A Deal Is Still a Deal: Morgan Stanley Capital Group v. Public Utility District No. 1, by Richard P. Bress, Michael J. Gergen, and Stephanie S. Lim

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A deal is a deal. This concept is firmly entrenched in American culture and law,1 and is widely viewed as an essential cornerstone of economic development and stability.2 It has thus long been understood

in our nation that it is not the role of the government to

relieve contracting parties of ??hard bargains?? resulting from their ??indiscretions and bad judgments??; rather, the Constitution ??with its conservative energy . . . requires contracts, not illegal in their character, to be enforced as made by the parties, even against any State interference with their terms.??3

This historical respect for the integrity of contracts was tested and strongly reaffirmed this term in Morgan Stanley Capital Group Inc. v. Public Utility District No. 1 of Snohomish County.4 Morgan Stanley presented the Supreme Court with the question whether the Federal Energy Regulatory Commission (FERC or the Commission)5 could

or should exercise its authority under the Federal Power Act (FPA) to abrogate or modify contracts for the purchase and sale of large amounts of electricity entered into in the western energy crisis of 2000?2001.6

Please read full article for more information. (This article is from the Cato Supreme Court Review 2007-2008).

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