Summary
The Supreme Court held that Michigan's Public Utilities Securities Act, which required natural gas companies to obtain state approval before issuing long-term securities, was pre-empted by the Natural Gas Act. The Court concluded that the federal regulatory scheme occupied the field of rates and facilities of interstate natural gas companies and that Michigan's law sought to regulate matters within the Federal Energy Regulatory Commission's exclusive jurisdiction. The Court affirmed the Sixth Circuit's judgment and did not reach the Commerce Clause issue.
Topics
Practice areas
Questions Presented
- Whether the Natural Gas Act preempts Michigan's requirement that natural gas companies obtain Michigan Public Service Commission approval before issuing and marketing long-term securities.
- Whether Michigan's securities-approval requirement violates the Commerce Clause if it is not preempted by the Natural Gas Act.
Holdings
- The Natural Gas Act occupies the field of rates and facilities of natural gas companies engaged in interstate transportation and sale for resale, and Michigan's Public Utilities Securities Act regulates within that federally occupied field. The state law is therefore preempted as applied to the respondents.
- The Court did not decide whether Michigan's law violates the Commerce Clause because the law was preempted by the Natural Gas Act.
Key quotations
“In this case we conclude that Act 144 regulates in a field the NGA has occupied to the exclusion of state law, and that it therefore is pre-empted.” (485 U.S. at 300)
“In short, the things Act 144 regulation is directed at, the control of rates and facilities of natural gas companies, are precisely the things over which FERC has comprehensive authority.” (485 U.S. at 308)
“We therefore conclude that the MPSC regulation of respondents through Act 144 impinges on a field that the federal regulatory scheme has occupied and, consequently, that Act 144 is pre-empted.” (485 U.S. at 310)
“Because we have concluded that Act 144 is pre-empted by the NGA, we need not decide whether, absent federal occupation of the field, Act 144 violates the Commerce Clause.” (485 U.S. at 311)
Factual background
ANR Pipeline and ANR Storage are natural gas companies subject to Federal Energy Regulatory Commission jurisdiction under the Natural Gas Act. Pipeline operates an interstate pipeline system transporting natural gas for resale across Michigan and other States, while Storage operates Michigan storage fields that receive and redeliver gas for interstate sale. Michigan's Public Utilities Securities Act required public utilities transporting natural gas for public use to obtain Michigan Public Service Commission approval before issuing long-term securities.
Procedural history
ANR Pipeline and ANR Storage sued members of the Michigan Public Service Commission in their official capacities. The Western District of Michigan held that Michigan's Public Utilities Securities Act was neither preempted by the Natural Gas Act nor unconstitutional under the Commerce Clause. The Sixth Circuit reversed on both grounds. The Supreme Court affirmed on federal preemption grounds and declined to reach the Commerce Clause issue.