Opinion issued July 28, 2015




                                     In The

                               Court of Appeals
                                    For The

                         First District of Texas
                           ————————————
                               NO. 01-12-00470-CV
                           ———————————
  ENTERGY CORPORATION, ENTERGY SERVICES, INC., ENTERGY
   POWER, INC., ENTERGY POWER MARKETING CORPORATION,
 ENTERGY ARKANSAS, INC., AND ENTERGY TEXAS, INC., Appellants
                                       V.
 DAVID JENKINS, GEORGE W. STRONG, FRANCIS N. GANS, AND
GARY M. GANS, INDIVIDUALLY AND ON BEHALF OF ALL PERSONS
               SIMILARLY SITUATED, Appellees



                   On Appeal from the 344th District Court
                         Chambers County, Texas
                       Trial Court Case No. CV20666


                         OPINION ON REHEARING

      Appellees, David Jenkins, George W. Strong, Francis N. Gans, and Gary M.

Gans, individually and on behalf of all persons similarly situated (collectively,
“Jenkins”), moved for rehearing and en banc reconsideration of our November 6,

2014 opinion. We granted rehearing and withdrew our November 6, 2014 opinion

and judgment and the December 30, 2014 dissenting opinion. We now issue this

opinion in its stead. Our disposition remains unchanged.

      This is an interlocutory appeal challenging the trial court’s order certifying a

class action in a suit brought under the Texas Theft Liability Act (“the Theft

Act”).1 In three issues, appellants, Entergy Corporation, Entergy Services, Inc.,

Entergy Power, Inc., Entergy Power Marketing Corporation, Entergy Arkansas,

Inc., and Entergy Texas, Inc. (collectively, “Entergy”), contend that the trial court

(1) lacked subject matter jurisdiction over this suit, (2) abused its discretion in

finding that the requisites for class certification had been established, and

(3) abused its discretion by making findings of fact and conclusions of law that

misstate and misapply the applicable law.

      We reverse and render.

                                        Background

      A.     Factual Background

      Entergy Corporation is a public utilities holding company with six electric

utility operating companies: Entergy Gulf States Louisiana, L.L.C., Entergy

Arkansas, Inc., Entergy Louisiana, LLC, Entergy Mississippi, Inc., Entergy New

1
      TEX. CIV. PRAC. & REM. CODE ANN. §§ 134.001–.005 (Vernon 2011 & Supp.
      2014).
                                          2
Orleans, Inc., and Entergy Texas, Inc. (“ETI”).          These six companies, which

operate in four southern states, provide electrical service to approximately 2.6

million retail customers.2

      Each operating company has electricity generation facilities, consisting of

nuclear, coal, natural gas, or oil-fired generating plants. The companies are parties

to the Entergy System Agreement (“ESA”), a federal tariff under which power is

shared and distributed.3 The companies also purchase power from each other and

from non-affiliated third parties in the power market. The ESA provides for

centralized control of power purchases, operations, and use of available resources

throughout the Entergy System. Although each company operates its generation,

transmission, and distribution systems independently, production, purchasing, and

sale of wholesale electricity on behalf of those companies to meet the needs of

retail and wholesale customers are controlled centrally by Entergy Services, Inc.

(“ESI”).

      ESI operates a Systems Operation Center, located in The Woodlands, which

controls the selection of power (“dispatch decisions”).          The ESA permits the

System Operator to purchase power at wholesale from third-party suppliers. The

2
      The generation and bulk transmission assets of these six companies are referred to
      as the “Entergy System.”
3
      A “tariff” is a document listing a public utility’s rates and services and having the
      force and effect of law. See First Assembly of God, Inc. v. Tex. Utils. Elec. Co., 52
      S.W.3d 482, 489 (Tex. App.—Dallas 2001, no pet.).
                                            3
System Operator controls daily operations and is in charge of determining whether

system-generated power is sufficient to meet capacity needs or whether purchasing

third-party power is necessary. ESI performs a monthly accounting, assigning a

portion of the total power resources used by the whole system to each operating

company, generating an “intra-system” bill. The cost is dictated by a formula in

Service Schedule MSS-3 of the ESA, which governs the intra-company accounting

for system resources.

       B.    Procedural Background

       On August 5, 2003, Jenkins filed suit against Entergy4 alleging that it had

devised and operated an improper energy-purchasing scheme under which it had

selected internally generated, higher-priced electrical power while rejecting less

expensive, available third-party power, resulting in theft from Texas retail power

customers in violation of the Theft Act. On September 15, 2003, Entergy removed

the suit to federal court alleging federal question jurisdiction. The federal court

remanded the case to state court, concluding that the suit did not invoke federal

law.

       On April 23, 2004, Entergy filed a motion to dismiss for want of

jurisdiction, contending that jurisdiction of Jenkins’s claims was preempted by the

Federal Energy Regulatory Commission (“FERC”) and the Texas Public Utilities

4
       Although not originally named as a defendant in the suit, Entergy Gulf States, Inc.
       (appellant ETI’s predecessor) later intervened.
                                            4
Commission (“PUC”) and that the claims were also barred by the filed-rate

doctrine. On November 24, 2004, the trial court granted Entergy’s motion to

dismiss, finding that it lacked subject matter jurisdiction over Jenkins’s claims.

      Jenkins appealed the trial court’s order dismissing the case. In Jenkins v.

Entergy Corp., 187 S.W.3d 785 (Tex. App.—Corpus Christi 2006, pet. denied)

(“Jenkins I”), the Corpus Christi Court of Appeals reversed the trial court’s order

dismissing the suit for lack of subject matter jurisdiction. On June 6, 2012, Jenkins

filed a motion to certify a class consisting of Texas retail customers served by ETI

who were billed and paid for electric power from January 1, 1994, to the present.

Entergy filed a second motion to dismiss for lack of jurisdiction and three motions

for summary judgment. The trial court denied the motion to dismiss and the

summary judgment motions.

      The parties submitted extensive briefing on class certification issues, and the

trial court held a certification hearing lasting several days. On April 30, 2012, the

trial court granted Jenkins’s motion for class certification and issued extensive

findings of fact and conclusions of law. Entergy timely perfected this interlocutory

appeal.

                                          Analysis

      In three issues, Entergy contends that the trial court (1) lacks subject matter

jurisdiction over Jenkins’s claims, (2) abused its discretion in finding that Jenkins

                                          5
had established the requirements for class certification, and (3) abused its

discretion by making findings of fact and conclusions of law that misstate and

misapply the law.       Jenkins argues that Jenkins I, which rejected Entergy’s

jurisdictional arguments, is the law of the case and prohibits reconsideration of the

subject-matter-jurisdiction issue. Entergy urges us to hold that Jenkins I is not the

law of the case because (1) the circumstances and evidence have changed,

(2) Jenkins I was wrongly decided, (3) the law of the case doctrine should not be

applied to subject matter jurisdiction determinations, and (4) Jenkins I did not

address all of the issues raised in this appeal.

      A.     Law of the Case

      Because this case comes to us on appeal following remand for further

proceedings in the trial court by the Corpus Christi Court of Appeals in Jenkins I,

which reversed the trial court’s previous order dismissing the case for want of

jurisdiction, we consider, as a preliminary matter, the law of the case doctrine to

determine whether the Corpus Christi Court of Appeals’ decision prevents us from

considering Entergy’s jurisdictional arguments.

      “Subject matter jurisdiction is ‘essential to a court’s power to decide a

case.’” City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex. 2013) (per curiam)

(quoting Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex. 2000)).

“Without jurisdiction the court cannot proceed at all in any cause; it may not

                                            6
assume jurisdiction for the purpose of deciding the merits of the case.” Fin.

Comm’n of Tex. v. Norwood, 418 S.W.3d 566, 578 (Tex. 2013) (quoting Sinochem

Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 431, 127 S. Ct. 1184,

1191 (2007)). “The failure of a jurisdictional requirement deprives the court of the

power to act (other than to determine that is has no jurisdiction), and ever to have

acted, as a matter of law.” City of DeSoto v. White, 288 S.W.3d 389, 393 (Tex.

2009) (quoting Univ. of Tex. Sw. Med. Ctr. v. Loutzenhiser, 140 S.W.3d 351, 359

(Tex. 2004)). Thus, “[a] judgment is void if rendered by a court without subject

matter jurisdiction.” In re United Servs. Auto. Ass’n, 307 S.W.3d 299, 309 (Tex.

2010) (orig. proceeding). “[N]ot only may an issue of subject matter jurisdiction

‘be raised for the first time on appeal by the parties or by the court’, a court is

obliged to ascertain that subject matter jurisdiction exists regardless of whether the

parties questioned it.”   Id. at 306 (quoting Loutzenhiser, 140 S.W.3d at 358)

(emphasis in original); City of Allen v. Pub. Util. Comm’n of Tex., 161 S.W.3d 195,

199 (Tex. App.—Austin 2005, no pet.) (“[T]he question of jurisdiction is

fundamental and can be raised at any time in the trial of a case or on appeal.”).

      The law of the case doctrine is defined as “that principle under which

questions of law decided on appeal to a court of last resort will govern the case

throughout its subsequent stages.” Loram Maint. of Way, Inc. v. Ianni, 210 S.W.3d

593, 596 (Tex. 2006); Brown & Brown of Tex., Inc. v. Omni Metals, Inc., 317

                                          7
S.W.3d 361, 373 (Tex. App.—Houston [1st Dist.] 2010, pet. denied). Under the

law of the case doctrine, a court of appeals will ordinarily be bound by its initial

decision if there is a subsequent appeal in the case. Briscoe v. Goodmark Corp.,

102 S.W.3d 714, 716 (Tex. 2003). “By narrowing the issues in the successive

stages of the litigation, the law of the case doctrine is intended to achieve

uniformity of decision as well as judicial economy and efficiency.” Id. (quoting

Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex. 1986)). This doctrine is based on

public policy and is aimed at bringing finality to litigation. Id.

      A decision rendered on an issue by an appellate court does not, however,

absolutely bar reconsideration of the issue on a second appeal. Id. Rather, the law

of the case doctrine “‘merely expresses the practice of the courts generally to

refuse to reopen what has been decided.’” See It’s the Berry’s, LLC v. Edom

Corner, LLC, 271 S.W.3d 765, 771 (Tex. App.—Amarillo 2008, no pet.) (quoting

Messenger v. Anderson, 225 U.S. 436, 444, 32 S. Ct. 739, 740 (1912)).

      The application of the law of the case doctrine lies within the discretion of

the court, depending on the circumstances of the case. Briscoe, 102 S.W.3d at 716;

see also City of Houston v. Harris, 192 S.W.3d 167, 171 (Tex. App.—Houston

[14th Dist.] 2006, no pet.) (“Application of the [law of the case] doctrine is flexible

and must be left to the discretion of the court and determined according to the

circumstances of the case.”). The doctrine does not necessarily apply when either

                                           8
the issues or the facts presented in successive appeals are not substantially the

same as those involved in the first trial.5 Pitman v. Lightfoot, 937 S.W.2d 496, 513

(Tex. App.—San Antonio 1996, writ denied). Moreover, it is an exception to the

law of the case doctrine that the original decision was clearly erroneous. Briscoe,

102 S.W.3d at 716.

      Most critically, the law of the case doctrine does not either confer or limit

subject matter jurisdiction and is not a limitation on the power of a court to act.

See It’s the Berry’s, 271 S.W.3d at 771–72 (refusing to apply law of the case

doctrine to bar review of district court’s exercise of subject matter jurisdiction).

“Subject matter jurisdiction cannot be conferred by consent, waiver, or estoppel at

any stage of a proceeding.” Id. (quoting Tourneau Houston, Inc. v. Harris Cnty.

Appraisal Dist., 24 S.W.3d 907, 910 (Tex. App.—Houston [1st Dist.] 2000, no

pet.)). It follows that subject matter jurisdiction cannot be conferred by a prior

decision in the case.

      Indeed, both the Texas Supreme Court and the Fourteenth Court of Appeals

have made clear that the law of the case doctrine does not preclude a re-

examination of the court’s jurisdiction. See Briscoe, 102 S.W.3d at 717 (“Because

application of the law of the case doctrine is discretionary, the court of appeals had


5
      The other occasion allowing the doctrine to be set aside—when a partial summary
      judgment is followed by a trial on the merits—is not relevant to this appeal. See
      Hudson v. Wakefield, 711 S.W.2d 628, 630–31 (Tex. 1986).
                                          9
the authority to re-visit its jurisdictional decision.”); Harris, 192 S.W.3d at 171

(“Application of the [law of the case] doctrine is flexible and must be left to the

discretion of the court and determined according to the circumstances of the

case.”). To the contrary, an appellate court is “obliged to ascertain that subject

matter jurisdiction exists regardless of whether the parties questioned it.” See In re

United Servs. Auto. Ass’n, 307 S.W.3d at 306 (emphasis in original). We therefore

hold that the law of the case doctrine does not preclude our reexamination of the

trial court’s subject matter jurisdiction over Jenkins’s case.

      Jenkins, however, argues that our decision to review a jurisdictional

determination by a prior court in the same case creates a conflict with the

Fourteenth Court of Appeals’ opinion in Jacobs v. Jacobs. Jenkins misreads

Jacobs.    In that case, our sister court did review the prior jurisdictional

determination before agreeing with the appellee that the prior decision of the court

“govern[ed] any jurisdictional and arbitration-related questions in this appeal.”

448 S.W.3d 626, 630 (Tex. App.—Houston [14th Dist.] 2014, no pet.). The court

noted that the appellant “asserts virtually the same arguments in this current

appeal” as it did in the prior appeal, and it then briefly addressed the jurisdictional

issue and concluded, as it had in its original opinion, that the trial court did not lack

jurisdiction to issue the challenged orders. Id. at 631. As Entergy points out, the

Fourteenth Court of Appeals appropriately exercised its discretion in Jacobs as to

                                           10
whether to apply the law of the case doctrine, and it also reexamined and explicitly

reaffirmed its prior jurisdictional conclusion.

       Instead of conflicting with Jacobs, our decision in this case to reexamine the

jurisdictional issue reflects the appellate court’s discretion to decide whether to

apply the law of the case doctrine. Moreover, as stated above, jurisdiction is a

fundamental inquiry and the law of the case doctrine does not preclude a re-

examination of a prior jurisdictional decision. See In re United Servs. Auto. Ass’n,

307 S.W.3d at 306; Briscoe, 102 S.W.3d at 717. We, therefore, review de novo

whether the Texas courts have subject matter jurisdiction over Jenkins’s claims in

this litigation.

       B.     Entergy’s Jurisdictional Arguments

       Entergy argues that the trial court lacks subject matter jurisdiction over

Jenkins’s claims for several reasons. First, Entergy argues that the FERC has

exclusive jurisdiction over those claims. Second, Entergy argues that if this Court

determines that FERC does not have exclusive jurisdiction, then the PUC, which

governs retail rates for power sold to Texas consumers, has exclusive jurisdiction.

Third, Entergy asserts that both the federal and Texas filed-rate doctrines bar

Jenkins’s suit. We conclude that FERC has exclusive jurisdiction over Jenkins’s

claims and that, therefore, those claims must be dismissed.




                                          11
             1.    Exclusive Jurisdiction

      An agency has exclusive jurisdiction when Congress or the Legislature has

granted that agency the sole authority to make an initial determination in a dispute.

In re Entergy Corp., 142 S.W.3d 316, 321 (Tex. 2004) (orig. proceeding); Subaru

of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002).

Likewise, an agency has exclusive jurisdiction “when a pervasive regulatory

scheme indicates that Congress intended for the regulatory process to be the

exclusive means of remedying the problem to which the regulation is addressed.”

In re Entergy Corp., 142 S.W.3d at 322 (quoting David McDavid Nissan, 84

S.W.3d at 221)). If an agency has exclusive jurisdiction, a party must exhaust all

administrative remedies before seeking review of the agency’s action. Id. at 321

(citing Cash Am. Int’l, Inc. v. Bennett, 35 S.W.3d 12, 15 (Tex. 2000)). Until the

party has exhausted all administrative remedies, the trial court lacks subject matter

jurisdiction and must dismiss any claims that fall within the agency’s exclusive

jurisdiction. Id. at 321–22; Oncor Elec. Delivery Co. LLC v. Giovanni Homes

Corp., 438 S.W.3d 644, 648 (Tex. App.—Fort Worth 2014, pet. filed). Whether an

agency has exclusive jurisdiction is a question of law that we review de novo. In

re Entergy Corp., 142 S.W.3d at 322; David McDavid Nissan, 84 S.W.3d at 222.




                                         12
             2.     FERC’s Jurisdiction

      Jenkins claims that ETI, in conspiracy with its parent and affiliates

(Entergy), stole the class’s money by charging them for using system-generated

electrical power instead of cheaper power available from third parties, in violation

of the Theft Act.

      As the Corpus Christi Court of Appeals noted in Jenkins I, the ESA provides

that: (1) the companies within the Entergy System, with the consent of or under

conditions specified by the operating committee, may agree to purchase capacity or

energy from outside sources that, if purchased by the operating company, shall be

allocated amongst the companies in the System in any manner mutually agreeable

to them; (2) the operating committee may purchase energy under economic

dispatch or emergency conditions; (3) the operating committee is to ensure the

continuous supply or capacity of energy, provide for and coordinate safe

dispatching and the proper distribution of reserves, coordinate negotiations for the

interchange and sale of power and energy, including the sale and delivery to others

on a profitable basis of power and energy not required for system purposes, and to

secure power from external sources as may be required or will result in savings to

the companies; and (4) the operating committee shall determine availability of

energy for purchase from or sale to outside systems in an economical manner. See

187 S.W.3d at 806.

                                        13
      As Entergy explains and its evidence shows, electricity cannot be practically

stored. Rather, at all times, available power must match demand, which is based

upon ever-changing customer usage. To match power and demand, Entergy selects

generating resources to meet estimated future demand (the commitment process)

and determines the level at which committed resources will be operated and

adjusted to meet the instantaneous demand (the demand process). These processes

involve determining what third-party power is available, what price the seller is

demanding, what quantity is available each hour, whether transmission service is

available to deliver the purchased power to where it is needed, whether available

third-party power can be automatically dispatched or must be purchased in

unchangeable blocks of time and energy, whether there is system-generated power

that could and should be displaced, and whether reserve requirements can be met.

      Operation of the System requires that a significant portion of the System’s

resources be able to respond to changes in demand through instantaneous changes

in the amount of electricity provided, which requires flexible system generators.

Entergy relies on flexible generation to be able to comply with federal law, which

permits industrial co-generators on the Gulf Coast to require Entergy to take excess

power into the System or to cease supplying power to the System without notice.

Entergy avers that third-party power is generally not flexible, limiting the amount

of third-party power the Entergy System can use.

                                        14
      Entergy’s fuel and purchased-power costs are subjected to scrutiny by FERC

under the Federal Power Act (“FPA”) and by the PUC under the Public Utilities

Regulatory Act (“PURA”). FERC regulates wholesale power transactions and has

exclusive jurisdiction over wholesale power rates.       The PUC governs ETI’s

recovery of fuel and purchased-power costs from its customers and, in fuel

reconciliation proceedings, it reviews and makes a final determination as to the

reasonableness and necessity of ETI’s incurred fuel and purchased-power costs.

The cost of system-generated or third-party power is charged directly to ratepayers,

subject to PUC prudence review. This cost charged to ratepayers is the subject of

Jenkins’s sole complaint—that Entergy has over-charged ratepayers in violation of

the Theft Act.

      Under the FPA, FERC has exclusive jurisdiction of the wholesale sale or

transmission of electricity in interstate commerce. See 16 U.S.C.A. § 824(a),

(b)(1) (LexisNexis 2011); Entergy La., Inc. v. La. Pub. Serv. Comm’n, 539 U.S.

39, 41, 123 S. Ct. 2050, 2053 (2003). FERC’s exclusive jurisdiction extends not

only to rates but also to power allocations that affect wholesale rates. See Miss.

Power & Light Co. v. Miss. ex rel. Moore, 487 U.S. 354, 371–72, 108 S. Ct. 2428,

2439 (1988) (holding that states may not alter allocations of power ordered by

FERC by substituting their own determinations of what would be just and fair;

FERC-mandated allocations of power are binding on states and must be treated as

                                        15
fair and reasonable when determining retail rates, and “[s]tates may not bar

regulated utilities from passing through to retail consumers FERC-mandated

wholesale rates”).

      FERC’s jurisdiction encompasses the determination of just and reasonable

rates—including all classifications, practices, regulations, and contracts affecting

rates, as well as the authority to hear complaints that an existing rate (or associated

charge, classification, rule, regulation, practice, or contract) is unjust,

unreasonable, unduly discriminatory or preferential. See 16 U.S.C.A. §§ 824d,

824e (LexisNexis 2011 & Supp. 2015). FERC also has exclusive jurisdiction to

make a final determination as to whether the rate has been violated. AEP Tex. N.

Co. v. Tex. Indus. Energy Consumers, 473 F.3d 581, 586 (5th Cir. 2006). The

“filed rate doctrine” requires that interstate power rates filed with, or fixed by,

FERC must be given binding effect by state utility commissions determining

intrastate rates because the FPA and the Supremacy Clause preempt any state

action modifying or overruling the filed rate.        See 16 U.S.C.A. § 824(b)(1)

(LexisNexis 2011); Entergy La., 539 U.S. at 47, 123 S. Ct. at 2056; AEP Tex. N.

Co., 473 F.3d at 584.

      The FPA gives states, municipalities, and retail ratepayers the right to

participate in FERC proceedings and to file complaints. 16 U.S.C.A. §§ 824d,

824e, 825e (LexisNexis 2011 & Supp. 2015). The FPA also gives FERC exclusive

                                          16
jurisdiction to remedy rate violations by providing refunds. Id. § 824e; AEP Tex.

N. Co., 473 F.3d at 586. And it provides civil penalties for violating any provision

of the governing chapter of the FPA or any rule or order thereunder. 16 U.S.C.A.

§ 825o-1(b) (LexisNexis 2011 & Supp. 2015).

      The Entergy Louisiana case is similar to this case.       Entergy Louisiana

involved the same group of energy companies as in this case and a similar issue

involving FERC preemption of state utility commission regulation of power rates

under the filed-rate doctrine. Entergy Louisiana shared capacity with its fellow

operating companies in the Entergy System, allowing the companies “to access

additional capacity when demand exceeds the supply generated by that company

alone.” Entergy La., 539 U.S. at 42, 123 S. Ct. at 2053. Pursuant to MSS-1 of the

System Agreement, the same ESA at issue here, Entergy allocated the costs of

keeping excess capacity available among the operating companies. Id. MSS-1

provided a formula to calculate “cost-equalization” payments among the

companies in the System, which ensured that companies within the System that

used more capacity than they contributed (“short” companies) made payments to

companies that contributed more capacity than they used (“long” companies). Id.

at 42–43, 123 S. Ct. at 2053–54. Entergy determined each company’s capacity on

a monthly basis, and a company that contributed more capacity than it used

received a payment equal to its average cost of the company’s generating units

                                        17
multiplied by the number of megawatts the company was considered “long.” Id. at

43, 123 S. Ct. at 2054. Under Entergy’s Extended Reserve Shutdown (“ERS”)

program, the operating committee could designate some generating units as not

immediately necessary for capacity needs; but because these units could be

activated if energy demand increased in the future, these units were considered

“available” under the MSS-1’s cost-equalization calculations. Id.

      FERC approved an amendment to the System Agreement that “allow[ed] an

ERS unit to be treated as available under MSS-1 if the operating committee

determine[d] it intend[ed] to return the unit to service at a future date.” Id. at 44,

123 S. Ct. at 2054.      Entergy Louisiana, which routinely had to make cost-

equalization payments to other companies within the System pursuant to MSS-1,

filed its 1997 retail rates with the Louisiana Public Service Commission

(“LPSC”)—the counterpart to the Texas PUC in this case. See id. at 45, 123 S. Ct.

at 2055. The LPSC determined that, although it was preempted from determining

whether the operating committee’s inclusion of ERS units prior to August 5,

1997—the date of the FERC order approving the amendment to the System

Agreement—was prudent, it was not preempted from “disallowing MSS-1 related

costs as imprudent subsequent to August 5, 1997.” Id. The LPSC “concluded that

the operating committee’s treatment of ERS units after August 5, 1997, was

imprudent and that [Entergy Louisiana’s] MSS-1 payments would not be

                                         18
considered when setting [its] retail rates in Louisiana.” Id. at 46, 123 S. Ct. at

2055.

        The United States Supreme Court determined that the LPSC’s order

“impermissibly ‘traps’ costs that have been allocated in a FERC tariff” in violation

of the filed-rate doctrine. Id. at 49, 123 S. Ct. at 2057. The Court noted that the

System Agreement “leaves the classification of ERS units to the discretion of the

operating committee” instead of involving a specific FERC-mandated cost-

allocation. Id. The Court refused to create an exception to the filed-rate doctrine,

even though the case did not involve a specific FERC mandate, reasoning that to

do so would “substantially limit FERC’s flexibility in approving cost allocation

arrangements.” Id. at 50, 123 S. Ct. at 2057. The Court also held that preemption

did not depend on the existence of a FERC order approving the particular

classification at issue, stating, “It matters not whether FERC has spoken to the

precise classification of ERS units, but only whether the FERC tariff dictates how

and by whom that classification should be made.” Id.

        The same FERC-approved System Agreement that governed in Entergy

Louisiana governs Entergy’s operations in this case. The precise duty Jenkins

claims was violated—the duty to acquire energy at the least cost—is expressly set

out in ESA Schedule MSS-3 section 30.02:

        The System Capability shall be operated as scheduled and/or
        controlled by the System Operator to obtain the lowest reasonable cost
                                         19
      of energy to all the Companies consistent with the requirements of
      daily operating generation reserve, voltage control, electrical stability,
      loading of facilities and continuity of service to the customers of each
      Company.

Likewise, Entergy’s “central dispatching function,” the control of generating

levels, was undertaken pursuant to sections 4.08 and 6.0l of the ESA. Section 4.08

provides, “Under general direction of the Operating Committee, [Entergy] Services

will operate a centralized operations center . . . to dispatch the capacity and energy

capability of the Companies, in the efficient, economical, and reliable manner as

provided in this Agreement.” And section 6.01 provides, “The operation of the

System shall be controlled by the System Operations Center which is operated by

[Entergy] Services.”

      ESA section 6.02 sets out the duties of the System Operating Center. This

section provides that Entergy Services shall “[d]etermine the most effective

scheduling of sources for the reliable supply of power and energy on an

economical basis to the companies” and “[d]etermine the availability of energy for

purchase from or sale to outside systems on an economical basis under effective

contracts and arrange for and schedule such transactions.” The ESA thus allows

the System Operator to meet energy demand by purchasing third-party power, but

the ESA does not specifically dictate the amount of power the System Operator is

to purchase from third-party sources relative to system-generated power. This



                                         20
decision is therefore left to the System Operator’s discretion under the FERC-

approved ESA.

      Entergy’s operation and maintenance of computer facilities to dispatch the

system and determine billing information in the wholesale market are specifically

governed by ESA section 6.02, which provides that Entergy Services shall

“[s]upervise the operation and maintenance of computer facilities specified by the

Operating Committee for the following purposes: 1. Economic system dispatch, 2.

Determination of billing information, and 3. Determination of other data required

by the Operating Committee.”      Decisions whether to dispatch Entergy-owned

resources or to purchase wholesale power off-system are likewise governed by

ESA sections 4.02, 4.03, 4.08 and 6.02. And, once energy has been purchased and

dispatched, the allocation of costs among the companies of the Entergy system is

governed by ESA Schedule MSS-3, while the calculation of intra-System billings

for exchange energy is determined in accord with ESA Schedule MSS-3 sections

30.08, 30.09 and 30.10.

      Finally, Jenkins’s argument that only express or specific rulings by FERC

invoke its exclusive jurisdiction was explicitly rejected by the Supreme Court in

Entergy Louisiana. See 539 U.S. at 50, 123 S. Ct. at 2057 (stating that “the ‘view

that the pre-emptive effect of FERC jurisdiction turn[s] on whether a particular

matter was actually determined in the FERC proceedings’ has been ‘long

                                       21
rejected’”) (quoting Miss. Power & Light Co., 487 U.S. at 374, 108 S. Ct. at 2440).

Indeed, many years before Entergy Louisiana, in Mississippi Power & Light, the

Supreme Court, invoking the Supremacy Clause, had expressly forbidden the states

to regulate “in areas where FERC has properly exercised its jurisdiction to

determine just and reasonable wholesale rates or to insure that agreements

affecting wholesale rates are reasonable” and it had also forbidden the states to

conduct “any proceedings that challenge the reasonableness of FERC’s allocation.”

487 U.S. at 374, 108 S. Ct. at 2440–41. If states may not exercise jurisdiction to

determine the reasonableness of agreements affecting wholesale rates and to set

wholesale rates in this area, a fortiori individual retail consumers may not invoke

the jurisdiction of state courts to challenge FERC’s exercise of its jurisdiction to

determine these rates.

      The whole basis of Jenkins’s theft claim in this case is that Entergy stole

money from the class of retail customers Jenkins represents, in violation of the

Texas Theft Liability Act, by not purchasing power from outside its own system at

more favorable wholesale rates.       Specifically, Jenkins alleges that Entergy

manipulated the computer programs used in making purchasing decisions, such

that Entergy purchased more expensive system-generated power even though

lower-cost third-party power was available, resulting in Entergy’s charging higher

rates to its retail customers. Jenkins seeks a refund of retail charges, but he

                                        22
complains about Entergy’s wholesale electricity purchases. Although Jenkins does

not allege breach of the FERC-approved ESA as a cause of action, he challenges

Entergy’s purchasing decisions—whether to use allegedly available third-party

electricity or system-generated electricity—which Entergy undertook pursuant to

the ESA. Determining whether Entergy permissibly exercised its discretion in

making its purchasing decisions thus necessarily requires consideration of the

ESA, a FERC-approved tariff.

      Jenkins contends, however, that the jurisdictional analysis in the recent

United States Supreme Court case of Oneok, Inc. v. Learjet, Inc., a case that

involved construction of the Natural Gas Act, a statute analogous to the FPA,

governs this case and requires a holding that his state-law claims are not pre-

empted and that the trial court has jurisdiction over them. See 135 S. Ct. 1591

(2015).

      In Oneok, retail natural gas consumers brought suit against interstate natural

gas pipelines, alleging that the pipelines had manipulated the prices of natural gas

reported to privately published natural gas indices, which were then used to

determine prices for their natural gas contracts. Id. at 1597–98. The consumers

filed state-law antitrust claims against the pipelines. Id. at 1598. The district court

granted summary judgment in favor of the pipelines, ruling that the Natural Gas

Act pre-empted the state-law antitrust claims because the pipelines were “natural

                                          23
gas companies engaged in the transportation of natural gas in interstate commerce”

and the allegedly wrongful practices that the consumers, although retail customers,

were targeting, “directly affected” wholesale natural gas rates, a matter within

FERC’s jurisdiction. Id.

      The Ninth Circuit reversed the summary judgment in the pipelines’ favor,

noting that the price manipulation that was the basis of the consumers’ complaint

affected both wholesale sales, which were within FERC’s jurisdiction under the

Natural Gas Act, and retail sales, which were not. Id. at 1599. The Ninth Circuit

held that the Natural Gas Act did not pre-empt the state-law antitrust claims

“aimed at obtaining damages for excessively high retail natural-gas prices

stemming from interstate pipelines’ price manipulation, even if the manipulation

raised wholesale rates as well.” Id. (citing In re W. States Wholesale Natural Gas

Antitrust Litig., 715 F.3d 716, 729–36 (2013) (emphasis in original)).

      The Supreme Court granted certiorari to determine “whether the Natural Gas

Act pre-empts retail customers’ state antitrust law challenges to practices that also

affect wholesale rates.” Id. The Court first noted that Oneok involved a question

of “field pre-emption,” that is, whether Congress has, either implicitly or explicitly,

forbidden the States from taking action in the field that the Natural Gas Act pre-

empts. Id. at 1595. The Court then stated that when a state law, such as the

antitrust laws at issue in Oneok, can be applied both to sales covered by the Natural

                                          24
Gas Act (i.e., wholesale sales) and sales that are not covered by the Natural Gas

Act (i.e., retail sales), courts must “proceed cautiously, finding pre-emption only

where detailed examination convinces us that a matter falls within the pre-empted

field as defined by our precedents.” Id. at 1599. An important consideration in

determining whether a state law is pre-empted is “the target at which the state law

aims,” and the “target” “must mean more than just the physical activity that a State

regulates.” Id. at 1599–1600 (emphasis in original).

      In Oneok, the consumers’ claims were solely directed at the pipelines’

practices involving retail rates, a matter the Natural Gas Act leaves to the states,

rather than at practices governed by a FERC-approved tariff, as here. See id. at

1600. The Supreme Court held that antitrust laws “are not aimed at natural-gas

companies in particular, but rather all business in the marketplace,” and their

“broad applicability” supports “a finding of no pre-emption here.” Id. at 1601.

The Court reasoned that the states have a “long history of providing ‘common-law

and statutory remedies against monopolies and unfair business practices,’” and the

consumers’ suits in Oneok “relied on this well established state power.”           Id.

(quoting California v. ARC Am. Corp., 490 U.S. 93, 101, 109 S. Ct. 1661, 1665

(1989)).

      The Oneok Court distinguished Mississippi Power & Light Co., noting that

that case “is best read as a conflict pre-emption case, not a field pre-emption case.”

                                         25
Id. (citing Miss. Power & Light Co., 487 U.S. at 377, 108 S. Ct. at 2442).

“Conflict pre-emption,” as the Court noted in Oneok, “exists where ‘compliance

with both state and federal law is impossible,’ or where ‘the state law stands as an

obstacle to the accomplishment and execution of the full purposes and objectives

of Congress.’” Id. at 1595 (quoting ARC Am. Corp., 490 U.S. at 100–01, 109 S.

Ct. at 1665).    The Court further stated that the “state inquiry” at issue in

Mississippi Power & Light was pre-empted because it was directed at sales within

FERC’s jurisdiction “in a way that [the Oneok consumers’] state antitrust lawsuits

are not.” Id. at 1602.

      By contrast to the field pre-emption at issue in Oneok, the Court stated that

the state action involved in Mississippi Power & Light, an inquiry into the

reasonableness of energy sales approved by FERC, “was effectively an attempt to

‘regulate in areas where FERC has properly exercised its jurisdiction to determine

just and reasonable wholesale rates.’” Id. (quoting Miss. Power & Light Co., 487

U.S. at 374, 108 S. Ct. at 2440). The consumers’ claims in Oneok, on the other

hand, “seek to challenge the background marketplace conditions that affected

both” wholesale rates and retail rates, rather than challenging “the reasonableness

of rates expressly approved by FERC.” Id. The Oneok Court, in affirming the

Ninth Circuit and holding that the consumers’ state-law claims were not pre-

empted, specifically noted that the conflict pre-emption doctrine “should prove

                                        26
sufficient to address” conflicts between “state antitrust law proceedings and the

federal rate-setting process,” but the parties had not argued conflict pre-emption, so

that issue must be left to the courts below to decide. Id.

      Jenkins contends that, although Oneok involves the Natural Gas Act instead

of the FPA, the pre-emption analysis is the same for both acts, and the statutes,

which contain similar language, should be read in pari materia, such that Oneok’s

construction of the limits of FERC’s jurisdiction under the Natural Gas Act should

also apply here. We disagree.

      Both the Natural Gas Act and the FPA contain similar jurisdictional

language and similar language describing FERC’s authority. The Natural Gas Act

provides that it shall apply: (1) “to the transportation of natural gas in interstate

commerce”; (2) “to the sale in interstate commerce of natural gas for resale for

ultimate public consumption for domestic, commercial, industrial, or any other use,

and to natural-gas companies engaged in such transportation or sale”; and (3) “to

the importation or exportation of natural gas in foreign commerce and to persons

engaged in such importation or exportation.” 15 U.S.C.A. § 717(b) (LexisNexis

2006 & Supp. 2015); Oneok, 135 S. Ct. at 1596. The Natural Gas Act specifically

states that it “shall not apply to any other transportation or sale of natural gas . . . .”

15 U.S.C.A. § 717(b). Similarly, the FPA applies “to the transmission of electric

energy in interstate commerce and to the sale of electric energy at wholesale in

                                            27
interstate commerce, but [with some exceptions not applicable here] shall not

apply to any other sale of electric energy.” 16 U.S.C.A. § 824(b)(1).

      Both the Natural Gas Act and the FPA provide that if FERC finds any rate

charged or collected by the respective energy company “subject to the jurisdiction

of” FERC or finds “any rule, regulation, practice, or contract affecting such rate,

charge, classification [to be] unjust, unreasonable, unduly discriminatory or

preferential, [FERC] shall determine the just and reasonable rate, charge,

classification, rule, regulation, practice, or contract to be thereafter observed and in

force, and shall fix the same by order.” 15 U.S.C. § 717d(a) (LexisNexis 2006 &

Supp. 2015) (Natural Gas Act); 16 U.S.C. § 824e(a) (Federal Power Act).

      Jenkins argues that because of the similarities in language in the Natural Gas

Act and the FPA, the pre-emption analysis articulated in Oneok should apply in

this case and mandates a holding that his civil theft claim against Entergy does not

fall within FERC’s exclusive jurisdiction. We disagree.

      As Entergy points out, unlike the gas sales price-fixing by retailers among

themselves in violation of state antitrust laws alleged in Oneok, Entergy’s

purchasing decisions are governed by the ESA, a FERC-approved tariff that gives

discretion to Entergy to meet its capacity needs by purchasing power from within

the Entergy system or by purchasing third-party power. A tariff filed with a

federal agency is the equivalent of a federal regulation. See Cahnmann v. Sprint

                                          28
Corp., 133 F.3d 484, 488 (7th Cir. 1998) (stating such in context of tariff on file

with Federal Communications Commission); see also Lowden v. Simonds-Shields-

Lonsdale Grain Co., 306 U.S. 516, 520, 59 S. Ct. 612, 614 (1939) (“Until changed,

tariffs bind both carriers and shippers with the force of law.”). This case thus

involves a question of conflict pre-emption: whether Jenkins’s claims under the

Texas Theft Liability Act that Entergy failed to obtain the best price available on

the wholesale gas market when satisfying the demand for electricity conflicts with

the discretion granted to Entergy to purchase electricity under the ESA, a FERC-

approved tariff. Oneok—which involves field pre-emption—stands in contrast to

this case in that it involves the question of price-fixing among sellers of gas to the

retail market after it has left the interstate pipeline transmission system.        It

therefore presented the question of whether FERC regulation had pre-empted the

entire field of gas prices—a question which the Supreme Court answered

negatively.

      Because resolving the dispute in this case involves the consideration and

interpretation of a FERC-approved tariff, we conclude that this dispute falls within

FERC’s exclusive jurisdiction. See AEP Tex. N. Co., 473 F.3d at 585 (“FERC, not

the state, is the appropriate arbiter of any disputes involving a tariff’s

interpretation.”); see also Entergy La., 539 U.S. at 50, 123 S. Ct. at 2057 (“It

matters not whether FERC has spoken to the precise classification of ERS units,

                                         29
but only whether the FERC tariff dictates how and by whom that classification

should be made.”).

      Because Jenkins did not exhaust his administrative remedies by first

bringing this dispute before FERC, we hold that the trial court lacks subject matter

jurisdiction over the case. See In re Entergy Corp., 142 S.W.3d at 321–22 (holding

that when agency has exclusive jurisdiction over dispute, party must exhaust all

administrative remedies before seeking relief in district court from agency

decision, and until party exhausts administrative remedies, trial court lacks subject

matter jurisdiction). We hold that the trial court erroneously denied Entergy’s

motion to dismiss for lack of jurisdiction and that the trial court’s class-

certification order is therefore void.

      Accordingly, we sustain Entergy’s first issue.6




6
      Given our disposition of Entergy’s first issue, we need not reach its second and
      third issues. See TEX. R. APP. P. 47.1.
                                         30
                                   Conclusion

      We declare the trial court’s order granting class certification void. We

reverse the order of the trial court denying Entergy’s motion to dismiss and render

judgment dismissing all claims against Entergy.




                                             Evelyn V. Keyes
                                             Justice

Panel consists of Justices Keyes, Huddle, and Lloyd.

Justice Lloyd, concurring.




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