LSP Transmission Holdings, LLC v. Katie Sieben, et al.

At the behest of electric transmission companies with an existing physical presence in the state, the Minnesota legislature granted those in-state incumbents a right of first refusal to construct any new transmission lines in Minnesota that connect to the interstate grid. That law not only expressly discriminates in favor of companies with an in-state presence, but does so with respect to a distinctly interstate market. Indeed, the costs of Minnesota’s protectionism are not even borne exclusively by Minnesota residents, but are spread to customers in 14 other states. The resulting facial discrimination in an interstate market violates even the narrowest conception of the Commerce Clause. The court below nevertheless upheld the law as nondiscriminatory because the law benefitted in-state incumbents without regard to whether they were headquartered or chartered elsewhere and involved police-power regulation of electricity markets. That decision conflicts with this Court’s precedent, decisions of other circuits, and any sensible construction of the Commerce Clause. The question presented is: Whether a state law that grants an express preference to entities with an existing in-state presence to build facilities serving a distinctly interstate market discriminates against interstate commerce, notwithstanding that a few of the preferred in-state incumbents are headquartered elsewhere.