Standing to Enjoin State Transmission ROFRs Requires a Defendant Who Can Redress the Injury (Not a Notice-Only State Regulator)

1. Introduction

This appeal arose from a challenge to Indiana’s statutory “right of first refusal” (ROFR) for certain interstate electric transmission projects. The plaintiffs, LSP Transmission Holdings II, LLC and affiliates (collectively, “LSP”), are non-incumbent transmission developers seeking to compete to build new high-voltage transmission facilities in Indiana. Indiana Code § 8-1-38-9(a)(1) grants an “incumbent electric transmission owner” a ROFR to construct and operate an approved transmission facility that connects to facilities the incumbent already owns.

LSP alleged that the Indiana ROFR violates the dormant Commerce Clause. Critically, however, LSP sued only the Chair and Commissioners of the Indiana Utility Regulatory Commission (“IURC Commissioners”) and sought a preliminary injunction barring them from “enforcing” the statute. Meanwhile, the entity that plans, approves, and assigns these regional transmission projects—Midcontinent Independent System Operator (“MISO”)—was not sued and was not bound by the requested injunction.

The district court issued a preliminary injunction; the IURC Commissioners and incumbent utilities intervening as defendants appealed. The Seventh Circuit vacated the injunction on standing grounds, focusing on redressability.

2. Summary of the Opinion

The Seventh Circuit (Judge Hamilton) held that LSP lacked standing to obtain the preliminary injunction because the requested relief was not likely to redress LSP’s asserted injury. The court emphasized:

• IURC has no meaningful enforcement role under Ind. Code § 8-1-38-9 beyond receiving notices and information filings.
• MISO, operating under a FERC-approved tariff requiring compliance with “Applicable Laws” (including state ROFRs), is the actor whose project assignments allegedly exclude LSP.
• A preliminary injunction against the IURC Commissioners does not bind MISO, and MISO stated it “need not and will not” treat such an injunction as voiding Indiana law for tariff purposes.
• The dissent’s alternative standing theory—treating the injunction as compelling IURC to use broader regulatory powers to block MISO-approved projects—was not the relief sought, not adopted below, not briefed, and would invite federal-state conflict given FERC’s jurisdiction.

The panel therefore vacated the preliminary injunction and remanded for further proceedings, expressly limiting its holding to standing for the preliminary injunction (not the merits of the dormant Commerce Clause claim).

3. Analysis

3.1 Precedents Cited

The opinion is notable for grounding a highly technical energy-market dispute in mainstream Article III standing doctrine—especially redressability where third parties control the challenged consequence.

A. Standing framework and redressability

• TransUnion LLC v. Ramirez and Lujan v. Defenders of Wildlife: The court restated the canonical three elements of standing (injury, causation, redressability) and reiterated that plaintiffs must establish standing for the particular form of relief sought. These cases supplied the basic analytic template the court used to isolate the problem: even if LSP fears a real competitive injury, the injunction requested must likely prevent it.
• Friends of the Earth, Inc. v. Laidlaw Env't Servs. (TOC), Inc.: Quoted for the requirement that standing be shown separately for each remedy. This was essential because LSP’s standing was evaluated as to a preliminary injunction against IURC, not as to some broader or different remedy against other actors.
• Allen v. Wright and Simon v. Eastern Kentucky Welfare Rights Org.: These cases supplied the court’s core redressability principle: federal courts generally cannot redress injuries that depend on “the independent action of some third party not before the court.” Here, the third party is MISO, which actually assigns transmission projects.
• California v. Texas: The panel used this case in two ways: (1) to caution against adopting a standing theory not developed by the parties (echoing Justice Thomas’s concurrence’s warning about “merits-like” standing theories); and (2) to reject “traceability/redressability by proxy” arguments—i.e., trying to attack one provision but obtain relief by forcing officials to act under other provisions that are not themselves alleged unconstitutional. The panel analogized: LSP challenges only HEA 1420/§ 8-1-38-9, but the dissent’s theory would rely on IURC’s other general powers to produce the desired practical outcome.
• Blum v. Yaretsky, Davis v. Colerain Township, Ohio, and National Federation of the Blind of Texas, Inc. v. Abbott: These cases reinforced the proposition that an injury from one part of a regulatory scheme does not automatically confer standing to litigate other, distinct governmental conduct—supporting the panel’s refusal to “bootstrap” standing by invoking broader IURC authority.
• Clapper v. Amnesty International USA and Department of Commerce v. New York (via quotation in California v. Texas): The panel used these to emphasize that, when causation/redressability turns on how independent actors will react, standing becomes “substantially more difficult” and requires evidence of predictable third-party responses—not speculation. MISO’s amicus submission defeated LSP’s prediction that MISO would treat the preliminary injunction as voiding the Indiana ROFR for tariff purposes.

B. Limits of preliminary injunctions and who is bound

• Lackey v. Stinnie and Winter v. Natural Res. Def. Council, Inc.: These were used to highlight the provisional nature of preliminary injunctions—based on likelihood of success, not final adjudication. This mattered because LSP’s redressability theory assumed the injunction would effectively make Indiana law inapplicable to MISO; the panel explained why that assumption is legally tenuous for a non-party.
• 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: These supported the point that preliminary injunction findings are non-final and subject to change, undermining the claim that a preliminary order would predictably alter a non-party’s legal obligations.
• Driftless Area Land Conservancy v. Valcq: The court cited this Seventh Circuit articulation that injunctions run against officials, not the statute itself—laws remain “on the books.” That framing directly undercut LSP’s assertion that enjoining IURC “enforcement” would render the ROFR law non-applicable to MISO under the tariff.
• United States v. Kirschenbaum, Regal Knitwear Co. v. NLRB, and Fed. R. Civ. P. 65(d): These authorities reinforced that non-parties generally cannot be enjoined unless acting in concert with enjoined parties—important because MISO was not alleged to be acting “in active concert” with IURC.

C. Energy-regulatory background shaping the court’s caution

• New York v. FERC and FPC v. Southern California Edison Co.: These anchored the court’s description of FERC’s jurisdiction over interstate transmission under the Federal Power Act, informing the panel’s concern that the dissent’s reading would invite a direct federal-state regulatory conflict if IURC were effectively ordered to block MISO/FERC-approved projects.
• Illinois Commerce Comm'n v. FERC and Morgan Stanley Capital Group Inc. v. Public Utility District No. 1: Cited to explain RTO/ISO structure and the centrality of tariffs as the regulatory instrument governing MISO’s practices. This mattered because the alleged exclusion from competition occurs through MISO’s tariff-driven assignment process.
• MISO Transmission Owners v. FERC, South Carolina Pub. Serv. Auth. v. FERC, and Transmission Planning & Cost Allocation by Transmission Owning & Operating Public Utilities (Order 1000): These established that FERC removed “federal ROFRs” but expressly did not preempt state ROFR laws, and that MISO’s tariff was amended to incorporate “Applicable Laws” granting ROFRs. While not dispositive of standing, this backdrop explains why the operative “enforcement” mechanism is not IURC action but MISO’s tariff compliance.
• The panel also noted, in a footnote, the circuit split on dormant Commerce Clause challenges to state ROFR laws: LSP Transmission Holdings, LLC v. Sieben (8th Cir., upholding Minnesota ROFR) and NextEra Energy Capital Holdings, Inc. v. Lake (5th Cir., reviving dormant Commerce Clause challenge), plus the district court decision on remand NextEra Energy Capital Holdings, Inc. v. Jackson. The Seventh Circuit did not reach these merits questions due to standing.

3.2 Legal Reasoning

The court’s reasoning is best understood as a strict alignment of the requested remedy with the mechanism of injury. LSP’s injury theory was competitive exclusion from MISO’s assignment of Indiana projects; but LSP’s requested remedy targeted only IURC Commissioners.

A. “Who enforces” the challenged statute?

The panel closely parsed Ind. Code § 8-1-38-9 and concluded it assigns IURC an essentially administrative role: IURC receives incumbents’ notices of intent to exercise the ROFR and receives project information filings. The statute does not confer on IURC power to police or implement the ROFR mechanism against MISO or to control MISO’s assignments.

Consequently, an injunction against IURC “enforcement” cannot, by itself, change the decision point where LSP loses out: MISO’s assignment decisions under a FERC-approved tariff requiring compliance with “Applicable Laws.”

B. Redressability cannot rest on speculative non-party compliance

LSP’s theory of redressability depended on predicting that MISO would treat the Indiana statute as “void and inapplicable” once a federal court enjoined IURC enforcement. The district court accepted that prediction. The Seventh Circuit rejected it after MISO’s amicus brief clarified that it would not treat the preliminary injunction as altering its tariff obligation to comply with Indiana ROFR law.

In effect, the court held that an injunction which (i) binds only state commissioners with no operative enforcement role and (ii) does not bind the entity causing the alleged harm cannot satisfy Article III redressability. The panel underscored that the plaintiffs’ later attempt to file a complaint at FERC claiming MISO violated its tariff only highlighted the standing defect: relief would require “an uncertain result in other proceedings.”

C. Rejection of the dissent’s “general enforcement powers” theory

The dissent relied on Ind. Code § 8-1-2-115 (IURC’s general authority to enforce laws relating to public utilities) to argue that IURC could stop incumbents from constructing projects and thus redress LSP’s injury. The majority rejected this on multiple grounds:

• Mismatch with the actual injunction: The injunction did not order IURC to block construction or to countermand MISO assignments; no party briefed or adopted that reading.
• Unbriefed “novel” standing theory: The panel invoked California v. Texas (Thomas concurrence) to caution against deciding standing on an undeveloped, merits-like theory.
• Traceability/severability problem: Echoing California v. Texas, the panel reasoned that LSP challenged only HEA 1420/§ 8-1-38-9, not the broader Indiana utility statutes that empower IURC. Trying to use other provisions to force a particular outcome risks an Article III disconnect: the relief would not target the “allegedly unlawful” conduct.
• Federal-state conflict risk: A construction-blocking injunction could create a collision with FERC-regulated interstate transmission planning and tariff implementation.

3.3 Impact

Although formally “only” a preliminary-injunction standing decision, the opinion is likely to have outsized practical influence on how state ROFR statutes are litigated in federally regulated transmission markets.

• Proper-defendant discipline in ROFR challenges: Plaintiffs challenging state ROFR regimes embedded in RTO/ISO tariffs must target defendants who actually control the complained-of exclusion. Suing a state commission that only receives notices—and is not the operative “enforcer”—risks dismissal for lack of redressability.
• Limits on “indirect” redress theories: The decision underscores that redressability cannot be premised on a court order’s hoped-for “signal” to non-parties—especially when the non-party affirmatively disclaims being bound and continues the contested conduct.
• Preliminary injunctions may be especially weak vehicles for tariff-mediated disputes: The panel emphasized the non-final nature of preliminary injunctions and the narrow scope of who is bound under Rule 65(d), which may make preliminary relief harder to obtain when the market actor is not a party.
• Channeling effects toward FERC and tariff litigation: The opinion notes that parties can raise challenges to “practices affecting rates” at FERC (with appellate review under 16 U.S.C. § 825l(b)). Practically, litigants may seek relief by attacking the tariff’s incorporation of state ROFRs (or the ISO’s interpretation of “Applicable Laws”) rather than only suing state officials.
• Preservation of the merits battleground: The Seventh Circuit did not decide whether Indiana’s ROFR violates the dormant Commerce Clause, leaving the circuit split (e.g., LSP Transmission Holdings, LLC v. Sieben vs. NextEra Energy Capital Holdings, Inc. v. Lake) unresolved in this circuit—but it erected a significant jurisdictional gatekeeping step.

4. Complex Concepts Simplified

• Dormant Commerce Clause: A doctrine inferred from the Commerce Clause that restricts states from discriminating against or unduly burdening interstate commerce, even when Congress has not legislated on the issue. LSP’s core claim is that Indiana’s ROFR unlawfully prefers “incumbent” in-state-connected utilities over out-of-state competitors.
• Article III standing (and “redressability”): To be in federal court, a plaintiff must show not just harm, but that the requested court order will likely fix it. “Redressability” failed here because the injunction ran only against IURC officials who did not control MISO’s project assignments.
• Preliminary vs. permanent injunction: A preliminary injunction is temporary and based on a likelihood of success; it preserves the status quo. It is not a final declaration that a statute is unconstitutional, and it typically binds only the parties (and those acting in concert) under Rule 65(d).
• FERC, RTOs/ISOs, tariffs: FERC regulates interstate transmission under the Federal Power Act. RTOs/ISOs like MISO operate regional grids and follow FERC-approved “tariffs,” which function like binding regulatory rulebooks. Here, MISO’s tariff required it to comply with applicable state ROFR laws, making MISO’s tariff compliance the immediate mechanism of competitive exclusion.
• “Notice repository” idea: The court concluded Indiana’s statute uses IURC primarily as a place incumbents must file notices and information—not as an agency empowered by that statute to decide who gets projects or to enforce ROFR rights against the market.

5. Conclusion

The Seventh Circuit’s decision establishes a clear procedural lesson for constitutional challenges to state transmission ROFR laws operating through RTO/ISO planning and FERC-approved tariffs: standing—particularly redressability—requires suing officials (or entities) who can actually alter the competitive outcome the plaintiff challenges.

By vacating the preliminary injunction for lack of redressability, the court emphasized the limits of injunctive relief against state regulators whose statutory role is administrative rather than operative, and it rejected attempts to bootstrap standing through broader, unbriefed theories of agency power. The ruling does not resolve the dormant Commerce Clause merits, but it materially shapes how such merits disputes must be framed, pleaded, and targeted in a heavily federalized transmission-planning environment.