Shell Oil Co. v. F.E.R.C.
| Decision Date | 21 February 1995 |
| Docket Number | 93-1762,Nos. 92-1634,s. 92-1634 |
| Citation | 47 F.3d 1186 |
| Parties | SHELL OIL COMPANY; Shell Pipe Line Corporation, Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Pennzoil Exploration and Production Company, et al., Intervenors. PENNZOIL EXPLORATION AND PRODUCTION COMPANY, et al., Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Shell Oil Company; Shell Pipe Line Corporation, Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petitions for Review of an Order of the Federal Energy Regulatory Commission.
Lawrence A. Miller, Washington, DC, argued the cause, for petitioners Shell Oil Co., et al. With him on the briefs was Kevin Hawley, Washington, DC.
John W. Ebert, Washington, DC, argued the cause, for petitioners Pennzoil Production Co., et al. With him on the briefs were Mark F. Sundback and Peter J. Thompson, Washington, DC.
Eric Lee Christensen, Atty., F.E.R.C., Washington, DC, argued the cause, for respondent. With him on the briefs were Anne K. Bingaman, Asst. Atty. Gen., John J. Powers, III and Robert Wiggers, Attys., U.S. Dept. of Justice, Jerome M. Feit, Sol., Joseph J. Davies, Deputy Sol., and Timm L. Abendroth, Atty., F.E.R.C., Washington, DC.
Kevin Hawley, Washington, DC, argued the cause, for intervenors Shell Oil Co., et al. With him on the brief was Lawrence A. Miller, Washington, DC. John W. Ebert, Mark F. Sundback and Peter J. Thompson, Washington, DC, were on the brief, for intervenor Pennzoil Exploration and Production Co., et al.
Before: WILLIAMS, GINSBURG, and ROGERS, Circuit Judges.
Opinion for the Court filed by Circuit Judge ROGERS.
Petitioners in these consolidated cases challenge an order of the Federal Energy Regulatory Commission concerning access to an oil pipeline system on the Outer Continental Shelf. Applying the "open and nondiscriminatory access" provision of the Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. Sec. 1334(f) (1988), the Commission ruled that the Bonito Pipe Line Company must provide Shell Oil Company with access and transportation service on its pipeline. Petitioner Pennzoil Exploration and Production Company, 1 which operates the Bonito pipeline, challenges this portion of the Commission's order. We hold that the court has jurisdiction over Pennzoil's case, which was transferred from the United States District Court for the Eastern District of Louisiana, and that requiring the Bonito pipeline to grant Shell access was consistent with the relevant statute, neither arbitrary nor capricious, and procedurally proper. Accordingly, we deny Pennzoil's petition (No. 93-1762).
The Commission also ruled that it lacks jurisdiction to enforce the Interstate Commerce Act ("ICA") with respect to oil pipelines located wholly on the OCS. Petitioners Shell Oil Company and Shell Pipe Line Corporation ("Shell") contest the Commission's disclaimer of ICA jurisdiction despite having prevailed in obtaining access to the Bonito pipeline under Sec. 5(f) of the OCSLA. Because we conclude that Shell has not yet demonstrated aggrievement or the likelihood of imminent injury under the Commission's order and therefore lacks standing, we dismiss Shell's petition (No. 92-1634) without prejudice and without reaching the merits of the Commission's decision that it lacks jurisdiction under the ICA.
In Part I of this opinion we outline how the petitions came before the court. In Part II we address Shell's challenge to our jurisdiction to consider Pennzoil's petition and our decision to retain jurisdiction over the transferred case, as well as the merits of Pennzoil's claims under the OCSLA. In Part III we address Shell's standing to challenge the Commission's ruling disclaiming ICA jurisdiction.
The Bonito pipeline system extends for 71 miles entirely on the Outer Continental Shelf ("OCS") in the Gulf of Mexico. Bonito is owned in part and operated by a subsidiary of petitioner Pennzoil. 2 The pipeline terminates at an offshore connection with the Ship Shoal pipeline system, which transports crude oil from Bonito and two other pipelines to distribution points and refineries onshore in the State of Louisiana. Ship Shoal is owned in part and operated by petitioner Shell Pipe Line Corporation.
In the early 1990s, Shell developed a new production facility on the OCS, known as the Auger Unit. Seeking to transport the Auger crude oil to points onshore, Shell constructed a 70-mile pipeline from the new wellhead to an interconnection point with the Bonito pipeline. Pennzoil, however, refused Shell's request to connect with the Bonito pipeline, claiming that the Auger crude's high sulfur content would degrade the average quality of Bonito-transported oil to the detriment of Bonito's present users. 3 Pennzoil then petitioned the Commission for a declaratory order that the Bonito pipeline was not required to transport the "sour" Auger crude. Shell intervened in the proceeding and opposed Pennzoil's petition, citing nondiscriminatory access provisions of both the OCSLA and the ICA. The Commission issued the order under review on October 8, 1992. Bonito Pipe Line Company, 61 FERC p 61,050 (1992) ("Order").
The Commission ruled that Pennzoil was required to grant Shell access to the pipeline under the "open and nondiscriminatory access" requirement of Sec. 5(f) of the OCSLA. Id. at p. 61,222-25; 43 U.S.C. Sec. 1334(f). With respect to Shell's claims under the ICA, however, the Commission ruled that the ICA does not apply to OCS oil pipelines that lie entirely on the OCS, and that the Commission therefore lacked jurisdiction to enforce the ICA against Bonito. 4 Hence, while the Bonito pipeline remained subject to the nondiscrimination provisions of the OCSLA, it was not bound by the rate reasonableness, nondiscrimination, or tariff filing provisions of the ICA. 5 See id. at p. 62,221; see also Oxy Pipeline, Inc., 61 FERC p 61,051 (1992) () (intra-OCS pipelines "need not comply with any of the requirements of the ICA with respect to their facilities on or across the [OCS]").
On December 7, 1992, Shell filed a petition for review in this court, challenging the Commission's disclaimer of ICA jurisdiction. Shell maintains that the Commission misread the scope of the ICA and that the denial of extra protection under that statute has caused Shell injury in fact despite its success in gaining access to the Bonito pipeline on alternative grounds. Pennzoil intervened, arguing that Shell lacks standing and that the Commission properly interpreted the ICA.
Meanwhile, in a separate proceeding commenced on February 12, 1993, in the United States District Court for the Eastern District of Louisiana, Pennzoil contested the portion of the Order granting Shell access to the Bonito pipeline under the OCSLA. 6 The district court ruled that it had original jurisdiction over Pennzoil's petition under the OCSLA, but nevertheless acknowledged the close connection between the separate claims filed by Shell and Pennzoil. After initially staying Pennzoil's case pending this court's decision on Shell's standing, the district court transferred Pennzoil's case to this court on November 3, 1993, in order "to avoid bifurcation of the issues in this case and unnecessary and duplicative litigation." 7
As an intervenor in Pennzoil's petition, Shell contends that the petition should be dismissed because Pennzoil failed to file timely in the proper court and, alternatively, that the Commission correctly applied the open and nondiscriminatory access provisions of the OCSLA. Because our view of Shell's standing depends on a resolution of Pennzoil's OCSLA contentions, we begin our analysis with Pennzoil's petition.
A. Subject-Matter Jurisdiction. We first address whether this court has subject-matter jurisdiction over the OCSLA claims presented by Pennzoil. The parties disagree about which statute governs the procedures for judicial review of Commission orders concerning OCS oil pipelines. Shell and the Commission contend that jurisdiction over Pennzoil's case is controlled by the Hobbs Act, which requires that a petition be filed with a court of appeals. 8 If Shell is correct, we must dismiss Pennzoil's petition for failure to file timely in the proper court. Pennzoil, however, maintains that the OCSLA provides the applicable judicial review procedures, and that its action was properly filed in the district court. We conclude that the OCSLA conferred original jurisdiction on the district court and that Pennzoil's filing was therefore timely. Applying principles adopted by the Seventh Circuit and this court, we also conclude that this court should retain jurisdiction over the transferred case notwithstanding the fact that the district court had original jurisdiction.
1. District Court Jurisdiction. Pennzoil's position, which the district court also adopted, is that jurisdiction to hear its challenge is governed by the judicial review procedures contained in the OCSLA. Section 23(a) of the OCSLA provides that "all suits challenging actions or decisions allegedly in violation of, or seeking enforcement of, the provisions of this subchapter ... shall be undertaken in accordance with the procedure described in this subsection." 43 U.S.C. Sec. 1349(a)(6) (emphases added). Section 23(b)(1) further provides that federal "district courts ... shall have jurisdiction of cases and controversies arising out of, or in connection with (A) any operation conducted on the [OCS] which involves exploration, development, or production of [OCS] minerals." Id. Sec. 1349(b)(1). In addition, the OCSLA defines the term "production" to include "transfer of minerals to shore," id. Sec. 1331(m), and the term "minerals" is defined to include "oil." Id. Sec. 1331(q). The only exceptions to district court review are specified in the statute...
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