Stanolind Oil & Gas Co. v. Freehill

• Decision Date: 02 June 1953
• Docket Number: No. 615.,615.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals
• Parties: STANOLIND OIL & GAS CO. et al. v. FREEHILL.

205 F.2d 305 (1953)

STANOLIND OIL & GAS CO. et al. v. FREEHILL.

No. 615.

United States Emergency Court of Appeals.

Heard January 17, 1953.

Decided June 2, 1953.

David Lloyd Kreeger, Washington, D. C., with whom Rawlings Ragland, Washington, D. C., was on the brief, for complainants.

George Arthur Fruit, Attorney, Department of Justice, Washington, D. C., with whom Holmes Baldridge, Asst. Atty. Gen., Edward H. Hickey, Chief, General Litigation Section, Department of Justice, and Herbert N. Maletz, Chief Counsel, James A. Durham, Associate Chief Counsel, Israel Convisser, Chief, Court Review Division, Brooklyn, N. Y., and Richard L. Hirshberg and Daniel J. Dykstra, Attorneys, Office of Price Stabilization, were on the brief, for respondent.

Before MARIS, Chief Judge, and MAGRUDER and McALLISTER, Judges.

Heard at Washington, D. C., January 17, 1953.

McALLISTER, Judge.

In a complaint filed in this suit, Stanolind Oil and Gas Company and Continental Oil Company seek review of an order of the Director of Price Stabilization denying a joint protest filed against Order L-50, and Order L-50, Amendment 1, in which the Director fixed the ceiling price of natural gas produced from the Woodlawn Field at Harrison County, Texas, at 10 cents per thousand cubic feet (MCF).

Subsequent to the filing of the complaint herein, on February 12, 1953, the Director of Price Stabilization issued General Overriding Regulation 12, exempting all sales of natural gas from any ceiling price regulation, after the date of the issuance of such regulation; and since that time, has filed, in this cause, suggestion that the issues in this proceeding have thereby become moot, setting forth that complainants make no claim that they have violated any of the provisions of the regulations or orders at issue in suit, or that they are subject to enforcement action therefor; nor that there is any enforcement suit pending or contemplated for any such violation.

Complainants filed objections to the suggestion of mootness, contending that it is without substance; that the decision in this cause will affect the rights of complainants to recover for sales of gas at the rate of 12 cents per MCF, under their contract with the Mississippi River Fuel Corporation, for the period during which Order L-50 and Order L-50, Amendment 1, were in force; that the suppression of such orders by the above mentioned General Overriding Regulation 12 does not deprive this court of jurisdiction to review the timely protests filed against the validity of the two orders; and that a denial to the complainants of an opportunity in this proceeding to test the validity of the orders in question would deprive them of due process of law in violation of the Fifth Amendment. No claim is made that complainants violated the above mentioned orders or that there is any enforcement suit pending against them or contemplated, based on any such violations. The sole ground upon which complainants ask the court for a determination on the merits is the existence of the above mentioned contract. They assert a right to recover a difference between the price specified in the contract, and the ceiling price for deliveries made while the orders were in effect.

It is the contention of complainants that a cause becomes moot only if a decision of the case cannot affect the rights of the litigants before the court, citing Collins v. Porter, 328 U.S. 46, 66 S.Ct. 893, 90 L.Ed. 1075; St. Pierre v. United States, 319 U.S. 41, 63 S.Ct. 910, 87 L.Ed. 1199; and they submit that although Revision 1 of General Overriding Regulation 12, issued February 12, 1953, exempts prospectively all sales of natural gas from any ceiling price regulations, nevertheless, Order L-50 dated August 22, 1951, and Order L-50, Amendment 1, dated February 19, 1952, continue to govern the validity of transactions that occurred under their rule; and that such orders, therefore, continue to limit to 10 cents per MCF the price which complainants may collect under their twenty-year contract with Mississippi River Fuel Corporation for gas delivered during the eighteen-month period in which the orders were in effect.

The contract in question, which was executed April 3, 1951, fixed a price of 12 cents per MCF for the gas delivered thereunder during the first two years, and provided for an increase in the price at stated intervals during the remainder of the twenty-year term. However — and this has to do with the ceiling price of 10 cents per MCF — the contract further provided that it would be subject to all present and future rules, regulations, and orders of any authority having jurisdiction in the premises, which would be relevant to the subject matter thereof; that each party would presume that all such rules, regulations, and orders were valid and subsisting in all respects until held otherwise by a court having jurisdiction in the premises.

Complainants, accordingly, submit that unless this court passes upon the validity of the two orders, they are presumed by the terms of the contract to be valid and subsisting in all respects; that, if the orders in question were invalid, the failure of this court so to determine, will prevent complainants from collecting the contract price of 12 cents per MCF for the period governed by the two orders; and that, conversely, a decision of this court upholding complainants' protest that the orders were invalid will enable complainants to collect the difference between the improperly reduced price of 10 cents and the full contract price of 12 cents per MCF. Such a decision, complainants declare, "has practical significance and makes this a living and not a hypothetical controversy", in the language of Collins v. Porter, supra 328 U.S. 46, 66 S.Ct. 894, and, accordingly, complainants insist the case is not moot, since it affects the rights of litigants before this court. Where a judgment by the Emergency Court of Appeals on the merits as to the validity of regulations and orders could not have any effect upon the rights of the parties before it, the complaint will be dismissed as moot. See J. J. Schmitt & Co. v. Turney, Em.App., 1948, 169 F.2d 425; Markbreiter v. Woods, Em.App., 1947, 163 F.2d 993; Waseca Realty Corp. v. Porter, Em.App. 1946, 157 F.2d 67; Fasons Realty Corp. v. Bowles, Em.App.1944, 146 F.2d 499. It is here claimed by the Director of Price Stabilization that complainants have no rights which would be affected by the decision of this court, and that the proceedings before us are, accordingly, moot. It is contended by complainants that their rights under their contract with the Mississippi River Fuel Corporation would be affected by this court's decision. Since this court has jurisdiction to determine whether proceedings before it have become moot, it has jurisdiction to construe the contract which the parties agree is decisive of that question, as an incident to the exercise of such jurisdiction. See Duncan Coffee Co. v. Reconstruction Finance Corp., Em.App., 1949, 178 F.2d 926, 929; Fast v. DiSalle, Em.App., 1951, 193 F.2d 181.

The answer to complainants' argument that their rights under their contract with the Mississippi River Fuel Corporation would be affected by this court's decision is that that contract provides for payment by the Mississippi Company of the ceiling price of 10 cents per MCF during the effective period of the orders of the Office of Price Stabilization. While a price of 12 cents per MCF is...