Civil Procedure — subject matter jurisdiction

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United States Court of Appeals For the Seventh Circuit

Civil

Civil Procedure — subject matter jurisdiction

A claim for breach of a long-term requirements contract for wholesale electricity arises under state, rather than federal, law.

“In terms of the jurisdictional issue, the facts in Portland General Electric are virtually indistinguishable from the facts of this case. Northeastern has filed a complaint that does not assert any claims based on the FPA and does not challenge the reasonableness of a filed rate. Northeastern simply seeks the interpretation of a contract term to determine whether Wabash Valley breached the contract by switching from state regulation to FERC regulation. And like Edison, Northeastern acknowledged at argument that if it prevails in state court, it will need to file a notice with FERC before terminating performance under the federally-filed rate schedule, providing FERC with an opportunity to address such remedial questions. See, e.g., Jersey Cent. Power & Light Co., 33 FERC ¶ 61071 (Oct. 25, 1985) (declining to permit withdrawal of filed rate schedule). Since Northeastern is seeking only a declaration of state contract rights, a declaration that cannot obligate FERC to modify Northeastern’s obligations under the federal tariff, we recognize that it is not at all clear whether state courts could award meaningful relief to Northeastern. Nevertheless, FERC’s practice in cases like Portland General Electric suggests that FERC finds state court contract interpretation helpful in resolving such disputes when they eventually come before FERC.”

Vacated and Remanded.

12-2037 Northeastern Rural Electric Membership Corp. v. Wabash Valley Power Association Inc.

Appeal from the United States District Court for the Southern District of Indiana, Barker, J., Hamilton, J.