David Applebaum Quoted by Inside FERC on Supreme Court Disgorgement Ruling

David Applebaum, co-chair of Akin Gump’s energy regulation, markets and enforcement practice, has been quoted in the Inside FERC article “Supreme Court statute of limitations ruling on SEC disgorgement likely applies to FERC.” The article reports on a unanimous ruling by the U.S. Supreme Court that could have implications for the Federal Energy Regulatory Commission and other federal agencies.

Applebaum, a former director of the Division of Investigations in FERC’s Office of Enforcement, said the implications of the ruling could be far-reaching. The statute in question, he said, “applies to federal government enforcement actions of all different kinds in any agency, unless [an agency’s] specific statutory scheme has its own statute of limitation.”

Applebaum added that he thinks the analysis in the Supreme Court’s decision would essentially apply to FERC, though the commission ultimately must make its own determination on whether it is bound by the ruling. “FERC doesn’t have to issue any rule or policy statement of any kind,” he noted. “They simply have to decide internally … how they’re going to interpret the Supreme Court decision. If they reach the conclusion that I’ve reached, … then they simply will not seek disgorgement past five years.”

While FERC occasionally seeks concessions in settlement negotiations that it would not have authority to impose before the courts, it could, Applebaum said, “settle with a subject, if the subject were willing, for a period of disgorgement going beyond five years.” Continuing, he said, “The significant majority of cases have not gone past five years whether because there was no disgorgement past five years or the agency was willing to settle within five years, but there have been settlements that have gone beyond that. Now, while FERC can continue to try to request disgorgement going beyond, they can no longer obtain it in court, which changes the dynamics of settlements.”