In Simon v. KeySpan Corp., the United States Court of Appeals for the Second Circuit upheld the dismissal of the plaintiffs claims on the ground that the filed rate doctrine blocked a consumer class action alleging that KeySpan used a complex financial transaction to overcharge New York City electricity buyers.
The filed rate doctrine holds that a rate filed with a regulatory agency may not serve as the basis for an antitrust action. The New York electricity market is concentrated and KeySpan and financial partner Morgan Stanley had previously settled with the Department of Justice on antitrust claims based on the same conduct. Moreover, the rate in question was set through an auction. Nevertheless, the Second Circuit held, regulators ultimately approved it and that was enough. “The auction process,” the court explained, “was circumscribed, and the process was reviewed by the regulatory body which determined the resulting rate to be reasonable. In these circumstances, the filed rate doctrine” applies.
The court also held that the name plaintiff lacked standing as an indirect electricity purchaser. Only the utilities may sue suppliers who anticompetitively drive up prices.