Air Products & Chemicals, Inc. v. United Gas Pipe Line Co.

• Decision Date: 03 September 1974
• Docket Number: DC-25.,No. DC-23,DC-23
• Citation: 503 F.2d 1060
• Parties: AIR PRODUCTS AND CHEMICALS, INC., and Stauffer Chemical Company, Plaintiffs-Appellants, v. UNITED GAS PIPE LINE COMPANY, Defendant-Appellee. ALLIED PAPER INCORPORATED, Plaintiff-Appellant, v. UNITED GAS PIPE LINE COMPANY, Defendant-Appellee.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals

503 F.2d 1060

AIR PRODUCTS AND CHEMICALS, INC., and Stauffer Chemical Company, Plaintiffs-Appellants, v. UNITED GAS PIPE LINE COMPANY, Defendant-Appellee.

ALLIED PAPER INCORPORATED, Plaintiff-Appellant, v. UNITED GAS PIPE LINE COMPANY, Defendant-Appellee.

Nos. DC-23, DC-25.

Temporary Emergency Court of Appeals,

Argued June 28, 1974.

Decided September 3, 1974.

Rehearing Denied October 7, 1974.

Peter J. Nickles, Covington & Burling, Washington, D. C. (John A. Hodges, John D. Taurman, Washington, D. C., on the brief), for appellants, Air Products and Chemicals, Inc., and others.

S. White Rhyne, Jr., Mullin, Connor & Rhyne, Washington, D. C. (Arthur A. Munisteri, New York City, on the brief), for appellant, Allied Paper Inc.

W. DeVier Pierson, Sharon, Pierson, Semmes, Crolius & Finley, Washington, D. C. (William B. Cassin, Houston, Tex., on the brief), for appellee.

Before HASTIE, CHRISTENSEN and ESTES, Judges.

PER CURIAM:

Contract purchasers of natural gas have taken these consolidated appeals under Section 211 of the Economic Stabilization Act of 1970, as amended (the Act), 12 U.S.C. § 1904 note (1972 Supp.), from orders dismissing their complaints, 373 F.Supp. 474. The actions had been brought in the district court as private suits under section 210 of the Act against the plaintiffs' supplier, United Gas Pipe Line Company (United), to recover allegedly unlawful overcharges.

Effective January 1, 1973 United imposed upon 55 of its industrial contract customers, among them the appellants, large direct increases in the price of gas. Before doing so and unknown to its customers, United, through informal direct communication, had obtained a letter, dated November 16, 1972 and signed by Assistant General Counsel of the Price Commission upon the basis of which United concluded that under a regulation of the Price Commission, 6 C.F.R. § 300.308, it might properly "self-certify" its proposed increases and put them into effect without prior Commission approval, albeit subject to subsequent review and possible invalidation.

As customers who had not been heard before the price increases became effective, the appellants then made formal submissions to the Cost of Living Council (CLC), to which the powers and responsibilities of the Price Commission had been transferred, seeking a ruling that the price increases were unlawful. Thereafter, without explicitly addressing the merits of appellants' contention, a letter signed by CLC General Counsel informed them that CLC declined "at this time" to intervene. Thus frustrated, the appellants filed the present suits.

Both actions were dismissed on the ground that, as private actions for relief under section 210 of the Act, they were premature. Failure to join the Cost of Living Council as an indispensable party was stated as an additional reason for dismissing the complaint of Allied Paper, Inc.

At the outset, we hold that failure to join CLC as a party did not in itself justify dismissal of the action. "If a party has been omitted who ought to be joined under Rule 19, the remedy is to join him, and dismissal is called for only if he cannot be served or his presence would destroy diversity." C. Wright, Federal Courts, 2d ed., 306. Yet, we have no doubt that CLC should have been made a party to the actions below. Under all the circumstances reflected in this record and discussed later in this opinion, including many communications between individual parties and agency officials, we hold that the appropriate agency or officer of the United States should be made a party to the actions below so that the positions and views of those who administered the Act in connection with this controversy can be fully presented. Cf. Associated General Contractors of America, Inc. v. Laborers Int'l. Union, Em.App., 1973, 476 F.2d 1388.

This brings us to the major question, whether the appellants' invocation of the remedy provided by section 210 of the Act was premature.

First, it is argued that, after being informed by General Counsel that CLC declined "at this time", to interdict the price increases which had occasioned customer complaints, appellants should have asked for administrative reconsideration before suing United. The short answer is that the agency itself says that its practice and regulations do not provide for any such reconsideration at the request of a complainant purchaser in the situation of the appellants.

Allied's counsel made several attempts to learn from General Counsel for CLC whether any further administrative remedies were available in this case. An affidavit of Allied's counsel states that he was told that CLC intended to take no further action and that there were no administrative remedies remaining to Allied. On April 29, 1974, Allied received a letter from CLC General Counsel affirming the position stated earlier. The letter reads in part:

It is the Council's position that under the Economic Stabilization Act and the Phase II regulations Allied had no further administrative remedies. There is no requirement in the regulations that a consumer complainant seek reconsideration of the Commission's or Council's refusal to act on a complaint submitted pursuant to 6 CFR 300.506. Nor do the regulations provide a procedure for reconsideration of the Commission's or Council's unpublished determination of issues in response to a request for a ruling. The General Counsel's letter of May 18, 1973 did not constitute "initial action" as that term is defined in 6 CFR Part 305 and, consequently, did not require a request for reconsideration in order for Allied to exhaust its administrative remedies.

In Baldwin County Electric Membership Corp. v. Price Commission, Em. App., 1973, 481 F.2d 920, cert. denied, 414 U.S. 909, 94 S.Ct. 230, 38 L.Ed.2d 147, customers of a utility challenged the validity of the Price Commission's approval of their supplier's rate increase. The utility intervened in the district court and contended that the customers' actions should be dismissed for failure to seek administrative reconsideration of the customers' complaints. However, the Price Commission denied that reconsideration was available. Neither the district court nor this court in its opinion specifically mentioned this issue. However, both courts implicitly rejected the utility's contention by upholding the Price Commission on the merits rather than disposing of the case on the motion to dismiss.

In our view, the "availability" of further administrative proceedings is a practical matter. When an agency itself has explicitly represented that reconsideration is not available after a certain type of ruling, and its regulations are not clearly to the contrary, resort to an otherwise available judicial remedy should not be...