![if gte IE 9]><![endif]><![if gte IE 9]><![endif]><![if gte IE 9]><![endif]>
Thank You For Submiting Feedback!
United States District Court for the Southern District of New York
November 1, 2007, Decided; November 1, 2007, Filed
07 Civ. 6682 (DC)
[*331] CHIN, D.J.
On July 25, 2007, the Commodity Futures Trading Commission (the "CFTC") brought this action against Amaranth Advisers, LLC and others (collectively, "Amaranth"), alleging price manipulation with respect to natural gas futures contracts and seeking injunctive relief and civil penalties. The very next day, July 26, 2007, the Federal Energy Regulatory Commission ("FERC") commenced an administrative enforcement proceeding against Amaranth, based essentially on the same transactions, for civil penalties and the disgorgement of profits. Hence, [*332] Amaranth is being pursued by two federal regulatory agencies in two separate proceedings in two different jurisdictions, based on the same alleged conduct.
Amaranth moves for a preliminary injunction to enjoin FERC -- which is not a party to the instant lawsuit -- from proceeding with its administrative action pending [**3] the outcome of this case. Amaranth contends that because this suit was filed by the CFTC, which has primary, if not exclusive, jurisdiction over the natural gas futures contracts market, the FERC administrative proceeding should be stayed to avoid inconsistent outcomes and to relieve Amaranth of the burden of defending itself in two different proceedings. Although I agree that it would be prudent for FERC to defer to this lawsuit, for the reasons that follow, I decline to order FERC to stay its administrative action. Amaranth's motion for a preliminary injunction is denied.
1. Federal Regulation of Natural Gas
Natural gas is sold in two different types of markets. In the financial markets, buyers and sellers trade standardized contracts for the delivery of natural gas on a future date at a prearranged price. These "futures contracts" are bought and sold on futures or commodity exchanges, such as the New York Mercantile Exchange ("NYMEX"). Natural gas itself is purchased, sold, and transferred in the physical market. According to a Senate report published in June 2007, although the trading of natural gas futures contracts "rarely result[s] in the physical delivery of [**4] natural gas," the price of natural gas in the financial markets is "linked to the price of natural gas in the physical market." Staff Rep. of S. Permanent Subcomm. on Investigations, Comm. on Homeland Sec. and Governmental Affairs, 110th Cong., Excessive Speculation in the Natural Gas Market 27 (2007) (FERC Ex. 2).
Two federal agencies regulate the trading of natural gas. The CFTC is responsible for overseeing commodity futures markets, including the natural gas futures market, under the Commodity Exchange Act, 7 U.S.C. § 1 et seq. (the "CEA"). FERC regulates the interstate transmission of electricity, natural gas, and oil pursuant to the Natural Gas Act, 15 U.S.C. § 717 et seq. (the "NGA").
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
523 F. Supp. 2d 328 *; 2007 U.S. Dist. LEXIS 80978 **
U.S. COMMODITY FUTURES TRADING COMMISSION, Plaintiff, - against - AMARANTH ADVISORS, LLC et al., Defendants.
Subsequent History: Related proceeding at Hunter v. FERC, 527 F. Supp. 2d 9, 2007 U.S. Dist. LEXIS 90475 (D.D.C., Dec. 10, 2007)
Motion denied by United States CFTC v. Amaranth Advisors, L.L.C., 554 F. Supp. 2d 523, 2008 U.S. Dist. LEXIS 40655 (S.D.N.Y., May 21, 2008)
Prior History: Amaranth Advisors, 120 F.E.R.C. P61085, 2007 FERC LEXIS 1463 (F.E.R.C., July 26, 2007)
natural gas, injunction, All-Writs Act, enjoin, preliminary injunction, court's jurisdiction, parties, contracts, markets, trading, administrative action, federal court, proceedings, commodity, court of appeals, district court, agencies, lawsuit, exclusive jurisdiction, state court, Anti-Injunction Act, investigations, coordinate, settlement, interfere, non-party, pursuing, cases
Administrative Law, Judicial Review, Remedies, Injunctions, Civil Procedure, Injunctions, General Overview, Writs, All Writs Act, Preliminary & Temporary Injunctions, Energy & Utilities Law, US Federal Energy Regulatory Commission, Civil Actions, Jurisdiction, Securities Law, Commodities Futures Trading, Federal & State Interrelationships, Anti-Injunction Act, Exceptions, Preclusion of Judgments, Estoppel, Collateral Estoppel, Subject Matter Jurisdiction, Jurisdiction Over Actions, Jurisdiction, Judgments, Res Judicata, Reviewability, Jurisdiction & Venue, Natural Gas Industry, Natural Gas Act, Administrative Proceedings