Arcadia, Ohio v. Ohio Power Company

by Antonin Scalia

United States Supreme Court

498 U.S. 73

Arcadia Ohio  v.  Ohio Power Company

No. 89-1283  Argued: Oct. 1, 1990. --- Decided: Nov 27, 1990

See 498 U.S. 1075, 111 S.Ct. 804.

Syllabus

Respondent Ohio Power Co. is subject to the overlapping regulatory jurisdiction of the Securities and Exchange Commission (SEC) under the Public Utility Holding Company Act (PUHCA) and the Federal Energy Regulatory Commission (FERC) under the Federal Power Act (FPA). In a series of orders authorizing Ohio Power to establish and capitalize an affiliate to secure and develop a reliable source of coal, the SEC specified that the price Ohio Power paid for such coal could be no greater than (and, in one order, equal to) the affiliate's actual costs. Subsequently, FERC declared coal charges complying with this specification unreasonable and thus unrecoverable in Ohio Power's rates to its wholesale customers, including petitioner municipalities, rejecting Ohio Power's argument that the SEC, by the above-mentioned orders, had "approved" the affiliate's charges, and that § 318 of the FPA ousts FERC of jurisdiction. The Court of Appeals reversed, holding FERC's disallowance of the charges to be precluded by § 318, which is captioned "Conflict of jurisdiction," and which provides that "[i]f, with respect to the issue, sale, or guaranty of a security, or assumption of obligation or liability in respect of a security, the method of keeping accounts, the filing of reports, or the acquisition or disposition of any security, capital assets, facilities, or any other subject matter, any person is subject both to a requirement of [PUHCA] and to a requirement of [the FPA], the [PUHCA] requirement . . . shall apply . . ., and such person shall not be subject to the [FPA] requirement . . . with respect to the same subject matter . . . ." (Emphasis added.)

Held:

1. Section 318 has no application to this case. The phrase "or any other subject matter" does not, as the lower court assumed, parallel the other listed subjects "with respect to [which]" duplicative agency requirements will trigger the pre-emption rule. Rather, it is part of the phrase that reads "the acquisition or disposition of any security, capital assets, facilities, or any other subject matter." Besides being more faithful to the precise words of the text, this reading allows § 318 to take on a shape that gives meaning to what otherwise seems a random listing of specific subject matters (with "any other subject matter" tagged on at the end). The section addresses conflicts of jurisdiction within four areas of plainly parallel authority granted both to the SEC and FERC by particular sets of PUHCA and FPA sections. This is confirmed by expert commentary and by the practice of FERC and its predecessor, which have never decided a § 318 issue except in connection with orders promulgated under one of the four enumerated categories. Thus, § 318 applies only if the "same subject matter" as to which the duplicative requirements exist is one of those specifically enumerated, and not some different, more general "other subject matter," as the lower court believed. Even assuming that FERC's rate order affecting the sale of electric power qualifies as a requirement "with respect to . . . the . . . disposition of . . . any other subject matter," it is still a requirement with respect to a different subject matter from Ohio Power's acquisition of its affiliate, which was the subject of the SEC orders. Pp. 77-85.

2. This Court expresses no view on, but leaves to the lower court to resolve, the arguments that FERC's decision violates its own regulation providing that the price of fuel purchased from an affiliate shall be deemed to be reasonable where subject to the jurisdiction of a regulatory body, and that the FERC-prescribed rate is not "just and reasonable" because it "traps" costs which the SEC has implicitly approved. P. 85.

279 U.S.App.D.C. 327, 880 F.2d 1400 (1989), reversed and remanded.

SCALIA, J., delivered the opinion of the Court, in which all other Members joined, except SOUTER, J., who took no part in the consideration or decision of the case. STEVENS, J., filed a concurring opinion, in which MARSHALL, J., joined, post, p. ----.

Carter G. Phillips, Washington, D.C., for petitioners.

Lawrence G. Wallace, Washington, D.C., for the federal respondent in support of petitioners, by special leave of Court.

Edward Berlin, Washington, D.C., for private respondents.

Justice SCALIA delivered the opinion of the Court.

Notes