George E. Warren LLC v. Colonial Pipeline Co

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 20-3569
__________________
GEORGE E. WARREN LLC,
Appellant
v.
COLONIAL PIPELINE CO;
POWDER SPRINGS LOGISTICS LLC
Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil Action No. 2-17-cv-01205)
District Judge: Honorable Kevin McNulty
Argued on September 24, 2021
Before: RESTREPO, BIBAS and ROTH, Circuit Judges
(Opinion filed: October 5, 2022)

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E. Danya Perry [ARGUED]
Perry Guha LLP
1740 Broadway
New York, New York 10019
Andrew B. Kratenstein
McDermott Will & Emery
One Vanderbilt Avenue
New York, New York 10017
Counsel for Appellant George E.
Warren, LLC
Jennifer Quinn-Barabanov [ARGUED]
Shaun M. Boedicker
Mark C. Savignac
Steptoe & Johnson LLP
1330 Connecticut Ave., N.W.
Washington DC 20036
Counsel for Appellee Colonial
Pipeline Company
Robert M. Palumbos [ARGUED]
James H. Steigerwald
Leah A. Mintz
Duane Morris LLP
30 South 17th Street
Philadelphia, PA 19103

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Lindsay A. Brown
Duane Morris LLP
1940 Route 70 East
Suite 100
Cherry Hill, NJ 08003
Counsel for Appellee Powder
Springs Logistics, LLC
OPINION OF THE COURT
ROTH, Circuit Judge:
This case is about who will have the opportunity to
maximize profits by blending cheaper blendstock, like butane,
into gasoline. George E. Warren LLC is a shipper and blender
of gasoline products that ships its gasoline on the pipeline
owned and operated by Colonial Pipeline Company. The
shipment terms are governed by a tariff approved by the
Federal Energy Regulation Commission (FERC). The tariff
defines several grades of gasoline by specifying ranges for
various characteristics. The parties do not dispute that Warren
consistently received on-specification gasoline from Colonial
that fully complied with the FERC-approved tariff. Instead,
Warren’s grievance concerns the purportedly reduced blend
margin in the gasoline that it received after shipping it through
Colonial’s pipeline.

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Warren sued Colonial and Powder Springs Logistics,
LLC, under the Carmack Amendment1 for loss resulting from
the blending of the gasoline. The District Court found that the
filed-rate doctrine precluded Warren’s claims against Colonial
and Powder Springs. We will affirm.
I.
This appeal centers on whether Warren is entitled to a
certain “blend margin” in the gasoline that Colonial transports.
Colonial operates an interstate pipeline that transports gasoline
and other petroleum products. Warren is a shipper that tenders
gasoline products to Colonial for shipment on Colonial’s
pipeline from Texas to New Jersey, where Warren owns and
manages a gasoline-blending operation. Colonial, as a
common carrier, does not own the products; rather, it simply
transports them. The rates, terms, and conditions for the
transportation services are specified in the tariffs that Colonial
files with FERC and that FERC approves.
The tariff recognizes that the gasoline batches Colonial
transports for Warren are fungible, so the tariff allows Colonial
to comingle gasoline from many shippers during transport.
Still, the tariff requires Colonial to deliver gasoline that meets
certain criteria—even though the gasoline received at delivery
need not consist of exactly the same molecules that Colonial
received from shippers. In short, the tariff requires Colonial to
deliver gasoline of the same volume and grade as the gasoline
that was first entrusted to it.
1 49 U.S.C. § 15906.

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The tariff also requires Colonial to deliver gasoline that
is “on specification”—meaning gasoline having
“characteristics that [influence] the gasoline’s combustion
performance, such as the gasoline’s octane rating and
distillation value, and its environmental impact, such as its
volatility, which is measured in terms of its Reid Vapor
Pressure[.]”2 Relevant here, the tariff does not state whether
“on specification” gasoline includes any “blend margin.”3
Gasoline blending is the process of adding different
types of gasoline—or “blendstocks”—to a grade of gasoline to
create more gasoline that still satisfies the specifications of the
tariff.4 The amount of blendstocks that can be added to
gasoline while staying “on specification” depends on the
amount of “blend margin” in the gasoline.5
The purpose of blending gasolines is to maximize
profitability. By blending cheaper gasolines with more
expensive ones, the blender can increase the amount of “on
specification” gasoline that it can sell and therefore from which
it may profit. For example, Warren regularly blends cheaper
gasolines with more expensive ones to increase the amount of
on-specification gasoline that it can sell, thus, increasing its
profit margin.
Blending blendstocks into gasoline flowing through a
pipeline is called “in-line blending.”6 In May 2016, FERC
2 App. 13–14 (internal quotation marks and citations omitted).
3 App. 16.
4 App. 14.
5 App. 15.
6 App. 15.

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approved a modification to the tariff that would treat gasoline
generated in the pipeline through in-line blending consistently
with the gasoline being transported. FERC concluded that the
regulation of in-line blending was outside its jurisdiction.
Colonial decided that it, too, could reap the benefits of
blending. So Colonial and Magellan Midstream Partners L.P.
entered a joint venture and created Powder Springs. Powder
Springs exists to blend butane into the product traveling
through Colonial’s pipeline. After this change to the tariff,
Powder Springs began in-line blending, which increased the
volume of on-specification gasoline. Powder Springs now
sells the excess on-specification gasoline that it creates by in-
line blending.
To reiterate, the parties do not dispute that Warren
consistently received on-specification gasoline from Colonial.
That is, Colonial has always given Warren gasoline that fully
complied with the relevant tariff. Warren claims, however,
that the gasoline that it receives from Colonial includes limited
blend margin. According to Warren, the limited blend margin
in the gasoline injures Warren because Colonial’s in-line
blending diminishes Warren’s own ability to blend cheaper
blendstocks into the gasoline, which Warren has been doing
for years. In other words, Warren wants Colonial to stop in-
line blending so that it can optimize its own profitability by
blending cheaper blendstocks itself.
So Warren sued Colonial and Powder Springs for loss
of profits caused by the diluting of the gasoline product’s blend
margin. As for Powder Springs, Warren alleged state-law
claims, including conversion, unjust enrichment, and tortious
interference. The parties moved for summary judgment. The

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District Court granted summary judgment to Colonial and
Powder Springs; it found that the filed-rate doctrine precluded
Warren’s claims. Warren appealed.
II.7
“The filed-rate doctrine is a set of rules that have
evolved over time but revolve around the notion that . . . utility
filings with the regulatory agency prevail over . . . other claims
seeking different rates or terms than those reflected in the
filings with the agency.”8 The filed-rate doctrine advances two
key purposes: “nondiscrimination” and “nonjusticiability.”9
The nondiscrimination goal is to “prevent[ ] carriers from
engaging in price discrimination as between ratepayers.”10 The
principle recognizes that in the doctrine’s absence, “victorious
7 We have subject-matter jurisdiction under 28 U.S.C. § 1291.
We review a district court’s grant of summary judgment de
novo, applying the same standard the district court would use.
Matheis v. CSL Plasma, Inc., 936 F.3d 171, 176 (3d Cir. 2019);
Tundo v. Cnty. of Passaic, 923 F.3d 283, 286–87 (3d Cir.
2019). Summary judgment is appropriate only if the movant
shows that there is no genuine dispute about any material fact
and the movant is entitled to judgment as a matter of law. See
FED. R. CIV. P. 56(a).
8 Breiding v. Eversource Energy, 939 F.3d 47, 52 (1st Cir.
2019) (omissions in original) (quotation marks omitted)
(quoting Town of Norwood v. FERC, 217 F.3d 24, 28 (1st Cir.
2000)).
9 McCray v. Fid. Nat’l Title Ins. Co., 682 F.3d 229, 241–42 (3d
Cir. 2012) (quotations and citation omitted).
10 Id. at 241.

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plaintiffs would wind up paying less than non-suing
ratepayers.”11
By contrast, the nonjusticiability principle involves the
federal courts’ respect for a regulatory agency’s institutional
competence. As we explained, “(1) legislatively appointed
regulatory bodies have institutional competence to address
rate-making issues; (2) courts lack the competence to set . . .
rates; and (3) the interference of courts in the rate-making
process would subvert the authority of rate-setting bodies and
undermine the regulatory regime.”12 Thus, we have noted that
the doctrine has an “expansive reach.”13
When an agency—like FERC—defines tariffs, the
filed-rate doctrine instructs that tariffs “cannot be varied or
enlarged by either contract or tort of the carrier. And they are
not affected by the tort of a third party.”14 “[T]he doctrine is
applied strictly to prevent a plaintiff from bringing a cause of
action even in the face of apparent inequities whenever either
the nondiscrimination strand or the nonjusticiability strand
11 Id. at 242 (quoting Wegoland Ltd. v. NYNEX Corp., 27 F.3d
17, 21 (2d Cir. 1994)).
12 Id. (alteration in original) (citation omitted).
13 See, e.g., AT&T Corp. v. JMC Telecom, LLC, 470 F.3d 525,
532 n.10 (3d Cir. 2006); see also Wah Chang v. Duke Energy
Trading & Mktg., LLC, 507 F.3d 1222, 1225 (9th Cir. 2007)
(noting that the filed-rate doctrine is a “fortification against
direct attack” that “is impenetrable”).
14 Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476
U.S. 409, 416–17 (1986) (citation omitted).

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underlying the doctrine is implicated by the cause of action the
plaintiff seeks to pursue.”15
III.
We will affirm the District Court’s grant of summary
judgment because Warren’s request seeks an enlargement of
its rights under the FERC-approved tariff and therefore
violates the filed-rate doctrine. Specifically, we conclude that
Warren’s claims against Colonial are barred by the filed-rate
doctrine’s nondiscrimination principle. Warren’s appeal turns
on whether it is entitled to a particular blend margin under the
tariff. The tariff does not entitle Warren to any blend margin.
Instead, the tariff entitles Warren only to on-specification
gasoline of the same grade and volume as it first entrusted to
Colonial. No one disputes that Warren has always received on-
specification gasoline from Colonial that complied with the
relevant tariffs. Thus, Warren’s request for a specific amount
of blend margin is a request for an enlargement of its rights
under the tariff. That is, Warren seeks treatment under the
tariff that differs from how Colonial could treat any other
gasoline shipper.
Although Warren contends that awarding it damages
would not lead to discrimination because it “would ‘still pay
the filed rate’ for the transportation services it receives,”16
court-awarded damages would effectively amount to an after-
the-fact discount or a rebate from the FERC-approved tariff
15 Marcus v. AT&T Corp., 138 F.3d 46, 59 (2d Cir. 1998)
(citing H.J. Inc. v. Nw. Bell Tel. Co., 954 F.2d 485, 489 (8th
Cir. 1992)).
16 Appellant Br. at 43.

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rate. In turn, that would permit Warren to pay different rates
for the same service as similarly situated shippers who did not
sue.17 That result is impermissible under the filed-rate
doctrine.
In addition, Warren asserts that Colonial’s decision to
reduce blend margin by using in-line blending falls outside
FERC’s regulatory oversight. Thus, it is “non-jurisdictional”—
it falls beyond the scope of the tariff. To be sure, Colonial
concedes that in-line blending is outside FERC’s jurisdiction.
Yet that is irrelevant. As the District Court correctly
concluded, the nature of the defendants’ conduct, i.e., the in-
line blending, does not control whether the filed-rate doctrine
applies.18 Rather, the doctrine applies if either the
nondiscrimination or nonjusticiability strand is implicated.
The tariff is clear that so long as a shipper receives gasoline
that falls within the specifications defined by the tariff—even
if some of the gasoline’s attributes differ from the gasoline first
entrusted to Colonial—then the tariff’s requirements are met.
To recognize that Warren has a right to receive gasoline with a
high blend margin to allow for downstream blending amounts
to the creation of a right not contemplated by the FERC-
approved tariff. Accepting Warren’s argument would
undermine the filed-rate doctrine’s nondiscrimination
principle. For that reason, we must reject it. We will therefore
affirm the judgment of the District Court.
17 See Marcus, 138 F. 3d at 60 (“Plaintiffs who were able to
prove their claims and recover damages would effectively
receive a discounted rate for phone service over other AT&T
customers.”).
18 See Marcus, 138 F.3d at 58.

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Although the District Court declined to address whether
Warren’s claims are also barred under the filed-rate doctrine’s
nonjusticiability principle, we recognize that Warren’s claims
run afoul of that filed-rate-doctrine principle too. The
nonjusticiability strand arises from the federal courts’ respect
for Congress’s decision to entrust the regulation of certain
common carriers to agencies with institutional competence—
here, FERC. The nonjusticiability strand “prevents more than
judicial rate-setting; it precludes any judicial action which
undermines agency rate-making authority.” 19 As we have
said, the “courts are ill-equipped to engage in the rate making
process.”20 As for Warren’s claims, we find persuasive the
United States Court of Appeals for the First Circuit’s decision
in Breiding v. Eversource Energy.21
In Breiding, the court rejected a challenge by retail
electricity customers that alleged that defendants took
advantage of the applicable pipeline tariff by “strategically
reserv[ing] excess capacity along the Algonquin Gas pipeline
without using or reselling it,” which ultimately caused spikes
in natural gas prices.22 This in turn “resulted in higher retail
electricity rates.”23 The court concluded that the filed-rate
doctrine barred plaintiffs’ claims because the “tariff sa[id]
nothing that would require [defendants] to release excess
19 Hill v. BellSouth Telecomms., Inc., 364 F.3d 1308, 1317
(11th Cir. 2004) (quoting Marcus, 138 F.3d at 61).
20 Leo v. Nationstar Mortg. LLC, 964 F.3d 213, 215 (3d Cir.
2020) (quoting In re N.J. Title Ins. Litig., 683 F.3d 451, 457
(3d Cir. 2012)).
21 939 F.3d 47 (1st Cir. 2019).
22 Id. at 49.
23 Id.

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capacity along the Algonquin pipeline to other users.”24 Thus,
the court held that, because the defendants did not engage “in
any conduct other than that allowed by Algonquin’s detailed
and reasonably comprehensive FERC-approved tariff”25 and
because FERC expressly declined to require direct purchasers
to release excess capacity, “[t]he filed-rate doctrine prohibits
[the court] from questioning that reasoned judgment.”26
Similarly, Warren’s claims would violate the
nonjusticiability principle because the claims seek an
impermissible judicial interference in the rate-making process.
Warren is asking us to compensate it for a sufficient blend
margin even though FERC did not write any blend margin
requirement into the tariff’s specifications. That would
undermine FERC’s authority. Likewise, granting an injunction
stopping defendants from in-line blending would effectively
overrule or, at the very least, improperly limit FERC’s
authority to set whatever specifications it sees fit.
IV.
In addition to granting summary judgment to Colonial,
the District Court also granted summary judgment to Powder
Springs. It found that Warren’s state-law tort claims against
Powder Springs amounted to a back-door way for Warren to
circumvent the filed-rate doctrine. We will also affirm the
District Court’s order granting summary judgment to Powder
Springs. The Supreme Court indicated in Square D Co. v.
24 Id. at 54 (emphasis in original).
25 Id.
26 Id. at 54–55.

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Niagara Frontier Tariff Bureau, Inc.27 that tort claims against
a third party are precluded by the filed-rate doctrine when those
claims attempt to enlarge a party’s rights under a tariff.
Warren’s claims against Powder Springs are exactly that: a
collateral attack on the amount of blend margin it receives from
Colonial. Because the tariff does not guarantee Warren any
blend margin, the state-law-tort claims amount to a challenge
to Warren’s rights under the tariff. Thus, the filed-rate doctrine
precludes Warren’s claims against Powder Springs.
V.
To the extent Warren has been wronged by Colonial’s
in-line blending, that wrong is not one that we can remedy.
Warren’s real grievance is with the specifications included in
the tariff. If the tariff had regulated blend margin, Warren’s
dispute would not have arisen. Congress empowered FERC to
regulate common carriers like Colonial and to set the rates in
tariffs. If the tariff at issue here needs refinement, FERC
should decide that—not us—as it is outside our authority and
expertise.
For the above reasons, the District Court’s order
granting summary judgment to Colonial and Powder Springs
will be affirmed.
27 476 U.S. at 416–17.

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