Com. of Va. v. Tenneco, Inc.

• Decision Date: 20 February 1976
• Docket Number: No. 75-1282,75-1282
• Citation: 538 F.2d 1026
• Parties: COMMONWEALTH OF VIRGINIA, Appellee, v. TENNECO, INC., et al., Appellants, Federal Power Commission, Intervenor.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1026

538 F.2d 1026

COMMONWEALTH OF VIRGINIA, Appellee, v. TENNECO, INC., et al., Appellants Federal Power Commission, Intervenor.

No. 75-1282.

United States Court of Appeals Fourth Circuit.

Argued Nov. 12, 1975.

Decided Feb. 20, 1976.

Gregory Grady, Washington, D.C. (Melvin Richter, Harold L. Talisman, Washington, D.C., L. F. Cadenhead, L. R. Pankonien, Houston, Tex., Littman, Richter, Wright & Talisman, Washington, D.C., on brief), for appellant.

Allan Abbot Tuttle, Sol., Washington, D.C. (Drexel D. Journey, General Counsel, John R. Staffier, William J. Grealis, Washington, D.C., on brief), as amicus curiae for F.P.C.

Diana J. Pioske, Asst. Atty. Gen. of Va., Richmond, Va. (Andrew P. Miller, Atty. Gen. of Va., Anthony F. Troy, Chief Deputy Atty. Gen. of Va., and Frederick S. Fisher, Asst. Atty. Gen. of Va., Richmond, Va., on brief), for appellee.

Before WINTER, CRAVEN and WIDENER, Circuit Judges.

WINTER, Circuit Judge:

This is an appeal from a temporary restraining order (TRO) prohibiting a supplier of natural gas from reducing allocations of gas to a customer in accordance with the former's plan for the allocation of gas supplies during periods of short supply. Initially the case presents questions of appealability, the timeliness of the appeal, and mootness. On the merits, the principal issue is whether the district court exceeded its jurisdiction by improperly interfering with the regulation of natural gas by the Federal Power Commission (FPC). Finally, if it is concluded to vacate the TRO, we must decide which forum should determine the need and form of redress of the consequences of the order.

We hold that the TRO is appealable, that the appeal was timely, and that this case is not moot. Further, we conclude that the TRO was improvidently entered; however, FPC, rather than the district court, is the proper body to determine what action, if any, should be taken to redress the effects of the TRO.

I.

Tennessee Gas Pipeline Company (Tennessee), a division of Tenneco, Inc. (Tenneco), supplies natural gas to East Tennessee Natural Gas Company (East Tennessee) which in turn supplies gas to Colonial Natural Gas Company (Colonial). Both Tennessee and East Tennessee are subject to regulation by FPC, both as to the quantities of gas they sell and the selling price.

Because Tennessee currently has insufficient natural gas available to fulfill all of its contractual obligations, it is obliged to curtail deliveries to its customers from time to time. Tennessee filed a curtailment plan with FPC on September 28, 1973, and this plan was placed into effect by Commission order dated October 30, 1973. The plan states that Tennessee shall periodically determine the volume available for affected services for appropriate curtailment periods; and if the volume is less than the estimated requirements of affected services for the period involved, Tennessee shall determine the quantity of gas which each customer shall be entitled to receive and shall promptly notify each affected customer of its curtailment period quantity entitlement.

On October 31, 1974, after this curtailment plan had become effective, East Tennessee, whose supplies are subject to reduction under Tennessee's plan, filed tariff sheets with FPC under § 4 of the Natural Gas Act, 15 U.S.C. § 717c, reflecting a plan for the allocation of gas supplies during periods of supply shortage. These tariff sheets provide that if the quantities of gas which East Tennessee has available for distribution in a given curtailment period shall fall short of total customer requirements, East Tennessee shall compute the amount of gas which each customer will receive according to the priority category into which the customer fits, and shall give notice of the reduced allotment as promptly as possible and "as far in advance and allocated over as long a period of time as is possible and reasonable." After suspension for one day, this plan took effect on November 27, 1974.

As of December 2, 1974, it was anticipated that, given the volume of gas supplies then thought to be available to East Tennessee, Colonial would receive, pursuant to the terms of East Tennessee's curtailment plan, 60% of Colonial's supply entitlement for the winter heating period from December 16, 1974 through March 31, 1975. However, on December 13, 1974, Tennessee advised East Tennessee that the latter would be receiving less gas for the winter season than was previously anticipated. East Tennessee thereupon immediately informed its customers that due to this reduction in deliveries, curtailment to many of them, including Colonial, would be increased. Colonial would thus receive only 45% of its entitlement rather than 60% thereof.

On December 23, 1974, Colonial filed with FPC, by telegram, a request for extraordinary relief from curtailment. This was followed on December 30, 1974 by a formal petition for extraordinary relief from the effects of the increased curtailments announced by East Tennessee on December 13, 1974. FPC, by order dated January 17, 1975, granted interim relief to Colonial for thirty days, and by FPC's order dated February 21, 1975, such interim relief was continued pending a final decision on Colonial's petition for extraordinary relief.

However, on December 31, 1974, prior to the Commission's granting of interim relief, the Commonwealth of Virginia (Virginia), acting in its capacity as parens patriae, filed an action in the district court. Alleging that the curtailment violated the notice provisions of 15 U.S.C. § 717c and would result in plant shutdowns and massive unemployment in the southwest portions of the state, Virginia asked that Tenneco, Tennessee, and East Tennessee be permanently enjoined from implementing the increased curtailments announced on December 13, 1974. In addition to the prayer for a permanent injunction, the complaint prayed a TRO preventing such implementation pending final disposition of the case.

On December 31, the district court held a hearing on the request for the TRO. FPC participated by counsel, contending that the district court lacked jurisdiction to receive the complaint or to grant the requested relief. The district court, however, issued an order requiring defendants to continue deliveries to Colonial in volumes equal to 55% of its supply entitlement. Specifically, the TRO directed defendants "to continue supplying natural gas to Colonial Natural Gas Company at a daily volume of 1802 Mcf in addition to the curtailment period quantity entitlement established by said company by letter of December 19 (sic), 1974." By its terms, the TRO would remain in effect until January 7, 1975.

On January 3, 1975, Tenneco, Tennessee, and East Tennessee moved the district court to vacate the TRO on the grounds that, under the Natural Gas Act, FPC had primary jurisdiction over the sale of natural gas in interstate commerce and that Colonial had failed to exhaust its administrative remedies before the Commission. Three days later, FPC moved to intervene and, also, to vacate the TRO and to dismiss the complaint. FPC's motion to intervene was not acted on by the district court, but we allowed intervention in this court.

On January 20, 1975, the district court entered an order dismissing the complaint on the ground that the time limit of the TRO had expired, and that Colonial was then seeking relief from FPC which was exercising jurisdiction in the matter. The order of dismissal made no provision with regard to the amounts of gas in excess of the curtailment announced by the letter of December 13, 1974, which Colonial was entitled to take under the authority of the TRO.

II.

The parties agree, as do we, that ordinarily a TRO is not an appealable order within the provisions of 28 U.S.C. §§ 1291 and 1292. There are exceptions to the rule, however, when, as here, the TRO was entered after full hearing in which plaintiff, defendants and FPC fully participated and the TRO bespeaks of the nature of a preliminary injunction, although of limited duration, rather than an order entered ex parte or on less than a full presentation of the facts. Connell v. Dulien Steel Products, 240 F.2d 414, 417-18 (5 Cir. 1957). Under such circumstances, it is appealable under 28 U.S.C. § 1292.

More important as a reason for holding this TRO appealable is a consideration of its practical effect, as Gillespie v. United States Steel Corp., 379 U.S. 148, 152-53, 85 S.Ct. 308, 13 L.Ed.2d 199 (1964), directs. Virginia's suit was founded on the theory that East Tennessee's December 13 curtailment advice was in violation of the notice requirements of the Natural Gas Act, 15 U.S.C. § 717c and the regulations adopted thereunder, notwithstanding that tariff sheets which purported to authorize the giving of such advice had been filed and notice of that filing given. It prayed that the December 13 curtailment be enjoined "until such time as the notice provisions of the Natural Gas Act have been met and the curtailment has been approved by the Federal Power Commission (emphasis added)." Thus, it was not contemplated that the action in the district court would finally adjudicate East Tennessee's right to curtail service. The TRO recited that it was necessary "until such time as the Federal Power Commission can act." ^* It was not intended to be supplemented by a temporary or permanent injunction; it was an end in itself, arrived at after full litigation by the interested parties.

The district court's January 20 order dismissing the complaint implicitly recognized that the TRO effectively granted the plaintiff all of the relief which it sought. In such a situation, an order which is ordinarily interlocutory is sufficiently final to be appealable. Peabody v. Local 1734, UMW, 484 F.2d 78 (6 Cir. 1973). See also Kimball v. Commandant Twelfth Naval District, 423 F.2d 88 (9 Cir. 1970) (denial of TRO appealable where such denial effectively decides the merits of the case). Moreover, coupled...