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Supreme Court sides with Wisconsin companies in natural gas price manipulation case

The U.S. Supreme Court on Tuesday sided with Wisconsin companies and others that allege gas companies conspired to overcharge them for natural gas they bought during the California energy crisis nearly 15 years ago.

The justices decided 7-2 to that the companies involved in natural gas trading, including American Electric Power Co., and Duke Energy Co., can be sued under state antitrust laws.

The gas companies had argued that federal law on energy matters precludes state law claims.

Natural gas customers allege the companies falsely reported data to industry trade publications, leading to higher gas prices.

A federal district court in Las Vegas had sided with the gas traders. But the 9th U.S. Circuit Court of Appeals in San Francisco reversed that ruling and said retail buyers of natural gas could go forward with their lawsuit.

The Supreme Court agreed in an opinion by Justice Stephen Breyer, who wrote that the state claims at issue are directed at retail pricing within the province of states and not pre-empted by federal law.

Among the consumers who sued over the rise in gas prices are manufacturers Briggs & Stratton Corp. of Wauwatosa, and Learjet Inc., as well as Carthage College in Kenosha, a Colorado brewery, a Kansas school district and a Missouri hospital.

Chief Justice John Roberts and Justice Antonin Scalia dissented in the case, Oneok v. Learjet, 13-271.

Businesses claim in their suit that a sudden spike in natural gas prices 15 years ago was linked to illegal manipulation by the natural gas traders. That manipulation, they allege, cost Wisconsin businesses an estimated $100 million more in 2001 than they had paid a year earlier.

Natural gas companies involved in submitting false pricing data to industry publications ended up paying federal penalties totaling $350 million, to settle investigations by federal agencies.

But customers who bought natural gas never saw any money returned from the amount they overpaid.

The Supreme Court heard oral arguments on the case in January.

Lawyers for the Wisconsin plaintiffs say essentially that federal regulators were asleep at the switch when the manipulation was occurring early in the last decade, and that the businesses should be entitled to recover damages under state antitrust laws. In addition to Briggs, Arandell Corp. and Carthage, plaintiffs include the paper company Verso Corp., Sargento Foods, ATI Ladish Forging and Merrick’s Inc.

They contended that Wisconsin antitrust law exists to prohibit conspiracies to manipulate prices and allows injured parties to sue to recover damages caused by illegal price manipulation.

In related news, Local governments cannot regulate fracking, Ohio Supreme Court rules.

The Associated Press contributed to this report.

This article was written by Thomas Content from Milwaukee Journal Sentinel and was legally licensed through the NewsCred publisher network.

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