On November 24, 2025, the U.S. District Court for the Middle District of North Carolina denied American Efficient LLC’s (American Efficient) preliminary injunction seeking to halt FERC’s civil enforcement proceedings for alleged market manipulation and tariff violations. American Efficient argued that FERC’s process violated the Seventh Amendment and Article III of the U.S. Constitution by denying its right to a jury trial in an Article III court. The Court held that the Federal Power Act’s (FPA) scheme—allowing FERC to assess a penalty but requiring the government to obtain a de novo jury trial in federal court before any penalty can be enforced—satisfies requirements under the Constitution.

On December 16, 2024, FERC issued American Efficient an Order to Show Cause alleging that American Efficient engaged in market manipulation in violation of the FPA, FERC regulations, and the terms of the PJM and MISO tariffs. FERC directed American Efficient to show case as to why it should not be held liable for $722 million in civil penalties and over $250 million in disgorged profits.

On January 29, 2025, American Efficient filed a complaint with the U.S. District Court for the Middle District of North Carolina for a preliminary injunction. American Efficient argued that FERC’s administrative enforcement process deprived it of its Seventh Amendment right to a jury trial and violated Article III because the claims—which alleged market manipulation and tariff violations—were analogous to common-law fraud and contract claims traditionally tried before a jury in Article III courts. FERC countered that the statutory scheme under 16 U.S.C. § 823b(d)(3)(B) guarantees a de novo jury trial in federal district court before any assessed penalty can be enforced. FERC also argued that American Efficient lacked standing because its claims were premature because no penalty had been enforced, and the administrative process itself did not inflict irreparable harm.

The Court held that American Efficient had standing because there was a likelihood that FERC would assess a penalty and Supreme Court precedent provided that district courts may hear cases from respondents who seek to enjoin ongoing administrative proceedings against them on constitutional grounds.

On the merits, the Court explained that a plaintiff seeking a preliminary injunction must establish that they are likely to succeed on the merits, that they are likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in their favor, and that an injunction is in the public interest. The court denied American Efficient’s request for a preliminary injunction because of its failure to establish its likelihood to succeed on the merits. The dispositive question was whether the FPA enforcement scheme—providing a de novo jury trial in federal district court under 16 U.S.C. § 823b(d)(3)(B)—satisfies the Seventh Amendment and Article III. American Efficient argued the scheme was deficient because it required them to complete the FERC proceeding, refuse to pay any assessed penalty, and then wait for FERC to initiate a separate enforcement action in district court. The Court disagreed, emphasizing that FERC cannot compel payment absent fully de novo litigation before a jury in district court, and the fact that only FERC may trigger the enforcement action does not infringe on any Seventh Amendment rights. Having found no clear showing of likely success, the Court did not reach the remaining preliminary injunction factors, allowing FERC’s administrative proceedings to continue.

A copy of the court’s Memorandum of Opinion and Order in American Efficient LLC, et al. v. FERC can be found here.