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FERC, Total SA Continue Market Manipulation Battle in Texas Court

Total Gas & Power North America Inc. (TGPNA) has asked a federal district court judge to reconsider a decision that the company may not defend itself against FERC enforcement staff allegations of natural gas trading manipulation in court -- a conclusion that would effectively return the case to the Commission.

But with nothing new added to TGPNA's arguments, that motion needs to be denied, according to the Federal Energy Regulatory Commission.

"Having apparently changed their minds about the proper forum for continuing to pursue their arguments, Plaintiffs now ask this Court to change its mind," FERC said in documents filed this week in the U.S. District Court for the Southern District of Texas in Houston [No. 4:16-cv-01250]. TGPNA in its request did not identify new evidence or errors of law or fact in Senior U.S. District Judge Nancy F. Atlas' conclusion six weeks ago that the court "cannot and should not entertain [TGPNA's] action for a declaratory judgment" (see Daily GPIJuly 18).

Instead, TGPNA "have merely re-argued the points made in their earlier briefing," FERC said in its filing.

The Total SA unit had contended that the federal courts are the only place where alleged violations of the federal Natural Gas Act may be sorted out (see Daily GPI, May 10). Attorneys for Total's North American operations argued that FERC does not get the first chance to decide alleged gas market manipulation cases.

In a declaratory judgment issued in July, Atlas denied as moot TGPNA's request for summary judgment and granted FERC's motion to dismiss the complaint, moving the debate back to the federal agency's docket.

"At least three different justiciability or jurisdictional doctrines support dismissal of this action," Atlas wrote in her decision. "Each of these doctrines revolves around the central theme that, absent extraordinary circumstances, Article III courts should not interfere with ongoing administrative proceedings. This principle is particularly relevant where the challenge is to agency processes still in their early stages."

The market manipulation case brought against TGPNA by FERC's enforcement staff "suffers from multiple infirmities" and doesn't include documentary evidence of intent to manipulate any market, the company has said (see Daily GPI, July 13). FERC should throw out the proceeding, TGPNA said in a 200-page response to an Office of Enforcement show cause order, which included allegations of natural gas market manipulation against the company and two of its trading managers (see Daily GPI, May 3). The order recommended civil penalties of nearly $226 million [IN12-17].

The trades allegedly took place at four Southwest locations between June 2009 and June 2012. FERC staff first issued a notice of the ongoing investigation in September 2015 (see Daily GPI, Sept. 22, 2015).

Separately, in December 2015, TGPNA forged a settlement with the Commodity Futures Trading Commission in which the company agreed to pay $3.6 million in civil penalties in a case charging the company with attempting to manipulate gas prices.

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