David Applebaum Quoted in Law360 on Court Scrutiny of FERC in Enforcement Cases
Law360 has quoted Akin Gump energy regulation, markets and enforcement partner David Applebaum in its article “Maxim Ruling Opens FERC Up To Deeper Court Scrutiny,” which reports on a recent ruling by a federal judge in Massachusetts that the Federal Energy Regulatory Commission (FERC) must go through a full court case, rather than simply having the judge review the agency’s proceedings, to enforce a market manipulation penalty against Maxim Power Corp.
The case in question involves a suit brought by FERC to enforce a $5 million manipulation penalty against Maxim. The judge, as the article reports, said Maxim was entitled to a full adversarial civil proceeding, including a jury trial, if necessary.
Applebaum, who supervised the Maxim investigation while serving as investigations director in FERC’s Office of Enforcement, said that if this decision is adopted widely in other cases, it “would likely increase the length of time of enforcement cases both at the agency and in district court simply because the civil litigation process in a complex case, including discovery and briefing, can often take a long time.”
That said, don’t expect FERC to back down. Applebaum noted, “FERC enforcement has been very consciously building up its trial-ready team, anticipating that these cases could be full-blown trials.”
The judge’s ruling in this case, the article says, is limited to electricity market manipulation. And unlike the Federal Power Act, there is no de novo review option under the Natural Gas Act.
According to Applebaum, however, when de novo reviews result in rulings on the merits of FERC’s manipulation allegations under the Federal Power Act, that will have some crossover appeal in Natural Gas Act manipulation cases. “The statutes have many differences, but the market manipulation provisions in those statutes are the same, and how the agency reviews market manipulation cases under each one is similar,” he said.