796 F.2d 86 (5th Cir. 1986), 85-2323, Oliver v. Trunkline Gas Co.

Docket Nº:85-2323.
Citation:796 F.2d 86
Party Name:Fred L. OLIVER, et al., Plaintiffs-Appellees Cross-Appellants, v. TRUNKLINE GAS CO., Defendant-Appellant Cross-Appellee.
Case Date:August 04, 1986
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 86

796 F.2d 86 (5th Cir. 1986)

Fred L. OLIVER, et al., Plaintiffs-Appellees Cross-Appellants,


TRUNKLINE GAS CO., Defendant-Appellant Cross-Appellee.

No. 85-2323.

United States Court of Appeals, Fifth Circuit

August 4, 1986

Page 87

John D. White, Betty Taylor Tauber, Houston, Tex., for defendant-appellant cross-appellee.

Michael Paul Graham, George F. Goolsby, Houston, Tex., for plaintiffs-appellees cross-appellants, Baker and Bolts.

Appeal from the United States District Court for the Southern District of Texas.

Before WISDOM, RUBIN and HIGGINBOTHAM, Circuit Judges.





In response to our holding that the federal district court lacked subject-matter jurisdiction over this contract dispute between buyer and sellers of natural gas, the plaintiff-sellers now suggest that the suit was one to recover the contract price and a "just and reasonable rate" under section 4(a) of the Natural Gas Act, 15 U.S.C. Sec. 717c(a). The complaint, however, made only one general allusion to the Natural Gas Act; it did not refer to section 4(a); it made no mention of "just and reasonable rates"; and it expressly alleged that Trunkline is liable because it "breached its contractual obligations to Plaintiffs under the Contract." 1 The plaintiffs now argue that the suit on the contract was somehow implicitly also a suit to enforce rights they had under section 4(a) of the federal statute. Assuming for the sake of argument that a suit could have been brought under section 4(a), 2 the plaintiffs' ingenious attempt

Page 88

to recharacterize this suit must fail. It is undisputed that the contract called for the defendant to pay the maximum rate allowed by law, and the complaint alleged that Trunkline paid the plaintiffs less than the maximum allowed by the applicable rule of the federal regulatory commission. The plaintiffs have cited no authority for the proposition that the commission's approval of the contract rate as "just and reasonable" implied that any misapplication of the pricing provision in the contract would result in a rate that was not "just and reasonable" under section 4(a). As we pointed out in our original opinion, both parties have acknowledged, as they must, that they would have been free under federal law to agree on a price that was lower than the maximum lawful price. There is simply no reason to indulge the fiction that the complaint in this case contained some implicit allegation about a "violation" of section 4(a) of the Natural Gas Act.


The plaintiffs also contend that their state contract claim by itself confers federal jurisdiction. They cite Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 103 S.Ct. 2841, 2848, 77 L.Ed.2d 420 (1983), which stated: "Even though state law creates [a party's] causes of action, its case might still 'arise under' the laws of the United States if a well-pleaded complaint established that its right to relief under state law requires resolution of a substantial question of federal law in dispute between the parties." (emphasis added). Though the plaintiffs first suggested this in a petition for rehearing, their argument has a certain apparent plausibility, and we think it deserves to be addressed.


As we suggested when citing Franchise Tax Board in a footnote to our original opinion, it is difficult to make any general statement about federal-question jurisdiction to which some exception could not be found. In the course of a broad review of the jurisprudence...

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