Puget Sound Energy, Inc. v. State of California - Opposition

No. 09-288

In the Supreme Court of the United States

PUGET SOUND ENERGY, INC., ET AL., PETITIONERS

v.

STATE OF CALIFORNIA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BRIEF FOR THE
FEDERAL ENERGY REGULATORY COMMISSION
IN OPPOSITION

ELENA KAGAN
Solicitor General
Counsel of Record
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

THOMAS R. SHEETS
General Counsel
ROBERT H. SOLOMON
Solicitor
LONA T. PERRY
Senior Attorney
JENNIFER S. AMERKHAIL
Attorney
Federal Energy Regulatory
Commission
Washington, D.C. 20426

QUESTIONS PRESENTED

1. Whether the court of appeals had jurisdiction to review a proceeding to investigate the reasonableness of rates for electric energy under 16 U.S.C. 824e, in which the Federal Energy Regulatory Commission held an evidentiary hearing, took recommendations from an ad ministrative law judge, held oral argument, and issued orders denying refunds.

2. Whether the court of appeals erred in failing to defer to the Federal Energy Regulatory Commission's decision to address various issues arising from the Cali fornia energy crisis by conducting separate supplier- specific enforcement proceedings under 16 U.S.C. 825h, rather than reopening a generic refund proceeding un der 16 U.S.C. 824e.

3. Whether the court of appeals erred in failing to defer to the Federal Energy Regulatory Commission's interpretation of the scope of a complaint.

In the Supreme Court of the United States

No. 09-288

PUGET SOUND ENERGY, INC., ET AL., PETITIONERS

v.

STATE OF CALIFORNIA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BRIEF FOR THE
FEDERAL ENERGY REGULATORY COMMISSION
IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a-37a) is reported at 499 F.3d 1016. The orders of the Federal Energy Regulatory Commission (Pet. App. 378a-408a, 409a-447a, 448a-453a) are reported at 103 F.E.R.C. ¶ 61,348, 105 F.E.R.C. ¶ 61,183, and 106 F.E.R.C. ¶ 61,109.

JURISDICTION

The judgment of the court of appeals was entered on August 24, 2007. The petitions for rehearing were de nied on April 9, 2009 (Pet. App. 454a). On June 29, 2009, Justice Kennedy extended the time within which to file a petition for a writ of certiorari to and including September 4, 2009, and the petition was filed on that date. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

1. The Federal Power Act (FPA or Act), 16 U.S.C. 791a et seq., grants the Federal Energy Regulatory Commission (FERC or Commission) exclusive jurisdic tion over the "transmission of electric energy in inter state commerce" and the "sale of electric energy at wholesale in interstate commerce" by public utilities. 16 U.S.C. 824(b)(1). Under the FPA, proposed rates for the sale or transmission of power within FERC's juris diction must be "just and reasonable" and not unduly discriminatory or preferential. 16 U.S.C. 824d(a) and (b).

The Act also provides for the Commission to review rates after they have been accepted for filing and gone into effect. If, after a hearing-either on its own motion or based on a complaint-the Commission determines that any existing rate or charge is "unjust, unreason able, unduly discriminatory or preferential," it must determine and fix by order "the just and reasonable rate * * * to be thereafter observed and in force." 16 U.S.C. 824e(a). The relief allowed under 16 U.S.C. 824e is temporally limited: FERC may order refunds only for rates collected after the "refund effective date"; during the period at issue in this case, that date could be set no earlier than 60 days after the filing of a complaint. 16 U.S.C. 824e(b) (2000).

Under 16 U.S.C. 825h, the Commission also has au thority to remedy tariff violations through enforcement proceedings. Section 825h grants the Commission "power to perform any and all acts, and to prescribe, issue, make, amend, and rescind such orders, rules, and regulations as it may find necessary or appropriate to carry out the provisions of this [Act]." 16 U.S.C. 825h. The Commission may use its authority under Section 825h to require disgorgement or other remedies if a seller is found to have violated the terms of its rate au thority, or rules or orders of the Commission.

2. This case arises out of the 2000-2001 energy crisis in the western United States. See generally Morgan Stanley Capital Group Inc. v. Public Util. Dist. No. 1, 128 S. Ct. 2733 (2008); California ex rel. Lockyer v. FERC, 383 F.3d 1006 (9th Cir. 2004), cert. denied, 551 U.S. 1140 (2007). During the western energy crisis, the price of electricity in the Pacific Northwest rose dramat ically. Pet. App. 9a. In October 2000, petitioner Puget Sound Energy, Inc. (Puget) filed a complaint with the Commission, seeking an order limiting the prices at which sellers subject to FERC's jurisdiction could sell electricity into the Pacific Northwest's wholesale power markets. Id. at 10a-11a. On December 15, 2000, the Commission dismissed the complaint. Id. at 11a; San Diego Gas & Elec. Co. v. Sellers of Energy & Ancillary Servs., 93 F.E.R.C. ¶ 61,294. The Commission explained that implementation of the "region-wide price cap" sought by Puget would be "impracticable given the mar ket structure in the Northwest." Id. at 62,019.

Puget sought rehearing before the Commission. While its request was pending, the Commission imposed price caps on all sales in all western spot markets. San Diego Gas & Elec. Co. v. Sellers of Energy & Ancillary Serv., 95 F.E.R.C. ¶ 61,418 (2001). Following that deci sion, Puget moved to withdraw both its complaint and its request for rehearing of the December 15, 2000 order dismissing its complaint. Various parties opposed the withdrawal motion. Pet. App. 11a-12a.

In July 2001, acting on its own initiative, the Com mission instituted a separate proceeding to consider past spot-market sales in the Pacific Northwest. Pet. App. 38a-110a. The Commission did not invoke 16 U.S.C. 824e to determine whether to change the rates on file. Instead, it explained that the "preliminary eviden tiary proceeding" was "intended to facilitate develop ment of a factual record on whether there may have been unjust and unreasonable charges for spot market bilateral sales in the Pacific Northwest for the period beginning December 25, 2000 through June 20, 2001," with the aim of "determin[ing] the extent to which the dysfunctions in the California markets may have af fected decisions in the Pacific Northwest." Pet. App. 102a-103a.

After discovery and an evidentiary hearing, an ad ministrative law judge (ALJ) recommended against or dering refunds for such sales. Pet. App. 326a. The evi dence demonstrated that the Pacific Northwest market for spot sales of electricity was competitive and func tional during the relevant time period and that prices were not unreasonable. Ibid. While California electric energy prices affected electric energy prices in the Pa cific Northwest, other factors contributed to higher prices in the Pacific Northwest, including reduced hy droelectric power due to drought, increased demand, and high natural-gas prices. Id. at 322a. The ALJ also recommended that the Commission affirm its dismissal of Puget's complaint and allow Puget to withdraw its rehearing request. Id. at 365a.

3. In June 2003, the Commission denied Puget's mo tion to withdraw its complaint and granted its request for rehearing of the December 2000 dismissal of its com plaint. The Commission reiterated that it had provided all the relief sought by Puget in its complaint when the Commission implemented price caps on wholesale spot- market sales throughout the West. Pet. App. 387a-390a. Based on an examination of the "totality of the circum stances," the Commission also determined that even if it were to conclude that prices during the potential refund period were unjust and unreasonable, "the directing of refunds in this proceeding would not result in an equita ble resolution of the matter." Id. at 401a-402a. Accord ingly, the Commission terminated the proceeding.

On the same day, the Commission initiated enforce ment proceedings relating to Enron's market-manipula tion strategies, which had come to light the year before. American Elec. Power Serv. Corp., 103 F.E.R.C. ¶ 61,345 (2003); Enron Power Mktg., Inc., 103 F.E.R.C. ¶ 61,346 (2003). The Commission directed dozens of en tities, including several Pacific Northwest sellers, to show cause why their conduct did not constitute market manipulation in violation of applicable tariffs. American Elec. Power Serv. Corp., supra. It further directed agency ALJs to recommend appropriate remedies for any unjust enrichment by those entities. 103 F.E.R.C. at 62,328. And it instituted another evidentiary proceed ing to address allegations that another set of sellers en gaged in gaming or other market-manipulation practices in concert with other market participants. Enron Power Mktg., Inc., supra.1

4. The Commission later denied a request for re hearing of its decision not to award refunds for sales in the Pacific Northwest. Pet. App. 409a-447a. In a sepa rate order, it denied a rehearing request filed by Cali fornia and some of its agencies. Id. at 448a-453a. The Commission clarified that bilateral transactions involv ing the California Energy Resources Scheduling Divi sion (CERS) of the California Department of Water Re sources were outside the scope of the Pacific Northwest proceeding. The Commission agreed with the ALJ that Puget's complaint concerned only wholesale power sales into the Pacific Northwest and that the evidence showed that the CERS transactions served only California load, not Pacific Northwest load. Id. at 452a-453a.

5. The court of appeals granted petitions for review. Pet. App. 1a-37a. The court rejected the Commission's argument that its decision to deny refunds was an exer cise of unreviewable agency discretion under Heckler v. Chaney, 470 U.S. 821, 831 (1985), holding that Heckler is limited to "agency refusals to institute investigative or enforcement proceedings." Pet. App. 18a (quoting Heckler, 470 U.S. at 838). But where an agency has ini tiated proceedings, the court reasoned, there are mean ingful standards for review and Heckler does not apply. Thus, the court continued, "where FERC has made a determination to adjudicate a dispute or take steps to wards enforcing a violation of the law," the outcome it chooses is subject to review under the standards set forth in the Administrative Procedure Act, 5 U.S.C. 706. Pet. App. 18a. Here, because "FERC has held hearings and taken evidence to adjudicate a dispute between the parties as to whether refunds should be awarded" in the Pacific Northwest, the court held that the agency's deci sion was reviewable under the same standards that gov ern review of other grants or denials of refunds. Id. at 18a-19a.

The court of appeals rejected FERC's determination that CERS purchases in the Pacific Northwest spot market were outside the scope of the proceeding be cause Puget's complaint focused on sales of energy "into" the Pacific Northwest, whereas purchases made by CERS were sales "into" California. Pet. App. 29a- 30a. The court concluded that substantial evidence in the record did not support the finding that energy pur chased by CERS was physically delivered in California, and, in any event, the legal change of ownership oc curred at interconnections located within the Pacific Northwest. Id. at 30a-31a. Further, although the court was "mindful" that it owed deference to FERC's inter pretation of the complaint, the court nonetheless re jected FERC's interpretation because "[o]n its face, Puget's complaint provides no indication of an intent to exclude refunds for energy purchased in the Pacific Northwest spot market for consumption outside the geo graphical area." Id. at 31a. The court further concluded that FERC's interpretation of Puget's complaint was inconsistent with its interpretation of a similar com plaint in the California refund proceeding. Id. at 32a.

The court of appeals also held that FERC had erred in failing to take into account evidence of market manip ulation when it decided not to order refunds. Pet. App. 33a-36a. In particular, the court determined that FERC was required to reconsider the finding that the Pacific Northwest market was functional and competitive in light of the evidence adduced concerning manipulative schemes in the California market involving Pacific Northwest sellers. Id. at 34a-35a. That evidence of market manipulation had led FERC to initiate separate enforcement proceedings in 2003. See p. 5, supra. The court of appeals rejected the argument that the need for reconsideration in these refund proceedings was obvi ated by FERC's decision to address market manipula tion in the separate enforcement proceedings. Pet. App. 35a-36a. The court noted that the Commission had failed to rely on that rationale in its order, and, in any event, "FERC's prosecutorial investigations cannot jus tify the denial of relief in contested adjudications before the Commission." Id. at 36a. Accordingly, the court "remand[ed] to permit FERC to examine this new evi dence of market manipulation in detail and account for it in any future orders regarding the award or denial of refunds in the Pacific Northwest proceeding." Ibid.

ARGUMENT

Petitioners argue (Pet. 12-23) that the court of ap peals was precluded from reviewing the FERC order at issue in this case, which, they say, represented a discre tionary decision not to initiate enforcement proceedings. The court of appeals reasonably concluded otherwise in the particular circumstances of this case, however, and its conclusion does not warrant review by this Court. The court of appeals reasoned that the Commission's decision in this case, reached after formal adversarial proceedings-including an evidentiary hearing-was subject to judicial review. Petitioners also object (Pet. 23-32) to several rulings by the court of appeals on pro cedural issues in the case concerning the scope of the refund proceedings and the discretion of the Commis sion to choose the manner in which it will pursue allega tions of violations. We agree that the court of appeals erred on those points. But those errors consist of the misapplication of correctly stated legal principles to the particular circumstances of this case, which arises out of the 2000-2001 western energy crisis, a highly unusual event that is unlikely to recur. See CAlifornians for Re newable Energy v. California Pub. Utils. Comm'n, 119 F.E.R.C. ¶ 61,058, at ¶ 30 (2007) (noting that "the 2000- 2001 energy crisis in the West" was "an unprecedented situation in which numerous adverse events occurred simultaneously"); id. ¶¶ 31-41 (describing steps taken by the Commission "to ensure that there are appropriate market safeguards in place to prevent a repeat of the California 2000-2001 energy crisis"). Moreover, the court of appeals remanded for further proceedings and explanation by the Commission, and did not decide that refunds would be appropriate. Further review therefore is not warranted.

1. Petitioners contend (Pet. 12-23) that FERC's or der in this case was not subject to judicial review. They rely on Heckler v. Chaney, 470 U.S. 821 (1985), which held that "an agency's decision not to prosecute or en force, whether through civil or criminal process," is not subject to review. Id. at 831. Before the court of ap peals, the Commission advanced a similar contention, arguing that its decision not to order refunds was analo gous to a decision not to undertake enforcement action and therefore was immune from review under Heckler. Pet. App. 17a. But as the court of appeals observed, the Commission action at issue here can appropriately be characterized as an order resolving an adjudicatory pro ceeding rather than as a decision not to initiate enforce ment proceedings. Id. at 18a. Here, the Commission ordered trial-type evidentiary hearings (with discovery, testimony and cross-examination) before an ALJ, who presented findings and recommendations to the Com mission, which later heard oral argument before issuing orders. Id. at 18a-19a. In this proceeding, unlike in a typical investigation related to enforcement proceed ings, the Commission allowed affected persons to inter vene and participate as parties in the trial-type eviden tiary hearing. Id. at 50a-52a. The proceeding therefore had much in common with adjudicatory proceedings that usually are subject to judicial review, as distinguished from prosecutorial decisions that are not.

Significantly, moreover, as the court of appeals noted, the Commission did not simply decline to initiate an enforcement proceeding or a refund proceeding un der 16 U.S.C. 824e; rather, it made a specific determina tion that refunds were not warranted in the Pacific Northwest. Pet. App. 18a-19a. And as the court of ap peals also correctly noted, courts "regularly exercise judicial review over FERC's decision to grant or deny refunds." Id. at 19a. In any event, even if the court of appeals erred in its assessment of the agency's action in this somewhat unusual proceeding, that case-specific error would not warrant this Court's review.

Petitioners assert (Pet. 12-17) that the decision below conflicts not only with Heckler but also with various lower court decisions applying Heckler. But most of the cases relied on by petitioners involved agency actions that were indisputably prosecutorial or pre-enforcement actions. See, e.g., Heckler, 470 U.S. at 824 (FDA refused to "take various [requested] investigatory and enforce ment actions" or "recommend * * * prosecution" to address alleged statutory violations); Association of Irritated Residents v. EPA, 494 F.3d 1027, 1035 (D.C. Cir. 2007) (settlement of potential enforcement action by consent agreement); Greer v. Chao, 492 F.3d 962, 963 (8th Cir. 2007) (agency investigated whether to take enforcement action against a government contractor and terminated the pre-enforcement action when the investi gation was inconclusive as to violations); Baltimore Gas & Elec. Co. v. FERC, 252 F.3d 456, 457 (D.C. Cir. 2001) (FERC issued a "show cause" order and undertook a "non-public" enforcement investigation into violations of the Natural Gas Act, then settled the enforcement pro ceeding without resolving liability); New York State Dep't of Law v. FCC, 984 F.2d 1209, 1211-1212 (D.C. Cir. 1993) (on the basis of internal agency audits, FCC initi ated an enforcement proceeding with a "show cause" order and terminated the proceeding on settlement, without resolving the legal issues); Sherman v. Black, 315 Fed. Appx. 347, 349 (2d Cir. 2009) (decision not to commence enforcement proceedings).

There are few, if any, analogous cases in which courts of appeals disclaimed authority to review formal agency orders that were preceded by the public, trial- type fact-finding proceeding that was conducted by the Commission in this case in response to the filing of a complaint. Petitioners point (Pet. 16) to Sierra Club v. Larson, 882 F.2d 128, 130-133 (4th Cir. 1989), which held that an agency's decision not to pursue "a formal penalty action" in response to a complaint was unreviewable, even though the agency had conducted a "fact-finding investigation," but there is no indication that the "inves tigation" in that case involved the kind of formal ad versarial proceedings at issue here. Rather, the agency's decision appears to have been an ordinary ex ercise of prosecutorial discretion not to proceed with enforcement. This case therefore does not give rise to a conflict with the other decisions cited by petitioners, which concerned judicial review of more traditional and typical prosecutorial decisions not to institute proceed ings.

2. Petitioners are correct (Pet. 23-28) that the court of appeals erred in holding that the Commission was required to consider allegations of tariff violations in an adjudicatory rate proceeding initiated by a complaint under Section 824e, when the Commission was already addressing those allegations in an enforcement proceed ing that it had initiated under 16 U.S.C. 825h. That as pect of the court's decision is contrary to Mobil Oil Ex ploration & Producing Southeast, Inc. v. United Distri bution Cos., 498 U.S. 211 (1991), which held that "[a]n agency enjoys broad discretion in determining how best to handle related, yet discrete issues in terms of proce dures and priorities." Id. at 230 (citation omitted); see ibid. ("The court clearly overshot the mark if it ordered the Commission to resolve the take-or-pay problem in this proceeding," rather than "in a separate proceed ing."); see also Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 543 (1978) ("Absent constitutional constraints or extremely compelling circumstances the administrative agencies should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudi nous duties.") (internal quotation marks and citation omitted); GTE Serv. Corp. v. FCC, 782 F.2d 263, 273-274 (D.C. Cir. 1986).

When presented with evidence of market manipula tion adduced by its staff and market participants, the Commission decided to consider that evidence in sepa rate, supplier-specific enforcement investigative pro ceedings concerning possible tariff violations, rather than to reopen generic rate-changing refund proceed ings that had been underway for years. FERC issued a package of orders on the same day in which it estab lished an enforcement structure for addressing the dif ferent types of allegations arising from the energy cri sis: (1) it instituted new enforcement proceedings under Section 825h to investigate allegations of tariff violations by individual sellers, American Elec. Power Serv. Corp., 103 F.E.R.C. ¶ 61,345 (2003), and Enron Power Mktg., Inc., 103 F.E.R.C. ¶ 61,346 (2003), and those bidding into California's centralized market, Investigation of Anomalous Bidding Behavior & Practices, 103 F.E.R.C. ¶ 61,347 (2003); and (2) it ended the adjudicatory proceeding under Section 824e initiated by Puget's complaint to determine the reasonableness of rates in the Pacific Northwest, finding that prospective rates were appropriately mitigated and that no refunds were warranted, Pet. App. 378a-408a. The next day, the Commission completed issuance of the package of orders by imposing conditions on market-based rate authority in a Commission-initiated proceeding under Section 824e. Investigation of Terms & Conditions of Pub. Util. Market-Based Rate Authorizations, 103 F.E.R.C. ¶ 61,349 (2003).

Nothing in Section 824e compels the Commission to consider any and all issues in a single adjudicatory rate proceeding. To the contrary, the statute contemplates that such a proceeding may be limited to particular is sues. Section 824e(a) provides that "[i]f, after review of any motion or complaint and answer, the Commission shall decide to hold a hearing, it shall fix by order the time and place of such hearing and shall specify the is sues to be adjudicated." 16 U.S.C. 824e(a). As the D.C. Circuit has observed, in requiring that the Commission "specify the issues to be adjudicated," Section 824e makes clear that these proceedings are designed to "identify and address such discrete issues." Colorado Office of Consumer Counsel v. FERC, 490 F.3d 954, 956 (2007), cert. denied, 128 S. Ct. 1872 (2008). Accordingly, in conducting a Commission-initiated investigation un der Section 824e, the Commission was not required to adjudicate additional issues raised by parties. Ibid.; see Mobil Oil, 498 U.S. at 230.

Although the court of appeals erred in holding that the Commission was required to consider market-manip ulation evidence in the Section 824e proceeding, that aspect of its decision does not warrant further review. The court rested its holding in part on its determination that the Commission had "fail[ed] to rely on this reason ing below," i.e., that FERC had not explained, in its or der, that consideration of market-manipulation evidence was unnecessary because that evidence was already be ing considered in a separate proceeding. Pet. App. 35a. The court's reasoning incorrectly assumes that the Com mission has an obligation to explain the overall structure of its dockets in each order it issues. Nevertheless, the court proceeded from the fundamentally correct premise that an agency's decision may not be upheld on a ground on which the agency did not rely. See SEC v. Chenery Corp., 318 U.S. 80, 88 (1943). The misapplication of that correctly stated rule of law to the particular set of or ders at issue here does not warrant this Court's review. See Sup. Ct. R. 10. That is especially true in light of the interlocutory posture of this case, since the court re manded the case to the Commission but did not dictate what steps the Commission must take on remand and did not hold that refunds would ultimately be required. See Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S. 251, 258 (1916).

3. Finally, petitioners are correct (Pet. 28-32) that the court of appeals erred in construing Puget's com plaint to include bilateral purchases in California, even though Puget-the party that drafted and filed the complaint-agreed with the Commission that its com plaint concerning the Pacific Northwest did not address sales to California purchasers in that market. The court of appeals identified three reasons why FERC's deter mination that Puget's complaint did not encompass sales to California electricity users in the Pacific Northwest spot market was arbitrary and capricious.2 First, the court defined the scope of the complaint by reference to what Puget did not explicitly exclude, rather than by reference to the violation it sought to remedy. Pet. App. 31a ("On its face, Puget's complaint provides no indica tion of an intent to exclude refunds for energy pur chased in the Pacific Northwest spot market for con sumption outside the geographical area."). Second, the court held that FERC should have interpreted the Puget complaint as it had interpreted another energy- crisis complaint requesting caps on bids into California's centralized energy market, as not "limiting refunds to entities that purchased energy for ultimate consumption in California." Id. at 32a. Third, the court emphasized that it had ruled in Public Utilities Commission v. FERC, 462 F.3d 1027, 1064 (9th Cir. 2006), that Califor nia transactions were outside the scope of that proceed ing "based in substantial part on the existence of this proceeding involving the Pacific Northwest." Pet. App. 33a.

The court's reasoning does not withstand scrutiny. In construing a complaint, an agency must consider the entire context of the complaint and base its construction on each element of the complainant's theory of relief in order to determine the issues for adjudication. See Burlington N. R.R. v. ICC, 985 F.2d 589, 594 (D.C. Cir. 1993). The scope of a complaint should not be defined by what it fails expressly to exclude, nor must a complaint be interpreted on the basis of how a different com plaint-brought by different complainants, involving different markets, and asserting different theories of relief-was interpreted in a different case. See Colo rado Office of Consumer Counsel, 490 F.3d at 956. Fi nally, basing an interpretation of a complaint on whether a non-complaining party would have a remedy is not relevant to the task before an agency in construing a complaint's scope.

As petitioners appear to recognize, however, the proper interpretation of the complaint involved in this case is not an issue that warrants this Court's review. Instead, petitioners say (Pet. 28-32) that the decision below conflicts with decisions of other courts of appeals because the court of appeals failed to defer to the agency's reading of the complaint. But the court ex pressly acknowledged that it "owe[d] deference to FERC's interpretation of the scope of Puget's com plaint," and it cited both Burlington Northern, supra, and Amerada Hess Pipeline Corp. v. FERC, 117 F.3d 596 (D.C. Cir. 1997), two of the cases on which petition ers rely in suggesting a conflict. Pet. App. 31a. Thus, the error of the court of appeals consists only in the mis application of a correctly stated rule of law to the partic ular facts of this case, which is still at an interlocutory stage. That error does not warrant this Court's review.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

ELENA KAGAN
Solicitor General

THOMAS R. SHEETS
General Counsel
ROBERT H. SOLOMON
Solicitor
LONA T. PERRY
Senior Attorney
JENNIFER S. AMERKHAIL
Attorney
Federal Energy Regulatory
Commission

NOVEMBER 2009

1 By 2005, the Commission had "completed all but one of the 60 investigations regarding market manipulation" that were instituted in these orders. FERC Report to Congress, The Commission's Response to the California Electricity Crisis and Timeline for Distributions of

Refunds 3 (Dec. 27, 2005) <http://www.ferc.gov/legal/staff-reports/ comm-response.pdf>.

2 The court of appeals resolved this issue only after first concluding that FERC could not have found, on the record before it, that the CERS purchases occurred in California. Pet. App. 30a-31a. The court therefore concluded that it "must determine whether sales to CERS were outside the scope of the Pacific Northwest refund proceeding even if the legal change of ownership occurred in the Pacific Northwest." Id. at 31a. Petitioners do not seek review of this fact-bound threshold ruling by the court of appeals. It presumably is open to FERC on remand to revisit that threshold issue.