## Facts

- A federal energy regulator investigated alleged manipulation of wholesale electricity markets in the Western United States from November 2006 through December 2008.
- The agency alleged a “loss-leader” strategy: traders built financial derivative positions expected to profit from index price movements, then executed allegedly uneconomic physical power trades at specific hubs to influence those indices.
- The agency issued an administrative order assessing civil penalties and disgorgement totaling approximately $487.9 million under Federal Power Act (FPA) § 222 (16 U.S.C. § 824v) and the agency’s Anti-Manipulation Rule (18 C.F.R. § 1c.2).
- After defendants did not pay, the agency filed a federal court petition (October 2013) seeking judicial enforcement of the penalty order under FPA § 31(d)(3) (16 U.S.C. § 823b(d)(3)).
- Defendants (a bank and individual traders) moved to dismiss or, alternatively, to transfer the case to the Southern District of New York.

## Issues

1. Whether the agency had statutory authority and jurisdiction under the FPA to pursue anti-manipulation claims based on the alleged trading strategy and its effects on wholesale electricity prices.
2. Whether the enforcement action was time-barred under 28 U.S.C. § 2462 or other limitations principles, including the effect of tolling agreements and the agency’s multi-step enforcement process.
3. Whether venue was proper in the Eastern District of California under the FPA and 28 U.S.C. § 1391.
4. Whether the case should be transferred to the Southern District of New York under 28 U.S.C. § 1404(a) for convenience and in the interest of justice.
5. Whether individual traders could be personally liable under FPA § 222 and the Anti-Manipulation Rule.

## Decision

- The court denied the motion to dismiss.
- The court held the agency had jurisdiction and statutory authority to enforce the anti-manipulation provisions as pleaded.
- The court held the claims were not time-barred at the pleading stage, considering the timing of the federal enforcement action and tolling/enforcement structure.
- The court held venue in the Eastern District of California was proper.
- The court denied transfer to the Southern District of New York.
- The court held the complaint plausibly alleged individual liability under the statute and rule.

## Legal Principles

- FPA § 222 and the Anti-Manipulation Rule reach deceptive or fraudulent schemes “in connection with” jurisdictional wholesale electricity transactions, including conduct alleged to affect wholesale price indices.
- For limitations analysis under 28 U.S.C. § 2462 in this enforcement setting, the relevant “action” may be the federal court enforcement proceeding rather than earlier administrative steps; tolling agreements and the statutory enforcement sequence may affect timeliness.
- Venue is proper where a substantial part of the events or omissions occurred, including where alleged market effects are tied to the district and relevant trading points and impacts connect to the forum.
- Transfer under 28 U.S.C. § 1404(a) requires a strong showing that convenience and the interests of justice favor a different forum; deference is commonly given to an enforcement plaintiff’s forum choice absent a clear imbalance.
- Statutory language applying to “any entity,” together with the implementing rule, can support claims against natural persons when the pleadings allege their direct participation in the alleged manipulation.

## Conclusion

The court allowed the enforcement action to proceed, concluding that the agency plausibly invoked federal anti-manipulation authority over alleged wholesale-market conduct, filed within applicable time constraints as pleaded, properly sued in the Eastern District of California, and stated claims against both the corporate defendant and individual traders, while declining to transfer the case to New York.


Fed. Energy Regul. Comm'n v. Barclays Bank PLC, 105 F. Supp. 3d 1121 (E.D. Cal. 2015)