Notice & Comment

D.C. Circuit Review – Reviewed: Contract Interpretation, the Plain Meaning Rule, and FERC

There was not much administrative law news in the published opinions of the D.C. Circuit during the first week of October. One published opinion dealt with res judicata and diversity jurisdiction. The other was Basin Electric Power Cooperative v. FERC. Writing for the unanimous panel, Judge Childs held that the Commission had properly interpreted a contract. The parties ultimately agreed that their writing was not ambiguous but each insisted that they had the better plain meaning argument. Applying a de novo standard of review, the D.C. Circuit agreed with the Commission’s application of the plain meaning rule, as defined by the applicable Nebraska law, in light of the writing’s text. As Judge Childs put it, “[b]ased on the plain language of [the relevant] provision, we agree with the Commission that section 9 does not prevent Northwest Rural’s withdrawal from Tri-State or constitute a breach of the Basin/Tri-State Agreement given that section 9 explicitly prescribes the procedures by which Basin and Tri-State would proceed in the event of Northwest Rural’s exit” from its agreements with Tri-State. The petitioner offered a contextualist argument about the contract’s purpose in light of industry practice in its brief, thus suggesting that the plain text did not alone determine the question. But at oral argument the petitioner conceded that there was no textual ambiguity, thus paving the way for the court to apply Nebraska’s plain meaning rule.