Court Finds CFTC RTO/ISO Exemptive Order Bars CEA § 22 Private Right of Action, but More to Come from the CFTC

Can private litigants bring claims under the Commodity Exchange Act alleging manipulation in ERCOT’s energy markets? On February 3, the U.S. District Court for the Southern District of Texas answered “no,” granting defendants’ motion to dismiss in Aspire Commodities v. GDF Suez Energy North America.

In Aspire v. GDF Suez, plaintiffs accused GDF Suez of violating the CEA’s anti-manipulation provisions, and six other electricity generators of aiding and abetting GDF Suez.1 Specifically, plaintiffs alleged that GDF Suez intentionally withheld electricity generation during times of tight supply to drive up Real-Time prices in the ERCOT market. While not challenging the ERCOT LMP prices themselves as being “unlawful, wrong or too high,” plaintiffs claimed that, by manipulating the ERCOT LMP, GDF Suez consequently created “artificial and unpredictable” prices in derivatives markets, such as ICE.2
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