Law360 and S&P Global Commodity Insights interviewed McGuireWoods partner Todd Mullins for stories about how a blockbuster appellate court opinion finding the U.S. Securities and Exchange Commission’s use of in-house judges unconstitutional is likely to impact the Federal Energy Regulatory Commission’s similar in-house enforcement process.
Law360 reported that the 5th U.S. Circuit Court of Appeals’ May 18, 2022, ruling — which found that the SEC’s enforcement process denied defendants their right to a jury trial in matters where the SEC was seeking penalties — is likely to force some changes to FERC’s process but not entirely uproot it. Many matters heard by FERC’s administrative law judges, like gas and electric rate cases, are unlikely to be affected.
“I don’t think the FERC ALJs are out of business, let’s put it that way,” Mullins said in the Law360 story published May 20. In the S&P Global story published May 26, he said enforcement work represents a small part of what FERC administrative law judges do.
Mullins, managing partner of McGuireWoods’ Washington, D.C., office, leads the firm’s energy enforcement practice and is a former investigations branch chief at FERC’s enforcement office. Experts told Law360 that the 5th Circuit opinion casts doubt on whether FERC can continue to prosecute gas market manipulation cases in-house.
“Someone in one of those cases is going to be raising this issue, and should, to preserve it for appeal later,” Mullins noted. “FERC runs the risk of their whole case getting thrown out eventually because it never should have been adjudicated to begin with.”
Mullins also noted that the decision presents a real opportunity for Congress to clarify and harmonize inconsistencies that exist in jurisdictional and procedural provisions in various statutes implemented by FERC.