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Reorganized FLI, Inc. v. Williams Companies, Inc.

No. 20-3056.  D.Kan. Judge Murphy. State Antitrust Action—Retroactivity of Statutory Amendment—Remedial versus Substantive Rights—Vested Rights—Summary Judgment.

June 21, 2021

Plaintiff brought an action against defendants in 2005 alleging that they violated the Kansas Restraint of Trade Act (KRTA) by engaging in anti-competitive conduct in conspiring to manipulate the price of natural gas. At that time, Kan. Stat. Ann. § 50-115 authorized a successful plaintiff to recover the full consideration or sum paid and treble damages.

Section 50-115 was repealed in 2013, thereby eliminating full consideration damages for violations of § 50-112. Plaintiff did not amend its complaint after the statute was repealed to remove its request for full consideration damages. Defendants moved for summary judgment in 2019, arguing that repeal of full consideration damages applied retroactively and left plaintiff with no viable suit. The district court denied the motion but certified the question of the statute’s retroactive application for interlocutory appeal.

On appeal, the parties disagreed on whether § 50-115 was remedial or substantive. If substantive, the repeal operates prospectively under the general Kansas rule, and plaintiff’s right to full consideration damages if it prevails on the merits is unaffected. If remedial, the repeal operates retroactively unless the Kansas legislature intended otherwise or unless retroactive application would affect plaintiff’s vested rights. The Tenth Circuit first held that the full consideration provision of § 50-115 was not substantive because it did not create liability but merely set out the remedy available to a plaintiff upon proof that a defendant was liable for violating § 50-112. The repeal of § 50-115 did not affect a plaintiff’s right to recover compensatory damages, impose new duties on a defendant, or expand the conduct prohibited by the KRTA. In addition, there was no clear legislative intent to apply the repeal on a prospective basis only.

The Tenth Circuit next concluded that applying the statutory change retroactively did not infringe on plaintiff’s vested rights in violation of due process, as the repealed statute was purely remedial, and retroactive application promotes the purpose of the legislative change. Further, no Kansas appellate court has addressed the retroactivity issue, so no Kansas case law affects the conclusion that the repeal of § 50-115 operates retroactively to extinguish plaintiff’s ability to recover full consideration damages.

Lastly, although the focus of plaintiff’s efforts was return of full consideration, plaintiff’s amended complaint filed in 2005 preserved the treble damages remedy under § 50-161(b) by referencing the provision and requesting such further relief as the court deems necessary. Therefore, although repeal of full consideration damages applied retroactively, defendants were not entitled to summary judgment.

The order denying defendants’ motion for summary judgment was affirmed, but for reasons other than those given by the district court.

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

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