A price-fixing lawsuit filed by a Wichita aviation company and other natural gas customers that climbed to the U.S. Supreme Court resulted in recovery by the state of Kansas of more than $950,000 from companies that manipulated prices in the early 2000s, officials said Tuesday.
Attorney General Derek Schmidt contributed to the prevailing argument before the Supreme Court that federal law didn't preempt authority of states to enforce its antitrust laws against price fixing of natural gas in retail transactions.
In 2015, the Supreme Court decided in Oneok v. Learjet that broad applicability of antitrust law supported a conclusion of no federal preemption. That allowed plaintiffs to continue the suit and prompted a settlement providing recovery of money overpaid because of illegally inflated prices.
Schmidt filed claims to recover excessive payment by the state of Kansas on 5.2 million British thermal units of natural gas. The state's general fund will receive a reimbursement of $957,000 to cover overcharges from 2000 to 2002.
"Our successful defense of state antitrust law made this recovery possible," the attorney general said. "We are gratified by this outcome and are determined to continue defending the public treasury from those who unlawfully lay claim to taxpayer funds."
The case began as Wichita-based Learjet and other purchasers of natural gas brought claims alleging false reporting of price index information and manipulation of sales during an energy crisis. The Oneok v. Learjet case hinged on the preemptive effect of the Natural Gas Act and enforcement authority of the Federal Energy Regulatory Commission.
The pipelines won at the federal district court level in Nevada, but that ruling was reversed by the U.S. Court of Appeals for the Ninth Circuit.
The Supreme Court took up the case to decide whether Congress forbade states from taking action regarding natural gas sales. The court concluded states had a history of offering common law and statutory remedies against unfair business practices, and the consumers' suits in Oneok "relied on this well-established state power."