On June 26, 2019, the U.S. District Court of Maine (“District Court”) denied a motion for leave to file an interlocutory appeal to the U.S. Court of Appeals for the First Circuit (“First Circuit”) ultimately concerning whether FERC’s enforcement action against Competitive Energy, LLC and its managing member Richard Silkman (collectively, “Respondents”) was time-barred. The District Court previously denied two motions for summary judgment, relying on the First Circuit’s decision in United States v. Meyer (“Meyer”), which held that a FERC enforcement action accrues when FERC assesses a penalty, and therefore was not barred. Respondents argued that the District Court should not have followed the First Circuit’s decision in Meyer because two subsequent United States Supreme Court (“Supreme Court”) decisions—Kokesh v. SEC (“Kokesh”) and Gabelli v. SEC (“Gabelli”)—have overruled Meyer. In denying the motion for interlocutory appeal, the District Court held that whether Meyer continues to be good law does not present a “controlling question of law as to which there is a substantial ground for difference of opinion.”
The facts of this dispute date back to July 2007–February 2008, when Respondents are alleged to have inflated baseline consumption levels to manipulate the ISO-New England Inc. Day-Ahead Load Response Program (see January 15, 2019 edition of the WER). After Respondents failed to pay penalties assessed by FERC in August 2013, FERC filed an enforcement action with the District Court in December 2013. Respondents filed a motion for summary judgment with the court arguing, among other things, that FERC’s enforcement action was time-barred due to the applicable statute of limitations, which is five years from the date the claim is first accrued. Specifically, Respondents argued that under the Supreme Court’s decisions in Kokesh and Gobelli, the limitation period began when the alleged conduct occurred (July 2007–February 2008), and thus FERC’s action in the District Court is time-barred. In January, the District Court denied Respondents’ motion finding FERC’s filing was timely based upon the First Circuit’s holding in Meyer, effectively interpreting the statute as having two separate periods where an administrative proceeding is required prior to enforcement. Respondents filed a motion for interlocutory appeal, claiming that Meyer is no longer good law following Kokesh and Gobelli.
Respondents also argued that the U.S. District Court for the Eastern District of Virginia (“Eastern District of Virginia”) recently allowed an interlocutory appeal on the same issue to the U.S. Court of Appeals for the Fourth Circuit (“Fourth Circuit”) (see October 3, 2018 edition of the WER) due to difficulty in applying the statute to FERC enforcement proceedings.
The District Court was not persuaded, however, that the Supreme Court had overruled Meyer and doubted that the First Circuit would conclude it had either. The District Court explained that it had already considered Respondents’ arguments and stated it “can do no better today in explaining its reasoning that it did in January.” Although the Eastern District of Virginia’s opinion gave the District Court pause, and the District Court considered issuing a certification to see whether the First Circuit would accept the appeal, the District Court ultimately concluded that it believes Meyer is still good law, and thus there was no “controlling question of law” as to which there is “substantial ground for difference of opinion” warranting an interlocutory appeal. The District Court therefore denied the Respondents’ motion.
A copy of the order is available here.