Oneok, Inc. v. Learjet, Inc.

Background

A group of manufacturers, hospitals, and other large buyers who purchased natural gas directly from interstate pipelines sued those pipelines under state antitrust laws. The buyers allege the pipelines manipulated privately published price indices through false reports and "wash trades," which raised both wholesale and retail natural-gas prices. The pipelines removed the cases to federal court and won summary judgment there on the ground that the federal Natural Gas Act pre-empted the state suits; the Ninth Circuit reversed and sent the question to this Court.

Reasoning

The Court examined whether Congress had "occupied the field" of wholesale natural-gas sales so completely that state antitrust claims are barred. It emphasized that the Natural Gas Act expressly leaves many subjects to the States and that pre-emption should be found only after careful analysis. The majority focused on where a state law is "aimed" and stressed that these antitrust laws apply generally and regulate marketplace conduct that affects both retail (state-regulated) and wholesale (federally regulated) sales. Because the suits target conduct affecting nonjurisdictional retail sales as well as jurisdictional wholesale sales, and because there was no FERC finding that state suits are pre-emptive, the Court concluded the Act does not categorically pre-empt these state claims. The Court also left conflict-preemption issues for lower courts to decide.

Real world impact

The decision lets state antitrust damage claims against pipelines proceed, meaning large gas buyers can pursue remedies in state courts even when FERC regulates wholesale markets. Pipelines may therefore face state litigation over the same practices regulated by FERC, and lower courts will address any direct conflicts between state suits and federal regulation.

Dissents or concurrances

Justice Thomas concurred in part, expressing caution about implied pre-emption doctrines; Justice Scalia dissented, arguing the Act should pre-empt state antitrust regulation of the contested conduct.