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Current Developments in the Commercial Divisions of the
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Posted: September 23, 2015

Claims Against Con Edison Dismissed Under Filed Rate Doctrine

On September 21, 2015, Justice Demarest of the Kings County Commercial Division issued a decision in Mont York Associates, LP v. Consolidated Edison Co. of N.Y., 2015 NY Slip Op. 51350(U), dismissing claims under the filed rate doctrine.

In Mont York Associates, the plaintiff brought claims against Con Edison “seek[ing] damages for breach of contract and negligent misrepresentation alleging that Con Ed misrepresented the cost to extend gas service to a residential apartment building owned by” the plaintiff. The court granted Con Edison’s motion to dismiss based on, among other grounds, the filed rate doctrine, explaining:

The filed rate doctrine bars actions against federal- and state-regulated entities which are grounded on the allegation that the rates charged by those entities are unreasonable. Simply stated, the doctrine holds that any filed rate—that is, one approved by the governing regulatory agency is per se reasonable and unassailable in judicial proceedings brought by ratepayers. Thus, a consumer’s claim, however disguised, seeking relief for an injury allegedly caused by the payment of a rate on file with a regulatory commission, is viewed as an attack upon the rate approved by the regulatory commission and, therefore, barred by the doctrine.

Two distinct policy “strands” underlie the filed rate doctrine. One is nondiscrimination, which recognizes that the regulatory agencies are established to provide for uniform rates, and that without the filed rate doctrine, a discriminatory system would result, with those having recourse to the courts paying less for the same services than other ratepayers who have either not sued, or who, having sued, are granted less substantial relief by different courts and juries. The other strand is justiciability, which recognizes that, unlike the regulating agencies, which have special competence to determine reasonable rates, courts do not have the expertise to make rate making decisions, and are simply ill-suited to systematically second guess the regulators’ decisions and overlay their own resolution. Indeed, not only are courts ill suited to make such ratemaking decision, a court’s interference with such a decision would subvert the primary jurisdiction granted to an administrative agency to set rates and thereby undermine the regulatory scheme established by the legislature.

(Internal quotations and citations omitted). Because the plaintiff’s claims related to tariffed services, they were dismissed.

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