On January 4, 2016, in Occidental Chem. Corp. v. Louisiana Public Svc. Comm'n, et al, the US Court of Appeals for the Fifth Circuit vacated a lower court's order staying litigation pending an agency ruling on plaintiff's administrative complaint. The appellate court found that it had jurisdiction of the appeal as a final decision of the district court because the agency's indefinite delay of action effectively put the plaintiff out of court. The court further held that even though the primary jurisdiction doctrine was applicable, the district court's indefinite stay should be vacated to allow a more equitable remedy on remand (No. 15–30100, (5th Cir. 2016)).

This case arose out of a dispute between Entergy Louisiana, LLC (Entergy), a utility, and Occidental Chemical Corporation (Occidental), a company that owns and operates a power production facility. Occidental claimed that it could compel Entergy to purchase the energy it produced at standard rates under the Public Utility Regulatory Policies Act of 1978 (PURPA) (16 U.S.C. § 824a-3(f)(1)). Occidental alleged that Entergy sought to avoid its obligations to purchase its energy by joining a regional transmission organization known as the Midcontinent Independent Transmission System Operator, Inc. (MISO), and integrating Occidental's facility into the organization. The resulting reorganization would wrongfully strip Occidental of its rights under PURPA.

On January 17, 2013, Occidental challenged MISO in an administrative action before the Federal Energy Regulatory Commission (FERC) to invalidate the integration of Occidental's plant and retain its PURPA rights. Apart from a request for additional information, the case did not proceed quickly and FERC took no more action. On January 9, 2014, while this administrative action was pending, the Louisiana Public Service Commission (LPSC) granted an application from Entergy, which effectively adopted Entergy's plan to integrate Occidental's facility into MISO and deprive Occidental of its PURPA rights.

Occidental responded to this order with a second FERC petition against the LPSC, alleging PURPA violations and seeking injunctive relief. On April 4, 2014, FERC notified the parties that it would not initiate an enforcement action on the second action because it raised the same issues as Occidental's first petition against MISO. Occidental then sued Entergy and the LPSC in district court laying out the same arguments as in the second administrative action and seeking declaratory relief that the LPSC order was preempted, as well as damages for breach of contract.

The defendants moved to stay the district court action pending an outcome in the first administrative action, citing the primary jurisdiction doctrine. Under this doctrine of judicial abstention, a district court may defer to another forum, such as an administrative agency, if it determines that the benefit of obtaining aid from the other forum will outweigh the need for expeditious litigation. Occidental responded that the primary jurisdiction doctrine did not apply to PURPA actions and, even if it did, the cost of indefinitely delaying the suit would outweigh any benefits from FERC's decision.

The district court granted the defendants' motion for a stay pending a decision by FERC on the first administrative complaint. Occidental appealed the district court's decision.

The Fifth Circuit vacated the district court's stay order and remanded the case back to the district court to enter a new order staying the proceedings for 180 days to give FERC an opportunity to rule on the first administrative complaint. If FERC fails to act within that period, the district court may extend the deadline or adjudicate the action without further deference to FERC.

Occidental brought the appeal under 28 U.S.C. § 1291 relating to final decisions of a lower court, so the Fifth Circuit first analyzed its own jurisdiction. The court used the "effectively out of court" doctrine laid out by the Supreme Court in Idlewild Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 541 (1949), and adopted by the Fifth Circuit in Hines v. D'Artois, 531 F.2d 726 (5th Cir. 1976). Because FERC had taken no action on Occidental's administrative complaint in nearly two years and provided no indication when it might act, Occidental was effectively put out of court by the agency for a protracted and indefinite period. As a result, the Fifth Circuit found it was justified in treating the stay order as a final order for purposes 28 U.S.C. § 1291 and ruled that it had appellate jurisdiction to review the order.

Regarding the primary jurisdiction question, the court disagreed with Occidental that Fifth Circuit case law precluded the application of that doctrine in this PURPA action. The court discussed the standard for application of the primary jurisdiction doctrine, finding that no fixed formula exists. Rather, a court must balance the potential assistance of an agency's special expertise on the matter in dispute against the litigant's certain delay in the resolution of their action.

Although the primary jurisdiction doctrine potentially applied here, the Fifth Circuit agreed that it could take years for FERC to actually resolve the first administrative complaint. The court therefore adopted a special solution from an earlier decision: to ensure that Occidental's rights were not delayed or compromised, the court vacated the order and set a deadline of 180 days for FERC to reach a decision on the administrative action. If FERC fails to rule in that time, the district court must either:

(Wagner & Brown v. ANR Pipeline Co., 387 F.2d 199 (5th Cir. 1988))

Practitioners in the Fifth Circuit should be aware that a district court may not defer to an agency's determination if it risks indefinitely delaying the resolution of the plaintiff's case. Courts are also willing to fashion case-specific equitable solutions depending on the needs of the case and the willingness of the agency to act in a timely fashion.