PROSECUTORIAL DEFERENCE VERSUS DUE PROCESS: THE FEDERAL POWER ACT AND PERPETUAL STATUTES OF LIMITATIONS

Although the anti-manipulation provisions of the Federal Power Act and the Federal Energy Regulatory Commission's adoption of additional administrative processes further complicate an already complex penalty assessment, the applicable statute of limitations does not. The basic legal standard for when a claim accrues for purposes of the statute of limitations, pursuant to 28 U.S.C. § 2462, has remained unchanged. As the Commission acknowledged when it adopted the anti-manipulation rule, the penalty action must "be commenced within five years of the date of the [underlying] fraudulent or deceptive conduct."In Gabelli v. SEC, the Supreme Court held that claims subject to the fiveyear statute of limitations under 28 U.S.C § 2462 accrue at the time of the fraudulent or manipulative conduct giving rise to the penalty, because statutes of limitations should not persist in perpetuity subject to the whims of law enforcement. Nonetheless, FÉRC continues to advocate an interpretation of the statute of limitations under the Federal Power Act's anti-manipulation provision (to which § 2462 applies) that would grant virtually limitless authority to the government to extend the limitations period by delaying its internal investigative penalty assessment process.Three federal district courts, and now a federal appellate court, have confronted these issues and adopted differing interpretations of the applicable statute. Two district courts and an appellate court would grant significant deference to FÉRC, either suspending the statute of limitations until FÉRC assesses a penalty or restarting the clock after the penalty assessment is issued. This article outlines a different approach, embraced by another federal district court in FERC v. Barclays Bank PLC and more consistent with Supreme Court precedent, applying the strong statutory and policy bases underlying Gabelli to proceedings under the anti-manipulation provisions of the Federal Power Act.