Two opinions, closely read

The dispute

Electricity customers in the Midwest spent years arguing that the utilities owning the region’s high-voltage transmission lines were being paid too much. The payment in question is the return on equity, or ROE, the profit rate a regulator lets a utility earn on the capital its investors sink into the grid. [1] That number is set by the Federal Energy Regulatory Commission, FERC, for transmission owners inside MISO, the nonprofit operator that runs the Midwestern grid. [1] Customers filed complaints in 2013 and 2015 attacking a 12.38 percent ROE as excessive. [1] FERC agreed in part, ordered lower rates, and directed refunds. In 2022 the D.C. Circuit vacated those orders, meaning it wiped them out, because FERC had quietly revived a methodology it had earlier discarded. [5] On remand FERC redid the work and backdated the refunds all the way to September 2016, the date of its first flawed order. [1] The transmission owners and a Louisiana regulator petitioned for review.

The hard question

The Federal Power Act normally forbids retroactive ratemaking. Under section 206 of that statute, when FERC finds a rate unlawful it may order refunds only for a limited stretch, roughly fifteen months, and may reset rates only going forward. [2] A refund window running from 2016 to 2024 dwarfs fifteen months. The difficulty was whether anything in the statute lets FERC blow past that cap when the only reason it is redoing the arithmetic is that a court erased its earlier orders. [1] Read strictly, fifteen months is a flat ceiling. Read differently, a court’s vacatur reopens the entire rate period, and FERC must be able to make customers whole across it.

Working through the statute

The court decided the statutory questions de novo, meaning it read the Federal Power Act fresh and without deferring to FERC’s own interpretation, while reviewing FERC’s factual and policy calls under the deferential arbitrary-and-capricious standard, which asks only whether the agency gave a reasoned explanation. [1] It started by granting the general rule: section 206 does cap refunds and does bar backward-looking rates. [2]

The pivot came next. Precedent recognizes a narrow exception grounded in section 309, the Act’s grant of general remedial power. [3] When a court sets aside FERC’s orders, FERC may use that power to put the parties back where they would have stood, because otherwise a judicial reversal would carry no practical force. [1] The decisive feature is that the reach-back is measured by the vacatur, not chosen freely by the agency. Because the 2022 decision had erased the rate determinations going back to the original 2016 order, FERC could align its remedy with the scope of that error. [1] The panel framed this as giving effect to its own prior judgment rather than as fresh retroactive ratemaking. [1]

The court then set aside a second challenge without reaching its merits. The transmission owners argued FERC wrongly allowed customers to file a second complaint about the same ROE. The panel held the owners lacked Article III standing, the constitutional requirement that a litigant show a concrete injury a court can actually redress. [1] The cost of defending the second complaint was already spent, so a ruling could not refund it, and any future complaint was too speculative to count as imminent harm. [1]

A final thread involved the Louisiana Public Service Commission, which tried to reopen points about FERC’s method, including a mismatched input in the capital-asset pricing model, a standard finance formula for estimating the return investors demand. The court refused under the law-of-the-case doctrine, the principle that an issue already resolved earlier in the same litigation stays resolved. [1]

What the ruling settles

The decision defines how a regulator rebuilds rates after losing in court, a recurring posture given how often FERC’s rate orders draw challenges and reversals. [5] Its logic keeps the fifteen-month cap intact for ordinary cases while treating reversals as a separate category with their own reach. [2] It also reinforces that a vacatur is not a simple do-over but sets the outer boundary of any fix. [1] The standing holding does quiet work as well, letting the court leave the contested question of repeat complaints for a future case brought by a party who can show injury. [1]

Reading the reasoning

The opinion’s strength is that it treats the reach-back as an arithmetic of the court’s own error rather than a policy preference, which keeps the analysis disciplined. [1] Its weaker seam is definitional. Whether curing a reversal is truly distinct from retroactive ratemaking depends on accepting that the vacatur, and not FERC, fixed the start date. The panel saw no gap there, and no judge dissented. [1]

The concrete result is that refunds reaching back to 2016 stand for MISO customers. [4] For the utilities, the ruling carries a counterintuitive lesson: winning a vacatur can enlarge, rather than shrink, the period of exposure once FERC redoes the numbers. [1]

The flooded lot

A discount store went up in Fort Worth, and the lot next door began to flood. [1] After Family Dollar built its store between 2014 and 2016, every rainfall pushed water, silt, and trash onto JLMH Investments’ adjacent property, damaging the building and the parking lot. [1] Engineering reports tied the flooding to the store’s new drainage system. [1] JLMH sued in 2020 on three theories: trespass, water diversion, and a violation of Texas Water Code section 11.086, which makes it actionable to divert the natural flow of surface water in a way that damages a neighbor. [1][4] It sought both money damages and an injunction ordering the flooding stopped. [1] The trial court dismissed everything on the two-year statute of limitations, the deadline past which a claim can no longer be brought. A court of appeals revived part of the case, and the state Supreme Court took it up. [5]

Two questions, one sharp

The court reviewed the summary judgment de novo, deciding the legal questions itself without deference to the courts below. [1] There were two of them, one procedural and one substantive. The procedural question was whether the trial court’s judgment was even final and appealable, because after signing an order that said it disposed of the whole case, the judge signed a second order granting a permissive interlocutory appeal, a mid-case appeal allowed only by the trial judge’s leave. [1] The substantive question was the sharp one. Everyone agreed the damages claims were too late. What remained was whether the same two-year deadline also bars a request for an injunction to stop an ongoing nuisance, or whether halting a continuing harm sits outside the clock. [1]

Following the logic

The court took the finality problem first. The original order carried unmistakable language of completion. [1]

This Order is final, disposes of all parties and all claims, and is appealable.

Such express language, the court held, must be taken at face value, and a later order can undo it only by saying so directly, not by implication. [1] The second order never purported to vacate or amend the first, so the judgment was final and the appeal proper. [1]

Then came the heart of the case. The court of appeals had reasoned that limitations bars a claim for damages but not an injunction to abate a nuisance. [1] The Supreme Court rejected the premise. It explained that nuisance is not itself a cause of action. It is a type of legal injury, the interference with the use and enjoyment of land, that some underlying wrongful act produces. [1]

From that starting point the logic runs in a straight line. A remedy rides on a claim, so the limitations period is fixed by the claim, not by the remedy a plaintiff requests. [1] Here the underlying claims were trespass, water diversion, and the Water Code violation, each carrying a two-year deadline. [1][4] An injunction is the usual tool for abating a nuisance, but it still requires proof of an underlying wrongful act, so it cannot outlive the claim it depends on. [1] The court anchored this in the merger of law and equity: under a blended system, statutes of limitation apply to equitable requests the same as to legal ones, and adding a prayer for an injunction neither restarts nor suspends the clock. [1] Because every claim accrued when the flooding began in 2016 or 2017, and JLMH did not sue until 2020, all of it was late. [1]

What turns on it

The practical stake is a warning to landowners: someone facing continuing damage cannot wait out the limitations period and then sue only for an injunction. [1] A nuisance claim must be brought within the deadline tied to the underlying wrong, or both the money and the fix are lost. [1] The dissent did not quarrel with that substantive rule. Justice Sullivan, joined by two colleagues, would have found no appellate jurisdiction at all, reading the second order as having quietly undone the judgment’s finality. [2] That disagreement matters, because it would have returned the case without ever reaching the limitations question, and it shows how much weight the majority’s face-value approach to finality language must carry. The fractured lineup, with separate opinions concurring in part, underscores that the gateway question split the court more than the merits did. [3]

How the reasoning holds up

As formal logic the majority’s move is clean: if remedies depend on claims, and claims carry deadlines, then remedies inherit those deadlines. [1] It resists the intuitive pull that ongoing harm should always be enjoinable, recasting that intuition as a question of which timely claim supports the injunction. [1] The dissent’s objection is narrower and procedural, yet it lands on a genuine soft spot, the rule that only explicit words can strip a judgment of its finality even when a judge plainly meant to do something else. [2]

For Texas landowners the reporting takeaway is concrete. The clock on a drainage or flooding dispute starts when the harm first appears, and asking a court to stop the water later does not reset it. [1][4]