U.S. District Court Judge Mark G. Mastroianni of the District of Massachusetts denied a Motion to Dismiss submitted by an energy corporation and employee concerning charges that they engaged in energy market manipulation and submitted false or misleading information to Federal Energy Regulatory Commission ("FERC")-approved regulatory entities.
The FERC initial Order called for a $5 million penalty against the corporation and a $50,000 penalty against the employee (collectively, the "Respondents"), penalties the Respondents elected not to pay. Judge Mastroianni asserted that a trial de novo will "enable the Court to develop the facts needed to test the correctness of the penalty assessment, subject to the procedural protections and adversarial rights ordinarily attendant to a civil action, before entering an order affirming (or modifying, or setting aside) the assessment."
"[T]he Court concludes that this case is to be treated as an ordinary civil action requiring a trial de novo, but with limitations on the discovery process in order to promote an efficient resolution of the case." The Court stated that the de novo review of law and fact would "not provide procedural protections or adversarial rights, but gives the District Court jurisdiction over factual development and legal analysis." Judge Mastroianni emphasized that:
The Court's reading of the statutory language, bolstered by FERC's prior pronouncements, the approaches of other courts, and the requirements of due process, leads the Court to conclude that [Federal Power Act Section 31(d)(3)] Option 2's de novo review means treating this case as an ordinary civil action governed by the Federal Rules of Civil Procedure that culminates, if necessary, in a jury trial.
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