What happened
The Tenth Circuit affirmed the dismissal of consolidated Kansas consumer class actions accusing wholesale natural-gas suppliers of violating state consumer law during Winter Storm Uri, holding that the Natural Gas Act leaves those interstate wholesale transactions to federal oversight.
The panel said the Kansas residents' claims under the Kansas Consumer Protection Act directly targeted wholesale natural-gas sales and practices regulated by the Federal Energy Regulatory Commission. That meant the suits were field-preempted, even though the alleged price spikes ultimately flowed through local distributors to residential customers.
The cases arose from February 2021's Winter Storm Uri, when subzero temperatures drove up demand and froze wellheads across the midcontinent region. According to the opinion, regional benchmark prices that had been around $2.545 to $2.580 per MMBtu rose as high as $622.785 per MMBtu during the storm.
The plaintiffs were Kansas residential gas consumers who bought from local distributors, not directly from the wholesale suppliers. They alleged the suppliers cut baseload gas supplies, pushed distributors into the higher-priced spot market and charged unconscionable prices that distributors later passed on to customers.
The district court dismissed the suits after granting a joint defense motion, and the Tenth Circuit agreed that FERC's exclusive jurisdiction over interstate wholesale natural-gas markets blocked the state-law theory. The appellate court rejected the plaintiffs' argument that their suits were really aimed at retail-market harms, saying downstream effects on consumers did not change the fact that the challenged conduct was wholesale pricing.
The panel also rejected the argument that the Kansas consumer statute's general applicability saved the claims. The opinion said the ruling does not preempt the Kansas Consumer Protection Act in its entirety, but bars this specific effort to extend the statute into FERC-regulated wholesale transactions.
The decision leaves Kansas consumers without these state-law claims against the wholesale suppliers over Uri-era prices. The opinion also noted that FERC's Office of Enforcement investigated wholesale natural-gas market activity during the storm and took no enforcement action.