J.P. Morgan Trust Co. v. Williams Companies, Inc.

471 F. Supp. 2d 1076, 164 Oil & Gas Rep. 95, 2006 U.S. Dist. LEXIS 95135
CourtDistrict Court, D. Nevada
DecidedDecember 18, 2006
DocketNo. MDL 1566; Nos. 2:03-CV-01431-PMPPAL, 2:05-CV-01331-PMPPAL
StatusPublished
Cited by1 cases

This text of 471 F. Supp. 2d 1076 (J.P. Morgan Trust Co. v. Williams Companies, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
J.P. Morgan Trust Co. v. Williams Companies, Inc., 471 F. Supp. 2d 1076, 164 Oil & Gas Rep. 95, 2006 U.S. Dist. LEXIS 95135 (D. Nev. 2006).

Opinion

ORDER

PRO, Chief Judge.

Presently before this Court is Defendants’ Motion to Dismiss (2:05-CV-01331, Doc. # 32), filed on June 22, 2006. Plaintiff filed an Opposition (2:05-CV-01331, Doc. # 38) on August 4, 2006. Defendants filed a Reply (2:05-CV-01331, Doc. # 41) on August 18, 2006.

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 WL 22758080 (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.

Plaintiff originally filed this action in the District Court of Wyandotte County, Kansas. (Notice of Removal, [2:05-CV-01331, Doc. # 1] at 2.) 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.

In this litigation, Plaintiff sues Defendants seeking to recover damages on behalf of natural gas rate payers. In the Amended Complaint, Plaintiff alleges Defendants engaged in anti-competitive activities with the intent to manipulate and artificially increase the price of natural gas for consumers. (Am. Compl. [2:05-CV-01331, Doc. # 11] at 35-36.) Specifically, Plaintiff alleges 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. at 35.)

Plaintiff J.P. Morgan Trust Company Association (“J.P.Morgan”) is the trustee for reorganized FLI, Inc. (“FLI”), a Kansas corporation with its principal place of business in Kansas City, Missouri. (Id. at 3.) J.P. Morgan brings this suit in its capacity as FLI’s trustee. FLI is a successor in interest to Farmland Industries, Inc., a Kansas corporation, with its principal place of business in Kansas. (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’ [1079]*1079production, in the United States and in the State of Kansas. (Id. at 4-33.)

Under Federal Rule of Civil Procedure 12(b)(6), Defendants now move to dismiss Plaintiffs Amended Complaint arguing the filed rate doctrine bars Plaintiffs claim and the Natural Gas Act (“NGA”) preempts Plaintiffs claim. 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. Plaintiff responds that the filed rate doctrine does not apply to this case because the Kansas antitrust statutes under which Plaintiff brings suit do not require the Court to determine the extent to which Defendants’ alleged misconduct artificially raised prices in the natural gas market. Further, Plaintiff argues 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 plaintiffs complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir.1994). There is a strong presumption against dismissing an action for failure to state a claim. See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir.1997) (citation omitted). The issue is not whether the plaintiff ultimately will prevail, but whether he may offer evidence in support of his claims. Id. (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)). Consequently, the Court may not grant a motion to dismiss for failure to state a claim “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); see also Hicks v. Small, 69 F.3d 967, 969 (9th Cir.1995).

The liberal rules of notice pleading set forth in the Federal Rules of Civil Procedure do not require a plaintiff to set out in detail the facts supporting his claim. See Yamaguchi v. United States Dep’t of the Air Force, 109 F.3d 1475, 1481 (9th Cir.1997) (quoting Conley v. Gibson, 355 U.S. at 47, 78 S.Ct. 99). All the Rules require is a “short and plain statement” that adequately gives the defendant “fair notice of what the plaintiffs claim is and the grounds upon which it rests.” Id. (citations and internal quotations omitted). A claim is sufficient if it shows that the plaintiff is entitled to any relief which the court can grant, even if the complaint asserts the wrong legal theory or asks for improper relief. See United States v. Howell, 318 F.2d 162, 166 (9th Cir.1963).

III. DISCUSSION

Defendants assert two alternative bases for dismissal in response to Plaintiffs allegations of knowingly reporting false gas prices and engaging in wash trades in the natural gas market. First, Defendants argue this Court’s previous dismissal orders in In re Western States Wholesale Natural Gas Antitrust Litigation, 368 F.Supp.2d 1110 (D.Nev.2005) (“Texas-Ohio ”), and In re Western States Wholesale Natural Gas [1080]*1080Antitrust Litigation, 408 F.Supp.2d 1055 (D.Nev.2005) (“Abelman ”) necessitate dismissal in this case because Plaintiffs allegations are essentially the same as the allegations in those cases. This Court ruled in Texas-Ohio

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471 F. Supp. 2d 1076, 164 Oil & Gas Rep. 95, 2006 U.S. Dist. LEXIS 95135, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jp-morgan-trust-co-v-williams-companies-inc-nvd-2006.