No Article III Standing for a Preliminary Injunction Against State Utility Commissioners Who Do Not Enforce a State Transmission ROFR

1. Introduction

This appeal arises from Indiana’s statutory “right of first refusal” (ROFR) for certain new interstate electric transmission projects. Indiana Code § 8-1-38-9(a)(1) gives an “incumbent electric transmission owner” the right to build and operate a transmission facility approved through a regional transmission organization planning process (here, MISO) when the facility connects to the incumbent’s existing facilities.

Plaintiffs (LSP Transmission Holdings II, LLC and affiliates) want to compete to build MISO-approved projects in Indiana and argue that Indiana’s ROFR discriminates against interstate commerce in violation of the dormant Commerce Clause. They sued only the Chair and Commissioners of the Indiana Utility Regulatory Commission (IURC) and obtained a preliminary injunction barring the Commissioners from “enforcing” the ROFR statute.

The central appellate issue was not the dormant Commerce Clause merits. It was whether plaintiffs had Article III standing to obtain a preliminary injunction against these defendants—specifically, whether an injunction against the IURC Commissioners was likely to redress plaintiffs’ injury when the entity actually applying the ROFR in the project-allocation process is MISO under a FERC-approved tariff.

2. Summary of the Opinion

The Seventh Circuit (Hamilton, J.) vacated the preliminary injunction for lack of standing, holding that plaintiffs failed to show redressability. The court concluded:

• The IURC Commissioners have no relevant enforcement role under Ind. Code § 8-1-38-9 beyond receiving notices and information filings. Enjoining them from “enforcing” the statute does not stop MISO from applying Indiana’s ROFR when assigning projects.
• Plaintiffs’ theory—that MISO would treat a preliminary injunction against the IURC as rendering the statute “inapplicable” under the MISO tariff—failed once MISO made clear it would not behave that way and, as a non-party, was not bound.
• The dissent’s alternative redressability theory (relying on the IURC’s general enforcement authority under Ind. Code § 8-1-2-115 to block project construction) was not the injunction issued, was not briefed, and would invite a federal-state regulatory conflict implicating FERC’s core jurisdiction.

The court emphasized that a preliminary injunction is not a final adjudication on constitutionality and ordinarily does not change the “applicability” of a law to non-parties.

3. Analysis

3.1 Precedents Cited

A. Standing, redressability, and third-party causation

• TransUnion LLC v. Ramirez and Lujan v. Defenders of Wildlife supplied the canonical three-part standing test (injury, traceability, redressability) and framed redressability as essential for injunctive relief.
• Friends of the Earth, Inc. v. Laidlaw Env't Servs. (TOC), Inc. was used for the requirement that standing must be shown separately for each form of relief—here, specifically for a preliminary injunction.
• Allen v. Wright and Simon v. Eastern Kentucky Welfare Rights Org. anchored the rule that standing is difficult when relief depends on “the independent action of some third party not before the court.” This was decisive because MISO (a non-party) was the actor whose behavior needed to change to redress plaintiffs’ competitive injury.
• California v. Texas did heavy lifting in two ways: (i) as a caution against adopting unbriefed, “merits-like” standing theories; and (ii) as a rejection of attempts to bootstrap standing by targeting other statutory provisions when the alleged injury is tied to a different provision. The majority analogized plaintiffs’ predicament to the ACA plaintiffs’ inability to trace/redress injury to an unenforceable (or unenforced) provision.
• Clapper v. Amnesty International USA and Department of Commerce v. New York were invoked (via California v. Texas) for the heightened difficulty of proving predictable third-party reactions and the need for specific facts beyond speculation at later stages.
• Murthy v. Missouri (quoted and discussed, including by the dissent) reinforced the “bedrock” third-party independence limitation, though the majority used it to underscore why the injunction could not bind or reliably move MISO.
• The majority cited Blum v. Yaretsky, Davis v. Colerain Township, Ohio, and National Federation of the Blind of Texas, Inc. v. Abbott to reject standing to challenge “other parts of the law” not causing the injury, and to reinforce traceability limits.

B. Preliminary injunctions as non-final merits determinations

• Lackey v. Stinnie and Winter v. Natural Res. Def. Council, Inc. were used to stress that preliminary injunctions assess only likelihood of success, not the final legality of a statute.
• Sierra On-Line, Inc. v. Phoenix Software, Inc., Lacy v. Cook County, Michigan v. U.S. Army Corps of Eng'rs, and Monroe v. Bowman supported the point that preliminary injunction findings remain subject to change and should not be treated as a final adjudication.

C. Limits of injunctions as to non-parties

• Driftless Area Land Conservancy v. Valcq was cited for the distinction between enjoining officials and “voiding” a law; an injunction runs against people, while the law remains on the books.
• United States v. Kirschenbaum and Regal Knitwear Co. v. NLRB (and the reference to Fed. R. Civ. P. 65(d)) reinforced that non-parties generally cannot be enjoined unless acting in concert with the enjoined party—something plaintiffs did not show as to MISO.

D. Electricity-regulation backdrop and ROFR context

• New York v. FERC, Public Utilities Comm'n of Rhode Island v. Attleboro Steam & Elec. Co., and Arkansas Elec. Co-operative Corp. v. Arkansas Pub. Serv. Comm'n explained the historic “regulatory gap” and Congress’s response in the Federal Power Act (FPA).
• Morgan Stanley Capital Group Inc. v. Public Utility District No. 1 was used for tariff concepts and RTO/ISO nondiscrimination framing.
• The Seventh Circuit’s own Illinois Commerce Comm'n v. FERC and the D.C. Circuit’s Entergy Arkansas, LLC v. FERC supported the description of RTOs/ISOs, tariffs, and FERC review authority.
• MISO Transmission Owners v. FERC, Transmission Planning & Cost Allocation by Transmission Owning & Operating Public Utilities (Order 1000), and South Carolina Pub. Serv. Auth. v. FERC framed the post-Order 1000 world: federal ROFRs removed, but state/local ROFRs expressly not preempted by Order 1000, and MISO’s tariff amended to incorporate “Applicable Laws and Regulations” granting ROFRs.

E. Analogous and contrasting ROFR litigation in other circuits (context, not holding)

• LSP Transmission Holdings, LLC v. Sieben (8th Cir.) upheld a Minnesota ROFR statute against a dormant Commerce Clause challenge.
• NextEra Energy Capital Holdings, Inc. v. Lake (5th Cir.) allowed a dormant Commerce Clause challenge to proceed (reversing dismissal), and NextEra Energy Capital Holdings, Inc. v. Jackson (W.D. Tex. on remand) later granted judgment on the pleadings for plaintiffs.
• The Seventh Circuit did not reach the merits here, but the split underscores why procedural gatekeeping (standing/redressability) can be outcome-determinative.

F. FERC-related and “checkpoint” reasoning

• The majority’s “federal checkpoints” discussion drew on the FPA’s jurisdictional grant and FERC’s tariff approval process, emphasizing that MISO’s tariff—once approved—has the “effect of federal law,” and that there are established review pathways under 16 U.S.C. §§ 824e(a) and 825l(b).
• The opinion also cited ITC Midwest, LLC, 185 FERC ¶ 61,123 and LS Power Midcontinent, LLC v. State to illustrate that even when a state-court preliminary injunction exists, FERC may still treat a ROFR statute as operative “unless and until” it is definitively invalidated.

G. Dissent’s standing and merits authorities (not adopted by the majority)

• The dissent relied on Spokeo, Inc. v. Robins, Ne. Fla. Chapter of Associated Gen. Contractors of Am. v. City of Jacksonville, All. for Clean Coal v. Miller, and Whole Woman's Health v. Jackson to argue that inability to compete is injury-in-fact and that general enforcement authority can support suit against state officials.
• On severability, the dissent invoked Seila L. LLC v. CFPB, NFIB v. Sebelius, and United States v. Booker for the proposition that severability is remedial/merits-stage doctrine and should not drive standing analysis.
• On justiciability and proper defendants, the dissent cited Haaland v. Brackeen and academic authority (Baude & Bray, “Proper Parties, Proper Relief”) to emphasize that relief must run against an entity that can redress the harm.

3.2 Legal Reasoning

The majority’s holding is narrowly procedural but practically consequential: redressability failed because the named defendants could not deliver the requested market-opening effect. The opinion’s reasoning unfolds in three connected moves.

(1) Parsing the challenged statute to identify who “enforces” it

The court read Ind. Code § 8-1-38-9 as granting incumbents a ROFR while assigning the IURC a limited administrative role: incumbents must send notices and basic project/rate information to the IURC. Nothing in the statute, in the majority’s view, empowers the IURC to police the ROFR, control MISO’s assignments, or stop construction flowing from a MISO award.

(2) Matching the remedy to the causal chain

Plaintiffs’ feared injury was exclusion from competition for MISO-planned projects—an injury that would be realized when MISO assigns projects to incumbents under its FERC-approved tariff. Because the injunction ran only against the IURC Commissioners, and because MISO is a non-party not acting in concert with the IURC, the order could not compel the needed behavioral change. Standing doctrine therefore barred relief: the court treated the case as an Allen/Simon scenario where relief depended on a third party not before the court.

(3) Rejecting “preliminary injunction = statute inapplicable” as too speculative and legally mistaken

The district court and plaintiffs assumed MISO would treat the preliminary injunction as making the Indiana ROFR law not “Applicable” under MISO’s tariff. On appeal, MISO clarified it did not view itself as bound and did not treat a preliminary injunction against the IURC as a final determination of the statute’s validity. The Seventh Circuit accepted this as both legally correct (non-parties are not bound) and factually dispositive for redressability.

The court’s response to the dissent’s alternative theory

The dissent treated Ind. Code § 8-1-2-115 (IURC’s general authority to “enforce … all … laws[] relating to public utilities”) as enough to make the Commissioners proper defendants capable of redress. The majority declined that approach as unbriefed and inconsistent with plaintiffs’ theory of harm (harm from HEA 1420 itself, not from the general utility code), and warned it could conscript the IURC into blocking MISO/FERC-sanctioned projects—potentially manufacturing a federal-state conflict in FERC’s jurisdictional “heartland.”

3.3 Impact

Although the Seventh Circuit did not reach the dormant Commerce Clause merits, the decision materially reshapes litigation strategy around state transmission ROFRs in RTO territories:

• Proper-defendant discipline: Plaintiffs seeking emergency relief must sue defendants who can actually change the market outcome. Where an RTO/ISO’s FERC-approved tariff is the mechanism implementing a state ROFR, an injunction against a state commission with no operative enforcement role may fail for lack of standing.
• Limits of “indirect compliance” theories: Standing based on the prediction that a sophisticated non-party (like MISO) will voluntarily treat a preliminary injunction as nullifying a statute is unstable—especially once the non-party disavows that interpretation.
• Preliminary vs. permanent relief matters: The court emphasized that preliminary injunctions do not conclusively resolve statutory validity and typically do not change a law’s applicability to non-parties. This may narrow the utility of preliminary injunctions in regulated-network markets governed by tariffs and multi-actor approval chains.
• Channeling into FERC processes: The opinion highlights that challenges to practices “affecting … rates” and tariff implementation can be raised before FERC, with appellate review routes under 16 U.S.C. § 825l(b). Practically, litigants may be pushed toward tariff/implementation disputes at FERC, even when their ultimate argument is constitutional.
• Cross-circuit ROFR merits split persists: Because the Seventh Circuit resolved the case on standing, it left intact the developing, conflicting merits landscape reflected by LSP Transmission Holdings, LLC v. Sieben and NextEra Energy Capital Holdings, Inc. v. Lake/NextEra Energy Capital Holdings, Inc. v. Jackson.

4. Complex Concepts Simplified

• Dormant Commerce Clause: An implied constitutional doctrine preventing states from discriminating against or unduly burdening interstate commerce, even when Congress has not passed a law on the subject.
• Standing (Article III): A plaintiff must show (1) a concrete injury, (2) traceable to the defendant, (3) likely to be redressed by the court’s order. Here, the fight was over redressability.
• Redressability: A court order must likely fix (or prevent) the injury. If the needed change depends on a third party not before the court, standing becomes “substantially more difficult” to prove.
• Preliminary injunction: A temporary order issued early in a case based on likelihood of success and equities; it does not finally declare a statute unconstitutional. The Seventh Circuit stressed that a preliminary injunction normally cannot be treated as rendering a statute void or “inapplicable” to everyone.
• RTO/ISO, MISO, and tariffs: MISO is a non-governmental ISO operating an RTO. Its FERC-approved tariff governs planning and assignment practices. A FERC-approved tariff can have the practical force of federal law, and disputes about its application often travel through FERC.
• ROFR (Right of First Refusal): A priority right allowing incumbents to build certain projects before non-incumbents can compete. Order 1000 removed federal ROFRs in regional plans but allowed state/local ROFRs to remain.

5. Conclusion

LSP Transmission Holdings II, LLC v. Huston establishes a pointed, practice-shaping rule for constitutional challenges to state transmission ROFR regimes in RTO territories: a preliminary injunction against state utility commissioners will be vacated for lack of Article III standing when those officials lack a meaningful enforcement role and the injury turns on project assignments made by a non-party RTO/ISO operating under a FERC-approved tariff.

The decision is a reminder that, in heavily networked regulatory environments, plaintiffs must align defendants and remedies with the real operational lever of injury. Otherwise, even substantial constitutional questions—here, a dormant Commerce Clause challenge amid a live circuit split—may go unanswered at the threshold.