IN RE: FIRSTENERGY SOLUTIONS CORP., ET AL. v. FEDERAL ENERGY REGULATORY COMMISSION; OHIO VALLEY ELECTRIC CORPORATION; DUKE ENERGY OHIO, INC., OFFICE OF THE OHIO CONSUMERS' - Articles

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IN RE: FIRSTENERGY SOLUTIONS CORP., ET AL. v. FEDERAL ENERGY REGULATORY COMMISSION; OHIO VALLEY ELECTRIC CORPORATION; DUKE ENERGY OHIO, INC., OFFICE OF THE OHIO CONSUMERS'

Posted by: Karen Belcher on Dec 12, 2019

Head Comment: COUNSEL; MARYLAND SOLAR HOLDINGS, INC. v. FIRSTENERGY SOLUTIONS CORP.; FIRSTENERGY GENERATION, LLC; OFFICIAL COMMITTEE OF UNSECURED CREDITORS; AD HOC NOTEHOLDERS GROUP; PASS-THROUGH CERTIFICATEHOLDERS

Court: 6th Circuit Court (Published Opinions)

Attorneys 1:

ARGUED:Joseph F. Busa, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellant Federal Energy Regulatory Commission. Erin E. Murphy, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellant Ohio Valley Electric Corporation. David A. Beck, CARPENTER LIPPS & LELAND LLP, Columbus, Ohio, for Appellant Office of the Ohio Consumers’ Counsel. Gary M. Kaplan, FARELLA BRAUN + MARTEL LLP, San Francisco, California, for Appellant Maryland Solar Holdings, Inc. Pratik A. Shah, AKIN GUMP STRAUSS HAUER & FELD LLP, Washington, D.C., for Appellees.

Attorneys 2:

 ON BRIEF: Joseph F. Busa, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellant Federal Energy Regulatory Commission. Erin E. Murphy, Subash S. Iyer, Kasdin M. Mitchell, KIRKLAND & ELLIS LLP, Washington, D.C., Mark McKane, P.C., KIRKLAND & ELLIS LLP, San Francisco, California, for Appellant Ohio Valley Electric Corporation. Matthew A. Fitzgerald, MCGUIREWOODS LLP, Richmond, Virginia, John H. Thompson, MCGUIREWOODS LLP, Washington, D.C., Aaron G. McCollough, MCGUIREWOODS LLP, Chicago, Illinois, for Appellant Duke Energy Ohio, Inc. David A. Beck, Michael N. Beekhuizen, CARPENTER LIPPS & LELAND LLP, Columbus, Ohio, Candice Kline CARPENTER LIPPS & LELAND LLP, Chicago, Illinois, for Appellant Office of the Ohio Consumers’ Counsel. Pratik A. Shah, Z.W. Julius Chen, Lide E. Paterno, AKIN GUMP STRAUSS HAUER & FELD LLP, Washington, D.C., John C. Fairweather, Lisa S. DelGrosso, BROUSE MCDOWELL, LPA, Akron, Ohio, David M. Zensky, Brian T. Carney, AKIN GUMP STRAUSS HAUER & FELD LLP, New York, New York, Gary Svirsky, Janine Panchok-Berry, O’MELVENY & MYERS LLP, New York, New York, Michael J. Kaczka, MCDONALD HOPKINS LLC, Cleveland, Ohio, Andrew Parlen, LATHAM & WATKINS LLP, New York, New York, Amy Caton, Paul Bradley O’Neill, Joseph A. Shifer, KRAMER LEVIN NAFTALIS & FRANKEL LLP, New York, New York, Aaron Renenger, Erin Elizabeth Dexter, MILBANK LLP, Washington, D.C., Alexander B. Lees, MILBANK LLP, New York, New York, Rocco I. Debitetto, Christopher B. Wick, HAHN LOESER & PARKS LLP, Cleveland, Ohio, for Appellees. Howard A. Learner, ENVIRONMENTAL LAW & POLICY CENTER, Chicago, Illinois, Donald B. Verrilli Jr., MUNGER, TOLLES & OLSON LLP, Washington, D.C., for Amici Curiae.

Judge(s): BATCHELDER, GRIFFIN, and DONALD, Circuit Judges

Court Appealed: Appeal from the United States Bankruptcy Court for the Northern District of Ohio at Akron

ALICE M. BATCHELDER, Circuit Judge. FirstEnergy Solutions Corp. (FES) and a subsidiary filed Chapter 11 bankruptcy and initiated an adversary proceeding to enjoin the Federal Energy Regulatory Commission (FERC) from interfering with its plan to reject certain electricity-purchase contracts that FERC had previously approved under the authority of the Federal Power Act (FPA), 16 U.S.C. § 791a, et seq., and/or the Public Utilities Regulatory Policies Act (PURPA), 16 U.S.C. § 2601, et seq. FERC opposed the action. Several other parties intervened to oppose the action as well, including three counterparties to those contracts (Ohio Valley Electric Corp. (OVEC), Duke Energy, and Maryland Solar Holdings Inc.) and the Ohio Consumers’ Counsel.

The questions here concern the status of these federal-agency-endorsed contracts in bankruptcy proceedings, the nature and extent of jurisdiction as between the bankruptcy court and the federal agency (FERC), and the proper standard for deciding a Chapter 11 debtor’s request to reject such contracts. We conclude that the bankruptcy court has jurisdiction to decide whether FES may reject the contracts, but that its injunction of FERC in this case was overly broad (beyond its jurisdiction), and its standard for deciding rejection was too limited. Therefore, we AFFIRM in part, REVERSE in part, and REMAND to the bankruptcy court for further consideration.

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