Cabot Corporation v. Public Service Com'n of W. Va., Civ. A. No. 71-190 CH.

Decision Date11 October 1971
Docket NumberCiv. A. No. 71-190 CH.
Citation332 F. Supp. 370
CourtU.S. District Court — Southern District of West Virginia
PartiesCABOT CORPORATION, a corporation, and Mountain Gas Co., a corporation, Plaintiffs, v. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA et al., Defendants.

F. Paul Chambers, Jackson, Kelly, Holt & O'Farrell, Charleston, W. Va., for plaintiffs.

John E. Lee, Chief Counsel, Public Service Comm., Charleston, W. Va., for defendants.

OPINION

FIELD, Chief Judge.

In this proceeding the plaintiffs ask that the defendants be enjoined from enforcing a certain order of the Public Service Commission of West Virginia entered by that body on August 13, 1971. The defendants have filed a motion to dismiss the complaint, or in the alternative, to grant them summary judgment.

From the allegations of the complaint which presently are not controverted, it appears that Cabot and Mountain are Delaware corporations with their principal places of business in Massachusetts and each of which is authorized to engage in business in the State of West Virginia. Each of the plaintiffs is a "Natural Gas Company" as defined by the Natural Gas Act (15 U.S.C. § 717 et seq.). The defendant, Public Service Commission of West Virginia, is an administrative agency created by West Virginia Code, Chapter 24, Articles 1-5, and is empowered by said statutes to regulate certain activities of public utilities in West Virginia. The personal defendants are the chairman and members of the West Virginia Commission.

Cabot and Mountain have entered into an agreement whereby Cabot proposes to transfer certain facilities to Mountain to be used by the latter incident to the transportation and sale of natural gas in interstate commerce, this agreement being conditioned on the issuance of a certificate of public convenience and necessity by the Federal Power Commission, an application for such certificate having been filed by Mountain with the FPC on June 23, 1971 in Docket No. CP 71-310. Since that proceeding anticipates the transfer of facilities from Cabot to Mountain, Cabot has petitioned to intervene in that Docket. A copy of Mountain's application to the FPC was delivered to the chief counsel of the West Virginia Commission on June 23, 1971. Among other facilities which Cabot proposes to transfer to Mountain are Cabot's X-1 storage pool, transmission and other facilities, which upon the application of Cabot were previously declared by the FPC in Opinion No. 564, Docket CP 68-176, to be exempted from FPC regulation under Section 1(c) of the Natural Gas Act. 15 U.S.C. § 717.

Mountain's application to assign Cabot's storage pool and other facilities is now pending before the FPC in Docket No. CP 71-310, and on May 10, 1971, Mountain entered into an Exchange Agreement with Consolidated Gas Supply Corporation, conditioned upon the granting of the certificate to Mountain by the FPC. Under the terms of this agreement the transmission facilities which Mountain proposes to acquire from Cabot will be used to transport gas which in part originates outside the State of West Virginia for delivery to Consolidated for its use in part outside of West Virginia, thereby resulting in the use of said facilities for the transmission of gas in interstate commerce. On July 20, 1971, Mountain entered into another contract with Consolidated, a purchaser for resale in interstate commerce, also conditioned upon the issuance by the FPC of the certificate to Mountain. Under the terms of this agreement Mountain is to sell to Consolidated winter gas from the subject storage pool commencing November 1, 1971, in the amount of at least 1,000,000 MCF per year at a rate not greater than 6,000 MCF per day, this agreement being filed as a supplement to Mountain's application in FPC Docket No. CP 71-310. Also conditioned upon the issuance to Mountain of the certificate by the FPC in Docket No. CP 71-310, Cabot has agreed to assign to Mountain a contract whereby Cabot is required to purchase 9,000 MCF of gas from Tennessee Gas Transmission Company, such gas originating in the southwestern United States.

On August 6, 1971, the West Virginia Commission filed a notice to intervene in Docket No. CP 71-310, and thereby submitted itself to the jurisdiction of the Federal Power Commission and became a party to that proceeding. Thereafter on August 13, 1971, the West Virginia Commission issued an order directed to Cabot in Case No. 7256, this being the order of which the plaintiffs complain in the present case. This order, in effect, recites that the Commission takes cognizance that Mountain, a wholely owned subsidiary of Cabot, has filed with the Federal Power Commission in FPC Docket No. CP 71-310 an application for a certificate of public convenience and necessity which would, among other things, authorize the acquisition of certain facilities from Cabot by Mountain and its operation thereof. The order states that a large part of these facilities presently owned by Cabot, including the X-1 storage pool, were declared exempt from FPC jurisdiction in Opinion No. 564 in Docket No. CP 68-176, and are subject solely to the jurisdiction of the West Virginia Commission.

The order then observes that Cabot has not filed with the West Virginia Commission an application for approval of the proposed transfer of such facilities, as required by West Virginia Code, Chapter 24, Article 2, Section 12, and has indicated that it does not intend to do so; and accordingly the West Virginia Commission requires that Cabot be made a respondent to the proceeding and appear and show cause why it should not be required to obtain approval of the West Virginia Commission before transferring any of said property to Mountain. The order concludes that Cabot "* * * shall not transfer any of said utility property to Mountain Gas Co. or to any other transferee until further order of the Commission West Virginia." A copy of this order was sent by the West Virginia Commission to the Secretary of the FPC with a request for a hearing in Docket No. CP 71-310 or, in the alternative, a stay of further proceedings of the Federal Power Commission pending further action by the West Virginia Commission pursuant to its order of August 13, 1971.

In their motion to dismiss the defendants primarily challenge the jurisdiction of the Court to entertain this action. The complaint alleges that the action arises under the Commerce Clause and the Supremacy Clause of the United States Constitution as well as the Due Process Clause of the Fourteenth Amendment. It is further alleged that the action arises under the Natural Gas Act, 15 U.S.C. § 717 et seq., and that this Court has jurisdiction thereof under 28 U.S.C. §§ 1331 and 1337. It is further alleged that as to each of the plaintiffs the amount in controversy exceeds, exclusive of interest and costs, the sum of $10,000.

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