Standing to Enjoin State ROFR Laws Requires a Defendant Who Can Redress MISO-Driven Injury

1. Introduction

This appeal arises from a fast-moving dispute over who gets to build major interstate electricity transmission projects in Indiana. Plaintiff LSP Transmission Holdings II, LLC and affiliates (collectively, “LSP”) seek to compete to build new regional transmission facilities. Indiana enacted a right-of-first-refusal statute—Ind. Code § 8-1-38-9(a)(1) (2024)—granting incumbent transmission owners priority to construct certain new transmission facilities approved through a regional planning process when those facilities connect to incumbents’ existing facilities.

LSP sued only the Chair and Commissioners of the Indiana Utility Regulatory Commission (“IURC Commissioners”), contending the Indiana ROFR violates the dormant Commerce Clause. The district court granted a preliminary injunction forbidding the IURC Commissioners from “enforcing” the ROFR. Incumbent utilities intervened to defend the statute. 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, a failure of redressability—because the challenged competitive harm depends on actions by Midcontinent Independent System Operator (“MISO”), a nonparty that plans and assigns projects pursuant to a FERC-approved tariff.

2. Summary of the Opinion

The Seventh Circuit vacated the preliminary injunction and remanded. It held that LSP lacked standing to obtain the injunction it sought because:

• IURC does not enforce Ind. Code § 8-1-38-9 in any way that could cause or prevent the feared competitive injury; under the statute, IURC largely receives notices and information.
• MISO is the entity that assigns projects and is the practical source of the injury LSP fears (foreclosure from competitive bidding), yet MISO was not sued and is not bound by the injunction.
• A preliminary injunction against the IURC Commissioners does not render the Indiana ROFR “inapplicable” such that MISO must ignore it under its tariff; MISO stated it would not treat the injunction as changing the law’s applicability, and as a nonparty it is not legally bound.
• The court rejected a “novel” dissenting theory that would interpret the injunction as compelling IURC to use broad regulatory powers to block construction of MISO/FERC-approved projects, warning this reading would exceed what the injunction says, was not briefed, and would risk direct federal-state regulatory conflict.

3. Analysis

3.1 Precedents Cited

A. The electricity-regulation backdrop (why MISO/FERC matter to causation and redressability)

• General Motors Corp. v. Tracy, 519 U.S. 278 (1997): Cited for historical context about the evolution from fragmented local regulation to regulated monopolies, underscoring why modern transmission planning and competitive access occur within layered federal-state structures. Here, it helps frame the institutional landscape (FERC + RTOs/ISOs + state commissions) relevant to identifying the true actor behind the alleged injury.
• Public Utilities Comm'n of Rhode Island v. Attleboro Steam & Elec. Co., 273 U.S. 83 (1927), abrogated by Arkansas Elec. Cooperative Corp. v. Arkansas Pub. Serv. Comm'n, 461 U.S. 375 (1983): Used to explain the “regulatory gap” that led Congress to enact the Federal Power Act, reinforcing the foundational point that interstate transmission sits in the heartland of federal oversight.
• New York v. FERC, 535 U.S. 1 (2002): Supports the breadth and clarity of FERC jurisdiction over interstate transmission under the Federal Power Act—context the majority invoked to caution against reading an injunction as forcing state regulators to block federally approved interstate projects.
• Morgan Stanley Capital Group Inc. v. Public Utility District No. 1, 554 U.S. 527 (2008): Cited for the tariff framework and for describing ISOs operating in a nondiscriminatory manner. It informs the court’s view that MISO’s tariff-driven conduct is central and not automatically altered by a preliminary injunction against nonparties.
• Illinois Commerce Comm'n v. FERC, 721 F.3d 769 (7th Cir. 2013): Cited to define RTOs/ISOs and confirm MISO’s role in planning expansions and upgrades. This supports the majority’s conclusion that any meaningful redress aimed at project assignment must reach MISO (or its tariff obligations), not the IURC Commissioners.
• MISO Transmission Owners v. FERC, 819 F.3d 329 (7th Cir. 2016) and South Carolina Pub. Serv. Auth. v. FERC, 762 F.3d 41 (D.C. Cir. 2014): Cited to show FERC lawfully eliminated federal ROFRs via Order 1000 but expressly left room for state ROFR laws; this sets up why MISO’s tariff incorporates “Applicable Laws” including state ROFRs.
• Entergy Arkansas, LLC v. FERC, 109 F.4th 583 (D.C. Cir. 2024): Reinforces that FERC reviews tariff changes for justness and reasonableness—again highlighting that MISO’s conduct is tariff-governed and supervised through federal administrative mechanisms.

B. Standing doctrine (the core holding)

• TransUnion LLC v. Ramirez, 594 U.S. 413 (2021) and Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992): Provide the three-part standing test (injury, traceability, redressability). The majority applied these elements to the specific relief sought—a preliminary injunction against IURC Commissioners—and found redressability missing.
• Friends of the Earth, Inc. v. Laidlaw Env't Servs. (TOC), Inc., 528 U.S. 167 (2000): Supplies the principle that standing must be shown “separately for each form of relief sought.” The court used this to emphasize that even if LSP might later seek different relief, it lacked standing for this particular preliminary injunction against these defendants.
• Allen v. Wright, 468 U.S. 737 (1984), abrogated on other grounds by Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014), and Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26 (1976): Anchor the redressability problem where harm depends on “independent action of some third party not before the court.” The majority treated MISO as that third party for purposes of this injunction.
• California v. Texas, 593 U.S. 659 (2021): A key analogue. The majority invoked California to reject merits-like, unbriefed “standing-through-severability” or indirect-enforcement theories, and to explain why plaintiffs cannot manufacture traceability/redressability by relying on other statutory provisions not alleged to be unconstitutional.
• Blum v. Yaretsky, 457 U.S. 991 (1982); Davis v. Colerain Township, Ohio, 51 F.4th 164 (6th Cir. 2022); National Federation of the Blind of Texas, Inc. v. Abbott, 647 F.3d 202 (5th Cir. 2011): Used to reinforce that an injury from one type of conduct does not confer standing to litigate different conduct (or other statutory provisions) that did not injure the plaintiff.
• Murthy v. Missouri, 603 U.S. 43 (2024): Cited to underscore the “bedrock principle” that courts cannot redress injuries caused by independent nonparty action; the majority used Murthy to rebut LSP’s theory that MISO would predictably change behavior based on an injunction against others.
• Department of Commerce v. New York, 588 U.S. 752 (2019) and Clapper v. Amnesty International USA, 568 U.S. 398 (2013): Quoted via California v. Texas to emphasize the heightened difficulty of standing when causation depends on third-party reactions, and the need for evidence that third parties will likely react predictably.
• FDA v. Alliance for Hippocratic Med., 602 U.S. 367 (2024) and Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208 (1974): Cited in a footnote to reject the argument that standing should be found merely because someone must be able to challenge the statute; some issues may be left to political processes or other review channels.

C. Preliminary injunction and nonparty-effect limits (why “Applicable Laws” didn’t change)

• Lackey v. Stinnie, 604 U.S. —, No. 23-621, 2025 WL 594737 (Feb. 25, 2025) and Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008): Support the proposition that preliminary injunctions do not conclusively resolve legal disputes; they rest on likelihood-of-success, not final merits.
• Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415 (9th Cir. 1984); Lacy v. Cook County, 897 F.3d 847 (7th Cir. 2018); Michigan v. U.S. Army Corps of Eng'rs, 667 F.3d 765 (7th Cir. 2011); Monroe v. Bowman, 122 F.4th 688 (7th Cir. 2024): Reinforce the preliminary/permanent injunction distinction and the nonfinal character of preliminary findings—undercutting the idea that a preliminary injunction against IURC changes state law’s applicability for MISO’s tariff purposes.
• Driftless Area Land Conservancy v. Valcq, 16 F.4th 508 (7th Cir. 2021): Cited for the idea that an injunction operates on officials, not on the statute “on the books,” supporting the majority’s view that an injunction against IURC does not “void” the law for nonparties.
• United States v. Kirschenbaum, 156 F.3d 784 (7th Cir. 1998) and Regal Knitwear Co. v. NLRB, 324 U.S. 9 (1945), with Fed. R. Civ. P. 65(d): Used to show courts generally cannot enjoin nonparties unless acting in concert/agency; MISO was neither.
• GEFT Outdoors, LLC v. City of Westfield, 922 F.3d 357 (7th Cir. 2019): Cited for the proposition that a statute becomes “void” only after a court holds it unconstitutional—highlighting why MISO could distinguish a final merits ruling (as in Iowa) from a preliminary injunction.
• Reed v. Goertz, 598 U.S. 230 (2023) and DIRECTV, Inc. v. F.C.C., 110 F.3d 816 (D.C. Cir. 1997): Distinguished by the majority to show why LSP’s “barrier to entry” framing fails at the preliminary stage against these defendants.

D. Severability and remedial restraint (used to critique the dissent’s theory)

• Alaska Airlines, Inc. v. Brock, 480 U.S. 678 (1987) and Regan v. Time, Inc., 468 U.S. 641 (1984): Cited for the remedial principle that courts should invalidate no more of a statute than necessary, and preserve separable valid provisions.
• Indiana authorities cited: Paul Stieler Enterprises, Inc. v. City of Evansville, 2 N.E.3d 1269 (Ind. 2014); Dorchy v. Kansas, 264 U.S. 286 (1924); Ettinger v. Studevent, 38 N.E.2d 1000 (Ind. 1942): Used to show Indiana severability principles and to reinforce a “firewall” concept (also supported by Ind. Code § 1-1-1-8(a)) separating HEA 1420 from the rest of the utility code—countering the dissent’s attempt to rely on broader IURC powers to manufacture redress.

E. Federal jurisdiction emphasis (why the dissent’s reading risked federal-state conflict)

• New York v. FERC, 535 U.S. 1 (2002) and FPC v. Southern California Edison Co., 376 U.S. 205 (1964): Cited to emphasize Congress’s “clear and specific” grant to FERC over interstate transmissions, supporting the majority’s warning that the dissent’s theory would pit IURC against FERC-approved planning and assignments.

3.2 Legal Reasoning

A. The court framed the injury and the requested remedy precisely

The majority accepted the practical nature of LSP’s feared injury: exclusion from competing for MISO-approved regional transmission projects because MISO’s tariff instructs MISO to “comply with any Applicable Laws and Regulations” granting ROFRs, and Indiana’s ROFR directs assignments to incumbents.

But standing turns on the particular relief sought: LSP requested a preliminary injunction only against IURC Commissioners. Under Friends of the Earth, Inc. v. Laidlaw Env't Servs. (TOC), Inc., standing must be shown for that remedy.

B. Redressability failed because IURC lacked enforcement authority over the ROFR

Reading Ind. Code § 8-1-38-9, the court found IURC’s role limited to receiving notices and information. Nothing in the provision authorizes IURC to assign projects, police MISO’s compliance, or prevent incumbents from invoking ROFRs in MISO’s process. Thus, enjoining IURC from “enforcing” the ROFR does not change the mechanism that allegedly injures LSP: MISO’s assignment decisions under a tariff incorporating state law.

C. The “third-party response” theory was disproven by the record

LSP argued (and the district court agreed) that MISO would treat an injunction against IURC as rendering the Indiana law “inapplicable,” and therefore MISO would open bidding. The Seventh Circuit held that this predictive chain was not “reasonably likely” because MISO—now participating as amicus—made clear it did not view itself as bound, and as a nonparty it was not bound under Rule 65(d). The resulting redress depended on the independent actions of a nonparty, triggering the concerns articulated in Allen v. Wright, Simon v. Eastern Kentucky Welfare Rights Org., Murthy v. Missouri, and California v. Texas.

D. The court refused to adopt the dissent’s alternative redress theory

The dissent sought to locate redressability in IURC’s general enforcement authority under Ind. Code § 8-1-2-115 and would read the injunction as effectively requiring IURC to use broader powers to stop incumbents from constructing projects awarded under HEA 1420. The majority refused for three interconnected reasons:

• Not presented/briefed: Echoing Justice Thomas’s caution in California v. Texas (concurring), the court declined to resolve standing via an unbriefed merits-like interpretive exercise.
• Mismatch with the injunction’s text and parties’ understanding: The injunction did not order IURC to block construction, and no party had interpreted it that way.
• Federal-state conflict risk: Treating IURC as the chokepoint could force IURC into conflict with FERC’s domain over interstate transmission planning and tariff-driven assignments, contrary to the federal framework emphasized in New York v. FERC and FPC v. Southern California Edison Co..

E. Why preliminary relief could not “void” the statute for MISO’s tariff purposes

The court emphasized that preliminary injunctions do not finally adjudicate constitutionality (Lackey v. Stinnie; Winter v. Natural Res. Def. Council, Inc.; Lacy v. Cook County). An injunction binds parties, not the statute itself as to the world (Driftless Area Land Conservancy v. Valcq). And nonparties like MISO are not bound absent Rule 65(d) exceptions (United States v. Kirschenbaum; Regal Knitwear Co. v. NLRB).

3.3 Impact

A. Litigation strategy in ROFR constitutional challenges

The decision is a procedural but highly consequential precedent: it warns that in the RTO/ISO era, a state ROFR may be operationalized by a non-governmental planner (MISO) through a FERC-approved tariff. If the claimed harm is exclusion from competitive assignment, plaintiffs must secure relief that actually binds or predictably changes the conduct of the assigning entity. Suing state commissioners who merely receive notices may be insufficient at the preliminary injunction stage.

B. Limits on using state regulators as proxies for nonparty conduct

The court’s redressability analysis tightens the window for “domino-effect” standing theories in complex regulatory ecosystems, reinforcing the post-Murthy v. Missouri skepticism of causation/redress chains dependent on third parties’ discretionary responses—especially when the third party appears and says it will not change course.

C. Channeling disputes toward FERC processes (and later judicial review)

By emphasizing MISO’s tariff and FERC’s oversight (and noting statutory review paths under 16 U.S.C. § 824e(a) and 16 U.S.C. § 825l(b)), the opinion signals that some state-ROFR disputes may be litigated more effectively as challenges to tariff implementation or “practices affecting rates,” with eventual appellate review of FERC orders.

D. What the decision does not decide

The Seventh Circuit did not decide whether Indiana’s ROFR violates the dormant Commerce Clause, nor did it decide whether LSP could establish standing for different relief (including possibly permanent relief) on a different record and/or against different defendants.

4. Complex Concepts Simplified

• Right of first refusal (ROFR): A priority right allowing incumbents to take (and build) certain projects before others can compete.
• RTO/ISO (MISO): A regional nonprofit entity coordinating grid planning and assigning transmission projects. It operates under a FERC-approved tariff.
• FERC tariff: A binding, filed schedule of rates/terms/practices. Once approved, it functions with federal-law force for regulated entities.
• Dormant Commerce Clause: A judge-made doctrine inferred from the Commerce Clause that limits state laws discriminating against or unduly burdening interstate commerce.
• Article III standing: A plaintiff must show (1) concrete injury, (2) traceability to the defendant, and (3) likely redress by the requested court order.
• Redressability: The remedy sought must likely fix or prevent the injury. If the injury depends on a third party not bound by the order, redressability becomes difficult.
• Preliminary vs. permanent injunction: Preliminary relief preserves the status quo based on likely success; it is not a final ruling that “voids” a statute.
• Rule 65(d): Federal injunctions bind parties (and certain closely related actors), not the world at large. Nonparties generally are not bound.

5. Conclusion

LSP Transmission Holdings II, LLC v. Huston is a standing-and-remedy decision tailored to modern transmission governance. The Seventh Circuit held that a preliminary injunction against state utility commissioners cannot support Article III standing where the commissioners do not enforce the challenged ROFR statute and where the feared competitive injury stems from a nonparty RTO/ISO’s project assignments under a FERC-approved tariff. The opinion reinforces stringent redressability requirements in multi-actor regulatory systems, clarifies that preliminary injunctions do not “void” laws as to nonparties, and cautions courts against adopting unbriefed theories that would conscript state regulators into conflicts with federal energy regulation.