2014 News Releases

AG Schmidt asks U.S. Supreme Court to uphold Kansas anti-price fixing law

Release Date: Dec 02, 2014

TOPEKA – (December 2, 2014) – Kansas Attorney General Derek Schmidt has asked the U.S. Supreme Court to shield a Kansas consumer-protection law from a legal challenge backed by the federal government.

Schmidt last week led a bipartisan group of 21 state attorneys general in filing an amicus curiae brief that asks the Supreme Court to allow continued enforcement of state anti-price fixing laws against retail sellers of natural gas who illegally rig prices. The federal government, which is opposite Kansas in this lawsuit, is arguing that state antitrust laws are preempted by the federal Natural Gas Act. The defendants and the federal government argue the preemption extends to the retail market when the challenged practice is engaged in by a federally regulated seller and affects a federally regulated wholesale rate.

“We’re asking the Supreme Court to reject the federal government's view that only Washington has the legal power to protect Kansas natural gas purchasers from costly illegal price fixing,” Schmidt said. “The federal Natural Gas Act clearly gives states a regulatory role over natural gas as it is transported and distributed within the state. Kansas antitrust laws protect consumers and taxpayers by ensuring a fair, competitive retail marketplace for natural gas. We have asked the Supreme Court to maintain the longstanding shared regulatory authority in this industry.”

The underlying lawsuit involves accusations by the plaintiffs, which include both Kansas-based Learjet, Inc., and Topeka Unified School District No. 501, that the defendants illegally drove up the retail price of natural gas, costing gas purchasers millions of dollars. Similar cases from around the country were consolidated into multi-district litigation in Nevada, and the San Francisco-based 9th Circuit Court of Appeals eventually allowed the plaintiffs to proceed with their state-law claims. The defendants have asked the Supreme Court to reject the lawsuit by concluding that federal law preempts state laws that combat price-fixing in the natural gas retail market when the challenged industry practices also affect the wholesale gas market.

The case, ONEOK v. Learjet, is scheduled for oral argument in the U.S. Supreme Court next month.

A copy of the brief can be found at http://1.usa.gov/1wlp5aX.

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