Florida Municipal Power Agency v. Florida Power & Light Co.

United States Court of Appeals, Eleventh Circuit.

No. 94-2320.

FLORIDA MUNICIPAL POWER AGENCY, Plaintiff-Appellant, Cross-
Appellee,

v.

FLORIDA POWER & LIGHT COMPANY, Defendant-Appellee, Cross-
Appellant.

Sept. 19, 1995.

Appeals from the United States District Court for the Middle
District of Florida. (No. 92-35-CIV-ORL-22), Anne C. Conway, Judge.

Before COX, Circuit Judge, RONEY and WOOD*, Senior Circuit Judges.

RONEY, Senior Circuit Judge:

The primary issue in this case is whether the "filed rate"

doctrine precludes Florida Municipal Power Agency's claim against

Florida Power & Light for refusal to sell network electric

transmission services. The filed rate doctrine provides that where

a regulated company has a rate for service on file with the

applicable regulatory agency, the filed rate is the only rate that

may be charged. Since there is a genuine issue as to whether the

filed rate covers the network service that plaintiff sought to buy,

we vacate and remand the district court's summary judgment for

Florida Power & Light.

The possible difference between what plaintiff sought to buy

and the filed rate for what defendant had to sell is pointed up by

a review of the facts. Plaintiff Florida Municipal Power Agency

(Agency) is a municipally owned agency established by law to sell

economic and reliable power to a twenty-six member group of Florida

*
Honorable Harlington Wood, Jr., Senior U.S. Circuit Judge
for the Seventh Circuit, sitting by designation.
cities and municipal power authorities. In the early 1980s,

Florida Power & Light (FPL) entered into settlement agreements with

the Department of Justice and the Nuclear Regulatory Commission and

a number of Florida cities, some of whom are members of the Agency.

The agreements gave the Agency members the right to purchase

transmission service and wholesale power from FPL. Under these

agreements, FPL sold "point-to-point" transmission services to the

Agency wherein FPL assessed a separate charge for transmission

between each generation point and a particular city. If the Agency

wanted to supply the city from another power source, it had to pay

a separate transmission charge. The rates were filed with the

Federal Energy Regulatory Commission (FERC), which has the

exclusive authority under the Federal Power Act to determine power

allocations and the reasonableness of wholesale power rates.

In a three-count complaint against FPL alleging breach of

contract and federal and state antitrust claims for damages and

injunctive relief, the Agency asserted that FPL refused to sell it

network transmission services from FPL's network. The Agency first

requested access to the network in 1989 to allow its members to

integrate resources in the same way as does FPL. Network

transmission is more economical because a utility can continually

change power sources throughout the day to respond to changing

demand levels. The Agency contended that without the network

service it could not establish an integrated power project and had

to rely on more expensive sources of power. In response to FPL's

motion for summary judgment, the Agency asserted that the rate

schedules currently on file with the Commission "do not provide for
transmission connecting each [integrated] resource to each

[integrated] member city, at any price." The Agency's Mem. Opp'n

FPL's Mot.Summ.J. at 16.

Without addressing the merits of either the contract or

antitrust claims, the district court granted FPL's motion for

summary judgment on the damage claim, finding the claim was barred

by the "filed rate" doctrine. The court denied the Agency's motion

for reconsideration. The district court also concluded that a

proposed FERC order requiring FPL to provide network transmission

service to the Agency mooted its claims for injunctive relief.

Both decisions were appealed.

The plaintiff Agency argues that its damage claim was not

barred by the filed rate doctrine because the doctrine does not

apply when no rate is filed. The Agency contends that while there

was a filed rate for point-to-point service, FPL refused to sell it

network transmission, a service the Agency insists is distinct from

point-to-point transmission. There was no filed network rate.

FPL asserts that network service is nothing more than

different pricing of FPL's existing transmission. It claims the

Agency's request for network service was actually a request to

modify or replace point-to-point rates on file with the FERC. Such

modification, FPL contends, is clearly precluded by the filed rate

doctrine enunciated in a long line of Supreme Court cases.

The characterization of the plaintiff's claim is therefore

critical to whether the filed rate doctrine will apply. The

parties do not dispute that if there was a filed rate covering

network service, the damage claim would be precluded by the filed
rate doctrine. This doctrine was announced in Keogh v. Chicago &

Northwestern Railway, 260 U.S. 156, 43 S.Ct. 47, 67 L.Ed. 183

(1922), where the Supreme Court first held that once a carrier's

rate had been submitted to and approved by the responsible

regulatory agency, in that case the Interstate Commerce Commission

(ICC), a private shipper could not successfully recover antitrust

damages on a claim that the rate was the product of an antitrust

violation. The Court reasoned that the ICC's approval had, in

effect, established the lawfulness of the shipper's rates. 260

U.S. at 162-63, 43 S.Ct. at 49. The Court has reaffirmed theKeogh

holding in later cases also applying the filed rate doctrine to

rates filed with the Federal Power Commission (FPC) and its

successor, FERC. E.g., Square D Co. v. Niagara Frontier Tariff

Bureau, Inc., 476 U.S. 409, 106 S.Ct. 1922, 90 L.Ed.2d 413 (1986)

(antitrust damage claim barred; rates filed with ICC); Arkansas

Louisiana Gas Co. v. Hall, 453 U.S. 571, 101 S.Ct. 2925, 69 L.Ed.2d

856 (1981) (breach of contract damage claim barred; rates filed

with FPC); Montana-Dakota Utilities Co. v. Northwestern Public

Service Co., 341 U.S. 246, 71 S.Ct. 692, 95 L.Ed. 912 (1951) (fraud

damage claim barred; rates filed with FPC).

In decisions subsequent to Keogh, however, the Court has

emphasized the limited scope of the filed rate doctrine to preclude

damage claims only where there are validly filed rates. In

Carnation Co. v. Pacific Westbound Conference, 383 U.S. 213, 216,

86 S.Ct. 781, 783, 15 L.Ed.2d 709 (1966), the Court held that a

shipper's implementation of rate-making agreements which were not

approved by the Federal Maritime Commission was subject to the
antitrust laws. In discussing the Carnation case, the Court later

noted: "The specific Keogh holding ... was not even implicated in

Carnation ..., because the ratemaking agreements challenged in that

case had not been approved by, or filed with [the Commission]."

Square D, 476 U.S. at 422 n. 29, 106 S.Ct. at 1930 n. 29. In its

most recent decision discussing the filed rate doctrine, the Court

held that a carrier could not rely on that doctrine when, having

filed a tariff lacking an essential element, "in effect it had no

rates on file...." Security Services v. K Mart Corp., --- U.S. ---

-, ----, 114 S.Ct. 1702, 1708, 128 L.Ed.2d 433 (1994). The Court

also has noted that "exemptions from the antitrust laws are

strictly construed and strongly disfavored." Square D, 476 U.S. at

421, 106 S.Ct. at 1929. It reiterated that the filed rate doctrine

does not bar criminal or injunctive antitrust actions. 476 U.S. at

421, 106 S.Ct. at 1929.

If the gravamen of the Agency's claim that the two services

are distinct and there is no filed network rate is accurate, then

it is clear the doctrine would not confer immunity. The district

court improperly concluded in its order on reconsideration that

even if network and point-to-point transmission are entirely

different services or products, the filed rate doctrine would bar

an antitrust claim. There needs to be a factual determination of

whether network transmission is such a different product from

point-to-point transmission that reasonable ratemaking would

require the filing of separate network transmission rates.

The United States has filed an amicus brief in this case

asserting concern over the district court's failure to determine if
the network transmission service sought by the plaintiff is

different from the point-to-point service for which FPL has filed

rates. In that brief the United States stated, as we do also, that

we "take[ ] no position as to whether the "network' service FMPA

[the Agency] sought was or was not "an entirely different service'

from the point-to-point service available at filed rates." The

United States suggested, as we do here, "[d]epending on the

circumstances, the court also could have considered a primary

jurisdiction referral to FERC in connection with this issue. Brief

of the United States as Amicus Curiae at 18-19 n. 11. See

generally Reiter v. Cooper, --- U.S. ----, ----, 113 S.Ct. 1213,

1220, 122 L.Ed.2d 604 (1993); Ricci v. Chicago Mercantile

Exchange, 409 U.S. 289, 93 S.Ct. 573, 34 L.Ed.2d 525 (1973);

United States v. Western Pacific Railroad, 352 U.S. 59, 77 S.Ct.

161, 1 L.Ed.2d 126 (1956); Wagner & Brown v. ANR Pipeline Co., 837

F.2d 199 (5th Cir.1988).

If on remand the district court concludes that the services

are distinct and FPL is not immune from antitrust liability, it

may, for the limited purpose of calculating damages, estimate the

rate that would have been in effect but for the violation without

infringing on the FERC's jurisdiction. Estimates are permissible

and unavoidable in antitrust damage computations. J. Truett Payne

Co. v. Chrysler Motors Corp., 451 U.S. 557, 565-66, 101 S.Ct. 1923,

1929, 68 L.Ed.2d 442 (1981); Zenith Radio Corp. v. Hazeltine

Research, 395 U.S. 100, 123-24, 89 S.Ct. 1562, 1577, 23 L.Ed.2d 129

(1969); Graphic Products Distributors v. Itek Corp., 717 F.2d

1560, 1579 (11th Cir.1983).
 We vacate the district court's denial of the Agency's claim

for injunctive relief, which will have to be decided by the outcome

of proceedings on remand.

We deny the Agency's motion to take judicial notice of

post-appeal testimony, which the district court properly can

address on remand.

VACATED and REMANDED.