Arkansas Louisiana Gas Co. v. FEDERAL POWER COM'N

• Decision Date: 06 July 1940
• Docket Number: No. 9329.,9329.
• Citation: 113 F.2d 281
• Parties: ARKANSAS LOUISIANA GAS CO. v. FEDERAL POWER COMMISSION et al.
• Court: U.S. Court of Appeals — Fifth Circuit

113 F.2d 281 (1940)

ARKANSAS LOUISIANA GAS CO. v. FEDERAL POWER COMMISSION et al.

No. 9329.

Circuit Court of Appeals, Fifth Circuit.

July 6, 1940.

William C. Fitzhugh and H. C. Walker, Jr., both of Shreveport, La., for petitioner.

William S. Youngerman, Jr., General Counsel, Federal Power Commission, David W. Robinson, Jr., General Counsel, Federal Power Commission, and Richard J. Connor, Atty., Federal Power Commission, all of Washington, D. C., for respondent Federal Power Commission.

W. A. Delaney, Jr., and Vernon Roberts, both of Ada, Okl., and W. T. Anglin, of Holdenville, Okl., for respondent Louisiana-Nevada Transit Co.

Before FOSTER, HUTCHESON, and HOLMES, Circuit Judges.

HUTCHESON, Circuit Judge.

Applying under Section 19 (b) of the Natural Gas Act, 15 U.S.C.A. §§ 717r (b),¹ as a party aggrieved by an order of the Federal Power Commission, petitioner seeks to review and reverse that order. The order complained of is one granting Louisiana Nevada Transit Company a certificate of public convenience and necessity, under Section 7 (c)² of the Natural Gas Act, 15 U.S.C.A. § 717f (c), to construct and maintain a gas pipe line from Cotton Valley Field in Webster Parish, Louisiana, to Okay, Oklahoma.

The complaint in general is that the finding of the commission as to the facts is not supported by substantial evidence, and therefore the order based on the finding may not stand. In particular, the complaint is that the only real facts shown in support of the application were that the applicant and the Ideal Cement plant at Okay wanted applicant to build the line in to serve the industrial enterprise; that the public interest or necessity was not served by the granting of the permit but on the contrary was disserved. That the permit was for construction into a territory and to plants of customers, already adequately served by petitioner, and the only result of the extension would be loss of revenue to petitioner which must be made up by raising the cost of the service to gas consumers generally. And this without benefit to anyone, except the applicant, since plaintiff could and would institute rates as low as those stipulated for in the granted permit.

In addition, there was an attack upon the permit on the ground that, containing conditions as to rates, etc., which, since the construction was to serve an industrial consumer, and not for the sale of gas for resale, it was beyond the power of the commission to impose, they made the certificate void and of no force. The commission and the applicant strongly oppose these contentions. They insist that the findings of public convenience and necessity are abundantly supported by evidence.

Here, the force of the arguments are directed to the intent and purport of Section 7 (c), prohibiting "the construction or extension of any facilities for the transportation of natural gas to a market in which natural gas is already being served by another natural-gas company," and particularly to the meaning the statute attaches to the certificate of the commission, made a requisite for such construction, "that the present or future public convenience and necessity require or will require such new construction or operation of any such facilities or extensions thereof."

Urging that the mischief aimed at is useless and costly duplication of service, the remedy, the protection of established lines against unnecessary and wasteful competition, while authorizing construction or extension where there is a real public need, petitioner insists that the words "the present or future public convenience and necessity" have a definitely established meaning under which the commission is not authorized to grant permits unless public, as opposed to private, convenience and necessity is clearly shown.

Applicant and the commission assert that in conditioning construction and extensions on obtaining certificates from the commission, Congress granted the commission wide discretionary powers, in determining whether such certificates should issue; that except as the Act requires the commission to give due consideration to the applicant's ability to render and maintain adequate service at rates lower than those prevailing in the territory to be served, Congress left it to the discretion of the commission to say whether conditions required the granting of the certificate; and that this discretion may not be interfered with except upon a clear showing of its abuse.

In support of its view that public convenience and necessity have acquired a definite and clearly established meaning and that the grant of power to the commission is in terms which clearly and precisely define that power, petitioner cites many cases to the effect that public convenience and necessity contemplates a definite public demand, or as some put it, a strong and urgent public need.³ And it particularly relies on the dissenting opinion and the cases it cites, In re Louisiana Nevada Transit Co., 32 P.U.R.(N.S.) 219, (1940), and the opinion of the Pulaski Circuit Court in the same matter on review of the order of the commission.

On their side, the applicant, Louisiana Nevada Company and the commission, in support of their position that the powers delegated to it are very broad and the action of the commission will not be interfered with except in clear cases of arbitrary or ill considered action, cite many cases.⁴ And in answer to petitioner's contention that the conditions imposed on the certificate were beyond the power of the commissioner to impose and render the certificate void, they cite: Day v. Public Service Comm. of Pennsylvania, 107 Pa.Super. 461, 164 A. 65; Board of Public Utility Comm. v. Sheldon, 95 N.J.Eq. 408, 124 A. 65. We do not find it necessary to go into or determine who has the right of it in the refinements each makes, on the one hand, upon the limitations on the commission's powers imposed by the use of the words "public convenience and...