government argue the preemption extends to the retail market when the challenged practice is engaged in by a federally regulated seller and affects a federally regulated wholesale rate.

The underlying lawsuit involves accusations by the plaintiffs, which include both Kansas-based Learjet, Inc., and Topeka Unified School District No. 501, that the defendants illegally drove up the retail price of natural gas, costing gas purchasers millions of dollars. Similar cases from around the country were consolidated into multi-district litigation in Nevada, and the San Francisco-based 9th Circuit Court of Appeals eventually allowed the plaintiffs to proceed with their state-law claims. The defendants have asked the Supreme Court to reject the lawsuit by concluding that federal law preempts state laws that combat price-fixing in the natural gas retail market when the challenged industry practices also affect the wholesale gas market.

The case is ONEOK, Inc. v. Learjet, Inc. Oral argument will be at 10 a.m. EST on Monday, January 12.


Close