On July 21, Judge Mastroianni of the U.S. District Court for the District of Massachusetts issued an order denying Maxim Power’s motion to dismiss in FERC’s enforcement case against Maxim Power. Importantly, however, Judge Mastroianni ruled that the case is an ordinary civil action subject to the Federal Rules of Civil Procedure and requiring a trial de novo (with some limitations on discovery). According to the order, “In short, the 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.” Judge Mastroianni reasoned: “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 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.”
On the motion to dismiss, Judge Mastroianni ruled that FERC pled facts sufficient to survive a motion to dismiss. Reading the petition in FERC’s favor for purposes of the motion to dismiss, Judge Mastroianni agreed that FERC is not merely alleging that Maxim Power offered on one fuel and burned another, but that Maxim Power planned to do so and mislead ISO-NE about it to collect a windfall. Finally, Judge Mastroianni called the issue of whether FERC has authority to issue a penalty against an individual “a close question,” but ultimately deferred to FERC’s interpretation that the anti-manipulation rule also applies to individuals.