Village of Old Mill Creek v. Star

The United States and FERC (together, the U.S.) submitted an amicus brief to the Seventh Circuit Court of Appeals in support of Illinois’s law requiring “zero emission credits” for certain nuclear power plants. The U.S. submitted the brief at the invitation of the Seventh Circuit, which sought the federal government’s views during the court’s review of a district court decision upholding the law. The U.S. asserted that the Federal Power Act did not preempt the Illinois law and that the Illinois program would not impede FERC’s regulation of wholesale markets. The U.S. also described guidance in FERC proceedings for how states may support renewable or clean power without interfering with FERC’s authority over wholesale energy transactions.

In the pending appeal challenging an Illinois law that established a Zero Emissions Credit (ZEC) program to support certain nuclear plants, the Seventh Circuit Court of Appeals issued an order inviting the United States “to file a brief as amicus curiae expressing the views of the government in these consolidated cases.” One issue raised by the Seventh Circuit is whether it should defer to the primary jurisdiction of the Federal Energy Regulatory Commission. The plaintiffs have argued that the ZEC program is preempted and that it violates the dormant Commerce Clause.

On January 3, 2018, after holding oral argument on an appeal of a district court decision upholding an Illinois law creating a Zero Emissions Credit (ZEC) program to support certain nuclear plants, the Seventh Circuit Court of Appeals directed the parties to submit supplemental memoranda addressing whether the court should defer to the Federal Energy Regulatory Commission’s (FERC’s) primary jurisdiction. The court also asked the parties to address whether Ex Parte Young, 209 U.S. 123 (1908), was available as the basis of equitable relief in the case and whether the lawsuits were prevented by the principle in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), which limited antitrust suits by indirect purchasers. The plaintiffs-appellants argued that the defendants had waived the issue of primary jurisdiction, that the case was not appropriate for primary jurisdiction referral because FERC did not have special expertise in constitutional preemption issues, that referral to FERC would prejudicially delay resolution of the plaintiffs’ claims, and that the court could seek FERC’s views by requesting an amicus brief. The plaintiffs-appellants also asserted that prospective injunctive relief was available under Ex parte Young because the State’s unlawful action caused them injury. The consumer plaintiffs also argued that Illinois Brick did not prevent their action because the company from which they purchased their electricity (the direct purchaser of ZECs) was controlled by the seller of the ZECs. A supplemental filing by the amicus curiae National Association of State Utility Consumer Advocates argued that Illinois Brick did not apply to suits filed pursuant to the Federal Power Act. The State defendants-appellees argued that the plaintiffs could not seek injunctive relief under Ex parte Young, but that if the court determined the plaintiffs had a cause of action for injunctive relief, the court should defer to FERC’s primary jurisdiction. The State defendants said FERC had before it several ongoing proceedings related to the issues in this case that it should be allowed to resolve. The owner of the nuclear plants that would likely benefit from the ZECs argued that the plaintiffs lacked a cause of action under Ex parte Young, and that primary jurisdiction should not apply if the court permitted the suit. The State defendants and the plants’ owner also said Illinois Brick prevented the retail plaintiffs’ suits.