Charles Simon, on behalf of himself and all others similarly situated v. Keyspan Corp., 785 F. Supp. 2d 120 (Southern District of N.Y. (S.D. N.Y) 2011)

SHIRAA. SCHEINDLIN, District Judge:

Charles Simon (“Simon” or “plaintiff’) brings this action against KeySpan Corporation (“KeySpan”) and Morgan Stanley Capital Group Inc. (“Morgan Stanley”) (collectively, the “defendants”) pursuant to Section 4 of the Clayton Antitrust Act (the “Clayton Act”) on his own behalf and on behalf of other similarly situated consumers.1 Simon is a retail consumer of electricity in New York City. KeySpan is a provider of wholesale electricity and electricity generating capacity (“ICAP” or “installed capacity”).2 Morgan Stanley is a provider of financial services. Plaintiff alleges that by entering into a financial transaction referred to as the “KeySpan Swap,”3 KeySpan and Morgan Stanley violated the following statutes: Section 1 of the Sherman Act;4 Section 2 of the Sherman Act;5 Section 7 of the Donnelly Act;6 and Section 349 of the New York General Business Law.7 Plaintiff also alleges that KeySpan violated Section 7 of the Clayton Act8 and that both defendants were unjustly enriched at his expense. Defendants move to dismiss the Complaint, in its en

tirety, on the following grounds: (1) the filed rate doctrine; (2) the doctrine of implied repeal; (3) lack of standing/antitrust injury; (4) field and conflict preemption; and (5) failure to allege facts sufficient to state a plausible claim upon which relief may be granted. For the reasons that follow, defendants’ motion is granted and the Complaint is dismissed in its entirety, with prejudice and without leave to amend.

I. BACKGROUND9

A. The NYC Installed Capacity Market and the Governing Regulatory Scheme

Congress empowered the Federal Energy Regulatory Commission (“FERC” or the “Commission”), an independent commission, with plenary and exclusive authority over wholesale electricity markets under the Federal Power Act (“FPA”).10 In particular, section 201 of the FPA11 delegates to FERC the “exclusive authority to regulate the transmission and sale at wholesale of electric energy in interstate commerce.”12 Sellers of retail electricity, such as Consolidated Edison Company of New York, Inc. (“Con Ed”), must purchase a product from electricity generators known as “installed capacity.” “Installed capacity” does not represent an actual unit of physical energy. Rather, it is a regulatory construct created by the New York Independent System Operator (“NYISO”) that measures the “capability to generate or transmit electrical power,” in units that wholesale electricity buyers like Con Ed must buy to ensure stable sources of supply.13 FERC requires retail sellers of electricity such as Con Ed, who are called “Load Serving Entities” or “LSEs,” to purchase installed capacity from suppliers such as KeySpan.14 These Load Serving Entities are required to make installed capacity payments that relate to their expected peak demand plus a share of reserve capacity.15 These payments provide energy suppliers such as KeySpan with a revenue stream sufficient to encourage the construction of new energy generating fa

cilities, as needed, and maintain adequate and reliable sources of electricity.16

FERC created and regulates the New York City Installed Capacity Market (hereinafter, the “NYC Capacity Market”) pursuant to its exclusive authority over the “transmission of electric energy in interstate commerce” and the “sale of electric energy at wholesale in interstate commerce” by public utilities.17 Congress vested FERC with the power to determine whether wholesale electricity rates are “just and reasonable” and not unduly discriminatory or preferential.18 FERC’s plenary authority also extends to any “practice” or “contract” that affects a jurisdictional rate.19 Because capacity is part of the “sale of electric energy at wholesale,” FERC’s authority encompasses capacity markets as well as any “practices” or “contracts” that could affect those markets.20

The price for installed capacity is set through FERC-approved market auctions administered by the NYISO. FERC regulates these auctions through its approval of, and ongoing modifications to, the New York Independent System Operator Market Administration and Control Area Services Tariff (the “NYISO Tariff’).21 The NYISO Tariff sets the rules for conducting auctions, authorizes the prices that suppliers can offer in the auctions, and specifies how the offer prices at auction are used to determine the prices that LSEs pay for installed capacity. In each auction, capacity suppliers offer price and quantity bids. Supplier bids are “stacked” from lowest to highest priced and then compared to the total amount of capacity demanded in a particular auction. The offering price of the last and highest bid in the “stack” needed to meet the total demand establishes the market price for all of the capacity bid in that auction. Capacity bid at a price higher than this market price is unsold.

FERC authorized the rate that KeyS-pan, under the NYISO Tariff, could offer capacity in the NYC Capacity Market auctions. Specifically, FERC authorized KeySpan to offer its capacity at or below FERC-specified price caps, otherwise known as “bid caps,” which set the highest price KeySpan could charge during the relevant time period.22 At the time FERC approved these rates, it expressly stated that it expected KeySpan to “bid the price

cap and set the market clearing price at that level even as new generation is added and supply increases.”23

Because of constraints limiting the amount of energy that can be imported into the New York City area from the power grid, the NYISO requires sellers of retail electricity (like Con Ed) to purchase eighty percent of their capacity from generators in the New York City region.24 Thus, at all relevant times, the NYC Capacity Market was highly concentrated with three companies — KeySpan, NRG Energy, Inc. (“NRG”), and Astoria Generating Company (“Astoria”) — controlling a substantial portion of generating capacity.25 These companies, which were subject to bid caps for nearly all of their generating capacity in New York City, were not allowed to sell that capacity outside of the NYISO auction process. The NYISO-set bid cap for KeySpan was the highest, followed by NRG and Astoria.

B. KeySpan’s Market-Based Filed Rate Approval

FERC also governs the NYC Capacity Market through separate “market-based rate tariffs” (“MBR Tariffs”) that each seller must file and have approved by FERC as a condition to selling capacity and wholesale electricity, whether such sales are made through market auctions or through independently negotiated contracts with LSEs. Instead of issuing rate schedules or rate-fixing contracts, the MBR Tariffs “simply state that the seller will enter into freely negotiated contracts with purchasers.”26 The MBR Tariffs authorize a seller to determine its prices for both capacity and wholesale electricity, subject to the conditions set forth in the MBR Tariff, the NYISO Tariff, and FERC’s other rules and regulations. FERC will approve an MBR Tariff only if a seller complies with extensive FERC filing and related requirements and can demonstrate that it either lacks market power or has market power that has been adequately mitigated such that it cannot unjustly or unreasonably impact market prices.27

Market-based rate sellers also are required to adhere to specific conduct rules,

including the obligation to “bid supply in a manner that complies with the Commission-approved rules and regulations of the applicable power market,” and refrain from engaging in “actions or transactions ... that are intended to or foreseeably could manipulate market prices, market conditions, or market rules for electric energy or electricity products.”28 After Congress vested FERC with specific anti-manipulation enforcement authority under the Energy Policy Act of 2005, FERC issued a rule prohibiting any entity from engaging in fraudulent or deceptive conduct in connection with the purchase or sale of electricity.29 Compliant with these requirements, KeySpan was authorized by FERC to sell capacity and wholesale electricity pursuant to its MBR Tariff.30

C. FERC’s Review of the KeySpan Swap

FERC conducted a comprehensive review of the Capacity Market that included an assessment of the KeySpan Swap and its potential impact on the Capacity Market. FERC concluded that KeySpan and Morgan Stanley acted lawfully and that prices in the auctions were authorized under the NYISO Tariff and consistent with FERC’s expectations.31 FERC therefore concluded that there was no basis on which to order any refunds or restitution to Con Ed (or any other purchasers in the auctions).32

In conjunction with these proceedings, FERC ordered its Enforcement Staff to investigate the “issue of whether any entity has engaged in manipulation of the [Capacity Market].”33 Among the matters considered by FERC was whether the KeySpan Swap caused KeySpan to “consistently offer[ ] its capacity at its bid cap and, as a result, raise[] prices in [the capacity] market.”34 This included an assessment of whether KeySpan engaged in “economic withholding” of its capacity in violation of FERC’s anti-manipulation regulations, ie., whether KeySpan offered its capacity “at a sufficiently high price” such that it would not sell all of its capacity and “as a result, the market clearing price [was] raised.”35

In February 2008, FERC’s Enforcement Staff submitted a 24-page report detailing its findings that no such unlawful withhold

ing occurred and that the KeySpan Swap was a lawful and legitimate transaction that had no impact on the Capacity Market.36 FERC’s Enforcement Staff found that:

FERC included the FERC Staff Report as part of its adjudicatory record and ordered that the market manipulation investigation be closed without further action.38 FERC confirmed the findings of the FERC Report, concluding that the prices for electric capacity “were not only permissible under the [NYISO Tariff] but consistent with the Commission’s expectations when it [set the price caps in 1998].”39 FERC concluded that “neither the [NYI-SO] tariff nor the Commission’s regulations were violated”40 and that KeySpan’s “bidding behavior in this case did not violate the filed rate.”41

Based on these findings, FERC denied the request by Con Ed and others for refunds on the prices paid for capacity in the auctions that are the subject of the instant Complaint. FERC found there was no basis on which to order any refunds and that any such restitution would “create substantial uncertainty in the market and undermine confidence in [it],” particularly because of the “impossibility of predicting and restoring what might have happened in the market under an alternative set of circumstances.”42 FERC also reasoned that “ordering refunds would not help achieve the goals of [the Capacity Market].”43

II. PLAINTIFF’S ALLEGATIONS44

A. KeySpan’s Plan to Avoid Competition

Between 2003 and 2006, purchasers of installed capacity (like Con Ed) required almost all of KeySpan’s output to meet expected demand.45 Because of this heightened demand, KeySpan’s ability to set price levels was limited only by the regulatory ceiling set by the “bid cap.”46

As a result, KeySpan set the market price in the capacity auctions by bidding its capacity at its bid cap.47 KeySpan anticipated that market conditions in the NYC Capacity Market would change in 2006, due to the entry of approximately 1000 megawatts of generation.48 “Because of the addition of this new capacity, KeySpan would have to withhold significantly more capacity from the market and would earn substantially lower revenues if it continued to bid all of its capacity at its bid cap.”49 KeySpan expected tight supply and demand conditions would resume in 2009.50

No longer confident that “bidding the cap” would remain its best strategy, KeyS-pan considered various competitive bidding strategies such as competing for sales by bidding more capacity at lower prices.51 Although this strategy could have potentially yielded much higher returns for KeySpan, it carried the risk that competitors would undercut KeySpan’s price and take sales away from KeySpan, thereby making it less profitable than “bidding the cap.”52

KeySpan also considered acquiring the generating assets of one of its competitors, Astoria, which happened to be for sale.53 “Astoria’s capacity would have provided KeySpan with sufficient additional revenues to make continuing to ‘bid the cap’ its best strategy.”54 KeySpan consulted with Morgan Stanley about acquiring Astoria’s assets but concluded that the acquisition of its largest competitor would raise “serious market power issues.”55 Instead of purchasing Astoria’s assets outright, KeySpan decided to acquire a financial interest in substantially all of Astoria’s capacity.56 KeySpan would pay Astoria “a fixed revenue stream in return for the revenues generated from Astoria’s capacity sales in the auctions.”57

Rather than approach Astoria directly, KeySpan turned to Morgan Stanley to “to enter into a financial agreement providing KeySpan with payments derived from the market clearing price for an amount of capacity essentially equivalent to what Astoria owned.”58 Morgan Stanley agreed to serve as the counterparty to this agreement, the “KeySpan Swap,” contingent upon Morgan Stanley entering into an offsetting agreement with Astoria — the so-called “Astoria Hedge.”59

B. The KeySpan Swap and Astoria Hedge Agreements

On January 9, 2006, KeySpan and Morgan Stanley finalized the terms of the

KeySpan Swap.60 Under that agreement, if the market (floating) price for installed capacity, determined by the NYISO demand curve spot auction, was above $7.57 per kW-month (the fixed price), Morgan Stanley would pay KeySpan the difference between the market price and $7.57 times 1800 megawatts (“MW”); if the market price was below $7.57, KeySpan would pay Morgan Stanley the difference times 1800 MW.61 The KeySpan Swap, executed on January 18, 2006, ran from May 2006 through April 2009.62

On January 9, 2006, Morgan Stanley and Astoria finalized the terms of the Astoria Hedge.63 Under that agreement, if the market price for installed capacity was above $7.07 per kW-month, Astoria would pay Morgan Stanley the difference times 1800 MW; if the market price was below $7.07, Morgan Stanley would pay Astoria the difference times 1800 MW.64 The Astoria Hedge, executed on January 11, 2006, ran from May 2006 through April 2009, the same duration as the KeySpan Swap.65

As a result of the KeySpan Swap and Astoria Hedge (collectively, the “Agreements”), Morgan Stanley earned the $.50 price differential between the two contracts regardless of the prices at which the auctions cleared in any given month. For example, if the floating or market price for installed capacity was $7.40/kW-month, KeySpan would pay Morgan Stanley $.17 x 1800 MW under the KeySpan Swap ($7.57/kW-month — $7.40/kW-month) while Astoria would pay Morgan Stanley $.33 x 1800 MW under the Astoria Hedge ($7.40/ kW-month — $7.07/kW-month). If the floating price was $8.00/kW-month, Morgan Stanley would pay KeySpan $.43 x 1800 MW while Astoria would pay Morgan Stanley $.93 x 1800 MW. If the floating price was $6.00/kW-month, KeySpan would pay Morgan Stanley $1.57 x 1800 MW and Morgan Stanley, in turn, would pay Astoria $1.07 x 1800 MW. Thus, Astoria was locked into the fixed price of $7.07/ kW-month under the Astoria Hedge. KeySpan was not locked into a fixed price under the KeySpan Swap. Rather, under the KeySpan Swap, KeySpan’s revenue increased in direct proportion to increases in the floating price, so long as the floating price exceeded $7.57/kW-month.66

C. The Anti-Competitive Effect of the Agreements

Con Ed, which purchased installed capacity in the NYC Capacity Market from 2006 through 2009, “passed through” one hundred percent of its costs for installed capacity to its customers, individual consumers of retail electricity.67 The purpose of the Agreements was to allow KeySpan to alter its bidding in the NYC Capacity Market auctions.68 According to plaintiff, without the Agreements,

KeySpan likely would have chosen from a range of potentially profitable competitive strategies in response to the entry of new capacity. Had it done so, the price of capacity would have declined. By transferring a financial interest in Astoria’s capacity to KeySpan, however, the [KeySpan] Swap effectively eliminated KeySpan’s incentive to compete for sales in the same way a purchase of Astoria or a direct agreement between KeySpan and Astoria would have done. By providing KeySpan revenues from Astoria’s capacity, in addition to KeyS-pan’s own revenues, the [KeySpan] Swap made bidding the cap KeySpan’s most profitable strategy regardless of its rival’s bids.69 -

After the Agreements went into effect in May 2006, KeySpan consistently offered its capacity at its bid cap even though a significant portion of its capacity went unsold.70 Consequently, “[d]espite the addition of significant new generating capacity in the NYC Capacity Market, the market price of capacity did not decline.”71

In sum, “[b]ut for the KeySpan Swap, installed capacity would have been procured at a lower price in New York City from at least May 2006 through February 2008.”72 Thus, “[t]he likely effect of the KeySpan Swap was increased capacity prices for the retail electricity suppliers [Con Ed] who purchased capacity, and, in turn, pass[ed] increased supply prices directly to consumers [Simon] who pay for electricity.”73

D. The Department of Justice Antitrust Action Against KeySpan

In May 2007, the Department of Justice (“DOJ”) began an official investigation of KeySpan’s conduct.74 Upon the completion of the DOJ investigation, the United States, acting through the Attorney General, brought a civil antitrust action against KeySpan.75 In that action, it was alleged that “KeySpan entered into an agreement the likely effect of which has been to increase prices in the NYC Capacity Market, in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.”76 Pursuant to a stipulation with the DOJ, KeySpan agreed to the entry of a Final Judgment requiring it to pay a $12 million civil fine to the U.S. Treasury.77

The Final Judgment, entered on February 2, 2011, states that KeySpan “consented to entry of this. Final Judgment, without trial or adjudication of any issue of fact or law, for settlement purposes only, and without this Final Judgment constituting any evidence against or an admission by KeySpan with respect to any allegation contained in the Complaint[.]”78 In the

Order accompanying the Final Judgment, Judge William H. Pauley notes that “[a]c-cording to the Government, from May 2006 to April 2008, KeySpan earned approximately $49 million in net revenues under the [KeySpan] Swap.”79 Despite the magnitude of KeySpan’s Swap revenue, Judge Pauley “defers to the Government’s conclusion that restitution — i.e., making New York City consumers whole — is likely unavailable.”80

III. LEGAL STANDARDS

A. Motion to Dismiss

“Federal Rule of Civil Procedure 8(a)(2) requires ... ‘a short and plain statement of the claim showing that the pleader is entitled to relief.’ ”81 When deciding a motion to dismiss under Rule 12(b)(6), a court must “accept as true all of the factual allegations contained in the complaint”82 and “draw all reasonable inferences in plaintiffs favor.”83 This assumption of truth, however, does not apply to allegations that are no more than legal conclusions.84 “Therefore, ‘a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.’ ”85

In order to survive a motion to dismiss, the allegations in the complaint must meet the standard of “plausibility.”86 The test is no longer whether there is “no set of facts” that a plaintiff could prove “which would entitle him to relief.”87 This new plausibility standard has been aptly summarized by the Second Circuit, as follows:

court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct,” however, dismissal is appropriate. Id. at 1950.88

B. Standing/Antitrust Injury

A challenge to the “standing” of a party is primarily a challenge to the limited jurisdiction of federal courts “to decide the merits of the dispute or of particular issues.”89 Generally, parties have “standing” to obtain adjudication of their disputes in federal court only if those parties allege and then establish an “injury in fact,”90 which is not “abstract,” “conjectural,” or “hypothetical,” but rather “distinct and palpable.”91 Although standing “subsumes a blend of constitutional requirements and prudential considerations,”92 the latter are not considered if Congress creates statutory standing that is intended to extend to the full limits of Article III.93

In the case of the antitrust laws, the Supreme Court has interpreted the Clayton Act to limit statutory standing to certain parties.94 Private plaintiffs seeking to enforce Sections 1 and 2 of the Sherman Act must satisfy the standing requirements of Section 4 of the Clayton Act which include (1) the presence of an “antitrust injury” suffered by (2) a plaintiff who is a “proper party” to bring suit against the defendant.95

In order to state a claim for “antitrust injury,” a plaintiff must sue for injury that “is of the type the antitrust laws were intended to prevent and that flows from that which makes defendant’s acts unlawful.”96 An “injury, although causally related to an antitrust violation, nevertheless will not qualify as ‘antitrust injury’ unless it is attributable to an anti-competitive aspect of the practice under scrutiny....”97 The antitrust injury requirement “ensures that the harm claimed by the plaintiff corresponds to the rationale for finding a violation of the antitrust laws in the first place, and it prevents

losses that stem from competition from supporting suits by private plaintiffs for either damages or equitable relief.”98 In sum, a plaintiff can recover on an antitrust claim only for a loss which “stems from a competition-reducing aspect or effect of the defendant’s behavior.”99

When analyzing whether a plaintiff is a “proper party” to bring an antitrust action, a court must balance several factors, none of which is singly dispositive.100 Factors to consider in determining whether a plaintiff is a “proper party” to bring suit include: (1) the causal connection between the alleged antitrust violation and the harm to the plaintiff; (2) the existence of an improper motive; (3) whether the injury was of a type that Congress sought to redress with the antitrust laws; (4) the directness of the connection between the injury and alleged restraint in the relevant market; (5) the speculative nature of the damages; and (6) the risk of duplicative recoveries or complex apportionment of damages.101

IV. DISCUSSION

A. Plaintiff Lacks Standing to Bring Suit Against Defendants

Defendants argue that Simon lacks antitrust standing to bring suit against them because he is an indirect purchaser, having purchased electricity from Con Ed rather than directly from KeySpan. The so-called “direct purchaser rule” states that, in general, only a direct purchaser can bring an antitrust action against a seller for a wrongful overcharge.102 The origin of this rule can be traced back to 1968, when the Supreme Court decided Hanover Shoe, Inc. v. United Shoe Machinery Corp. (“Hanover Shoe”)103 Since then, the rule was further established in Illinois Brick Company v. Illinois (“Illinois Brick” )104 and elaborated upon in

In Hanover Shoe, the defendant, United Shoe Machinery Corporation (“United”) raised the defense that the plaintiff, Hanover Shoe, Inc. (“Hanover”), had passed on the overcharge to its customers and, therefore, had suffered no legally cognizable injury.

The Supreme Court rejected this proposed defense, stating that “Hanover proved injury and the amount of its damages for the purposes of its treble-damage suit when it proved that United had overcharged it during the damage period and showed the amount of the overcharge; United was not entitled to assert a passing-on defense.”108 Thus, in Hanover Shoe, the Supreme Court ruled that, in general, a pass-on theory may not be used defensively against a direct purchaser plaintiff who, in this case, would be Con Ed.

In Illinois Brick, the Court was confronted with the issue of whether a pass-on theory could be used offensively by an indirect purchaser plaintiff against an alleged antitrust violator.109 The Court declined to construe section 4 of the Clayton Act “to permit offensive use of a pass-on theory against an alleged violator that could not use the same theory as a defense in an action by direct purchasers.”110 The Court held that indirect purchasers may not sue for antitrust damages.111 In dismissing the antitrust claims of the indirect purchasers, the Court stated:

As in Hanover Shoe, the Court intimated that an exception to the direct purchaser rule may be warranted in the limited circumstance where there is a pre-existing cost-plus contract.113 The Court reasoned that in a cost-plus contract situation, “the purchaser is insulated from any decrease in its sales as a result of attempting to pass on the overcharge, because its customer is committed to buying a fixed quantity regardless of the price.”114

The Supreme Court was again confronted with the offensive use of a pass-on theory in Kansas, where it was forced to decide “who may sue under § 4 when, in violation of the antitrust laws, suppliers overcharge a public utility for natural gas and the utility passes on the overcharge to its customers.”115 The Court declined to overrule Hanover Shoe or create exceptions for any particular industry.

The Court stood by its interpretation of section 4 of the Clayton Act, stating that it would be “an unwarranted and counterproductive exercise to litigate a series of exceptions” even though the “economic assumptions underlying the Illinois Brick rule might be disproved in a specific case.”117 The Court further held that “[t]he suggestion in Hanover Shoe and Illinois Brick that a departure from the direct purchaser rule may be necessary when an indirect purchaser buys under a pre-existing cost-plus contract does not justify an exception in this case.”118 In declining to create such an exception, the Court stated:

Here, plaintiff seeks to take advantage of the cost-plus contract exception referred to in Hanover Shoe, Illinois Brick, and Kansas.120 The fundamental

problem with plaintiffs argument is that its premise is false. Despite Simon’s allegation to the contrary,121 he did not purchase electricity from Con Ed under an existing cost-plus contract.122 The monthly amounts of electricity purchased by Simon were not fixed in advance. Rather, like all other Con Ed consumers, Simon was billed each month for the specific amount of electricity he consumed, measured in kilowatt hours.123 Consumers of retail electricity such as Simon have the option of reducing the amount of electricity they consume in response to increases in price. The rationale behind the cost-plus contract exception does not apply where consumers, like Simon, can reduce their consumption of electricity and thereby affect the amount of overcharge they absorb. Accordingly, Simon cannot use the cost-plus contract exception to avoid application of the direct purchaser rule.

Furthermore, the proposition that Con Ed is able to pass through one hundred percent of any overcharge to its consumers in the form of retail price increases is suspect given the differing nature of the two markets. Con Ed purchased installed capacity from KeySpan while Simon purchased retail electricity from Con Ed. Plaintiff has failed to allege how the demand for retail electricity by individual consumers translates into the demand for installed capacity by direct purchasers like Con Ed. Given that the markets for installed capacity and retail electricity are inherently dissimilar, the proposition that Con Ed could pass through one hundred percent of its supply cost increases to Simon and other consumers without any decrease or fluctuation in the level of retail sales is suspect.

In sum, Simon tries to circumvent the direct purchaser rule on two grounds: (1) that Simon purchased retail electricity from Con Ed under a pre-existing cost-plus contract even though he never committed to buying pre-determined, fixed quantities of electricity regardless of cost; and (2) that Con Ed was capable of a complete and provable pass-on of one hundred percent of its increased supply costs resulting from the allegedly illegal overcharge. However, because Simon did not purchase electricity under a fixed quantity, cost-plus contract with Con Ed, he does not fall within any cost-plus contract exception to the direct purchaser rule. Accordingly, Simon’s federal antitrust and monopoly claims124 are hereby dismissed because he has not suffered a legally cognizable antitrust injury and, therefore, lacks antitrust standing.125

B. The Filed Rate Doctrine

Even if plaintiff did have antitrust standing, his claims would nonetheless be dismissed on an alternative ground, namely, the filed rate doctrine. Plaintiffs claims impermissibly seek to challenge as unreasonable the filed rates KeySpan offered in the wholesale auctions. Plaintiffs causes of action are all premised on the assertion that plaintiff was injured in the retail electricity market because KeySpan offered to sell its capacity in the installed capacity auctions at “supracompetitive” prices.126 Because this alleged “supracompetitive” price is the filed rate that FERC authorized KeySpan to offer in the installed capacity market, any claim asserting that some other rate would have been charged is barred as a matter of law under the filed rate doctrine.127

Because the rate challenged by plaintiff as “supracompetitive” was a FERC filed rate, the adjudication of plaintiffs claims would require this Court to determine “a hypothetical rate different from that actually set by FERC.”128 Such a hypothetical construct is prohibited by the filed rate doctrine, which bars both federal and state claims where the challenged rates were either fixed or accepted by FERC.129

Furthermore, “the underlying conduct [of the defendant] does not control whether the filed rate doctrine applies. Rather, the focus for determining whether the filed rate doctrine applies is the impact the court’s decision will have on agency procedures and rate determinations.”131 Thus, “[a]pplication of the filed rate doctrine in any particular case is not determined by the culpability of the defendant’s conduct or the possibility of inequitable results.”132 Accordingly, when FERC has approved a rate pursuant to its applicable tariffs, courts must “give effect to Congress’ desire to give FERC plenary au

thority over interstate wholesale rates.”133

Plaintiffs unfounded allegation that the price Con Ed paid for capacity during the relevant period was not a rate set by tariff is incorrect for two reasons. First, the prices offered by KeySpan in the capacity auctions were authorized under the NYI-SO Tariff that FERC approved and issued pursuant to its authority under the Federal Power Act.134 The NYISO Tariff set the rates that KeySpan could offer in the capacity auctions. Second, any rates charged by KeySpan pursuant to its FERC-approved authority under its separate MBR Tariff, either in the wholesale auctions for capacity or in contracts for wholesale electricity, were also unassailable as a “filed rate” protected by the filed rate doctrine.135

In sum, the FERC-authorized rates that KeySpan offered in the capacity auctions have the force of federal law and can only be altered or refunded through adjudicatory proceedings that must be commenced before FERC pursuant to rules established under the Federal Power Act.136 Plaintiffs claims impermissibly seek to challenge those rates and must, therefore, be dismissed under the filed rate doctrine. Accordingly, the filed rate doctrine serves as an alternative ground in which to dismiss all of plaintiffs claims, based on both federal and state law.137

C. Preemption

The doctrine of federal preemption provides an independent basis for dismissing all of plaintiffs state law claims. “Federal preemption of state law is rooted in the Supremacy Clause, Article VI, clause 2, or the United States Constitution.”138 Preemption may be express or implied.

Here, plaintiffs state law claims are preempted under both “field preemption” and “conflict preemption.”

two ways.... Under field preemption, “[i]f Congress evidences an intent to occupy a given field, any state law falling within that field is preempted.” Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 248, 104 S.Ct. 615, 78 L.Ed.2d 443 (1984). Alternatively, there is conflict preemption: “[i]f Congress has not entirely displaced state regulation over the matter in question, state law is still preempted to the extent it actually conflicts with federal law, that is, when it is impossible to comply with both state and federal law, or where the state law stands as an obstacle to the accomplishment of the full purposes and objectives of Congress.” Id.”140

In sum, “[a]s a result of FERC’s exclusive authority in the area, any cause of action or claim that requires a forum other than FERC to compute the reasonable price for wholesale electricity or damages based upon the payment of a price in excess of the reasonable price is barred by the three related doctrines of field preemption, conflict preemption and the filed rate doctrine.”141 FERC created and oversees every aspect of the Capacity Market at issue, including how prices are determined and how suppliers like KeyS-pan can exercise any market power they may have to influence clearing prices at auction. Plaintiffs state law claims based on New York’s General Business Law142 plainly intrude on FERC’s comprehensive regulation of this wholesale market.143 Such claims are both field and conflict preempted as a matter of law and are therefore dismissed.144

D. Leave to Amend the Complaint

Under Federal Rules of Civil Procedure 15(a), leave to amend a complaint should be “freely given when justice so requires.”145 In general, a plaintiff should be permitted to amend his complaint prior to its dismissal for failure to state a claim “unless the court can rule out any possibility, however unlikely it might be, that an amended complaint would succeed in stating a claim.”146 Thus “it is well established that leave to amend a complaint need not be granted when amendment would be futile.”147

Here, plaintiffs claims have been dismissed, as a matter of law, on the following grounds: lack of antitrust injury/antitrust standing; the filed rate doctrine; and the

federal preemption doctrine. There are no allegations that plaintiff could add that could possibly rescue his claims. Thus, amendment of the instant Complaint would be futile and, for that reason, is denied.

Y. CONCLUSION

Plaintiffs Complaint is dismissed in its entirety, with prejudice and without leave to amend. The Clerk of the Court is directed to close defendant’s joint motion to dismiss (Document # 13) and this case.

SO ORDERED.