In re Western States Wholesale Natural Gas, 2:06-CV-0233-PMP-PAL.

• Decision Date: 27 July 2007
• Docket Number: No. 2:06-CV-0233-PMP-PAL.,No. 2:03-CV-1431-PMP-PAL.,2:06-CV-0233-PMP-PAL.,2:03-CV-1431-PMP-PAL.
• Citation: 633 F.Supp.2d 1151
• Parties: In re WESTERN STATES WHOLESALE NATURAL GAS ANTITRUST LITIGATION, Learjet, Inc., et al., Plaintiffs, v. Oneok, Inc., et al., Defendants.
• Court: U.S. District Court — District of Nevada

633 F.Supp.2d 1151

In re WESTERN STATES WHOLESALE NATURAL GAS ANTITRUST LITIGATION,

Learjet, Inc., et al., Plaintiffs, v. Oneok, Inc., et al., Defendants.

No. 2:06-CV-0233-PMP-PAL.

No. 2:03-CV-1431-PMP-PAL.

United States District Court, D. Nevada.

July 27, 2007.

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Donald D. Barry, Barry Law Offices, L.L.C., Eric I. Unrein, Davis, Unrein, McCallister, Biggs & Head, L.L.C., Topeka, KS, Gary D. McCallister, Gary D. McCallister & Associates, Ltd., Chicago, IL, Gregory M. Bentz, Jennifer Gille Bacon, Patrick D. Martin, R. Lawrence Ward, Shughart Thompson & Kilroy, PC, Kansas City, MO, Gregory L. Musil, Shughart Thompson & Kilroy, Overland Park, KS, Von S. Heinz, Lewis & Roca, LLP, Las Vegas, NV, Charles A. Moore, Leboeuf Lamb Greene MacRae, LLP, Houston, TX, Jared M. Katz, Leboeuf Lamb Greene MacRae, LLP, Los Angeles, CA, Dennis J. Stewart, San Diego, CA, Michelle B. Goodman, Sidley Austin LLP, Kate Reznick, Boni & Zack, LLC, Bala Cynwyd, PA, John Preston Baker, Philip Wayne Bledsoe, Shughart Thomson & Kilroy, PC, Denver, CO, Susan G. Kupfer, Glancy Binkow & Goldberg, LLP, San Francisco, CA, Coachella Valley Taxi Owners Association, Palm Springs, CA, for Plaintiffs.

Oliver S. Howard, Amelia A. Fogleman, Mason G. Patterson, Gable & Gotwals, David Len Bryant, Bryant Law Firm, Tulsa, OK, Jerome T. Wolf, Sonnenschein Nath & Rosenthal, LLP, Kansas City, MO, Joel B. Kleinman, Leslie H. Spiegel, Dickstein Shapiro Morin & Oshinsky, LLP, Lisa M. Kaas, Dickstein Shapiro, LLP, Amy M. Gallegos, Jonathon Abram, Robert B. Wolinsky, Steven J. Routh, William H. Johnson, Hogan & Hartson, Frederic G. Berner, Jr., Sidley Austin Brown & Wood, LLP, Washington, DC, Douglas R. Tribble, Pillsbury Winthrop Shaw Pittman LLP, Brian I. Cheng, Matthew E. Digby, Bingham McCutchen, Heather R. Skinazi, Sidley Austin, LLP, A. William Urquhart, Kristen Bird, Marshall M. Searcy, Roxanna Manuel, Quinn Emanuel Urquhart, et al, Joshua D. Lichtman, Fulbright & Jaworski, L.L.P., David T. Peterson, Joseph Duffy, Michael C. Lieb, Morgan Lewis & Bockius, Robert A. Sacks, Richard P. Levy, Gibson, Dunn & Crutcher LLP, Alan Z. Yudkowsky, Peter F. Jazayeri, Stroock & Stroock & Lavan LLP, Los Angeles, CA, Christopher J. Healey, Jeffrey D. Wexler, Luce, Forward, Hamilton & Scripps LLP, Bruno William Katz, Shea Stokes & Carter, ALC, Jeffrey M. Shohet, Nancy L. Stagg, Stanley J. Panikowski, DLA Piper Rudnick Gray Cary US LLP, Mark H. Hamer, Noah A. Katsell, San Diego, CA, Karen C. Corallo, Orrin L. Harrison, III, Stephen R. Mick, Akin, Gump, Strauss, Hauer & Feld, LLP, Dallas, TX, Mark A. James, Bullivant Houser Bailey, PC, Las Vegas, NV, Terry J. Houlihan, Bingham, McCutchen Law Firm, Katrina June Lee, Scott Phillip Devries, Nossaman, Gunthur, Knoy & Elliott, John M. Grenfell, Michael J. Kass, Pillsbury Winthrop Shaw Pittman, LLP, Diane E. Pritchard, Stuart C. Plunkett, Morrison & Foerster, San Francisco, CA, Glen G. Reid, Jr., Robert E. Craddock, Jr., Wyatt, Tarrant & Combs, LLP, John S. Golwen, Bass Berry & Sims, PC, Paul Howard Morris, Martin Tate Morrow & Marston, Amy Pepke, Armstrong Allen, PLLC, Memphis, TN, Barry S. Hyman, Samantha C. Norris, William M. Hannay, Schiff Hardin LLP, Chicago, IL, Franz Hardy, White and Steele, PC, Steven M. Kaufmann, Morrison & Foerster, LLP, James E. Scarboro, Jessica Brody, Matthew Douglas, Arnold & Porter LLP, Denver, CO, Amy E. Tabor, Mark R. Robeck, Baker Botts, LLP, Jefferson Gregory Copeland, Houston, TX, D. Neal Tomlinson, Joseph P. Hardy, Bullivant Houser Bailey, PC, Las Vegas, NV, Thomas F. Reese, Casper, WY, for Defendants.

ORDER

PHILIP M. PRO, District Judge.

Presently before the Court is Defendants' Motion to Dismiss on Grounds of Federal Preemption and the Filed Rate Doctrine (2:06-CV-0233-PMP-PAL, Doc. # 57; 2:03-CV-1431-PMP-PAL, Doc. #426), filed on September 29, 2006. Plaintiffs filed a Response to Defendants' Motion Based upon Filed Rate and Federal Preemption Principles (2:06-CV0233-PMP-PAL, Doc. #71) on November 14, 2006. On January 12, 2007, Plaintiffs filed a Supplemental Memorandum (2:06-CV-0233-PMP-PAL, Doc. # 82) regarding this Court's December 18, 2006 Order, 471 F.Supp.2d 1076 (D.Nev.2006), dismissing a related case under the doctrine of field preemption. Defendants filed a Reply (2:06-CV-0233-PMP-PAL, Doc. # 83; 2:03-CV-1431-PMP-PAL, Doc. #463) on January 26, 2007.

Also before the Court is Defendants' Request for Judicial Notice in Support of Response to Court's Orders of April 3, 2007 (2:06-CV-0233-PMP-PAL, Doc. # 91; 2:03-CV-1431-PMP-PAL, Doc. # 508), filed on April 25, 2007. Plaintiffs filed a Response (2:06-CV-0233-PMP-PAL, Doc. # 94) and Joint Evidentiary Objections (2:06-CV-0233-PMP-PAL, Doc. # 93) on May 23, 2007.

Also before the Court is Plaintiffs' Motion for Discovery and Continuance of Decision Pursuant to FRCP Rule 56(f) (2:06-CV-0233-PMP-PAL, Doc. # 88), filed on April 25, 2007. Defendants filed a Joint Memorandum in Opposition to Plaintiffs' Motion for Discovery and Continuance of Decision Pursuant to FRCP 56(f) (2:06-CV-0233-PMP-PAL, Doc. # 92; 2:03-CV143 1-PMP-PAL, Doc. # 513) on May 11, 2007. Plaintiffs filed a Reply (2:06-CV-0233-PMP-PAL, Doc. #94) on May 23, 2007.

Also before the Court is Defendants' Motion to Strike and Memorandum in Support of Motion to Strike (2:06-CV-0233-PMP-PAL, Doc. # 78), filed on December 27, 2006. On January 12, 2007, Plaintiffs filed a Response (2:06-CV-0233-PMP-PAL, Doc. # 82). Defendants filed a Reply (2:06-CV-0233-PMP-PAL, Doc. # 83; 2:03-CV-1431-PMP-PAL, Doc. # 463) on January 26, 2007.

I. BACKGROUND

This case is one of many in consolidated Multi District Litigation arising out of the energy crisis of 2000-2001. During that time, the national energy and natural gas markets became mutually dysfunctional, and, feeding off each other spiraled into a nationwide energy crisis. Amendments to Blanket Sales Certificate, 105 F.E.R.C. ¶ 61,217, at ¶ 12 (2003). The Federal Energy Regulatory Commission ("FERC") undertook a fact finding investigation of the market crisis in which it concluded, "spot gas prices rose to extraordinary levels, facilitating the unprecedented price increase in the electricity market." Id. FERC found the dysfunctions in the natural gas market stemmed from efforts to manipulate price indices compiled by private trade publications, including reporting of false data and wash trading.¹ Id.

Plaintiffs originally filed the above action in the District Court of Wyandotte County, Kansas. (Notice of Removal, Am. Compl. [2:06-CV-0233-PMP-PAL, Doc. # 1].) Defendants removed the case to the United States District Court for the District of Kansas. (Id.) The Judicial Panel on Multidistrict Litigation entered a Transfer Order pursuant to 28 U.S.C. § 1407 centralizing the foregoing action in this Court for coordinated or consolidated pretrial proceedings. (Letter dated June 14, 2006 [2:06-CV-0233-PMP-PAL, Doc. # 41-1].)

In this litigation, Plaintiffs seek to recover damages on behalf of natural gas rate payers. In the First Amended Complaint, Plaintiffs allege Defendants engaged in anti-competitive activities with the intent to manipulate and artificially increase the price of natural gas for consumers. (Am. Compl. at 30-32.) Specifically, Plaintiffs allege Defendants knowingly delivered false reports concerning trade information and engaged in wash trades, which conduct violated Kansas Statutes Annotated § 50-101, et. seq ("Kansas antitrust statutes"). (Id.)

Plaintiff Learjet, Inc. ("Learjet") is a Delaware corporation with its principal place of business in Wichita, Kansas. (Id. at 3.) Plaintiff Cross Oil Refining & Marketing, Inc. ("Cross Oil") is a Delaware corporation with offices located in Kansas. (Id.) Plaintiff Topeka Unified School District 501 ("Topeka"), is a local government unit, organized under the laws of the State of Kansas with its headquarters in Kansas. (Id. at 4.) Plaintiffs allege they purchased natural gas directly from one or more Defendants, and from other natural gas sellers in the State of Kansas, during the years 2000-2002. (Id. at 3-4.) According to the Amended Complaint, Defendants are natural gas companies that buy, sell, transport, and store natural gas, including their own and their affiliates' production, in the United States and in the State of Kansas. (Id. at 4-30.)

Under Federal Rule of Civil Procedure 12(b)(6), Defendants move to dismiss Plaintiffs' Amended Complaint arguing the filed rate doctrine bars Plaintiffs' claims and the Natural Gas Act ("NGA") preempts Plaintiffs' claims. Defendants argue that because Plaintiffs' allegations are essentially the same as those allegations asserted in other cases this Court already has dismissed on the basis of the filed rate doctrine, the Court should dismiss this case as well. In addition, Defendants assert that even if the filed rate doctrine does not apply, the Court should dismiss Plaintiffs' Amended Complaint pursuant to the doctrines of field preemption and conflict preemption. Plaintiffs respond that the filed rate doctrine does not apply to this case because the Kansas antitrust statutes under which Plaintiffs brought suit do not require the Court to determine what a just and reasonable rate would have been absent Defendants' alleged misconduct. Further, Plaintiffs argue federal preemption does not apply to state antitrust laws.

II. LEGAL STANDARD

In considering a motion to dismiss, "all well-pleaded allegations of material fact are taken as true and construed in a light most favorable to the non-moving party." Wyler Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir.1998) (citation omitted). However, the Court does not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations in the plaintiff's complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir.1994). There is a strong presumption against...