Seventh Circuit: No Article III Standing for a Preliminary Injunction When State Utility Commissioners Do Not Enforce a State ROFR and Redress Depends on Nonparty MISO

1. Introduction

This appeal arises from a fast-moving challenge to Indiana’s 2023 “right of first refusal” (ROFR) statute for new interstate electricity transmission projects: Ind. Code § 8-1-38-9(a)(1) (2024). The plaintiffs—LSP Transmission Holdings II, LLC and affiliates—seek to compete to build and operate transmission facilities in Indiana that are planned and approved through the Midcontinent Independent System Operator (MISO), the region’s Independent System Operator (ISO) operating a Regional Transmission Organization (RTO).

Indiana’s ROFR grants “incumbent electric transmission owner[s]” a preference to construct certain MISO-approved projects that connect to the incumbent’s existing Indiana facilities. LSP contended that this preference violates the dormant Commerce Clause and sued only the Chair and Commissioners of the Indiana Utility Regulatory Commission (IURC), requesting a preliminary injunction against “enforcing” the ROFR. The district court granted that injunction.

On appeal, the Seventh Circuit did not reach the dormant Commerce Clause merits. Instead, it vacated the preliminary injunction for lack of Article III standing—specifically, lack of redressability—because the injunction ran only against IURC Commissioners who, as a matter of Indiana law and regulatory structure, had no enforcement responsibilities that could prevent LSP’s alleged injury.

2. Summary of the Opinion

Majority disposition

• Vacated the preliminary injunction and remanded.
• Held plaintiffs failed to establish standing for the preliminary injunction because the injunction was not reasonably likely to redress their feared injury.
• Found the IURC’s role under § 8-1-38-9 is essentially receipt of notices and information, not enforcement that affects MISO’s assignment of projects.
• Rejected the district court’s theory that enjoining IURC would likely cause MISO (a nonparty) to treat the Indiana ROFR as inapplicable.
• Declined to adopt the dissent’s alternative redressability theory—treating the injunction as effectively directing IURC to use other statutory powers to block construction—because it was unbriefed, inconsistent with the injunction’s text, and would risk a direct federal-state conflict implicating FERC’s jurisdiction.

Dissent’s position

• Would have affirmed standing and the preliminary injunction.
• Reasoned that IURC has broad authority to “enforce … all … laws[] relating to public utilities” under Ind. Code § 8-1-2-115 and thus can be enjoined from enforcing the ROFR.
• Would reach the merits and hold Indiana’s ROFR facially discriminates against interstate commerce, is not saved by General Motors Corp. v. Tracy, and is not clearly authorized by the Federal Power Act.

3. Analysis

3.1 Precedents Cited (and How They Shaped the Decision)

A. Standing and redressability framework

• TransUnion LLC v. Ramirez and Lujan v. Defenders of Wildlife supplied the canonical three-part standing test (injury-in-fact, traceability, redressability). The majority used these to emphasize that plaintiffs must show a remedy that is likely to redress the injury, not merely imaginable.
• Friends of the Earth, Inc. v. Laidlaw Env't Servs. (TOC), Inc. anchored the requirement that standing must be shown separately for each form of relief sought. That principle mattered because the appeal concerned only standing to obtain a preliminary injunction against particular defendants.
• Allen v. Wright and Simon v. Eastern Kentucky Welfare Rights Org. were central to the “independent third party” problem: when harm depends on the actions of a third party not before the court, redressability becomes difficult. The majority treated MISO as that third party for purposes of the injunction actually issued.
• Murthy v. Missouri was invoked (by both majority and dissent, in different ways) for the “bedrock principle” that federal courts cannot redress injuries that result from the independent action of a nonparty third party.
• Clapper v. Amnesty International USA and Department of Commerce v. New York (quoted via California v. Texas) underscored the Supreme Court’s reluctance to accept standing theories that depend on speculative predictions about independent actors’ responses to litigation.

B. Limits of preliminary injunctions as a redress mechanism

• Lackey v. Stinnie (2025) was used for the proposition that preliminary injunctions do not conclusively resolve disputes; they preserve positions pending final adjudication.
• Winter v. Natural Res. Def. Council, Inc. supplied the “likely to succeed on the merits” framework and reinforced that a preliminary injunction is based on likelihood, not final merits findings.
• Lacy v. Cook County, Michigan v. U.S. Army Corps of Eng'rs, and Monroe v. Bowman supported the majority’s doctrinal point: preliminary injunction findings are not conclusive and remain subject to change, making it harder to claim that a preliminary injunction against one entity renders a statute “inapplicable” to a different, nonparty entity.

C. Injunction scope and nonparty constraints

• Driftless Area Land Conservancy v. Valcq and United States v. Kirschenbaum (plus Regal Knitwear Co. v. NLRB) framed the remedial limit: injunctions operate on parties and those acting in concert under Rule 65(d), while the challenged law can remain “on the books.” This directly undercut the district court’s assumption that an injunction against IURC would bind or compel MISO’s conduct.

D. The “novel theory” dispute and merits-like standing maneuvers

• California v. Texas did double duty. First, it supported the majority’s caution against adopting an unbriefed, “merits-like” standing theory. Second, it supplied the majority’s traceability/redressability critique of the dissent’s approach: plaintiffs cannot challenge one provision (HEA 1420) and manufacture standing by seeking relief that effectively targets enforcement mechanisms found elsewhere, absent a demonstrated constitutional defect in those other provisions.
• Blum v. Yaretsky, Davis v. Colerain Township, Ohio, and National Federation of the Blind of Texas, Inc. v. Abbott reinforced that standing is not a license to litigate “other conduct of another kind” or other statutory pieces that did not cause the injury.
• Alaska Airlines, Inc. v. Brock and Regan v. Time, Inc. supported the majority’s severability/remedial restraint: courts should invalidate no more than necessary, which also supported the majority’s skepticism that general IURC powers could be repurposed to block MISO/FERC-approved projects as a way of “enforcing” a single challenged ROFR statute.

E. Federal power regulation background (context rather than holding)

• New York v. FERC, FPC v. Southern California Edison Co., and the historical discussion around Public Utilities Comm'n of Rhode Island v. Attleboro Steam & Elec. Co. (and its later abrogation by Arkansas Elec. Cooperative Corp. v. Arkansas Pub. Serv. Comm'n) provided the narrative of why FERC regulates interstate transmission and why RTO/ISO tariffs matter.
• MISO Transmission Owners v. FERC and Transmission Planning & Cost Allocation by Transmission Owning & Operating Public Utilities (Order 1000) supplied the ROFR backdrop: federal ROFRs were removed from tariffs, but Order 1000 stated it did not “limit, preempt, or otherwise affect” state siting/construction laws—an opening many states used to enact state ROFRs.
• The majority also cited FERC materials and related decisions to show (i) MISO’s role is tariff-governed and federally supervised, and (ii) there are established administrative/judicial review paths under 16 U.S.C. § 824e(a) and 16 U.S.C. § 825l(b).

3.2 Legal Reasoning

A. What, exactly, was the injury and what relief was requested?

LSP’s practical injury was exclusion from a competitive process to build certain MISO-approved projects in Indiana. But the suit sought only an injunction against “the Chair and Commissioners” of IURC, enjoining them from “enforcing” Ind. Code § 8-1-38-9. The majority treated the identity of the defendant and the mechanics of the injury as dispositive: LSP’s feared harm would occur via MISO’s assignment practices under its FERC-approved tariff, not via IURC enforcement.

B. Why the majority found no redressability

1. IURC had no relevant enforcement role under the challenged statute. The court read § 8-1-38-9 as requiring incumbents to provide notice and cost/rate information to IURC, but not empowering IURC to police, allocate, approve, or block ROFR-based project assignments. This made an injunction against IURC ineffective to stop the alleged harm.
2. MISO is the operative actor and is a nonparty not bound by the injunction. Under Rule 65(d) principles and Seventh Circuit precedent, an injunction binds parties and those acting in concert. MISO was not a party, and plaintiffs did not argue it acted in concert with IURC. MISO’s amicus brief stated it would not treat the preliminary injunction as changing whether HEA 1420 was an “Applicable Law” under its tariff.
3. A preliminary injunction does not “void” a law for third parties. The majority emphasized the interim nature of preliminary relief (Lackey v. Stinnie; Lacy v. Cook County), rejecting the district court’s view that enjoining IURC would make HEA 1420 inapplicable to MISO’s tariff compliance decisions.

C. Why the majority rejected the dissent’s alternative standing theory

The dissent relied on IURC’s general enforcement statute, Ind. Code § 8-1-2-115, arguing IURC could be enjoined from enforcing “all laws relating to public utilities,” including the ROFR, and could therefore prevent incumbents from constructing/operating ROFR-awarded projects.

The majority refused that approach for three principal reasons:

• It was not the injunction issued, not the theory argued, and not the theory briefed. The majority invoked California v. Texas (Thomas concurrence) to caution against resolving standing via an unpresented, merits-like theory.
• It would risk forcing a direct federal-state regulatory conflict. Interpreting the injunction as requiring IURC to block MISO-assigned (and implicitly FERC-governed) interstate transmission projects would place state regulators in conflict with federal jurisdiction and tariff-based planning/assignment.
• It created traceability/severability problems. Drawing on California v. Texas, the majority reasoned that plaintiffs challenged HEA 1420 specifically; they did not allege the general public utility enforcement provisions were unconstitutional. Using those other provisions as the operative target would not be “fairly traceable” to enforcement of HEA 1420 itself.

D. The practical consequence: plaintiffs’ chosen defendants did not match the causal chain

The majority repeatedly returned to a single point: the requested preliminary relief could not predictably change MISO’s behavior. Because standing for injunctive relief requires likely redress, and because MISO stated it would not treat the injunction as controlling, the plaintiffs’ redressability showing failed.

3.3 Impact

A. Litigation strategy in ROFR challenges (especially in MISO/FERC regions)

• Defendant selection becomes central. Plaintiffs challenging state ROFRs in RTO/ISO regions must match defendants to the entity whose conduct actually causes the injury (often the RTO/ISO acting under a FERC-approved tariff).
• “Enjoin the state commission” may be insufficient where the commission is not the implementing actor. Even if the challenged statute is state law, the implementation mechanism may be private (MISO) and tariff-based.

B. Standing doctrine: a cautionary application of redressability in regulated-industry settings

• The opinion operationalizes the Supreme Court’s skepticism toward speculative third-party reaction theories (California v. Texas; Clapper v. Amnesty International USA).
• It also reinforces that a preliminary injunction’s non-final character makes it harder to argue that a law becomes “inapplicable” to third parties.

C. Federal administrative pathways are highlighted (implicitly channeling disputes toward FERC)

The majority emphasized that plaintiffs can raise issues through FERC processes and then obtain Article III review under 16 U.S.C. § 825l(b). While not a holding that FERC is exclusive, the opinion signals judicial unease with using state-commission-focused preliminary injunctions to indirectly reshape tariff-driven RTO/ISO decisions.

D. Relationship to circuit splits on ROFR merits

The opinion acknowledges, but does not resolve, existing merit disagreement across circuits on dormant Commerce Clause challenges to state ROFRs: LSP Transmission Holdings, LLC v. Sieben (8th Cir.) and NextEra Energy Capital Holdings, Inc. v. Lake (5th Cir.). By deciding on standing for a preliminary injunction, the Seventh Circuit avoided contributing to the substantive split—while significantly influencing how such cases must be framed procedurally in the Seventh Circuit.

4. Complex Concepts Simplified

Dormant Commerce Clause

The dormant Commerce Clause is a judge-made doctrine inferred from Congress’s Commerce Clause power. It limits states from discriminating against or unduly burdening interstate commerce, even when Congress has not legislated. LSP argued Indiana’s ROFR favors incumbents and excludes out-of-state entrants from competing.

RTO/ISO, MISO, and tariffs

An RTO/ISO like MISO plans and administers the regional grid. Its “tariff” is a set of rules, rates, and practices filed with and approved by FERC. Here, MISO’s tariff requires it to comply with “Applicable Laws” granting ROFRs. That tariff obligation, rather than IURC action, was the immediate driver of project assignment practices at issue.

Article III standing and “redressability”

Standing requires not just an injury but that a court order against the defendant will likely fix (or prevent) that injury. If the injury depends on a third party’s independent choice—and the court order does not bind that third party—redressability is difficult to show. That was the decisive failure the majority identified.

Preliminary vs. permanent injunction

A preliminary injunction is temporary, based on likelihood of success, and does not finally decide constitutionality. The majority treated that interim character as a key reason why a preliminary injunction against IURC could not be expected to change whether HEA 1420 remained “applicable” to MISO’s tariff compliance.

5. Conclusion

The Seventh Circuit’s decision establishes a practically important procedural rule for challenges to state transmission ROFR statutes in regions where project planning and assignment are administered by an RTO/ISO under a FERC-approved tariff:

• Standing turns on remedial realism: plaintiffs must sue defendants who can actually redress the injury.
• A preliminary injunction against state commissioners does not, by itself, render a state ROFR “inapplicable” to a nonparty RTO/ISO.
• Courts will not adopt unbriefed, expansive theories that effectively conscript state agencies to block federally supervised, tariff-based project outcomes.

By vacating on standing grounds, the court left unresolved the underlying dormant Commerce Clause merits. But the opinion meaningfully reshapes the litigation landscape: future plaintiffs must confront, at the outset, who implements the alleged barrier (often the RTO/ISO via tariff) and whether the requested judicial relief will likely change that implementation—especially at the preliminary injunction stage.