The Supreme Court’s 7-2 ruling in Oneok v. Learjet is a solid win for states, consumer protection, and the Ninth Circuit. The Court held the Natural Gas Act does not preempt state-law antitrust lawsuits alleging price manipulation that affect both federally regulated wholesale natural-gas prices and nonfederally regulated retail natural-gas prices.
Historically, federal regulation of the natural-gas industry has been divided into three segments: production, interstate gas pipelines (wholesale), and local gas distribution (retail). The federal Natural Gas Act regulates only the second segment—the interstate shipment of gas including rate setting—states regulate the other segments. Since deregulation in the 1970s, pipeline wholesalers have sold natural gas at market rate based on price indices of voluntarily reported data of natural gas sales. In 2003 the indices were found to be inaccurate because natural-gas traders had been reporting false data.