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On July 6, 2026, the United States Court of Appeals for the Tenth Circuit issued a unanimous published opinion affirming the dismissal with prejudice of consolidated class actions brought by Kansas residential natural gas consumers against natural gas marketing and transportation companies seeking more than $450 million in damages arising from Winter Storm Uri in February 2021. In re Winter Storm Uri Nat. Gas Litig., No. 25-3046, 2026 WL 1944831 (10th Cir. July 6, 2026). The opinion was written by Circuit Judge Hartz and joined by Chief Judge Holmes and District Judge Garcia (sitting by designation).
These consolidated class actions target the segment of the energy chain responsible for moving significant quantities of natural gas from producers to end users—natural gas marketing and transportation companies. After extensive briefing and oral argument, the Tenth Circuit affirmed the district court’s judgment based on field preemption and its “holding that FERC’s exclusive jurisdiction over the interstate wholesale natural-gas market under the [Natural Gas Act (“NGA”)] preempts Plaintiffs’ state-law claims.” Id. at *3. This decision confirms that the NGA’s field preemption doctrine remains a powerful shield for participants in the interstate wholesale natural gas market, even in the face of extraordinary market events and significant downstream consumer impact.
Background
In February 2021, Winter Storm Uri hit Kansas, bringing subzero temperatures that simultaneously spiked demand for natural gas and froze wellheads, causing natural gas prices to soar from roughly $2.55/MMBtu to as high as $622.785/MMBtu—approximately 20 times the 15-year peak. Id. at *2. The Kansas Governor declared a State of Disaster Emergency, and the Kansas Corporation Commission ordered distributors to ensure continued service and authorized deferral of extraordinary costs. Id.
Plaintiffs were individual Kansas residents who purchased natural gas from five different regional distributors that serve municipal entities or retail customers in Kansas. Id. at *1. Plaintiffs did not sue these regional distributors. Instead, Plaintiffs sued the natural gas producers, suppliers, and marketers from whom the non-party regional distributers purchased wholesale natural gas during Winter Storm Uri. Id. Defendants included many of the largest natural gas marketers and transporters in the world.
These class actions brought statutory claims under the Kansas Consumer Protection Act (“KCPA”) challenging the wholesale prices that distributors agreed to pay natural gas marketers for natural gas delivered during Winter Storm Uri. Id. Plaintiffs alleged that Defendants profiteered during an emergency by cutting distributors’ baseload gas supplies tied to the lower first-of-the-month prices, forcing them into the exponentially higher-priced spot market. Id. at *1-2. FERC’s Office of Enforcement investigated the wholesale transactions during the storm to determine whether there had been market manipulation or other misconduct, and the investigation did not result in any enforcement action. Id. at *3.
After extensive briefing of motions to dismiss, the district court (D. Kan.) granted Defendants’ joint motion and dismissed all claims with prejudice on February 28, 2025, holding that FERC’s exclusive jurisdiction over the interstate wholesale natural-gas market under the Natural Gas Act (“NGA”) preempts Plaintiffs’ state-law claims.
Opinion Analysis — Key Holdings
On appeal, the Tenth Circuit affirmed based on field preemption, holding that FERC’s exclusive jurisdiction over the interstate wholesale natural-gas market under the NGA preempts Plaintiffs’ state-law claims. Id. The Court accepted all of Defendants’ key arguments as presented. As the Court stated, it is “well settled” that “Congress occupied the field of matters relating to wholesale sales and transportation of natural gas in interstate commerce.” Id. at *1 (quoting Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 305 (1988)).
Plaintiffs’ Claims Target Wholesale Transactions. The Court had “little doubt that what Plaintiffs are targeting in this case are wholesale (jurisdictional) transactions.” In re Winter Storm Uri Natural Gas Litig. at *6. The Court applied the Oneok, Inc. v. Learjet, Inc., 575 U.S. 373 (2015) “direct target” test, concluding that whether the plaintiffs are targeting wholesale or retail transactions is the key inquiry. Id. at *7-8. The Court distinguished this Winter Storm Uri class action from Oneok—in Oneok, the challenged practices (alleged index manipulation) independently affected both wholesale and retail prices through “background marketplace conditions,” but here retail prices were affected only because non-party distributors paid increased wholesale prices. Id. at *6. As the Court put it: “Although Plaintiffs complain of the increase in retail prices, that increase was a direct result of the increase in wholesale prices.” Id.
Downstream Retail Effects Do Not Alter the Analysis. The Court was “not persuaded” by Plaintiffs’ argument that “the impact of these wholesale transactions on the retail market was so extensive during Winter Storm Uri that jurisdiction should fall to the States.” Id. at *5. The Court rejected this argument as it “rests on the ripple effects of wholesale transactions on downstream retail transactions.” Id. at *8.
General Applicability of State Statute Does Not Save Claims. The Court also rejected Plaintiffs’ argument that the general applicability of the KCPA should save their claims from preemption, holding that preemption analysis requires a claim-specific inquiry into the conduct targeted, not merely an examination of the breadth of the state statute. Id. “The problem for Plaintiffs is that the specific theory of their lawsuit improperly extends the KCPA into FERC’s jurisdiction.” Id. at *9. However, the Court noted that field preemption of Plaintiffs’ suit does not suggest that the NGA preempts the KCPA—or any other generally applicable state statute—in its entirety. Id.
Parallel Federal Power Act Precedent. The Court accepted Defendants’ interpretation of parallel Federal Power Act cases, including FERC v. Electric Power Supply Association (EPSA), 577 U.S. 260 (2016), and Hughes v. Talen Energy Marketing, 578 U.S. 150 (2016), reinforcing the breadth of federal preemption in the wholesale energy markets. Id. at *8.
The Court determined that it “need not address conflict preemption, because Defendants prevail on field preemption.” Id. at *4 n. 2.
Why This Matters
This decision is a significant victory for natural gas marketers and transporters facing claims arising from Winter Storm Uri, or future weather events. This litigation—which follows attorney general investigations in Texas, Oklahoma, and Kansas—exemplifies the more aggressive energy enforcement playbook in play at the state level in the U.S. today. But it also supports the contention that wholesale power and gas market prices during winter events are subject to federal law rather than scrutiny under state laws.
The Tenth Circuit’s opinion reinforces that the NGA’s comprehensive federal regulatory scheme over interstate wholesale natural gas sales provides a robust preemption defense when plaintiffs’ claims directly target wholesale transactions, even when those transactions had downstream effects on retail consumers. The decision also clarifies the application of the Oneok direct-target test: where the challenged conduct consists solely of interstate wholesale transactions, the mere fact that those transactions had ripple effects on retail prices is insufficient to escape NGA field preemption.
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