Standing to Enjoin State Transmission ROFRs Requires a Defendant Who Can Redress the Injury

1. Introduction

LSP Transmission Holdings II, LLC and affiliates (“LSP”) sought to compete to build new interstate electric transmission projects in Indiana developed through the Midcontinent Independent System Operator (“MISO”) planning process. Indiana enacted a right-of-first-refusal (“ROFR”) statute granting “incumbent” transmission owners the first option to build certain new facilities connecting to their existing lines. Ind. Code § 8-1-38-9(a)(1).

LSP sued the Chair and Commissioners of the Indiana Utility Regulatory Commission (“IURC Commissioners”), asserting that Indiana’s ROFR discriminates against interstate commerce in violation of the dormant Commerce Clause. The district court entered a preliminary injunction barring the IURC Commissioners from “enforcing” the ROFR statute. On interlocutory appeal, the Seventh Circuit did not reach the Commerce Clause merits. Instead, it vacated the preliminary injunction for lack of Article III standing—specifically, lack of redressability.

Central issue on appeal: Whether an injunction against the IURC Commissioners was likely to prevent or redress LSP’s asserted harm (being excluded from competing for MISO-approved projects), given that MISO—operating under a FERC-approved tariff—allocates and assigns the projects and was not a party.

2. Summary of the Opinion

The Seventh Circuit vacated the preliminary injunction and remanded. Applying standard standing doctrine—injury, traceability, and redressability—the court held that LSP had not shown that enjoining the IURC Commissioners was reasonably likely to redress its feared injury.

The court’s core conclusions were:

• IURC lacks relevant enforcement responsibility for the ROFR statute; its role under § 8-1-38-9 is largely as a recipient of notices, not an entity that compels MISO assignments or controls whether incumbents build MISO-assigned projects.
• Meaningful redress would have to operate against MISO, which plans, approves, and assigns construction under a FERC-approved tariff, but MISO was not sued and is not bound by the injunction.
• A preliminary injunction against non-implementing state officials does not make a statute “inapplicable” to non-parties as a matter of law, and MISO stated it would not treat the injunction as changing its obligations.
• The dissent’s alternative standing theory—treating the injunction as requiring IURC to use broad regulatory powers to block construction—was not advanced by LSP, was not adopted by the district court, and would risk a direct federal–state conflict in a domain “squarely” within FERC’s jurisdiction.

3. Analysis

3.1 Precedents Cited

The opinion is principally a standing and remedies decision. The cited authorities fall into four functional clusters.

A. Article III standing and redressability

• TransUnion LLC v. Ramirez and Lujan v. Defenders of Wildlife supplied the basic three-part standing test and the requirement that each element be shown for the specific form of relief sought.
• Friends of the Earth, Inc. v. Laidlaw Env't Servs. (TOC), Inc. reinforced that standing must be established separately for each remedy, here a preliminary injunction.
• Allen v. Wright and Simon v. Eastern Kentucky Welfare Rights Org. provided the “independent third party not before the court” principle—where third-party action breaks the causal chain, redressability becomes speculative.
• California v. Texas did heavy lifting: the court used it to reject attempts to generate standing by tying an unenforceable (or non-enforced) provision to other statutory mechanisms and to caution against adopting “merits-like” standing theories not developed by the parties. The court analogized: as in California, enjoining the named defendants from enforcing the challenged provision did not change the conduct that allegedly caused harm.
• Clapper v. Amnesty International USA and Department of Commerce v. New York supplied the principle that standing premised on predicting third-party behavior is “substantially more difficult” and requires evidence that third parties will react in predictable ways.
• The majority also cited Blum v. Yaretsky, Davis v. Colerain Township, Ohio, and National Federation of the Blind of Texas, Inc. v. Abbott to emphasize a narrow injury-to-claim-to-remedy alignment: injury from one statutory component does not automatically support standing to litigate “conduct of another kind.”

B. Limits of preliminary injunctions and non-party effect

• Lackey v. Stinnie, Winter v. Natural Res. Def. Council, Inc., and the Seventh Circuit’s own Lacy v. Cook County and Monroe v. Bowman were used to underscore that preliminary injunctions do not conclusively resolve legality and are designed to preserve the status quo pending final adjudication.
• Driftless Area Land Conservancy v. Valcq supplied the remedial point that injunctions operate on officials, while the law remains “on the books.”
• United States v. Kirschenbaum and Regal Knitwear Co. v. NLRB, together with Fed. R. Civ. P. 65(d), were used to explain why non-parties (here MISO) are not bound absent “active concert” or agency-type relationships.

C. Severability as a constraint on “workaround” redress

• Alaska Airlines, Inc. v. Brock and Regan v. Time, Inc. were invoked for the remedial duty to invalidate no more of a statutory scheme than necessary.
• Indiana’s severability rule, Ind. Code § 1-1-1-8(a), and Indiana cases discussed in a footnote—Paul Stieler Enterprises, Inc. v. City of Evansville and Ettinger v. Studevent—supported the majority’s view that HEA 1420 is easily separable from the broader utility code, undermining the dissent’s notion that general IURC powers could be pressed into service to “enforce” the dormant Commerce Clause against MISO-approved projects.

D. Federal power regulation context (FERC–MISO–tariff structure)

• Historical and jurisdictional background came from General Motors Corp. v. Tracy, New York v. FERC, Public Utilities Comm'n of Rhode Island v. Attleboro Steam & Elec. Co., Arkansas Elec. Cooperative Corp. v. Arkansas Pub. Serv. Comm'n, and FPC v. Southern California Edison Co..
• The court explained MISO’s tariff regime using Morgan Stanley Capital Group Inc. v. Public Utility District No. 1, Illinois Commerce Comm'n v. FERC, and Entergy Arkansas, LLC v. FERC.
• On ROFRs specifically, the court relied on MISO Transmission Owners v. FERC, South Carolina Pub. Serv. Auth. v. FERC, and FERC’s Transmission Planning & Cost Allocation by Transmission Owning & Operating Public Utilities (Order 1000).
• For the “federal checkpoint” theme (federal approval weakening the premise that a state injunction against the wrong actor can change project assignment), the court cited Merrion v. Jicarilla Apache Tribe and White v. Massachusetts Council of Const. Employers, Inc..

3.2 Legal Reasoning

A. The key holding: no redressability against the named defendants

The majority treated redressability as the “central problem.” Even if LSP’s injury (being excluded from competition) is real, the injunction it sought ran only against state commissioners who, under the court’s reading of Ind. Code § 8-1-38-9, do not “enforce” the ROFR in the way that matters: they do not assign projects, control MISO’s designation of competitive versus ROFR-eligible projects, or otherwise cause MISO to treat the statute as binding.

In the majority’s view, § 8-1-38-9 makes IURC a notice recipient: incumbents must notify IURC of their intent, provide project descriptions and cost estimates, and use competitive bidding “to the extent commercially practicable.” Nothing in the statute gives IURC affirmative authority to police MISO’s assignment decisions or to prevent incumbents from acting on a MISO assignment.

B. Why MISO’s non-party status was dispositive

The relief LSP practically wanted was a competitive solicitation at MISO, not a paperwork change at IURC. But MISO was not sued and is not bound by the injunction under Rule 65(d). The district court assumed MISO would treat an injunction against IURC as voiding the statute’s “applicability” under MISO’s tariff. On appeal, that assumption collapsed: MISO stated it “need not and will not” respond as expected.

The court highlighted that MISO’s obligation to honor state ROFRs is embedded in a FERC-approved tariff (MISO Tariff, Attachment FF, ¶ VIII.A.1), and FERC approval gives tariffs the effect of federal law. Thus, absent a judgment that binds MISO (or a FERC ruling), an injunction against state officials who do not implement the tariff does not reliably change MISO’s conduct.

C. The “novel” dissent theory and the majority’s rejection

The dissent relied on IURC’s broad enforcement clause, Ind. Code § 8-1-2-115, to argue IURC can enforce “all … laws … relating to public utilities,” and therefore can be enjoined from “enforcing” HEA 1420 in a way that would prevent incumbents from building ROFR-awarded projects.

The majority rejected this approach on three interlocking grounds:

• Scope of the actual injunction: no party treated the order as commanding IURC to block construction of MISO/FERC-approved projects. The court declined to reinterpret the injunction into an order that would effectively conscript IURC into a new regulatory posture.
• Risk of federal–state conflict: the dissent’s theory would force IURC into conflict with FERC in “the heartland” of federal jurisdiction. The majority treated that as a serious institutional and federalism concern, especially at the preliminary-injunction stage.
• Standing-through-other-provisions (California v. Texas): even if IURC has broad authority generally, LSP alleged injury from HEA 1420, not from the rest of Indiana’s utility code. Enjoining IURC’s exercise of other statutory powers would not be “fairly traceable” to enforcement of the challenged provision in the way standing doctrine requires.

D. Preliminary injunctions do not “void” statutes as to non-parties

The opinion contains an important remedial clarification: a preliminary injunction “does not conclusively resolve legal disputes” (Lackey v. Stinnie), and judicial findings at the preliminary stage remain “subject to change” (Lacy v. Cook County). Therefore, even conceptually, it is hard to treat a preliminary injunction against one set of officials as rendering a statute non-“Applicable” to an independent, non-party tariff administrator.

3.3 Impact

Although the court did not decide the dormant Commerce Clause question, the decision reshapes the litigation playbook for challenges to state ROFR statutes in federally regulated transmission markets:

• Proper defendant and remedy alignment becomes central: plaintiffs must target an actor whose legally compelled conduct is likely to change with the requested injunction. In MISO territory, that may mean litigating within the FERC/tariff framework (or crafting a suit that binds the entity implementing the tariff obligations), rather than suing state commissioners who merely receive notices.
• Limits on indirect-redress standing: reliance on a prediction that a sophisticated third party will voluntarily conform its behavior to an injunction against someone else is precarious—especially when that third party has a federal-law duty (a tariff) pointing the other way.
• State ROFRs remain vulnerable on the merits in other circuits: the opinion expressly notes the circuit split signaled by LSP Transmission Holdings, LLC v. Sieben and NextEra Energy Capital Holdings, Inc. v. Lake, and the post-remand district court decision NextEra Energy Capital Holdings, Inc. v. Jackson. But this case postpones merits resolution in the Seventh Circuit until a posture with proper redressability.
• Regulatory forum channeling: the court emphasized that plaintiffs can raise issues before FERC and obtain Article III review under 16 U.S.C. § 825l(b), reinforcing a pathway that may be more effective where the contested practice is embedded in a FERC-approved tariff.

4. Complex Concepts Simplified

• Dormant Commerce Clause: an implied constitutional rule that states generally may not discriminate against or unduly burden interstate commerce, even when Congress has not passed a specific statute about the subject.
• Right of first refusal (ROFR): a priority right allowing incumbents to take a project before it is offered to competitors. In transmission, state ROFRs can eliminate competitive bidding for certain new lines.
• FERC tariff: a federally regulated document filed with the Federal Energy Regulatory Commission that governs rates and practices. Once approved, it effectively functions like binding federal law for the regulated entity’s operations.
• MISO / RTO / ISO: MISO is an Independent System Operator that runs a Regional Transmission Organization—planning and coordinating the grid regionally, including selecting and assigning projects under its tariff.
• Standing—redressability: even if a plaintiff is injured, federal courts can act only if the requested court order is likely to fix (or prevent) that injury. If the injury depends on what a non-party does, redressability is harder to show.
• Preliminary vs. permanent injunction: a preliminary injunction is temporary and based on likelihood of success; it does not conclusively determine legality for all purposes or all actors, especially non-parties.
• Rule 65(d) (who is bound): injunctions bind parties and closely connected persons acting with them; they generally do not bind strangers to the case.

5. Conclusion

The Seventh Circuit’s decision establishes a practical, litigation-shaping rule for transmission ROFR challenges: a plaintiff cannot obtain (or keep) a preliminary injunction by suing state officials who do not implement the challenged ROFR in a way that affects the plaintiff’s competitive position. Where the operative exclusion from competition is carried out by a non-party (here, MISO acting under a FERC-approved tariff), redressability fails and Article III standing collapses—regardless of the underlying constitutional controversy.

The immediate significance is remedial rather than substantive: the court did not bless Indiana’s ROFR on the merits, but it demanded doctrinal discipline about who must be enjoined to achieve meaningful relief in a federally administered, tariff-driven transmission planning regime.