In Williams v. Duke Energy, a group of plaintiffs sued Duke Energy, alleging that Duke Energy, a retail electric service provider, paid unlawful rebates to its large customers in exchange for those customers’ acquiescence to a rate-stipulation plan submitted to the Public Utilities Commission of Ohio (“PUCO”).  The district court dismissed plaintiffs’ complaint because, inter alia, the court lacked subject matter jurisdiction pursuant to the “filed rate doctrine.”

The filed rate doctrine, as the Sixth Circuit previously held in MCI Telecomms. Corp. v. Ohio Bell Tel. Co., 376 F.3d 539, 547 (6th Cir. 2004), “requires that common carriers and their customers adhere to tariffs filed and approved by the appropriate regulatory agencies.”  In other words, if the applicable agency approves the rates, such as PUCO did here, the doctrine precludes challenges to the reasonableness of that common carrier’s authorized rate.  The doctrine has been adopted to fulfill a dual purpose:  preventing carrier discrimination and leaving to the agencies to set the rates.

Relying on MCI, the Sixth Circuit reversed the district court’s dismissal.  It held that there is a substantive difference between challenging the reasonableness of the set rate and challenging which rate, among more than one, actually applies to a particular plaintiff.  Thus, this case was indistinguishable from MCI, where the issue was whether to apply the tandem rate or the end office rate—not whether either was unreasonable.

Indeed, the Sixth Circuit held that plaintiffs did not challenge “the particular rate set by the PUCO, but rather payments made outside of the rate scheme.”  Plaintiffs claimed that the alleged payments to large-preferred customers effectively served as indirect rebates not accessible to plaintiffs resulting in higher rates.  Because plaintiffs did not dispute the filed rate but rather the non-uniform application of the filed rate, the Court held that the district court’s decision contravened the Court’s earlier decision in MCI and required reversal.