The U.S. Court of Appeals for the Fifth Circuit, in a scathing opinion, directed its fire at the Federal Energy Regulatory Commission for the "inexplicable misunderstanding" it displayed toward bankruptcy courts.

At issue is a turf battle over jurisdiction in cases where energy companies regulated by the commission end up in bankruptcy. The Fifth Circuit has held, at least since 2004, that bankruptcy courts have sole discretion over agency-regulated contracts when a petitioner proposes to reject them for reorganization purposes.