Chapman v. El Paso Natural Gas Co., No. 11078.

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtCLARK, PRETTYMAN and PROCTOR, Circuit
Citation204 F.2d 46
PartiesCHAPMAN, Secretary of the Interior v. EL PASO NATURAL GAS CO. et al.
Docket NumberNo. 11078.
Decision Date26 March 1953

204 F.2d 46 (1953)

CHAPMAN, Secretary of the Interior
v.
EL PASO NATURAL GAS CO. et al.

No. 11078.

United States Court of Appeals District of Columbia Circuit.

Argued May 13, 1952.

Decided March 26, 1953.


204 F.2d 47

Harold S. Harrison, Atty., Department of Justice, Washington, D. C., with whom Roger P. Marquis, Atty., Department of Justice, Washington, D. C., was on the brief, for appellant. Deputy Atty. Gen. A. Devitt Vanech also entered an appearance for appellant.

Howard Boyd, Washington, D. C., and Allen R. Grambling, El Paso, Tex., pro hac vice, by special leave of Court, with whom Paul R. Connolly and Joseph M. F. Ryan, Jr., Washington, D. C., were on the brief, for appellee El Paso Natural Gas Company. Joseph J. Smith, Jr., Washington, D. C., also entered an appearance for appellee El Paso Natural Gas Company.

Roger J. Whiteford and Hubert A. Schneider, Washington, D. C., entered appearances for appellees Southern Union Gas Company, City of Flagstaff, Arizona, Town of Williams, Arizona, and City of Winslow, Arizona.

Before CLARK, PRETTYMAN and PROCTOR, Circuit Judges.

CLARK, Circuit Judge.

This is an appeal from a judgment of the United States District Court for the District of Columbia.

Appellee is a corporation engaged in the transportation and sale of natural gas in interstate commerce. For convenience, we shall refer to it as "El Paso", and the Secretary of the Interior will be referred to as "the Secretary". El Paso undertook to construct a gas pipe line from New Mexico to California, and to that end obtained appropriate authorization from the Federal

204 F.2d 48
Power Commission. There were prolonged negotiations between El Paso and the Secretary looking to the grant of rights-of-way for the proposed line across public lands. The Secretary is authorized to grant such rights-of-way by Section 28 of the Mineral Leasing Act of February 25, 1920, as amended. 49 Stat. 678 (1920), 30 U.S. C.A. § 185. On July 21, 1950, the Secretary through his qualified agent, issued a "Decision" setting forth his requirements for the granting of rights-of-way to El Paso. By letter of August 18, 1950, he informed El Paso that filing a form of stipulation,1 would be "satisfactory as compliance with the common carrier stipulation requirement in connection with the applications which the El Paso Natural Gas Company proposes to file for the San Juan Basin Pipe Line * * *." El Paso executed the stipulation and filed the same with the Secretary

From time to time, as construction of the San Juan Basin pipe line progressed, El Paso applied for and promptly received certain rights-of-way. In the continuing relations between El Paso and the Secretary, concerning rights-of-way for other lines as well as for San Juan, there developed a disagreement as to the specific nature of El Paso's obligation as a common carrier in the operation of its gas lines. When all but a very small portion of the San Juan Basin line had been built,2 on March 22, 1951, by letter, the Secretary, through his authorized representative, informed El Paso that the remaining rights-of-way needed for completion of the line would not be granted unless El Paso signed a stipulation3 which accompanied the letter

204 F.2d 49
and accepted the conditions of that stipulation

El Paso filed suit for a mandatory injunction to require the Secretary to issue the remaining rights-of-way, and to enjoin the Secretary from attaching conditions to such rights-of-way beyond the authority of the Secretary to exact. Negotiations continued between the parties, with the result that a still further form of proposed stipulation was submitted to El Paso under date of May 29, 1951.4 This, too, was rejected by El Paso.

204 F.2d 50

The District Court ordered the rights-of-way issued, and enjoined the Secretary from requiring El Paso to file any form of stipulation other than that contained in the Secretary's letter of August 18, 1950, supra. In its conclusions of law, the court ruled that the Secretary fully exercised and exhausted his discretion when he decided and concluded that the common carrier obligation of the Mineral Leasing Act, supra, would be fulfilled by El Paso's execution and filing of the stipulation contained in the Secretary's letter of August 18, 1950, and also that the terms of the proposed stipulations of March 22, 1951, and May 29, 1951, were beyond the Secretary's authority, arbitrary, capricious, and an abuse of discretion.

204 F.2d 51

The Secretary asserts that his authority to attach the conditions of the stipulations of March 22, 1951, and May 29, 1951, will be found in Section 28 of the Mineral Leasing Act, supra, which imposes the requirement that rights-of-way issued by the Secretary contain the express condition that the pipe lines be "constructed, operated, and maintained as common carriers", together with Section 32 thereof, which authorizes the Secretary to establish rules and regulations to accomplish the purposes of the Act. Directing our attention first to Section 32, we do not consider that section to authorize conditions such as those set forth in the stipulations.

As for Section 28, in the absence of more specific language by Congress, we regard the condition that pipe lines be constructed, operated, and maintained as "common carriers" to embrace the common law meaning of the term. Compare McNally v. Hill, 1934, 293 U.S. 131, 136, 55 S.Ct. 24, 26, 79 L.Ed. 238, and see 3 Sutherland, Statutory Construction, §§ 5303, 5304 (3rd ed. 1943). Ample protection of the public interest exists, and adequate enforcement of the condition is possible, under the provision for forfeiture of the grant by the United States District Court, in an appropriate proceeding, for failure to comply with the provisions of the section or with appropriate regulations and conditions established by the Secretary. The language of Section 28 clearly gives the Secretary authority to provide regulations and conditions as to survey, location, application, and use, but we read that to pertain to the physical aspects of the rights-of-way and not to the operation of the pipe line. Without more than the requirement that a condition be imposed that pipe lines be "constructed, operated, and maintained as common carriers", we do not regard the statute as conferring upon the Secretary authority to exercise so vast and so detailed a power as the promulgation of specific regulations and conditions for operation of the pipe line as a common carrier, as attempted in the proposed stipulations of March 22 and May 29, 1951.

As further support to that view, the statute does not purport to express adequate standards for guidance of the Secretary in the complex problems attendant upon such intimate regulation of corporate affairs as the financing, construction, and employment of facilities as is attempted in the contested stipulation. Had Congress desired the Secretary to enter upon such comprehensive supervision of those to whom rights-of-way were granted, we believe it would have expressed its desire more clearly and in more detail. Instead, Congress required that a condition be incorporated in any rights-of-way granted, and provided for court decision of any question which might arise as to the adequacy of compliance. It is significant, also, that for thirty-one years the Secretary of the Interior has made no such extensive effort at regulation, thus leaving at least a question that he did not consider the authority to exist. See F.P.C. v. Panhandle Eastern Pipe Line Co., 1949, 337 U.S. 498, 513, 69 S.Ct. 1251, 1260, 93 L.Ed. 1499; F.T.C. v. Bunte Brothers, 1941, 312 U.S. 349, 352, 61 S.Ct. 580, 582, 85 L.Ed. 881; Norwegian Nitrogen v. U. S., 1933, 288 U.S. 294, 315, 53 S.Ct. 350, 358, 77 L.Ed. 796.

Indeed, when Congress later, by passage of the Natural Gas Act, 15 U.S.C.A. § 717 et seq., recognized the need for regulation of gas pipe lines operating in interstate commerce, not only were careful and detailed standards set forth, but specific provision was also made that the regulatory body — the Federal Power Commission — should have no authority to compel enlargement of facilities, or extension or improvement of services, if to do so would impose an undue burden upon the pipe line company or impair its ability to render adequate service to its customers. Before the Commission may enter an order for extension or enlargement of facilities or service, it must first grant opportunity for hearing, and it must thereafter find that no undue burden would be imposed by the contemplated order. No such reasonable limitations appear in the contested stipulations.

Even more, without regard to the provisions of the March 22 and May 29, 1951, stipulations, the requirements which they seek to impose, and the provisions they set forth concerning the obligations falling upon

204 F.2d 52
the pipe line as a common carrier and upon one seeking carriage of gas, are those of contract carriage and not of common carriage as we understand the term. By the terms of the stipulation, if gas is proferred for common carriage, appellee would be required to increase the capacity of its line to accommodate that gas, subject only to the limitation that the increase in capacity cannot be required to be in excess of that part of the existing capacity devoted to private carriage. But the terms of the stipulations defeat the asserted purpose because they provide for contractual arrangements between shipper and pipe line, in advance of construction, which immediately remove any new capacity from availability for common carriage

We do not agree with El Paso's proposition that the Natural Gas Act impliedly repealed the requirement of Section 28 of the Mineral Leasing Act that rights-of-way be subject to the express condition that pipe lines be "constructed, operated, and maintained as common carriers". When Congress enacted the Natural Gas Act it did so in recognition of the fact that "the business of transporting...

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21 practice notes
  • Natural Resources Defense Council, Inc. v. Thomas, Nos. 85-1488 and 86-1331
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 13, 1988
    ...v. FCC, 463 F.2d 268 (D.C.Cir.), cert. denied, 406 U.S. 950, 92 S.Ct. 2042, 32 L.Ed.2d 338 (1971); Chapman v. El Paso Natural Gas Co., 204 F.2d 46, 52-54 (D.C.Cir.1953). In Greater Boston, the court described the doctrine as binding an agency "to respect the governance of a final administra......
  • United States v. Eaton Shale Co., Civ. A. No. C.-4139.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • May 25, 1977
    ...(9th Cir. 1970); McKay v. Wahlenmaier, 96 U.S.App. D.C. 313, 226 F.2d 35, 43 (1955); Chapman v. El Paso Nat. Gas Co., 92 U.S.App.D.C. 154, 204 F.2d 46, 53-54 (1953); Davis, Administrative Law of the Seventies § 17.01 (1976); Estoppel Against the Government; Have Recent Decisions Rounded the......
  • Shell Oil Co. v. Kleppe, Civ. A. No. 74-F-739.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • January 17, 1977
    ...(9th Cir. 1970); McKay v. Wahlenmaier, 96 U.S.App.D.C. 313, 226 F.2d 35, 43 (1955); Chapman v. El Paso Nat. Gas Co., 92 U.S. App.D.C. 154, 204 F.2d 46, 53-54 (1953); Davis, Administrative Law of the Seventies, § 17.01 (1976); Comment, "Emergence of an Equitable Doctrine of Estoppel Against ......
  • Tosco Corp. v. Hodel, Civ. A. No. C-8680
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • May 1, 1985
    ...estopped from disavowing official advice include Seaton v. Texas Co., 256 F.2d 718 (D.C.Cir.1958); Chapman v. El Paso Natural Gas, 204 F.2d 46 Brandt v. Hickel, 427 F.2d 53, 56 (9th Cir.1970) (emphasis supplied); See also Johnson v. Williford, 682 F.2d 868, 872 (9th Cir.1982). For more than......
  • Request a trial to view additional results
20 cases
  • Natural Resources Defense Council, Inc. v. Thomas, Nos. 85-1488 and 86-1331
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 13, 1988
    ...v. FCC, 463 F.2d 268 (D.C.Cir.), cert. denied, 406 U.S. 950, 92 S.Ct. 2042, 32 L.Ed.2d 338 (1971); Chapman v. El Paso Natural Gas Co., 204 F.2d 46, 52-54 (D.C.Cir.1953). In Greater Boston, the court described the doctrine as binding an agency "to respect the governance of a final administra......
  • United States v. Eaton Shale Co., Civ. A. No. C.-4139.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • May 25, 1977
    ...(9th Cir. 1970); McKay v. Wahlenmaier, 96 U.S.App. D.C. 313, 226 F.2d 35, 43 (1955); Chapman v. El Paso Nat. Gas Co., 92 U.S.App.D.C. 154, 204 F.2d 46, 53-54 (1953); Davis, Administrative Law of the Seventies § 17.01 (1976); Estoppel Against the Government; Have Recent Decisions Rounded the......
  • Shell Oil Co. v. Kleppe, Civ. A. No. 74-F-739.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • January 17, 1977
    ...(9th Cir. 1970); McKay v. Wahlenmaier, 96 U.S.App.D.C. 313, 226 F.2d 35, 43 (1955); Chapman v. El Paso Nat. Gas Co., 92 U.S. App.D.C. 154, 204 F.2d 46, 53-54 (1953); Davis, Administrative Law of the Seventies, § 17.01 (1976); Comment, "Emergence of an Equitable Doctrine of Estoppel Against ......
  • Tosco Corp. v. Hodel, Civ. A. No. C-8680
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • May 1, 1985
    ...estopped from disavowing official advice include Seaton v. Texas Co., 256 F.2d 718 (D.C.Cir.1958); Chapman v. El Paso Natural Gas, 204 F.2d 46 Brandt v. Hickel, 427 F.2d 53, 56 (9th Cir.1970) (emphasis supplied); See also Johnson v. Williford, 682 F.2d 868, 872 (9th Cir.1982). For more than......
  • Request a trial to view additional results

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