Total Gas & Power North America Inc. (TGPNA) ran up against another roadblock in its lengthy dispute with FERC Thursday when an appeals court turned away the company's argument that the agency does not have the authority to adjudicate violations of the Natural Gas Act (NGA) and to impose civil penalties on violators.
"Total does not object to any actions” that the Federal Energy Regulatory Commission has already taken, the U.S. Court of Appeals for the Fifth Circuit said in a 23-page opinion [No. 16-20642]. "Rather, Total seeks to preemptively challenge a FERC order that may never be issued.
“All of Total's arguments are predicated on future events and are brought before FERC has even scheduled the matter for a hearing -- let alone issued an order finding a NGA violation and imposing a civil penalty."
The court had previously held that any challenge to FERC's authority to adjudicate NGA violations and impose civil penalties must await a final determination of a violation and imposition of a penalty by FERC.
"Total's suit is thus not ripe and the district court did not err in dismissing on justiciability grounds," the court concluded.
The seeds of the dispute were sown in September 2015, when FERC's Office of Enforcement (OE) alleged that the Houston-based subsidiary of France's Total SA and two of the company's West Desk traders and supervisors had developed a scheme to manipulate the price of natural gas in the southwest United States between June 2009 and June 2012.
TGPNA's Therese Nguyen Tran and Aaron Hall, who remain plaintiffs in the case, violated section 4A of the NGA and the FERC's Anti-Manipulation Rule by devising and executing a scheme to manipulate gas prices over the three-year period, FERC staff said in a Notice of Alleged Violations.
In January 2016 TGPNA asked the federal court for a declaratory order to stop FERC from proceeding with any administrative enforcement. It asked the court to guarantee the company a chance to have the allegations heard by a jury trial in a federal district court.
Total based its argument on Section 24 of the NGA, which states that "The District Courts of the United States...shall have exclusive jurisdiction of violations of [the NGA]...and of all suits in equity and actions at law brought to enforce any liability or duty created by, or to enjoin any violation of [the NGA]."
Since then, Total has fought to take the case away from FERC on parallel, independent tracks, both before FERC and in the courts.
In a filing at FERC in January, the company said FERC should not make the "findings" on disputed facts and issues in a case involving TGPNA, as previously recommended by enforcement staff, and should instead dismiss most of staff's claims, pursuing any remaining allegations in federal district court [IN12-17].
OE has asked that FERC set the Total case for a hearing before an administrative law judge, decide some undisputed facts without a hearing, and reject Total's legal and jurisdictional challenges, FERC has not order the hearing or taken any action on the other motions, the court said Thursday.