In Castillo v. Johnson, No. CV-17-04688-PHX-DRY, 2019 WL 4222289, at *1 (D. Ariz. September 5, 2019), a group that the federal judge called "the Bribery Defendants" were sued for racketeering, unjust enrichment, and "conspiring to unlawfully raise utility rates through racketeering, wire fraud, and bribery of a public servant."
In response to these claims, the Bribery Defendants actually alleged that bribing them was immunized by the Filed Rate Doctrine! In other words, the utility rates in question were allegedly subject to approval by an authorized administrative agency, they argued. That meant, according to them, that there could be no claim against them even if they took bribes to charge the approved utility rates.
Well, the long and the short of it is that the federal judge rejected the Bribery Defendants' argument in this case. First, the Federal Filed Rate Doctrine just could not apply in this case. "Because no federal rate is implicated here, the federal filed rate doctrine is inapplicable." Castillo, 2019 WL 4222289, at *3.
Second, whether or not Arizona has its own filed rate doctrine, and whether or not it would apply here anyway, the relevant Arizona administrative authority had already expressly rejected the idea that utility rates in Arizona can be obtained by bribery:
The Court is unpersuaded that Arizona has adopted a version of the filed rate doctrine. Nor is the Court persuaded that the doctrine, assuming one has been adopted, would apply to the type of conduct at issue here. Nevertheless, even assuming that Arizona has adopted a filed rate doctrine and that it applies under these circumstances, the doctrine does not bar Plaintiffs’ claims because the [Arizona Corporation] Commission repudiated the doctrine in this instance. The Court therefore denies the Bribery Defendants’ motion to dismiss.
Castillo, 2019 WL 4222289, at *8. The federal court's three-part analysis of state filed rate doctrine is instructive. First, the court looked to whether the forum state has adopted a version of the filed rate doctrine. In the course of its opinion, the federal court cautioned that this first question cannot be answered simply by resorting to federal filed rate precepts.
Second, the federal court looked to see whether a state filed rate doctrine could be applied on the merits. Even assuming that a state filed rate doctrine could apply to these facts -- after showing that the facts of this case could not support any filed rate doctrine here -- the federal court turned to the last of the trio of questions.
Third and finally, the relevant state administrative agency had already taken action that "repudiated the doctrine in this instance." Simply put, no filed rate doctrine can ever be applied in the face of state administrative agency action that repudiates it in the case at bar.
Those federal litigants and judges who have ears to hear, including in other Circuits that have ruled to the contrary based upon federal and not state filed rate doctrine rules, let them hear the voices of the states about their own filed rate doctrines.
Please Read The Disclaimer. ©2019 Dennis J. Wall. All Rights Reserved.
Comments