Salt River Project Agricultural Improvement and Power District v. Tesla (Argument Postponed)

Procedural Law

New-school and old-school power companies visit the Supreme Court to argue about the timing of Old-School's appeal.

We know Tesla is in the case name, but this one is not about electric cars. It's about solar versus electric power.

SolarCity, a solar company that is now a subsidiary of Tesla, started the case. Salt River-too-long-of-a-name is the exclusive electricity provider to the Phoenix, Arizona area. As SolarCity entered the market, offering solar power to Phoenix residents, Salt River changed its prices. SolarCity then sued Salt River, arguing the price changes functioned to secure Salt River's monopoly over electric power in the area.

Salt River Project v Tesla

Immunity from Liability

Salt River asked the trial court to dismiss the case because it should be immune from liability. 

State Action Immunity protects state governments from liability for anticompetitive actions if the state is pursuing a regulatory goal with the state's citizens in mind. The doctrine was established in a Supreme Court case, Parker v. Brown (1943). In Parker, the state of California had created a marketing program that limited competition among raisin growers and controlled prices. California was acting to “conserve the agricultural wealth of the State” and to “prevent economic waste in the marketing of agricultural crops.” A raisin grower that stood to be pushed out of the market as a result of the state law sued, claiming the state law violated federal antitrust laws. The Supreme Court said that states can pursue regulatory goals without fear of antitrust liability. Certain arms or instrumentalities of the state can take advantage of the state action doctrine, as long as they are acting for the state with the intent to create policy.

The trial court denied Salt River's request to qualify for State Action Immunity. Normally, with pre-trial rulings, a party must wait until the end of the case to appeal.

Interrupting Cow : : Interlocutory Appeal

Knock knock

--Who's there?

Interrupting Cow

--Interr-----

MOOOOOOO

Okay, it sounds better in audio... But interrupting is just the type of appeal that Salt River wants in this case. Salt River does not want to wait until the case is over to file the appeal. It wants an "interlocutory appeal." In fact, the word interlocutory comes from the Latin word for "interrupt."

Will Salt River get it?

Contrasting state immunities

Salt River's success depends on a comparison of the type of immunity it claimed versus a different type of state immunity: one that comes from the Constitution. 

The Supreme Court has already ruled that denials of State Sovereign Immunity can get interlocutory appeals (Cohen v. Beneficial Industrial Loan Corp. (1949)). Even when requested by an arm of the state (Puerto Rico Aqueduct and Sewer Authority v. Metcalf & Eddy (1993)). But that's not the type of immunity that Salt River is up for. State Sovereign Immunity comes straight from the Constitution. The Eleventh Amendment says that state governments cannot be pulled into federal court. It comes from the concept of sovereignty, meaning self-rule, which we discussed earlier this term in a case involving a foreign nation (Rubin v. Iran). The Eleventh Amendment makes sure that states rule themselves to a degree. 

In contrast, in this case Salt River seeks State Action Immunity from antitrust liability. This type of immunity is about respect for state-autonomy also, but does not come directly from the Constitution. It comes from an interpretation of antitrust law. When Congress passed the Sherman and the Clayton Acts, it did not specify whether state instrumentalities would be governed by the laws. The Supreme Court implied respect toward the states on the part of Congress: if Congress had meant to make states liable, it would have said so. Thus, this type of immunity is not an immunity from being pulled into court (not a jurisdictional immunity). It's a less-strong type of immunity: immunity from liability under the antitrust laws.

The challenge for Salt River will be to tell the Court that State Action Immunity, despite the differences from State Sovereign Immunity, deserves a right to immediate appeal.

Salt River is going to have an especially hard time fighting these two differences:

  • The immunity it seeks does not come from the Constitution;
  • The immunity it seeks does not keep it from being in court all together; it only keeps it from being liable.

These two differences will make it hard for Salt River to claim it deserves an interlocutory appeal - one that is only given for questions that raise "some particular value of a high order" (Will v. Hallock (2006)).

The argument was scheduled for March 19, 2018, but it has been postponed because the parties may settle.


Legal Landscape on Antitrust

View the laws governing this area.

Sovereignty in other cases of this term

Rubin v. Iran (foreign government immunity) and Upper Skagit Indian Tribe v. Lundgrens (tribal immunity).