A federal appeals court in Washington this week skirted resolving a jurisdictional dispute between two federal agencies, instead ruling that it is too soon to rule on the turf war.
The Federal Energy Regulatory Commission and the Commodity Futures Trading Commission in 2007 both brought an enforcement action against a man named Brian Hunter for alleged manipulation of trade in natural gas futures contracts.
In the U.S. District Court for the District of Columbia, Hunter last year lost his effort to block FERC’s action and appealed.
The U.S. Court of Appeals for the D.C. Circuit heard argument in the case last month. Hunter’s lawyer, Michael Kim of Kobre & Kim, argued that only the Commodity Futures Trading Commission—and not FERC—has the power to prosecute a person such as Hunter. Kim said that FERC regulates wholesale energy markets. Hunter had nothing to do with wholesale energy, Kim said.
Robert Solomon, a lawyer with the CFTC, argued that FERC and the CFTC have overlapping jurisdiction.
The D.C. Circuit yesterday affirmed the dismissal of Hunter’s request to block FERC’s order to show cause, which FERC issued based on a preliminary finding that Hunter had manipulated natural gas markets through trading on the New York Mercantile Exchange. Hunter is a former co-head of the trading desk for commodity derivatives at Amaranth Advisors.
A three-judge panel of the appeals court ruled without touching the issue of agency authority to prosecute. The court said in a three-page per curiam judgment that it has jurisdiction to hear an appeal of a final order of FERC, and that in this case there is no final order.
The CFTC, which intervened in the dispute on Hunter’s side at the appellate level, has a case pending against him in federal district court in New York.
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