LSP Transmission Holdings II, LLC v. James F. Huston

In the

United States Court of Appeals

For the Seventh Circuit

____________________

Nos. 24-3248, 24-3249, & 25-1024

LSP TRANSMISSION HOLDINGS II, LLC, et al.,

Plaintiffs-Appellees,

v.

JAMES F. HUSTON, Chairman,

Indiana Utility Regulatory Commission, et al.,

Defendants-Appellants,

and

NORTHERN INDIANA PUBLIC SERVICE COMPANY, et al.,

Intervening Defendants-Appellants.

____________________

Appeals from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 24-cv-1722 — Tanya Walton Pratt, Chief Judge.

____________________

ARGUED JANUARY 27, 2025 — DECIDED MARCH 13, 2025

____________________

Before HAMILTON, SCUDDER, and JACKSON-AKIWUMI,

Circuit Judges.

HAMILTON, Circuit Judge. Plaintiff LSP Transmission Hold-

ings II, LLC, and several of its affiliates seek to build and

2 Nos. 24-3248, 24-3249, & 25-1024

operate interstate electricity transmission lines in Indiana. An

Indiana statute gives incumbent electric companies rights of

first refusal to build and operate new interstate transmission

facilities that connect to facilities they own. Ind. Code § 8-1-

38-9(a)(1) (2024). Plaintiffs contend in this appeal that the In-

diana statute violates the dormant commerce clause implied

in Article I, Section 8 of the United States Constitution. The

district court issued a preliminary injunction barring the

Chair and Commissioners of the Indiana Utility Regulatory

Commission (collectively, the IURC Commissioners) from en-

forcing the statute.

The IURC Commissioners and several intervening de-

fendants have appealed that injunction. We vacate the injunc-

tion for lack of standing. Plaintiffs have not shown that the

injunction is reasonably likely to redress or prevent their

feared injuries. As we explain below, the IURC Commission-

ers have no relevant responsibilities for enforcing the chal-

lenged statute. Any genuine redress would have to operate

against a non-party, Midcontinent Independent System Op-

erator (MISO), a non-governmental entity that plans, ap-

proves, and assigns construction for new interstate transmis-

sion projects in Indiana.

Plaintiffs argued to this court and the district court that

they have standing because it seemed reasonably likely that,

even though MISO is not a party to this lawsuit or the injunc-

tion, it would respond to a preliminary injunction against the

IURC Commissioners by treating the Indiana law as void and

inapplicable. The district court agreed. LSP Transmission Hold-

ings II, LLC v. Huston, No. 1:24-CV-01722-TWP-MG, 2024 WL

5008048, at *5–6 (S.D. Ind. Dec. 6, 2024). MISO has now made

clear that it need not and will not respond to the preliminary

Nos. 24-3248, 24-3249, & 25-1024 3

injunction as plaintiffs and the district court expected, so that

theory of standing is not viable.

The dissenting opinion would find standing on a different

and novel theory that has not been presented by plaintiffs,

was not adopted by the district court, and has not been the

subject of any briefing or argument. That theory would treat

the injunction as having ordered the IURC to use its regula-

tory powers to block construction of new facilities approved

by MISO and (implicitly) by the Federal Energy Regulatory

Commission (FERC). The injunction does not actually say

that, though, and no party has interpreted it that way. That

interpretation would also likely force a direct federal-state

regulatory conflict between FERC and the IURC. Accordingly,

we decline to adopt this novel theory and conclude that plain-

tiffs lack standing to seek this preliminary injunction.

I. Statutory and Regulatory Background

To explain, we begin with background on the respective

roles of the IURC, FERC, and MISO, and on rights of first re-

fusal in construction of new interstate transmission facilities.

Disagreement over the roles of federal and state electricity

regulators is not new. As the electricity industry expanded in

the late nineteenth century, States tried to regulate their grids

statewide. General Motors Corp. v. Tracy, 519 U.S. 278, 289 n.7

(1997), citing Robert L. Swartwout, Current Utility Regulatory

Practice from a Historical Perspective, 32 Nat. Resources J. 289,

298 (1992). These one-size-fits-all approaches proved “inflexi-

ble, impractical, untimely and burdensome on the legisla-

tures,” so States left regulation up to local governments.

Swartwout, supra, at 298.

4 Nos. 24-3248, 24-3249, & 25-1024

Some local governments adhered to laissez-faire economic

principles in utility management, which led to “predictable

and disastrous” consequences: “an initial period of ‘wasteful

competition,’ followed by massive consolidation and the

threat of monopolistic pricing.” General Motors, 519 U.S. at 289

(footnotes omitted), citing Dorner, Initial Phases of Regulation

of the Gas Industry, in 1 Regulation of the Gas Industry § 2.03

(American Gas Ass’n 1996). Others granted overlapping fran-

chises for utility operation (including, infamously, “45 mostly

overlapping franchises … for electric utility operation in Chi-

cago between 1882 and 1905”). Swartwout, supra, at 299. Chas-

tened by this experience, States began to provide “a single,

local franchise with a business opportunity free of competi-

tion ….” General Motors, 519 U.S. at 290; see also New York v.

FERC, 535 U.S. 1, 5 (2002) (“In 1935, when the FPA became

law, most electricity was sold by vertically integrated utilities

that … operated as separate, local monopolies subject to state

or local regulation.”).

In 1927, the Supreme Court held that States could not reg-

ulate certain elements of interstate electricity transmission.

Public Utilities Comm’n of Rhode Island v. Attleboro Steam & Elec.

Co., 273 U.S. 83, 89–90 (1927), abrogated by Arkansas Elec. Co-

operative Corp. v. Arkansas Pub. Serv. Comm’n, 461 U.S. 375, 393

(1983). The Attleboro ruling created an important regulatory

gap for a few years by allowing only the federal government

to regulate interstate electrical transmission. New York, 535

U.S. at 6. Enter Congress in 1935 with the Federal Power Act

(FPA or the Act). The Act created the Federal Power Commis-

sion (FERC’s predecessor) to regulate “the transmission of

electric energy in interstate commerce” and “the sale of elec-

tric energy at wholesale in interstate commerce.” See id. at 6–

7 (internal quotation marks omitted), quoting 16 U.S.C.

Nos. 24-3248, 24-3249, & 25-1024 5

§ 824(b). The Act requires all “rates and charges made, de-

manded, or received by any public utility for or in connection

with the transmission or sale of electric energy subject to the

jurisdiction of the Commission” to be “just and reasonable.”

16 U.S.C. § 824d(a). It also gives federal regulators the power

to correct unlawful practices, including unreasonable rates.

New York, 535 U.S. at 7, citing 16 U.S.C. § 824e(a).

To carry out that provision, the Act requires each regu-

lated utility to file with FERC its “rates and charges,” along

with “the classifications, practices, and regulations affecting

such rates and charges.” 16 U.S.C. § 824d(c). For our pur-

poses, that filing is known as a tariff. See Morgan Stanley Cap-

ital Group Inc. v. Public Utility District No. 1, 554 U.S. 527, 531

(2008). Utilities may not change their tariffs without giving

notice to FERC and to the public, § 824d(d), and FERC has the

authority to “suspend the operation” of a changed tariff, sub-

ject to some procedural constraints. § 824d(e).

Since the 1990s, FERC has encouraged owners of interstate

transmission systems to establish non-governmental entities

to plan and operate interstate transmission in their respective

regions. See, e.g., Promoting Wholesale Competition Through

Open Access Non-Discriminatory Transmission Services by Public

Utilities; Recovery of Stranded Costs by Public Utilities and Trans-

mitting Utilities, 61 Fed. Reg. 21,540-01, at 21,552 (Apr. 24,

1996) (“[W]e see many benefits in ISOs, and encourage utili-

ties to consider ISOs as a tool to meet the demands of the com-

petitive marketplace.”); Regional Transmission Organizations,

89 FERC ¶ 61,285, 1999 WL 33505505, at *37 (Dec. 20, 1999)

(“We conclude that properly structured RTOs throughout the

United States can provide significant benefits in the operation

of the transmission grid.”).

6 Nos. 24-3248, 24-3249, & 25-1024

These Regional Transmission Organizations (RTOs) are

“voluntary associations of utilities that own electrical trans-

mission lines interconnected to form a regional grid and that

agree to delegate operational control of the grid to the associ-

ation.” Illinois Commerce Comm’n v. FERC, 721 F.3d 769, 769

(7th Cir. 2013), citing 18 C.F.R. § 35.34(j) & (k)(1)(i). Many are

managed by Independent System Operators (ISOs) like

MISO, which are non-profit entities that run the RTOs in “a

nondiscriminatory manner.” Id. at 770, quoting Morgan Stan-

ley, 554 U.S. at 536–37. As required, MISO has filed with FERC

a tariff outlining its rates, charges, and practices affecting such

rates and charges. 16 U.S.C. § 824d(c). FERC may review

changes to a tariff like MISO’s to determine whether the

changes are just and reasonable. Entergy Arkansas, LLC v.

FERC, 109 F.4th 583, 587 (D.C. Cir. 2024), citing 16 U.S.C.

§ 824d(a). MISO is also responsible for planning expansions

and upgrades to the grid in its area. See Illinois Commerce

Comm’n, 721 F.3d at 770.

Before 2011, as a matter of federal law, when MISO de-

cided that a new interstate transmission facility was needed

in some part of its region, the MISO member that served the

local area where the facility would be built had a right of first

refusal to build the new facility. MISO Transmission Owners v.

FERC, 819 F.3d 329, 332 (7th Cir. 2016). This was because

FERC had approved a provision in MISO’s tariff that con-

ferred a federal right of first refusal for incumbent transmis-

sion owners in MISO’s area to build new interstate facilities

in their service areas. See id.

In 2011, however, FERC changed its policy. FERC’s Order

1000 required RTOs and ISOs like MISO to remove provisions

from their tariffs that “grant[ed] incumbent transmission

Nos. 24-3248, 24-3249, & 25-1024 7

providers a federal right of first refusal to construct transmis-

sion facilities selected in a regional transmission plan for pur-

poses of cost allocation.” Transmission Planning & Cost Alloca-

tion by Transmission Owning & Operating Public Utilities (Order

1000), 136 FERC ¶ 61051, at ¶ 253, 2011 WL 2956837, at *81

(July 21, 2011).

That policy change by FERC—abrogating the federal

rights of first refusal—was challenged and upheld. See, e.g.,

MISO Transmission Owners, 819 F.3d at 335 (“In summary,

FERC’s abrogation of the right of first refusal in the MISO

Transmission Owners Agreement was lawful.”); South Caro-

lina Pub. Serv. Auth. v. FERC, 762 F.3d 41, 76–77 (D.C. Cir. 2014)

(noting that Order 1000 was based on market competition the-

ory and reflected a reasoned decision that rights of first re-

fusal would lead to “unjust” or “unreasonable” practices).

At the same time, however, Order 1000 made crystal clear

that it did not “limit, preempt, or otherwise affect state or lo-

cal laws or regulations with respect to construction of trans-

mission facilities ….” Order 1000, 136 FERC ¶ 61,051 at ¶ 227.

Taking FERC at its word, MISO amended its tariff to incorpo-

rate any applicable state and local right of first refusal laws.

MISO Tariff, Attachment FF, ¶ VIII.A.1 (MISO “shall comply

with any Applicable Laws and Regulations granting a right of

first refusal to a Transmission Owner.”).

Several States in the MISO region enacted state rights of

first refusal, including Indiana through House Enrolled Act

1420, 2023 Ind. Acts 1444–46 (codified at Ind. Code § 8-1-38-

9). See also, e.g., Minn. Stat. § 216B.246, subdiv. 2 (2024); Mich.

Comp. Laws § 460.593 (2024). Indiana’s right of first refusal

law gives an “incumbent electric transmission owner” the

right to “construct, own, operate, and maintain” an electricity

8 Nos. 24-3248, 24-3249, & 25-1024

transmission facility that has been “approved for construction

through a regional transmission organization planning pro-

cess and that connects to an electric transmission facility

owned by the incumbent electric transmission owner.” Ind.

Code § 8-1-38-9(a)(1) (2024). 1

II. Factual and Procedural Background

In 2022, MISO began planning a new batch of transmission

projects as part of its “Long Range Transmission Planning”

initiative. It divided those projects into several “tranches,” the

first of which was approved in July 2022. Tranche 2 was an-

nounced in December of that year. In March 2024, MISO re-

leased specific Tranche 2.1 plans, including several projects in

Indiana.

Plaintiffs filed this lawsuit against the IURC Commission-

ers in October 2024 challenging Indiana’s right of first refusal

law on several grounds, focusing most on the dormant com-

merce clause. Plaintiffs expected the MISO Board to approve

the Tranche 2.1 projects at a meeting scheduled for December

10–12, 2024. Plaintiffs also expected that MISO’s approval of

those projects would result in immediate assignment of con-

struction of the projects to incumbents in accordance with

HEA 1420 and MISO’s tariff. Plaintiffs sought a preliminary

1 Similar laws have been challenged on dormant commerce clause

grounds in two other circuits with different results. See LSP Transmission

Holdings, LLC v. Sieben, 954 F.3d 1018 (8th Cir. 2020) (upholding Minnesota

law against dormant commerce clause challenge); NextEra Energy Capital

Holdings, Inc. v. Lake, 48 F.4th 306 (5th Cir. 2022) (reversing dismissal of

dormant commerce clause claim); see also NextEra Energy Capital Holdings,

Inc. v. Jackson, No. 1:19-CV-626-DII, 2024 WL 4660920, at *17 (W.D. Tex.

Oct. 28, 2024) (district court opinion on remand, granting judgment on the

pleadings for plaintiffs on dormant commerce clause claim).

Nos. 24-3248, 24-3249, & 25-1024 9

injunction—but only against the IURC Commissioners—to

enjoin the Commissioners from “enforcing Indiana House En-

rolled Act 1420 of 2023.” Several incumbent transmission

owners intervened to defend their rights of first refusal under

the Indiana statute. Plaintiffs did not seek injunctive relief

against MISO or even name it as a defendant.

The IURC Commissioners challenged plaintiffs’ standing

to seek an injunction preventing the Commissioners from en-

forcing the rights of first refusal. Intervenor defendants made

related arguments under the preliminary injunction standard.

Both the IURC Commissioners and the intervenor defendants

argued that the IURC simply does not “enforce” the rights of

first refusal, so an injunction running only against the IURC

Commissioners could not redress or prevent the injuries that

plaintiffs feared.

On December 6—four days before MISO’s Board was

scheduled to begin its meeting on the Tranche 2.1 projects—

the district court issued a preliminary injunction. It found that

plaintiffs had standing because “the IURC enforces the rights

of first refusal” and concluded that, if it enjoined the IURC

from enforcing HEA 1420, MISO would “no longer be permit-

ted to recognize an incumbent’s right of first refusal….” LSP

Transmission Holdings II, LLC v. Huston, No. 1:24-CV-01722-

TWP-MG, 2024 WL 5008048, at *5–6 (S.D. Ind. Dec. 6, 2024).

The district court also found that plaintiffs were likely to suc-

ceed on the merits of their commerce clause challenge, id. at

*7–9, and that the equities weighed in favor of enjoining en-

forcement of the law. Id. at *9–10.

The IURC Commissioners and the intervening defendants

appealed on December 11, seeking a stay of the injunction

pending appeal and an administrative stay of the injunction

10 Nos. 24-3248, 24-3249, & 25-1024

pending resolution of that motion. This court granted the ad-

ministrative stay at around 7:30 am Central Time on Decem-

ber 12. Later that morning, MISO approved the Tranche 2.1

projects. That action started a 90-day clock for incumbents in

Indiana to notify the IURC whether they intended to exercise

their rights of first refusal on those Tranche 2.1 projects. See

Ind. Code § 8-1-38-9(c) (2024).

On December 17, this court heard argument on defend-

ants’ request for a stay pending appeal. We granted the stay

and set argument on the merits of the appeal for January 27,

2025. We also invited MISO to offer its position on “whether

(and on what basis, voluntarily or under legal obligation) it

would adhere to any court orders or judgments addressing

the constitutionality of the right of first refusal” in HEA 1420,

and we invited FERC to provide its perspective on “whether

the Federal Power Act and its implementing regulations, pol-

icies, or directives address the legality and enforceability (un-

der the U.S. Constitution or otherwise) of state law rights of

first refusal available to incumbent electric transmission own-

ers.”

We thought that order would preserve the status quo until

oral argument, but we were wrong. On December 30, plain-

tiffs moved for reconsideration of the order granting a stay

pending appeal, asserting that MISO was going to decide “no

later than January 13, 2025” which of the Tranche 2.1 projects

in Indiana would be designated for competitive bidding and

which would go to incumbents under their rights of first re-

fusal. Plaintiffs also stated their belief that MISO would treat

such designations as irreversible. We expedited briefing on

the motion to reconsider and ultimately granted it, conclud-

ing that the “equitable factors weigh in favor of lifting the stay

Nos. 24-3248, 24-3249, & 25-1024 11

and allowing the district court’s order preliminarily enjoining

the enforcement of House Enrolled Act 1420 to take effect.” At

that point, however, we had not yet heard from MISO or

FERC, the entities closest to the center of this controversy. The

parties then filed full briefs on the merits of this appeal. As

invited, MISO and FERC both filed amicus briefs. 2

We held argument on January 27, 2025. We now vacate the

preliminary injunction and remand the case to the district

court for further proceedings. The relief at issue in this ap-

peal—a preliminary injunction against only the IURC Com-

missioners—would not redress and is not redressing plain-

tiffs’ anticipated harm. That means plaintiffs lack standing to

seek the requested injunction.

III. Standing for the Preliminary Injunction

“[T]o establish standing, a plaintiff must show (i) that he

suffered an injury in fact that is concrete, particularized, and

actual or imminent; (ii) that the injury was likely caused by

the defendant; and (iii) that the injury would likely be re-

dressed by judicial relief.” TransUnion LLC v. Ramirez, 594 U.S.

413, 423 (2021), citing Lujan v. Defenders of Wildlife, 504 U.S.

555, 560–61 (1992). “[A] plaintiff must demonstrate standing

separately for each form of relief sought.” Friends of the Earth,

Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167, 185 (2000).

A core tenet of standing doctrine under Article III of the

Constitution is the general rule “barring adjudication of gen-

eralized grievances more appropriately addressed in the

2 Plaintiffs later filed a motion to respond to MISO’s and FERC’s ami-

cus briefs. We grant that motion. The tendered response shall be deemed

filed, and we have considered that brief as well as the responses during

oral argument.

12 Nos. 24-3248, 24-3249, & 25-1024

representative branches ….” Allen v. Wright, 468 U.S. 737, 751

(1984), abrogated on other grounds by Lexmark Int’l, Inc. v.

Static Control Components, Inc., 572 U.S. 118, 126 & 127 n.3

(2014) (endorsing principle under Article III). The central

problem with plaintiffs’ request for injunctive relief is redress-

ability. As we see it, there are two related issues: whether

plaintiffs sued the right defendants and whether plaintiffs

sought relief that would likely redress or prevent the harm

they fear. We address each in turn.

A. The IURC Commissioners

Plaintiffs believe the rights of first refusal granted under

HEA 1420 are unconstitutional. They seek to require MISO to

assign the rights to build and operate the Indiana Tranche 2.1

projects using competitive bidding by all interested and qual-

ified bidders. Plaintiffs did not, however, seek any injunctive

relief against MISO itself or even name MISO as a defendant.

1. The District Court’s Approach to Redressability

The district court concluded that the requested injunction

would likely redress or prevent plaintiffs’ feared injuries: “Be-

cause the IURC enforces the rights of first refusal, see Ind.

Code § 8-1-2-115, LSP’s alleged injury is traceable to the IURC

Defendants. … IURC would no longer be permitted to recog-

nize an incumbent’s right of first refusal, and neither, in turn,

would MISO.” LSP Transmission Holdings II, LLC v. Huston,

2024 WL 5008048, at *6. The court accordingly issued an in-

junction against the IURC Commissioners. They were “pre-

liminarily enjoined from enforcing the rights of first refusal of

Indiana Code § 8-1-38-9.” The injunction did not and could

not declare § 8-1-38-9 unconstitutional or prevent its enforce-

ment more generally. Nor did the injunction purport to affect

Nos. 24-3248, 24-3249, & 25-1024 13

IURC’s enforcement of any laws other than § 8-1-38-9 or to

order the IURC to block construction of any projects that

MISO might approve.

On appeal, we have had the benefit of more thorough

briefing, as well as a statement from MISO on how it views

the interplay among HEA 1420, FERC, and the IURC. We con-

clude that the district court’s preliminary injunction against

the IURC Commissioners has not and would not redress or

prevent plaintiffs’ feared injuries.

This case presents an unusual situation. Plaintiffs and the

dissenting opinion insist that a governmental body has pow-

ers that the governmental body says it does not have. The

IURC Commissioners insist that the IURC has no role in en-

forcing rights of first refusal under HEA 1420. The IURC

Commissioners told us in their brief, for example: “But the

named defendants here—IURC’s Chairman and Commis-

sioners—do not participate in designating MISO-planned

projects. Nor does IURC have any enforcement authority over

how MISO conducts those awards.” Appellants’ Br. at 24; ac-

cord, id. at 25 (“IURC does not participate in the approval or

allocation of MISO-planned projects for any electric transmis-

sion owner.”). Counsel for the Commissioners also told us at

oral argument that even if there were a final judgment declar-

ing HEA 1420 unconstitutional, IURC “wouldn’t have any en-

forcement authority to do anything” to prevent construction

consistent with a MISO award. Oral Arg. at 22:45–24:30; 24:10.

Based on our review of the statutes, we agree with the IURC’s

assessment of its own powers.

HEA 1420 vests incumbents with a right to build new

transmission projects. See § 8-1-38-9(a). To exercise that right,

an incumbent must “give written notice” to the IURC within

14 Nos. 24-3248, 24-3249, & 25-1024

90 days of project approval of its intent to construct the new

project. § 8-1-38-9(c). If the incumbent notifies the IURC of its

intent “not to construct the approved electric transmission fa-

cility, another entity may seek to construct [the facility] in ac-

cordance with the regional transmission organization plan-

ning process and this chapter.” Id. A constructing incumbent

must provide the IURC with a brief description of the con-

struction, the reason for the construction, an estimate of the

total cost of the project, and a copy of the rate that it has most

recently filed with FERC. § 8-1-38-9(d)(1) & (d)(2). The incum-

bent must also, “to the extent commercially practicable, use

competitively bid engineering, procurement, or construction

contracts, as applicable, that meet all the technical, commer-

cial, and other specifications, such as safety performance, re-

quired by the incumbent electric transmission owner with re-

spect to the electric transmission facility.” § 8-1-38-9(e).

These provisions grant incumbency rights of first refusal,

but they do not give the IURC any enforcement authority to

police or enforce those rights. Even the subsections of the stat-

ute that mention the IURC make clear that the IURC functions

only as a notice repository, not as an enforcer of the rights of

first refusal. See, e.g., § 8-1-38-9(c) (requiring an incumbent

exercising a right of first refusal to “give written notice to the

commission” and specifying that if an incumbent declines

that right, any other aspiring constructor must go to the RTO

for approval); § 8-1-38-9(d) (requiring a constructing incum-

bent to provide the IURC with information about the con-

struction project).

In sum, HEA 1420 requires incumbents exercising rights

of first refusal to file notice with the IURC at several different

points during the construction project. That is all HEA 1420

Nos. 24-3248, 24-3249, & 25-1024 15

has to say about the IURC. If the incumbent does not wish to

build the project, HEA 1420 directs non-incumbents to seek

construction approval from the RTO “in accordance with the

regional transmission organization planning process and this

chapter.” § 8-1-38-9(c). No provision gives the IURC any re-

sponsibilities toward RTOs’ or ISOs’ decisions assigning pro-

jects, whether based on the statutory rights of first refusal or

any other considerations. Enjoining the IURC Commissioners

from enforcing HEA 1420 therefore cannot redress or prevent

plaintiffs’ harm.

2. The Dissenting Approach to Redressability

The dissenting opinion offers a different perspective. Re-

lying on the IURC’s general power to enforce public utility

laws in Indiana Code § 8-1-2-115, the dissenting opinion

treats the preliminary injunction as requiring the IURC to use

its statutory powers to block construction when an incumbent

seeks to build a project assigned by MISO in reliance upon the

HEA 1420 right of first refusal. The preliminary injunction

does not purport to do that, and neither plaintiffs, defendants,

intervenor-defendants, nor the district court have interpreted

the preliminary injunction that way.

That fact alone counsels against consideration of the dis-

senting theory here. In California v. Texas, 593 U.S. 659 (2021),

the Supreme Court faced similar standing problems in a chal-

lenge to the Affordable Care Act. Justice Thomas wrote a per-

suasive concurring opinion explaining why resolving a case

based on a theory of standing that connects an unenforceable

provision to other statutory provisions, without briefing from

the parties, is not prudent. “This lack of legal development is

particularly significant because standing-through-insevera-

bility—assuming it is a legitimate theory of standing—is

16 Nos. 24-3248, 24-3249, & 25-1024

fundamentally a merits-like exercise that requires courts to

apply ordinary principles of statutory interpretation to deter-

mine if it is at least ‘arguable’ that a statute links the lawful-

ness of one provision to the lawfulness of another. Thus, a

failure to develop a standing-through-inseverability argu-

ment poses a significant obstacle to review.” Id. at 684 n.2

(Thomas, J., concurring) (internal citations omitted).

There are good reasons why plaintiffs and the district

court have not pursued the dissenting theory. Under the dis-

senting opinion’s approach, the district court would have or-

dered (or actually did order) the IURC to block construction

of interstate transmission projects approved and assigned by

MISO. Those projects lie squarely in the heartland of FERC’s

jurisdictional territory. That approach would force the IURC

into a power struggle with FERC over whether legitimately

assigned and important projects may be constructed—essen-

tially obliging the State officials to block construction projects

approved by federal authorities.

The dissenting opinion would in effect conscript the IURC

to enforce the dormant commerce clause rather than carry out

its more general duties to enforce Indiana public utility laws.

And it would do so to accommodate plaintiffs’ tactical choice

not to sue the entity that is actually complying with HEA

1420, which is MISO, acting under its FERC-approved tariff.

There is another problem with the dissenting approach. It

assumes that plaintiffs have standing to seek an injunction

that would employ the rest of Indiana public utility law to

prevent enforcement of HEA 1420. But none of plaintiffs’

claimed or feared harms come from any provisions of Indiana

law other than HEA 1420. This creates a traceability problem

linked to severability.

Nos. 24-3248, 24-3249, & 25-1024 17

In California v. Texas, the Supreme Court rejected a similar

argument that a plaintiff had standing when his alleged harm

came from an unenforceable provision, even when relief

could have operated against other statutory provisions. 593

U.S. 659. In that case, several States and individuals chal-

lenged the Affordable Care Act’s requirement that individu-

als obtain health insurance coverage. However, amendments

to the Affordable Care Act set the penalty for failure to obtain

health coverage at $0 (effectively nullifying any enforcement

authority). Id. at 667. The Supreme Court held that plaintiffs

accordingly lacked standing. While the Affordable Care Act

told individuals to obtain minimum coverage, it had “no

means of enforcement. … Because of this, there is no possible

Government action that is causally connected to the plaintiffs’

injury….” Id. at 669. The State plaintiffs in that case nonethe-

less asserted that they had standing because the individual

mandate “also causes them to incur additional costs directly”

by requiring them to provide information to insurance bene-

ficiaries and the IRS. Id. at 678.

The Supreme Court rejected this argument: “The problem

with these claims, however, is that other provisions of Act, not

the minimum essential coverage provision, impose these

other requirements. Nothing in the text of these form provi-

sions suggests that they would not operate without [the alleg-

edly unconstitutional provision].” Id. The Court explained

why this approach failed to confer Article III standing: “To

show that the [individual mandate] is unconstitutional would

not show that enforcement of any of these other provisions

violates the Constitution. … The Government’s conduct in

question is therefore not ‘fairly traceable’ to enforcement of

18 Nos. 24-3248, 24-3249, & 25-1024

the ‘allegedly unlawful’ provision of which the plaintiffs com-

plain ….” Id. at 679, quoting Allen, 468 U.S. at 751. 3

So too here. Plaintiffs contend that only HEA 1420 is un-

constitutional. As in California, the injunction bars the named

defendants from enforcing the allegedly unconstitutional pro-

vision, but they do nothing to enforce that provision. The dis-

senting opinion would try to redress the injury allegedly

caused by that provision by enjoining the IURC from exercis-

ing duties imposed by other statutory provisions. But plain-

tiffs do not allege that “enforcement of any of these other pro-

visions violates the Constitution.” California, 593 U.S. at 679.

As a result, plaintiffs have not shown that the IURC’s other

conduct is “fairly traceable” to the allegedly unconstitutional

action, and they cannot manufacture standing by seeking re-

dress through an injunction against enforcement of the other

(constitutional) statutory provisions. Id.; see also Blum v.

Yaretsky, 457 U.S. 991, 999 (1982) (“Nor does a plaintiff who

has been subject to injurious conduct of one kind possess by

virtue of that injury the necessary stake in litigating conduct

of another kind, although similar, to which he has not been

subject.”); Davis v. Colerain Township, Ohio, 51 F.4th 164, 171

(6th Cir. 2022) (“[W]hen a plaintiff has been injured by one

part of a law, the plaintiff cannot invoke that injury to chal-

lenge other parts of the law that have done nothing to the

plaintiff.”), citing California, 593 U.S. at 678–79; National Feder-

ation of the Blind of Texas, Inc. v. Abbott, 647 F.3d 202, 210 (5th

3 The dissenting opinion in California adopted the same view of stand-

ing—and cited some of the same cases, including Seila Law LLC v. CFPB,

591 U.S. 197, 211 (2020)—as the dissenting opinion in this case. See Califor-

nia, 593 U.S. at 698–703 (Alito, J., dissenting). Those arguments did not

carry the day in that case and should not do so here.

Nos. 24-3248, 24-3249, & 25-1024 19

Cir. 2011) (plaintiffs did not allege injury from one statutory

provision, so—despite “limits imposed on them” by another

statutory provision—they did not have standing).

The dissenting opinion’s demand that the IURC act to

block MISO-approved projects runs contrary to both federal

precedent and Indiana law on severability and redressability.

See California, 593 U.S. at 678 (“The problem with these claims,

however, is that other provisions of Act, not the minimum es-

sential coverage provision, impose these other requirements.

Nothing in the text of these form provisions suggests that they

would not operate without [the challenged provision].”). It is

well-established that a court should “refrain from invalidat-

ing more of the statute than is necessary…. ‘[W]henever an

act of Congress contains unobjectionable provisions separable

from those found to be unconstitutional, it is the duty of this

court to so declare, and to maintain the act in so far as it is

valid.’” Alaska Airlines, Inc. v. Brock, 480 U.S. 678, 684 (1987)

(alterations in original), quoting Regan v. Time, Inc., 468 U.S.

641, 652 (1984) (plurality opinion). 4

HEA 1420 is clearly severable from the other provisions of

Indiana law dealing with utility regulation. First, contrary to

the dissenting opinion, Indiana law provides a general

“firewall” separating unconstitutional provisions from other

statutory components: “If any provision of this Code as now

4 Indiana courts also follow this approach to severability. See, e.g.,

Paul Stieler Enterprises, Inc. v. City of Evansville, 2 N.E.3d 1269, 1278–79 (Ind.

2014), citing Dorchy v. Kansas, 264 U.S. 286, 289–90 (1924); Ettinger v. Stu-

devent, 38 N.E.2d 1000, 1007 (Ind. 1942) (“Where the legislature attempts

to do several things one of which is invalid it may be discarded if the re-

mainder of the act is workable and in no way dependent upon the invalid

portion.”).

20 Nos. 24-3248, 24-3249, & 25-1024

or later amended or its application to any person or

circumstance is held invalid, the invalidity does not affect

other provisions that can be given effect without the invalid

provision or application.” Ind. Code § 1-1-1-8(a); cf. post at 38.

Moreover, the other provisions of Chapter 38—which impose

the IURC’s statutory obligations—were in place and effective

well before HEA 1420 took effect in 2023. See, e.g., 2013 Ind.

Acts 1767–1770 (enacting other provisions of Chapter 38). The

provisions of Chapter 2 cited for the IURC’s broad authority

over public utilities have been in effect since at least the 1970s

and 1980s, with many dating from the early 20th century. See,

e.g., 1913 Ind. Acts 167–214 (creating the IURC’s predecessor),

177 (vesting commission with authority to set rates); 1979 Ind.

Acts 382 (defining scope of Commission’s authority to

regulate relations between utilities and the public); 1984 Ind.

Acts 678–743 (overhauling Chapter 2 and the powers of the

Commission); 2017 Ind. Acts 3736–3751 (amending certain

elements of the IURC’s authority over public utility rate-

setting).

Those older provisions of Indiana public utility law are

easily enforceable whether or not HEA 1420 is in effect; they

do not depend and have never depended on the later-enacted

HEA 1420. See Paul Stieler Enterprises, 2 N.E.3d at 1278–79.

This serves as a firewall preventing courts from upending the

entire Indiana utility code upon finding one provision uncon-

stitutional. Cf. California, 593 U.S. at 679 (rejecting effort to

overturn entire Affordable Care Act based on challenge to one

unenforceable provision). HEA 1420’s relative brevity and re-

cent enactment show its limited role in Indiana utility law

generally. Our analysis of redressability should recognize

that reality.

Nos. 24-3248, 24-3249, & 25-1024 21

The IURC’s minimal role under HEA 1420—receiving no-

tices that incumbents are exercising rights of first refusal—

could not cause plaintiffs’ feared harm. Instead, plaintiffs’

feared irreparable injury would result “from the independent

action of some third party not before the court.” Allen, 468

U.S. at 757 (internal quotation marks omitted), quoting Simon

v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 42 (1976).

That means plaintiffs lack standing.

We do not suggest that MISO’s actions are independent of

HEA 1420. Its FERC-approved tariff requires MISO to comply

with HEA 1420, after all. But MISO’s actions on these projects

are independent of the IURC Commissioners, who are the

only parties subject to this preliminary injunction. Plaintiffs

chose not to sue and seek relief against MISO. Because the

IURC simply has no statutory duty to enforce the rights of first

refusal established under HEA 1420, the preliminary injunc-

tion has not—and could not be expected to—redress the harm

plaintiffs fear. As a result of plaintiffs’ choice not to name

MISO as a defendant, redressability is missing here.5

B. Preliminary Injunction

Plaintiffs argue that even if the IURC is not directly in-

volved in enforcing Indiana’s rights of first refusal, the pre-

liminary injunction against enforcement of HEA 1420 should

render the law no longer “applicable” under the language of

MISO’s tariff, thereby preventing MISO from awarding

5 The dissenting opinion submits that uncertainty regarding how to

properly sue MISO makes the IURC a proper defendant. Post at 43. Re-

spectfully, the possible merits of a different hypothetical lawsuit against

an entity not before the court have no bearing on whether plaintiffs have

standing in this case.

22 Nos. 24-3248, 24-3249, & 25-1024

contracts on the basis of that law. As noted, the district court

adopted this reasoning. LSP Transmission Holdings, 2024 WL

5008048, at *6.

We see three problems with plaintiffs’ reasoning. First, the

well-understood limits of a preliminary injunction support

defendants’ position that the injunction does not change the

applicability of the law in question to non-parties. As the Su-

preme Court reminded us just last month: “Preliminary in-

junctions, however, do not conclusively resolve legal dis-

putes.” Lackey v. Stinnie, 604 U.S. —, —, No. 23-621, slip op. at

6, 2025 WL 594737, at *4 (Feb. 25, 2025). When deciding

whether to issue a preliminary injunction, a court must deter-

mine whether the movant is “likely to succeed on the mer-

its….” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20

(2008). Based on that early assessment, a court may determine

whether State officials ought to be able to enforce the law

pending further proceedings. But a preliminary injunction is

“not a preliminary adjudication on the ultimate merits: it is an

equitable device for preserving rights pending final resolu-

tion of the dispute.” Sierra On-Line, Inc. v. Phoenix Software,

Inc., 739 F.2d 1415, 1423 (9th Cir. 1984); accord, Lackey, 604 U.S.

at —, slip op. at 6, 2025 WL 594737, at *4.

As we have explained, the difference between a prelimi-

nary injunction and a permanent injunction is meaningful: “in

granting or denying a preliminary injunction, the court [de-

cides] only the plaintiffs’ likelihood of success on the merits,

whereas in granting or denying a permanent injunction, it [de-

cides] their actual success on the merits.” Lacy v. Cook County,

897 F.3d 847, 859 (7th Cir. 2018), citing Michigan v. U.S. Army

Corps of Eng’rs, 667 F.3d 765, 782 (7th Cir. 2011); accord, Mon-

roe v. Bowman, 122 F.4th 688, 690–91 (7th Cir. 2024) (district

Nos. 24-3248, 24-3249, & 25-1024 23

court could not retroactively convert preliminary injunction

into permanent injunction). “In other words, only a hearing

on permanent injunctive relief would result in conclusive find-

ings …; any judicial findings made in deciding preliminary re-

lief would remain subject to change.” Lacy, 897 F.3d at 859,

citing Michigan, 667 F.3d at 782. That is true between the par-

ties to the case in which a preliminary injunction is issued,

and a preliminary injunction ordinarily has no bearing on

whether a law remains “applicable” or even “in effect” as ap-

plied to persons and entities not before the issuing court, like

MISO in this case. 6

Second, MISO does not view itself as bound by the injunc-

tion, and as a matter of law it is not bound. In its amicus brief,

MISO noted that the district court’s preliminary injunction

“does not direct MISO to take any action, nor does it prohibit

MISO from taking any action,” and MISO explained its view

that the preliminary injunction was not a final adjudication of

6 For this reason, plaintiffs are incorrect in asserting that a favorable

ruling in this appeal would remove “an unlawful barrier” to their partici-

pation in the interstate transmission market. A favorable ruling would not

“remove” such a barrier at all. It would instead only (1) perhaps prevent

the IURC from receiving notices from incumbents intending to exercise

rights of first refusal and (2) indicate our belief that plaintiffs would be

“likely” to prevail in an ultimate trial on the merits. For the reasons ex-

plained above, the statute’s continued legitimacy absent a final judgment

distinguishes this situation from the cases cited in plaintiffs’ brief. See, e.g.,

Reed v. Goertz, 598 U.S. 230, 234 (2023) (plaintiff had standing to challenge

State DNA testing procedures because prosecutor relied on those proce-

dures to deny DNA testing, making it “substantially likely” that favorable

decision would result in relief); DIRECTV, Inc. v. F.C.C., 110 F.3d 816, 829–

30 (D.C. Cir. 1997) (DIRECTV had standing to challenge rule requiring it

to divest certain holdings upon winning an auction because rule was an

allegedly “unlawful barrier” to its participation in the auction).

24 Nos. 24-3248, 24-3249, & 25-1024

the statute’s constitutionality. MISO’s position is that the lan-

guage in its tariff—which obliges it to “comply with any Ap-

plicable Laws and Regulations granting a right of first refusal

to a Transmission Owner”—does not require it to comply

with a preliminary injunction against another entity’s sup-

posed enforcement of a right of first refusal statute.

Seeking to remedy this problem, after oral argument in

this appeal, plaintiffs filed a complaint with FERC asserting

that MISO is violating its tariff by continuing to assign pro-

jects based on HEA 1420 despite issuance of the preliminary

injunction. But this maneuver proves defendants’ point: the

preliminary injunction will not redress or prevent the harm

plaintiffs fear absent an uncertain result in other proceed-

ings. 7

7 The dissenting opinion implies that plaintiffs’ constitutional

challenge to HEA 1420 simply must be justiciable. Post at 42. The position

is not persuasive for two reasons. First, the Supreme Court has repeatedly

rejected such arguments when a plaintiff otherwise fails to show standing.

E.g., FDA v. Alliance for Hippocratic Med., 602 U.S. 367, 396 (2024) (“The

‘assumption’ that if these plaintiffs lack ‘standing to sue, no one would

have standing, is not a reason to find standing.’ Rather, some issues may

be left to the political and democratic processes….” (internal citations

omitted)), quoting Schlesinger v. Reservists Comm. to Stop the War, 418 U.S.

208, 227 (1974); Kurowski v. Krajewski, 848 F.2d 767, 774 (7th Cir. 1988) (“In

some cases no one will have standing to sue.”). Second, and more

specifically, plaintiffs can raise their constitutional issues in proceedings

before FERC, whose decisions are subject to review by Article III courts.

See 16 U.S.C. § 824e(a) (FERC shall resolve challenges to practices affecting

the rates by order); 16 U.S.C. § 825l(b) (any party aggrieved by a FERC

order may “obtain a review of such order” in the D.C. Circuit or

geographic circuit); cf. United States v. Richardson, 418 U.S. 166, 179 (1974)

(“In a very real sense, the absence of any particular individual or class to

litigate these claims gives support to the argument that the subject matter

is committed to the surveillance of Congress, and ultimately to the

Nos. 24-3248, 24-3249, & 25-1024 25

Plaintiffs argue that a plaintiff can establish redressability

and therefore standing when a court’s order is likely to make

third parties act in a particular way that would redress the

plaintiff’s harm. Appellees’ Br. at 24–27, first citing Skyline

Wesleyan Church v. California. Dep’t of Managed Health Care, 968

F.3d 738, 742 (9th Cir. 2020), and then citing Bennett v. Spear,

520 U.S. 154, 169 (1997). That’s true as a general rule. But given

MISO’s legally correct view that it is not bound by this pre-

liminary injunction because it is not a party, it is not likely that

the injunction would cause MISO to act in a way that would

prevent or redress plaintiffs’ feared injuries. The dissenting

opinion is correct in saying “it is a bedrock principle that a

federal court cannot redress ‘injury that results from the inde-

pendent action of some third party not before the court.’” Post

at 41, quoting Murthy v. Missouri, 603 U.S. 43, 57 (2024). 8

political process. … Lack of standing within the narrow confines of Art.

III jurisdiction does not impair the right to assert his views in the political

forum or at the polls.”).

8 Our view is also consistent with FERC’s statement in unrelated

proceedings that a developer’s “rights to own, develop, and construct [a]

Project” under an Iowa right of first refusal statute remained “uncertain”

notwithstanding an Iowa Supreme Court preliminary injunction against

enforcement of that statute. ITC Midwest, LLC, 185 FERC ¶ 61,123 at ¶¶ 34-

35, 2023 WL 8001300, at *7–8 (Nov. 16, 2023) (“[U]nless and until the Iowa

ROFR Statute is ruled unconstitutional, the Project was properly assigned

to ITC Midwest under MISO’s Tariff.”); see also LS Power Midcontinent,

LLC v. State, 988 N.W.2d 316, 322 (Iowa 2023) (underlying Iowa Supreme

Court case, reversing court of appeals’ decision on standing and granting

temporary injunction to stay enforcement of Iowa right of first refusal law

pending litigation of merits of state constitutional challenge). To be sure,

that FERC decision arose in a different posture than this case. The dispute

was whether costs incurred by a constructing utility “after the Iowa

Supreme Court enjoined the ROFR statu[t]e’s effectiveness” would be

26 Nos. 24-3248, 24-3249, & 25-1024

Third, the plain terms of this particular injunction show

the limited scope of relief that plaintiffs sought here. By nam-

ing only the IURC Commissioners as defendants, plaintiffs

ensured that the district court’s order could not operate

against MISO directly. See Driftless Area Land Conservancy v.

Valcq, 16 F.4th 508, 522 (7th Cir. 2021) (“[A] federal injunction

prevents state officials from enforcing the challenged statute,

regulation, or agency action in the future based on its incom-

patibility with federal law. An injunction operates on the en-

joined officials; the law, regulation, or agency action remains

on the books ….”); United States v. Kirschenbaum, 156 F.3d 784,

794 (7th Cir. 1998) (“A district court may not enjoin non-par-

ties who are neither acting in concert with the enjoined party

nor are in the capacity of agents, employees, officers, etc. of

the enjoined party”), first citing Fed. R. Civ. P. 65(d), and then

citing Regal Knitwear Co. v. NLRB, 324 U.S. 9, 12 (1945). MISO

is the entity that is responsible for “assigning” contracts, as

plaintiffs made clear when they petitioned for reconsideration

asserting their fear of irreparable harm resulting from MISO

assignments.9

deemed per se “imprudent” and therefore non-recoverable. See ITC

Midwest, 185 FERC ¶ 61,123, at ¶ 25. But it shows nonetheless that FERC

does not view a preliminary injunction against state regulatory

enforcement of a state right of first refusal law as a conclusive

determination that project assignment is invalid.

9 Preliminary injunctions may operate against non-parties who are of-

ficers, agents, servants, employees, or attorneys of the enjoined parties or

are otherwise in active concert or participation with them. See Fed. R. Civ.

P. 65(d)(2). None of those circumstances are present here. Plaintiffs do not

argue that MISO is acting in concert or participation with the IURC. In-

stead, MISO is continuing to comply with HEA 1420 based on the inde-

pendent legal effect of its FERC-approved tariff.

Nos. 24-3248, 24-3249, & 25-1024 27

This outcome is also consistent with congressional direc-

tion on electricity regulation. The Federal Power Act specifies

that “electric energy shall be held to be transmitted in inter-

state commerce”—and therefore subject to FERC regulation—

“if transmitted from a State and consumed at any point out-

side thereof ….” 16 U.S.C. § 824(c). The Supreme Court has

explained that this text “unambiguously authorizes FERC to

assert jurisdiction over” interstate transmission. New York v.

FERC, 535 U.S. 1, 19–20; id. at 22 (“[T]he FPA contains … ‘a

clear and specific grant of jurisdiction’ to FERC over interstate

transmissions ….”), quoting FPC v. Southern California Edison

Co., 376 U.S. 205, 215 (1964).

The rights of first refusal challenged in this appeal passed

through two separate federal checkpoints—subject to exten-

sive FERC oversight—before taking effect. First, in Order

1000, FERC amended its cost allocation requirements for pub-

lic utility transmission providers to remove federal rights of

first refusal, but FERC explicitly allowed States to grant their

own. See Order 1000, 136 FERC ¶ 61,051 at ¶ 227 (removing

federal right of first refusal to “provide flexibility for public

utility transmission providers in each region to propose …

how best to address participation by nonincumbents” but

noting that “nothing in this Final Rule is intended to limit,

preempt, or otherwise affect state or local laws or regulations

with respect to construction of transmission facilities, includ-

ing but not limited to authority over siting or permitting of

transmission facilities.”). 10

10 We borrow the phrase “federal checkpoints” from Merrion v. Jicarilla

Apache Tribe, 455 U.S. 130, 155 (1982), where the Supreme Court found that

a federal agency’s approval of an Indian tribe’s arguably discriminatory

tax meant the tax did not violate the Indian commerce clause. See also

28 Nos. 24-3248, 24-3249, & 25-1024

Second, and more specifically, FERC approved MISO’s

tariff, which provides that MISO “shall comply with any Ap-

plicable Laws and Regulations granting a right of first refusal

to a Transmission Owner.” MISO Tariff, Attachment FF,

¶ VIII.A.1. MISO’s tariff thus adopts HEA 1420, and FERC’s

approval of the tariff gave the tariff the effect of federal law.

FERC had the power to reject that proposed term if it thought

its application would not be “just and reasonable.” See 16

U.S.C. § 824d(a)–(d). It decided to leave that question to the

States. Moreover, as noted above, there are congressionally

established paths for aggrieved parties to seek review of that

policy decision by both FERC and federal courts of appeals.

See, e.g., 16 U.S.C. § 824e(a); 16 U.S.C. § 825l(b).

Early in this case, plaintiffs relied on MISO’s statement in

an amicus brief to the Iowa Supreme Court that “no [rights of

first refusal] will be accorded to Iowa projects” subsequently

assigned by MISO after an Iowa trial court entered a final

judgment and permanent injunction against the Iowa law.

Plaintiffs here argued—and the district court agreed—that the

Iowa amicus brief showed that MISO would similarly refrain

from assigning projects based on HEA 1420 if the district

court issued a preliminary injunction in this case against

IURC enforcement of it pending a final judgment on the mer-

its. LSP Transmission Holdings, 2024 WL 5008048, at *6 (district

court order citing that amicus brief in Iowa). Plaintiffs

dropped that argument in their merits brief to this court.

There were two good reasons to do so.

White v. Massachusetts Council of Const. Employers, Inc., 460 U.S. 204, 213 &

213 n.11 (1983) (federal agency approval of city policy favoring local con-

tractors meant policy did not violate dormant commerce clause).

Nos. 24-3248, 24-3249, & 25-1024 29

First, as explained above, MISO has made clear in this court

that it does not view itself as bound by the preliminary injunc-

tion directed only against the IURC Commissioners. Second,

the fact that the Iowa state trial court had issued a final judg-

ment and permanent injunction adjudicating that the Iowa

right of first refusal was unconstitutional under state law

made that case critically different from this one. MISO’s rep-

resentation in Iowa that it would be bound by that final judg-

ment is understandable: such a judgment can deprive the stat-

ute of effect, unlike a preliminary injunction that simply pre-

vents enforcement by a particular entity (in this case the

IURC) against particular plaintiffs. See GEFT Outdoors, LLC v.

City of Westfield, 922 F.3d 357, 369–70 (7th Cir. 2019) (“After a

court holds that a statute or ordinance is unconstitutional,

that legislation is void.… But the court’s ruling that the law is

invalid is the crucial trigger for voiding it.”) (internal citations

omitted).

The dissenting opinion suggests that this opinion is inter-

nally inconsistent because it implies that plaintiffs might have

standing to seek a permanent injunction but adopts reasoning

that would deny them standing for a permanent injunction.

See post at 40–41. To be clear, we do not intend to imply any

conclusion about whether plaintiffs would have standing to

seek a permanent injunction against the IURC Commissioners

under a theory that MISO would feel itself bound by a final

judgment treating HEA 1420 as unconstitutional. It is not im-

possible, but it is difficult, to establish standing based on a

prediction about how a non-party is likely to respond to a

court decision. Here is what the Supreme Court said in reject-

ing such an attempt in California v. Texas:

30 Nos. 24-3248, 24-3249, & 25-1024

We have said that, where a causal relation be-

tween injury and challenged action depends

upon the decision of an independent third party

(here an individual’s decision to enroll in, say,

Medicaid), “standing is not precluded, but it is

ordinarily ‘substantially more difficult’ to estab-

lish[.]” Lujan, 504 U.S., at 562 (quoting Allen, 468

U.S., at 758); see also [Clapper v. Amnesty Interna-

tional USA, 568 U.S. 398, 414 (2013)] (expressing

“reluctance to endorse standing theories that

rest on speculation about the decisions of inde-

pendent actors”). To satisfy that burden, the

plaintiff must show at the least “that third par-

ties will likely react in predictable ways.” De-

partment of Commerce v. New York, 588 U. S. 752,

768 (2019). And, “at the summary judgment

stage, such a party can no longer rest on … mere

allegations, but must set forth … specific facts”

that adequately support their contention. Clap-

per, 568 U.S., at 411–412 (internal quotation

marks omitted). The state plaintiffs have not

done so.

593 U.S. at 675.

Principles of judicial restraint call for us to focus on the

only order on appeal: the preliminary injunction. MISO has

told us and shown us that the preliminary injunction against

the IURC Commissioners is not affecting its actions. Standing

to seek permanent injunctive relief is not before this court in

this appeal. In addition, developments before FERC or deci-

sions by MISO may affect future proceedings before the dis-

trict court. We cannot and should not try to determine

Nos. 24-3248, 24-3249, & 25-1024 31

plaintiffs’ standing to seek a permanent injunction when so

much is still subject to change.

In sum, plaintiffs lacked standing to seek the preliminary

injunction here because the injunction against the IURC did

not oblige MISO—the entity actually responsible for assign-

ing these projects and for the harm plaintiffs fear—to act in

any particular way. Nor did the injunction prompt MISO to

modify its actions. The preliminary injunction is hereby

VACATED and the case is REMANDED to the district court

for further proceedings consistent with this opinion.

32 Nos. 24-3248, 24-3249, & 25-1024

SCUDDER, Circuit Judge, dissenting. LSP Transmission

Holdings seeks to build electric transmission lines in Indiana

but is unable to compete for these projects because of the

State’s House Enrolled Act 1420. The statute affords “incum-

bents,” companies who already own transmission lines in In-

diana, a right of first refusal. As its name implies, the right

gives existing transmission providers the option to construct

any new projects that connect to their existing lines without

having to bid or otherwise compete for those projects.

LSP and affiliated companies invoked 42 U.S.C. § 1983 and

brought suit against the Chair and Commissioners of the In-

diana Utility Regulatory Commission. They claim HEA 1420

violates the Constitution by discriminating against interstate

commerce and sought and received preliminary injunctive re-

lief before the district court. The Commissioners now appeal,

joined by several companies that qualify as incumbents under

HEA 1420 who intervened to defend the Indiana statute.

I would affirm. LSP not only has standing but also has

demonstrated a likelihood of success on the merits because

HEA 1420 facially discriminates against interstate commerce

and Congress has not clearly authorized that discrimination.

The balance of equities also weighs in favor of injunctive re-

lief.

I

Article III’s Case or Controversy limitation makes LSP’s

standing the necessary and proper beginning point. At the

preliminary injunction stage, the plaintiffs must make a “clear

showing” that they are “‘likely’ to establish each element of

standing.” Murthy v. Missouri, 603 U.S. 43, 58 (2024) (quoting

Nos. 24-3248, 24-3249, & 25-1024 33

Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 22

(2008)). LSP clears this modest hurdle.

A

Article III standing doctrine requires LSP to make the

threefold showing that it “(1) suffered an injury in fact,

(2) that is fairly traceable to the challenged conduct of the de-

fendant, and (3) that is likely to be redressed by a favorable

judicial decision.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338

(2016) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–

61 (1992)).

LSP alleges that HEA 1420 inflicts commercial injury—in

violation of the dormant Commerce Clause—by depriving

the company of the ability to compete on equal terms for

transmission projects in Indiana. Evaluating this allegation

benefits from knowing more about the Indiana statute.

Section 8-1-38-9(a) provides an “incumbent electric trans-

mission owner” with the “right to construct, own, operate,

and maintain” not only an electric transmission facility “that

connects to an electric transmission facility owned by the in-

cumbent electric transmission owner,” but also “[u]pgrades

to an existing electric transmission facility owned by the in-

cumbent.” Ind. Code § 8-1-38-9(a). The statute defines “in-

cumbent electric transmission owner” as a “public utility that

owns, operates, and maintains an electric transmission facility

in whole or in part in Indiana.” Id. § 8-1-38-2.

For a project to trigger a right of first refusal, a regional

transmission organization, here the Midcontinent Independ-

ent System Operator (MISO), must approve it. See id. § 8-1-38-

9(a). And because the right is limited to projects approved

through MISO’s planning process, HEA 1420 only regulates

34 Nos. 24-3248, 24-3249, & 25-1024

transmission lines that connect to the interstate electric grid—

even if an individual project is confined within the state bor-

ders of Indiana.

HEA 1420 gives incumbents first dibs to construct qualify-

ing projects. A non-incumbent, by contrast, is only permitted

to compete for transmission projects when the incumbent

provides the Commission notice that it does not intend to ex-

ercise its right of first refusal. See id. § 8-1-38-9(c).

LSP’s complaint named the Commissioners of the Indiana

Utility Regulatory Commission as defendants and sought de-

claratory relief that Indiana Code § 8-1-38-9, as amended by

HEA 1420, is unconstitutional and an order enjoining the

Commissioners from enforcing the statute. In granting LSP’s

motion for a preliminary injunction, the district court en-

joined the “Commissioners of the Indiana Utility Regulatory

Commission, their agents, servants, and employees, and per-

sons acting in concert or participation with them” from “en-

forcing the rights of first refusal of Indiana Code § 8-1-38-9.”

Returning, then, to the requirements of Article III stand-

ing, LSP seeks to bid on several transmission projects in Indi-

ana but cannot do so unless the incumbents decline to exercise

their statutory right of first refusal. The “inability to compete

on an equal footing in the bidding process,” the Supreme

Court has recognized, satisfies the injury-in-fact requirement.

Ne. Fla. Chapter of Associated Gen. Contractors of Am. v. City of

Jacksonville, 508 U.S. 656, 666 (1993); see also All. for Clean Coal

v. Miller, 44 F.3d 591, 594 (7th Cir. 1995) (applying City of Jack-

sonville in the dormant Commerce Clause context and finding

the inability to “compete on an equal footing in interstate

commerce” a sufficient injury). Indeed, the panel majority

does not dispute that the injury-in-fact requirement is met

Nos. 24-3248, 24-3249, & 25-1024 35

here. I too have little trouble concluding that LSP is likely to

suffer a concrete and actual injury by losing the ability to com-

pete for certain transmission projects because of HEA 1420.

From there the questions are whether that injury is fairly

traceable to the Commissioners and capable of being re-

dressed through a favorable judicial decision. Causation and

redressability, the Supreme Court has emphasized, are often

“flip sides of the same coin.” FDA v. All. for Hippocratic Med.,

602 U.S. 367, 380–81 (2024) (quoting Sprint Commc’ns Co. v.

APCC Servs., Inc., 554 U.S. 269, 288 (2008)). “If a defendant’s

action causes an injury, enjoining the action or awarding dam-

ages for the action will typically redress that injury.” Id. at 381.

Every indication in Indiana law is that the Commission, in

the words of HEA 1420, has the power to prevent an incum-

bent from being able to “construct, own, operate, and main-

tain” an electric transmission project in Indiana awarded pur-

suant to a right of first refusal. Ind. Code § 8-1-38-9(a). The

Indiana General Assembly has expressly charged the Utility

Regulatory Commission with the power and duty to “en-

force … all … laws[] relating to public utilities.” Id. § 8-1-2-

115. There is no doubt that HEA 1420 is such a law. Its right

of first refusal is codified in the title of the Indiana Code gov-

erning utilities. And to qualify as an “incumbent” under the

statute one must be “a public utility that owns, operates, and

maintains an electric transmission facility in whole or in part

in Indiana.” Id. § 8-1-38-2 (emphasis added). The Commis-

sioners thus “possess[]” overarching “enforcement authority”

that “a federal court might enjoin [them] from exercising.”

Whole Woman’s Health v. Jackson, 595 U.S. 30, 43 (2021).

Everyone agrees that the Commission is the regulatory

agency with authority over public utilities in Indiana.

36 Nos. 24-3248, 24-3249, & 25-1024

Everyone agrees that HEA 1420 is a law “relating to public

utilities.” And everyone agrees that, when an incumbent is

awarded a transmission project pursuant to HEA 1420, mov-

ing forward with that project will necessarily involve activity

in Indiana. It defies belief that the Indiana General Assembly

vested the Commission with broad enforcement authority but

the Commissioners are nevertheless powerless to impose any

limitation on a utility company’s ability to construct, own, op-

erate, or maintain electric transmission facilities within the

State. To adopt that view is to conclude that Indiana law does

not mean what it says.

It is inconceivable that the named defendants could not

give effect to the district court’s injunction—prohibiting them

from enforcing the right of first refusal pursuant to a statute

that the court has declared likely violates the dormant Com-

merce Clause. Because the preliminary injunction denies in-

cumbents the right that HEA 1420 provides (constructing,

owning, operating, and maintaining a transmission facility

without a competitive bidding process), it follows that LSP’s

injury (the inability to compete on equal terms) is redressable

by a federal court order.

B

The Commissioners and panel majority press a different

analysis. They emphasize that it is MISO—not the Commis-

sion—who shoulders responsibility for assigning a transmis-

sion project to an incumbent in accordance with HEA 1420.

And, they continue, the Commission has no authority over

MISO. While these observations may be accurate, they are in-

complete and do not resolve the standing question before us.

Nos. 24-3248, 24-3249, & 25-1024 37

Whether LSP has Article III standing does not turn on

whether the Commissioners have authority to assign trans-

mission projects or direct MISO, a non-party, to do anything.

All the ink the majority spills over MISO’s role in the assign-

ment process is neither here nor there—non-responsive, in

my respectful view, to the central issue: whether the Commis-

sion itself has the power to prevent an incumbent from con-

structing, owning, operating, or maintaining an electric trans-

mission facility in the State of Indiana. Indiana law tells us it

does. By its terms, § 8-1-2-115 grants the Commission general

enforcement authority over all laws relating to public utilities.

And we should take the Indiana General Assembly at its

word—rather than acquiesce in the agency’s understanding

of its own statutory authority.

The panel opinion portrays this theory of standing as

“novel.” Op. at 3. But there is nothing novel about discerning

the scope of an agency’s administrative authority by inter-

preting the plain language of the statute defining its powers

of enforcement. Nor is there any meaningful difference be-

tween my analysis and the district court’s. As applied here,

the Indiana legislature gave the Commission authority to en-

force the statute that causes LSP’s alleged harm.

The majority’s error stems from reading Indiana law with

too narrow a focus, looking only to the immediate provision

containing the right of first refusal and, as a consequence,

leading the panel to conclude the requirement that incum-

bents provide the Commission with notice of their intent to

exercise the right is “all HEA 1420 has to say about the IURC.”

Op. at 14–15. But § 8-1-38-9, which houses the right of first re-

fusal, is one provision within the broader Indiana Utility

Code—a complex regulatory scheme made up of over 70

38 Nos. 24-3248, 24-3249, & 25-1024

chapters and more than 1,000 separate sections. And I see no

indication that the Indiana General Assembly sought to erect

an interior firewall around HEA 1420, neither separating it

from the rest of the Code nor stripping the Commission of its

“broad authority over public utilities.” Op. at 20.

The majority reaches the opposite conclusion by analyzing

whether HEA 1420 is “severable from the other provisions of

Indiana law dealing with utility regulation.” Op. at 19. But the

severability analysis it employs is not one the law knows or

recognizes.

The Supreme Court has described severability as a ques-

tion of the proper remedy for constitutional violations. See,

e.g., Seila L. LLC v. CFPB, 591 U.S. 197, 232 (2020); NFIB v. Sebe-

lius, 567 U.S. 519, 585–88 (2012); United States v. Booker, 543

U.S. 220, 245 (2005). Severability doctrine comes into play

only after a court has decided the constitutional merits. But, in

resolving this appeal on standing grounds, the majority never

reaches the merits of LSP’s constitutional challenge to HEA

1420. So it is not at all clear why the majority reaches for the

severability doctrine to answer a threshold question of Arti-

cle III standing.

The clear design of the majority’s severability analysis is

to isolate HEA 1420 from the rest of the Indiana Utility Code

and avoid the Indiana General Assembly’s delegation of gen-

eral enforcement authority to the Commission. But whether

the right of first refusal is indeed severable in no way answers

or even informs the Article III standing inquiry: whether the

Commissioners can redress LSP’s alleged injury. Nor does

any canon of construction I know of consider a statute’s “rel-

ative brevity and recent enactment,” Op. at 20, to conclude, in

categorical terms, that the rest of the statutory scheme is

Nos. 24-3248, 24-3249, & 25-1024 39

extraneous and, by extension here, irrelevant to a proper Ar-

ticle III standing analysis.

HEA 1420 does not speak to the Commissioners’ power to

enforce the right of first refusal. Contra Jackson, 595 U.S. at 35–

36, 43–44 (citing Tex. Health & Safety Code Ann. § 171.207(a))

(concluding that plaintiffs lacked standing to sue the Attorney

General of Texas where the state statute expressly divested

state officials of enforcement authority). So resolving what

authority these named defendants have under Indiana law re-

quires looking outside the four corners of the provision

providing the right of first refusal.

All I am saying is we must read HEA 1420 in “context”

and “with a view to [its] place in the overall statutory

scheme.” West Virginia v. EPA, 597 U.S. 697, 721 (2022) (cita-

tion omitted). Against this backdrop, the grant of general en-

forcement authority belies the majority’s claim that the Com-

mission—the state regulatory body tasked with overseeing

public utilities—is merely a maildrop, functioning “only as a

notice repository, not as an enforcer of the rights of first re-

fusal.” Op. at 14. The plain language of § 8-1-2-115 compels a

clear conclusion: the Commission can redress the harm im-

posed by an unconstitutional statute that it has the power to

enforce.

The majority doubles down on its error by the way it ana-

lyzes the harm HEA 1420 inflicts upon LSP. The panel opinion

narrowly focuses on MISO’s “assignment” of a transmission

project to an incumbent and disregards the steps in the pro-

cess that will follow. Whatever it means to be assigned a pro-

ject, this is only the first step of a years-long venture that will

culminate in an incumbent constructing and operating new

transmission lines in Indiana. But LSP does not merely want

40 Nos. 24-3248, 24-3249, & 25-1024

to be awarded a project: the company wants to reap the finan-

cial benefit of that project through construction and, ulti-

mately, operation of the transmission line within the State.

The district court’s preliminary injunction properly ac-

counts for this. By its terms, its scope extends beyond the act

of assigning a transmission project to an incumbent—prohib-

iting the Commissioners instead from more generally “en-

forcing the rights of first refusal” under Indiana law. And re-

member that the General Assembly defined the scope of that

right to “construct, own, operate, and maintain” certain elec-

tric transmission facilities, Ind. Code § 8-1-38-9(a), not merely

to be assigned such a project.

Consider for a moment what the majority opinion does

not say. Nowhere does the panel conclude that LSP lacks Ar-

ticle III standing to seek a permanent injunction. In fact the

majority takes pains to disavow that conclusion and contends

the question remains open. See Op. at 29–31. But ask yourself

what could possibly happen on remand that would allow LSP

to seek permanent injunctive relief where it lacked standing

to seek preliminary injunctive relief. The clear answer is, in a

word, nothing.

The dormant Commerce Clause claim, the named defend-

ants, and the Commission’s authority are not subject to

change based on any fact-finding that may occur in the dis-

trict court. To the contrary, the facts critical to the Article III

standing question here all remain the same whether we con-

sider LSP’s request for a preliminary or permanent injunction.

If, as the majority urges, this case really does begin and end

with MISO’s exclusive authority to assign new transmission

projects, how could LSP have standing to seek permanent

Nos. 24-3248, 24-3249, & 25-1024 41

injunctive relief on the very same basis against the very same

defendants?

Any approach that depends on how MISO, a non-party,

would respond to a permanent injunction would run head-

long into a basic tenet of standing doctrine: a plaintiff cannot

rely on a judgment’s domino effect on a non-party to establish

redressability. To the contrary, “it is a bedrock principle a fed-

eral court cannot redress ‘injury that results from the inde-

pendent action of some third party not before the court.’”

Murthy, 603 U.S. at 57 (citation omitted).

Nor can a federal court declare a statute unconstitutional

in the abstract—Article III always demands a proper defend-

ant capable of redressing the alleged injury. See California v.

Texas, 593 U.S. 659, 672 (2021) (explaining that “[r]emedies”

traditionally “operate with respect to specific parties” (cita-

tion omitted)); see also William Baude & Samuel L. Bray,

Proper Parties, Proper Relief, 137 Harv. L. Rev. 153, 158, 177–79

(2023).

Nothing about how MISO would react to a final judgment

expands the enforcement authority of the Commissioners—

the only named defendants in this action. See Haaland v. Brack-

een, 599 U.S. 255, 292–93 (2023) (concluding that plaintiffs

lacked Article III standing to enjoin enforcement of a federal

law where third parties, not the named defendants, “carry out

the court-ordered placements” giving rise to plaintiffs’ al-

leged injury). And nothing about the nature of the relief

sought gives the Commission a role in redressing LSP’s in-

jury, transforming them into proper defendants. So regardless

of any subsequent “developments before FERC or decisions

by MISO,” Op. at 30, the standing inquiry would remain the

same on remand.

42 Nos. 24-3248, 24-3249, & 25-1024

I see only two options: either the Commissioners’ enforce-

ment authority is sufficient to allow LSP to seek both prelim-

inary and permanent injunctive relief or its authority is insuf-

ficient as to both. If, as the majority would have it, the Com-

mission lacks authority to enforce the statute that causes the

alleged harm, the proper resolution should be to remand this

case to the district court with instructions to dismiss for lack

of subject matter jurisdiction. But the panel opinion leaves

open the possibility of a different outcome in connection with

a permanent injunction on remand because it is unwilling to

say that LSP’s claim is not justiciable. In this respect, the ma-

jority’s conclusion is at odds with itself.

Recognize too the incoherence of the Commissioners’ po-

sition. In advancing the contention that federal law has au-

thorized any violation of the dormant Commerce Clause, the

Commissioners emphasize that the Federal Power Act pre-

serves state authority over utility regulation—including in

the siting and construction of electric transmission lines. But

in their same breath, when it comes to Article III standing, the

Commissioners insist the Commission itself is powerless to

regulate utility companies operating in Indiana—through, for

example, their authority over powerline siting and construc-

tion. Try as they might, the Commissioners cannot have it

both ways.

Walking even further out on a legal limb, the Commission-

ers tell us that no arm of Indiana can be sued on a claim that

HEA 1420 violates the dormant Commerce Clause. They ef-

fectively say that LSP’s claim is non-justiciable. With all re-

spect, that position is way off the mark. Foremost, the Com-

missioners’ position flies in the face of the Ex parte Young doc-

trine and cannot be correct—particularly not where, as here,

Nos. 24-3248, 24-3249, & 25-1024 43

Indiana law plainly tells us which state officials enforce the

statute and plaintiffs have named those precise officials as de-

fendants. The Supreme Court has recognized the dormant

Commerce Clause confers a right actionable under § 1983. See

Dennis v. Higgins, 498 U.S. 439, 440 (1991).

On this point, the majority’s opinion struggles. The major-

ity suggests that LSP might cure any defect with respect to

Article III’s redressability requirement by adding MISO to its

lawsuit, faulting the plaintiffs’ “tactical choice” not to name

MISO as a defendant. Op. at 16. Perhaps that is the skeleton

key “development” the majority envisions upon remand. But

this solution begs a question: what claim could LSP bring? No

one has suggested that MISO—a non-profit, private entity—

is a proper § 1983 defendant. So what cause of action would

allow a plaintiff to sue MISO as a non-state actor for a viola-

tion of the dormant Commerce Clause? The majority opinion

offers no answer. And I have been unable to come up with

one.

***

No doubt the standing question immerses us in the con-

sideration of complicated facts and an equally complicated

regulatory scheme. But nothing about that twofold complex-

ity changes what Article III requires to show a redressable in-

jury caused by a state statute. The majority has allowed litiga-

tion complexity to overwhelm and cloud a clear takeaway

from the authority the Indiana General Assembly gave the

State’s Utility Regulatory Commission. In the final analysis

for me, the named defendants—charged as they are by State

law with enforcing Indiana’s public utility laws—are posi-

tioned to give effect to a judicial order enjoining enforcement

of HEA 1420’s right of first refusal based on a judicial

44 Nos. 24-3248, 24-3249, & 25-1024

determination that the provision likely violates the dormant

Commerce Clause.

II

That brings us to the merits. Recall that these appeals come

to us following the district court’s grant of a motion for a pre-

liminary injunction. The standard for receiving such relief is

clear. “A plaintiff seeking a preliminary injunction must es-

tablish [1] that he is likely to succeed on the merits, [2] that he

is likely to suffer irreparable harm in the absence of prelimi-

nary relief, [3] that the balance of equities tips in his favor, and

[4] that an injunction is in the public interest.” Winter, 555 U.S.

at 20.

LSP has satisfied the requirements. HEA 1420 facially dis-

criminates against interstate commerce by imposing differen-

tial treatment on companies’ ability to compete for new con-

struction projects in Indiana based on their preexisting own-

ership of transmission facilities in the State. The statute fails

to satisfy strict scrutiny and nothing in the Federal Power Act

reflects that Congress authorized this dormant Commerce

Clause violation with a clear statement. I also see no abuse of

discretion in the district court’s weighing of the equitable con-

siderations.

A

The Constitution extends to Congress the power to “regu-

late Commerce … among the several States.” U.S. Const.

art. I, § 8, cl. 3. But the Supreme Court has long interpreted

the Commerce Clause to also contain a “dormant” or “nega-

tive” component, which prohibits states and municipalities

from “erecting barriers to the free flow of interstate com-

merce.” Raymond Motor Transp., Inc. v. Rice, 434 U.S. 429, 440

Nos. 24-3248, 24-3249, & 25-1024 45

(1978). This restraint on state action applies even when Con-

gress has “failed to legislate on the subject.” Okla. Tax Comm’n

v. Jefferson Lines, Inc., 514 U.S. 175, 179 (1995).

“To determine whether a law violates this so-called

‘dormant’ aspect of the Commerce Clause,” the first question

is whether the challenged measure “discriminates on its face

against interstate commerce.” United Haulers Ass’n, Inc. v.

Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 338

(2007). “Discrimination” in this context “means differential

treatment of in-state and out-of-state economic interests that

benefits the former and burdens the latter.” Or. Waste Sys., Inc.

v. Dep’t of Env't Quality of State of Or., 511 U.S. 93, 99 (1994). A

state law discriminating in this way is “subject to a ‘virtually

per se rule of invalidity,’ which can only be overcome by a

showing that the State has no other means to advance a legit-

imate local purpose.” United Haulers, 550 U.S. at 338–39 (quot-

ing Philadelphia v. New Jersey, 437 U.S. 617, 624 (1978)).

B

These principles find straightforward application to HEA

1420. The statute provides a benefit—a right of first refusal—

only to companies who already own transmission facilities in

Indiana. And it does so to the exclusion of all potential out-of-

state competitors, who must wait for an incumbent to decline

a new project before having a chance to enter the bidding mix.

HEA 1420 disfavors—discriminates against—companies

wanting to construct transmission lines in Indiana but cur-

rently lacking a presence there.

The differential treatment is express on the statute’s face.

HEA 1420 defines “incumbent” as a “public utility that owns,

operates, and maintains an electric transmission facility in

46 Nos. 24-3248, 24-3249, & 25-1024

whole or in part in Indiana.” Ind. Code § 8-1-38-2 (emphasis

added). An “in-state presence requirement” of this type runs

contrary to the principle that states “cannot require an out-of-

state firm ‘to become a resident in order to compete on equal

terms.’” Granholm v. Heald, 544 U.S. 460, 475 (2005) (quoting

Halliburton Oil Well Cementing Co. v. Reily, 373 U.S. 64, 72

(1963)). This suffices to establish facial discrimination.

The Commissioners urge that HEA 1420 draws a neutral

distinction between incumbents—electric transmission own-

ers whose existing facilities will connect to the approved new

project—and all other entities, regardless of whether they are

in-state or out-of-state. Regulating based on incumbency sta-

tus, they argue, does not discriminate according to a com-

pany’s presence in Indiana because a company that is an in-

cumbent as to some projects (those that connect to their facil-

ities) will not be an incumbent as to other projects (those that

do not).

But that position falters on another well-established prin-

ciple: a state law is “no less discriminatory” because in-state

businesses “are also covered by the prohibition.” C&A Car-

bone, Inc. v. Town of Clarkstown, 511 U.S. 383, 391 (1994); see

also Dean Milk Co. v. City of Madison, 340 U.S. 349, 354 n.4

(1951). HEA 1420, like the ordinance in Carbone, provides a

preference to “favored operator[s]” in Indiana—the incum-

bents—and deprives out-of-state entities the opportunity to

compete for transmission projects on the same terms. 511 U.S.

at 391. It makes no difference, then, that when the Indiana

statute confers a right of first refusal on an in-state incumbent,

it disadvantages both out-of-state entities and in-state non-in-

cumbents alike. That Indiana has also frozen out these in-state

Nos. 24-3248, 24-3249, & 25-1024 47

would-be-competitors is irrelevant to the facial discrimina-

tion analysis.

The Fifth Circuit charted this same course of reasoning in

NextEra Energy Capital Holdings, Inc. v. Lake, 48 F.4th 306 (5th

Cir. 2022). The court held that a Texas law providing a right

of first refusal to incumbent transmission owners facially dis-

criminated against interstate commerce. “Limiting competi-

tion based on the existence or extent of a business’s local foot-

hold,” the court explained, “is the protectionism that the

Commerce Clause guards against.” Id. at 326. And while the

Fifth Circuit confronted a different statutory scheme, the prin-

ciples guiding its reasoning apply with full force to HEA 1420.

The Eighth Circuit’s contrary analysis in LSP Transmission

Holdings, LLC v. Sieben, 954 F.3d 1018 (8th Cir. 2020), which

found a Minnesota right-of-first-refusal law

non-discriminatory, comes up short, in my respectful view. A

focus on where the companies who benefit from a protection-

ist measure are “based” does not resolve the question of

whether the law discriminates against interstate commerce.

No matter if a company is incorporated or headquartered in

the state, a statute providing a legal benefit predicated on a

company’s physical presence there triggers scrutiny under

the dormant Commerce Clause. See Lake, 48 F.4th at 323–24

(collecting cases).

C

The conclusion that HEA 1420 discriminates against inter-

state commerce brings us to the question of tailoring. Where

a statute discriminates against nonresident economic actors

or out-of-state goods, the law can be sustained only if the state

shows it has “no other means to advance a legitimate local

48 Nos. 24-3248, 24-3249, & 25-1024

purpose.” United Haulers, 550 U.S. at 338–39. The Supreme

Court has told us that this standard imposes an “extremely

difficult burden” and requires the “strictest scrutiny.” Camps

Newfound/Owatonna, Inc. v. Town of Harrison, 520 U.S. 564,

581–82 (1997) (citation omitted).

The Commissioners say that HEA 1420 protects the safety

of Indiana residents and promotes the reliability and stability

of its electric grid. But review of the statutory scheme con-

firms the right of first refusal is not necessary for the State to

achieve this goal.

HEA 1420 does not compel incumbents to accept a new

business opportunity and construct transmission projects that

connect to their existing facilities. Rather it confers a right of

first refusal—it offers them first choice to accept such projects.

The State might reasonably prefer incumbents to undertake

projects which connect to their existing lines. But if this was

truly necessary for safety and reliability of the electric grid,

Indiana would not open the project to competitive bidding.

What is more, regardless of which company is awarded a pro-

ject, they will be subject to extensive federal and state regula-

tion in the construction and operation of the transmission line.

I would hold that HEA 1420 violates the dormant dimen-

sion of the Commerce Clause.

D

The Commissioners press two additional arguments that

warrant response. Each attempts to remove HEA 1420 from

dormant Commerce Clause scrutiny altogether—even if the

statute facially discriminates against out-of-state power sup-

pliers and Indiana has other means to advance its interest. But

both contentions fall flat.

Nos. 24-3248, 24-3249, & 25-1024 49

1

The Commissioners first contend that the Supreme

Court’s decision in General Motors Corp. v. Tracy, 519 U.S. 278

(1997), forecloses LSP’s challenge. Not so in my view.

Tracy is difficult to distill into a simple description. The

case involved an Ohio law which provided a tax exemption

to local distributors of natural gas but not to out-of-state bulk

gas sellers. See id. at 281–83. This tax exemption operated in

two different retail markets. The local distributors sold natu-

ral gas to residential and small-business customers in a “cap-

tive” monopoly market, where gas was “bundled” with pro-

tections mandated by state regulators and the distributors

served all customers at restricted rates. See id. at 296–99, 303–

04. But the exemption also applied to sales these local distrib-

utors made in the separate, competitive market for large in-

dustrial customers—where they competed against out-of-

state companies, who sold “unbundled” gas and whose sales

were not tax exempt. See id. at 282–83, 297–98, 302. General

Motors, which bought natural gas from the out-of-state

sellers, appealed Ohio’s application of the tax to its purchases,

alleging that the differential tax treatment violated the Com-

merce Clause. See id. at 285.

In upholding the challenged Ohio statute, the Supreme

Court focused on the purposes of the dormant Commerce

Clause doctrine. Where companies provide different prod-

ucts in different markets and would continue to do so even if

the alleged discriminatory burden on interstate commerce

were removed, the Court explained, “eliminating the … reg-

ulatory differential would not serve the dormant Commerce

Clause’s fundamental objective of preserving a national mar-

ket for competition undisturbed by preferential advantages

50 Nos. 24-3248, 24-3249, & 25-1024

conferred by a State upon its residents or resident competi-

tors.” Id. at 299.

Because the local, captive market was a regulated monop-

oly, “competition would not be served by eliminating any tax

differential as between sellers, and the dormant Commerce

Clause ha[d] no job to do.” Id. at 303. But eliminating this dis-

parity between the companies in the noncaptive market, on

the other hand, might intensify competition. See id. The case

thus turned on whether to “accord controlling significance to

the noncaptive market in which they compete, or to the non-

competitive, captive market in which the local utilities alone

operate[.]” Id. at 303–04.

Tracy chose to give “greater weight to the captive market”

and the local distribution companies’ “singular role in serving

[that market].” Id. at 304. Invalidating the tax exemption, the

Supreme Court determined, could “imperil” the distributors’

ability to serve the captive market by reducing their competi-

tive advantage. Id. at 304–07. So the Court rejected the

dormant Commerce Clause challenge and let the Ohio statute

stand.

The Commissioners see incumbents under HEA 1420 as

situated like the local distributors in Tracy and, from that ob-

servation, argue that Indiana state law should be permitted to

treat these companies differently than non-incumbents. In-

cumbents own the existing facilities that will be upgraded or

to which new transmission lines will connect and so, the ar-

gument goes, are in a materially different position to under-

take construction than a new operator. Further, they urge,

many Indiana incumbents are vertically integrated utilities

(meaning they generate, transmit, and distribute electricity)

Nos. 24-3248, 24-3249, & 25-1024 51

and serve captive retail customers, just like the Tracy local dis-

tributors.

In insisting on a side-by-side comparison with Tracy, the

Commissioners overlook a crucial fact supporting the Court’s

decision there that is not present here. The natural gas com-

panies primarily operated in two different markets (one cap-

tive, one competitive) and the challenged law regulated both.

See Camps Newfound, 520 U.S. at 582 n.16 (observing that Tracy

“premised its holding that the statute at issue was not facially

discriminatory on the view that sellers of ‘bundled’ and ‘un-

bundled’ natural gas were principally competing in different

markets”).

HEA 1420, by contrast, governs only a single competitive

market: the market to construct transmission lines that con-

nect to the interstate power grid, where vertically integrated

utilities compete alongside independent transmission opera-

tors. “In the market for transmission of electricity,” the Fifth

Circuit recognized, “vertically integrated utilities and trans-

mission-only companies compete and offer the same services:

building, operating, and owning transmission lines.” Lake, 48

F.4th at 319 (interpreting and applying Tracy). HEA 1420’s

right of first refusal stifles competition in this market. Indeed,

the reason that several incumbent power suppliers intervened

in this litigation to defend the Indiana law is to avoid having

to compete for these projects through competitive bidding.

HEA 1420 does not regulate a “noncompetitive, captive

market in which the local utilities alone operate[.]” Tracy, 519

U.S. at 303–04. And Tracy cannot be read to remove from

Commerce Clause scrutiny laws regulating a single market

where vertically integrated utilities undoubtedly compete

alongside other transmission-only operators. See Energy

52 Nos. 24-3248, 24-3249, & 25-1024

Mich., Inc. v. Mich. Pub. Serv. Comm’n, 126 F.4th 476, 492–97

(6th Cir. 2025) (explaining that Tracy should be limited “to its

unique factual setting”).

It is easy to get lost in the weeds of Tracy, but do not let all

of this detail create confusion. The clearest principle to be de-

rived from the case is that the ordinary rules of dormant Com-

merce Clause jurisprudence can sometimes give way when

their application would not serve the doctrine’s core aim: pro-

tecting competition in interstate markets. Because HEA 1420

undermines this objective, I have little trouble concluding that

Tracy does not save it.

2

The Commissioners’ final effort to save HEA 1420 comes

with the contention that Congress in the Federal Power Act

authorized states to enact right of first refusal laws like this

one. Here, too, I disagree. Having reviewed the Federal Power

Act, I do not see anywhere where Congress supplied the nec-

essary clear statement to immunize a dormant Commerce

Clause violation.

“[F]or a state regulation to be removed from the reach of

the dormant Commerce Clause,” the Supreme Court has em-

phasized, “congressional intent must be unmistakably clear.”

S.-Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 91 (1984).

“The requirement that Congress affirmatively contemplate

otherwise invalid state legislation is mandated by the policies

underlying dormant Commerce Clause doctrine,” id. at 91–92,

and a state has the “burden of demonstrating a clear and un-

ambiguous intent on behalf of Congress to permit the discrim-

ination against interstate commerce,” Wyoming v. Oklahoma,

502 U.S. 437, 458 (1992). By contrast, the mere “fact that the

Nos. 24-3248, 24-3249, & 25-1024 53

state policy … appears to be consistent with federal policy—

or even that state policy furthers the goals we might believe

that Congress had in mind—is an insufficient indicium of

congressional intent.” S.-Cent. Timber Dev., 467 U.S. at 92.

The Federal Power Act contains no unambiguous state-

ment of congressional intent to authorize state rights of first

refusal. The Commissioners rely on the so-called savings

clause of the Act, which reserves for the states authority over

“facilities used for the generation of electric energy,” “facili-

ties used in local distribution or only for the transmission of

electric energy in intrastate commerce,” and “facilities for the

transmission of electric energy consumed wholly by the trans-

mitter.” 16 U.S.C. § 824(b)(1). Our court has interpreted this

language to retain state authority over “the location and con-

struction of electrical transmission lines.” Ill. Com. Comm’n v.

FERC, 721 F.3d 764, 773 (7th Cir. 2013). But Congress giving

states authority over siting and construction is a far cry from

Congress empowering states to discriminate in favor of in-

state interests with respect to interstate transmission lines.

If the lack of a clear statement alone was not enough, the

Supreme Court has twice rejected that the Federal Power

Act’s savings clause constitutes “an affirmative grant of

power to the states to burden interstate commerce ‘in a man-

ner which would otherwise not be permissible.’” New England

Power Co. v. New Hampshire, 455 U.S. 331, 341 (1982) (citation

omitted). In New England Power the Court held that the Fed-

eral Power Act did not permit a state to restrict the interstate

transmission of hydroelectric power, despite the savings

clause’s additional assurance that the Act would not deprive

a state “of its lawful authority now exercised over the expor-

tation of hydroelectric energy which is transmitted across a

54 Nos. 24-3248, 24-3249, & 25-1024

State line.” 16 U.S.C. § 824(b)(1). Notwithstanding this lan-

guage, the Court explained that “[n]othing in the legislative

history or language of the statute evinces a congressional in-

tent to alter the limits of state power otherwise imposed by

the Commerce Clause.” New England Power, 455 U.S. at 341

(internal quotation marks omitted) (citation omitted). And

that case presented a stronger basis for congressional author-

ization than rights of first refusal, as the Federal Power Act’s

savings clause does specifically speak to state authority over

hydroelectric energy.

The Supreme Court returned to the Power Act a decade

later and reached the same conclusion. The savings clause, the

Court reaffirmed, “simply saves from pre-emption under

Part II of the Federal Power Act such state authority as was

otherwise ‘lawful.’” Wyoming, 502 U.S. at 458 (quoting New

England Power, 455 U.S. at 341) (declining to find congres-

sional approval of state law reserving a segment of the Okla-

homa coal power market for Oklahoma-mined coal). Leaving

nothing to doubt, the Court underscored that its decisions

“have uniformly subjected Commerce Clause cases implicat-

ing the Federal Power Act to scrutiny on the merits.” Id.

Against the backdrop of Supreme Court precedent requir-

ing a clear statement and explicitly rejecting that the savings

clause contains such a statement, I see no indication—and

definitely no clear statement—that Congress authorized the

violation of the dormant Commerce Clause perpetrated by

HEA 1420.

III

In addition to likelihood of success on the merits, a party

seeking a preliminary injunction must show that it “is likely

Nos. 24-3248, 24-3249, & 25-1024 55

to suffer irreparable harm in the absence of preliminary relief,

that the balance of the equities tips in [its] favor, and that an

injunction is in the public interest.” Higher Soc’y of Ind. v.

Tippecanoe County, 858 F.3d 1113, 1116 (7th Cir. 2017) (quoting

Winter, 555 U.S. at 20). The district court was right to conclude

that each of these factors weighs in LSP’s favor.

“The existence of a continuing constitutional violation,”

we have emphasized, “constitutes proof of an irreparable

harm, and its remedy certainly would serve the public inter-

est.” Preston v. Thompson, 589 F.2d 300, 303 n.3 (7th Cir. 1978).

And LSP further faces irreparable harm based on its showing

that, absent an injunction, it will be deprived of the equal op-

portunity to compete for billions of dollars in Indiana trans-

mission projects—which HEA 1420 sets aside for incumbents.

On the other side of the scale, the Commissioners contend

that a preliminary injunction threatens the safety, stability,

and reliability of the transmission grid in Indiana. But this

concern rings hollow. The transmission projects implicated by

HEA 1420 are all future projects—scheduled for completion

years down the road. If an incumbent were to decline to exer-

cise their right of first refusal, as the statute permits, that alone

would initiate a lengthy competitive bidding process for the

project. A preliminary injunction does not imminently

threaten any Indiana residents losing power or hamper the

ability of current operators to respond to service disruptions.

So I fail to see irreparable harm in requiring incumbents to

compete for these planned projects in the first instance.

The Commissioners have not shown that the district court

clearly erred in its evaluation of the other preliminary injunc-

tion factors.

56 Nos. 24-3248, 24-3249, & 25-1024

***

For these reasons, I respectfully dissent and would affirm

the district court’s entry of a preliminary injunction.