FERC Maxim Ruling Hints At Shift In Favor Of Defendants

On July 21, 2016, the U.S. District Court for the District of Massachusetts rejected theFederal Energy Regulatory Commission’s effort to limit review de novo to the administrative record. Judge Mark Mastroianni ruled in Maxim Power — a generation “burn as bid” manipulation case brought by FERC seeking $5 million in penalties — that not only did de novo review allow for discovery and fact finding, but defendants are entitled to a full civil trial including the possibility of a jury trial with all attendant protections and processes.[1]

Recall that on April 11, 2016, the same court (albeit a different judge) issued an order on motions to dismiss in the FERC v. Silkman and Competitive Energy Services LLC and the FERC v. Lincoln Paper and Tissue LLC cases — two closely aligned FERC enforcement cases stemming from alleged manipulative conduct by the defendants in ISO New England’s electricity demand response market. Rejecting a statute of limitations defense, Judge Douglas Woodlock denied the motions and transferred the cases to the U.S. District Court for the District of Maine without definitively ruling on the de novo review issue.[2]

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