Perspective

How the filed-rate policy wreaks havoc- and what courts can do about it.

Like many venerable legal rules, the filed-rate doctrine is rarely questioned. Over the last century, it has served many important purposes. However, with deregulated wholesale electric power markets at the federal level and various degrees of deregulation across the states, both the doctrine's continued applicability and usefulness are suspect.

As recent examples in the industry suggest, presumptive application of the filed-rate doctrine by both firms and courts can cause affirmative harm for energy-market development and policy. For example, a recent U.S. District Court decision in Texas applied the filed-rate doctrine in an astonishingly broad manner (), precluding anti-trust claims against energy suppliers in the deregulated Texas wholesale power market and leaving those harmed by market abuses without any legal or administrative remedy.

Examples such as this one illustrate a serious need for reassessment of the doctrine by federal courts in the energy context. Both courts and litigators have at their disposal ways of lowering the filed-tariff shield to allow more efficient energy markets to develop, better furthering the goals of energy policy.

In the deregulated electric power industry, the filed-rate doctrine continues to play an important role in precluding judicial enforcement of antitrust, contract, and tort laws.

For instance, the filed-rate doctrine has been used to bar antitrust claims in the deregulated electric power industry. In , the First Circuit invoked the Keogh strand of the filed-rate doctrine () to bar a price squeeze claim against a utility-even where the tariff filed with FERC was a market-based tariff relying on competitively set prices. ² The court reasoned, "It is the filing of the tariffs, and not any affirmative approval or scrutiny by the agency, that triggers the filed-rate doctrine." ³

A recent article analyzing the filed-rate doctrine, however, argues that automatic application of the filed-rate doctrine to the partially deregulated electric power industry leads to harmful results. ⁴ The conventionally understood concern with the filed-rate doctrine in deregulated markets is that, by valuing regulatory over market-price determinations, it stands in the way of competitive markets.

Another concern with the filed-rate doctrine arises due to the strategic actions of firms in the regulatory process. To the extent cases such as allow the mere filing of tariffs to presumptively determine whether a court will exercise jurisdiction, the filed-rate doctrine invites even more radical deregulation than either Congress or the regulatory agencies accepting tariffs would prefer-that is, markets absent antitrust and common law remedies. Surely, Congress did not intend this in the Federal Power Act or in subsequent energy legislation.

Unlike other types of immunity from litigation, which often apply to firms across the board, the filed-rate doctrine is a firm-specific defense. To the extent the doctrine is used by courts as a basis to decline jurisdiction, private firms might look to tariffing as a clever strategy to foreclose antitrust or common law litigation, thus reducing the possibility of judicial enforcement. Allowing private conduct to determine the institutional forum for market enforcement leads to a serious bias against judicial enforcement. This