Federal Power Commission v. Texaco, Inc, No. 386

CourtUnited States Supreme Court
Writing for the CourtDOUGLAS
Citation377 U.S. 33,12 L.Ed.2d 112,84 S.Ct. 1105
Decision Date20 April 1964
Docket NumberNo. 386
PartiesFEDERAL POWER COMMISSION, Petitioner, v. TEXACO, INC., et al

377 U.S. 33
84 S.Ct. 1105
12 L.Ed.2d 112
FEDERAL POWER COMMISSION, Petitioner,

v.

TEXACO, INC., et al.

No. 386.
Argued March 25, 1964.
Decided April 20, 1964.
Rehearing Denied June 15, 1964.

See 84 S.Ct. 1881.

Page 34

Howard E. Wahrenbrock, Washington, D.C., for petitioner.

Carroll L. Gilliam, Washington, D.C., and Alfred C. DeCrane, Jr., Houston, Tex., for respondents.

Mr. Justice DOUGLAS delivered the opinion of the Court.

The Federal Power Commission in its regulation of independent producers1 of natural gas has required them

Page 35

to file their contracts as rate schedules. This was done by regulations which evolved as a result of a series of rule-making proceedings.2 The pertinent regulations presently provide that only certain pricing provisions in the contracts of independent producers are 'permissible,'3 any other being 'inoperative and of no effect at law.' 4 The regulations go on to say that any contract executed on or after April 2, 1962, containing pricechanging provisions other than the 'permissible' ones, 'shall be rejected' so far as producer rates are concerned,5 that a producer's application for a certificate of public convenience and necessity under § 7 of the Natural Gas Act 'shall be rejected' if any contract submitted in support of it contains any of the forbidden provisions,6 and that, so far as pipeline certificates are concerned, any producer contract executed after that date which has that

Page 36

infirmity 'will be given no consideration in determining adequacy' of a pipeline company's gas supply.7

These regulations were adopted pursuant to the provisions of § 4 of the Administrative Procedure Act, 60 Stat. 238, 5 U.S.C. § 1003. General notice of the proposed rule making was published in the Federal Register as required by § 4(a) of that Act. The Commission also gave interested parties a 'hearing' under § 4(b).8 No oral argument was had but an opportunity was afforded for all interested parties to submit their views in writing; and the two respondents in this case—Texaco and Pan American—along with others, did so.

Later, each respondent submitted an application for a certificate of public convenience and necessity under § 7 of the Natural Gas Act, to supply natural gas to a pipeline company. Section 7 provides, with exceptions not presently material, that the Commission 'shall set' such an application 'for hearing.' Since, however, the applications disclosed price clauses that are not 'permissible' under the regulations,9 the Commission without a hearing

Page 37

rejected the applications. 28 F.P.C. 551; 29 F.P.C. 378. Petitions for review were filed with the Court of Appeals, which set aside the orders of the Commission. 10 Cir., 317 F.2d 796. It held that while the regulations are valid as a statement of Commission policy, they cannot be used to deprive an applicant of the statutory hearing granted those who seek certificates of public convenience and necessity. The two cases are here in one petition for certiorari which we granted because of an apparent conflict between that decision and Superior Oil Co. v. Federal Power Comm'n, 9 Cir., 322 F.2d 601, decided by the Court of Appeals for the Ninth Circuit. 375 U.S. 902, 84 S.Ct. 193, 11 L.Ed.2d 142.

I.

A preliminary question, which concerns Texaco Inc., alone, is whether venue to review these orders of the Commission was properly in the Tenth Circuit. The governing provision is § 19(b) of the Natural Gas Act which provides:

'Any party to a proceeding under this Act aggrieved by an order issued by the Commission in such proceeding may obtain a review of such order in the court of appeals of the United States for any circuit wherein the natural-gas company to which the order relates is located or has its principal place of business, or in the United States court of appeals for the District of Columbia * * *.'

The term 'is located' would have an ambivalent meaning if venue lay only in 'any circuit' where the natural gas company 'is located.' But in the context of § 19(b) 'any circuit' covers either the place where the company

Page 38

'is located' or where it 'has its principal place of business.' Hence the main argument of Texaco derives from the fact that 'is located' was substituted for 'resides' in an early draft of the bill10 which later emerged as the Federal Power Act, from which § 19(b) of the Natural Gas Act is derived. The Court of Appeals found that change decisive; but we can only conjecture as to why it was made, as no explanation appears. The bill in which 'resides' was used gave review to 'any person aggrieved' and the bill substituting 'is located' for 'resides' substituted 'licensee or public utility' for 'person aggrieved.' Since the latter language was changed from the personal to the impersonal it may be, as the Commission says, that the Congress was trying to use common legal parlance that a corporation 'can have its legal home only at the place where it is located by or under the authority of its charter,' as stated in Ex parte Schollenberger, 96 U.S. 369, 377, 24 L.Ed. 853. And see Neirbo Co. v. Bethlehem Corp., 308 U.S. 165, 169, 60 S.Ct. 153, 84 L.Ed. 167. However that may be, we think that 'is located' means more than having physical presence or existence in a place, since the alternate venue referred to in § 19(b) is 'principal place of business.' The Court of Appeals recognized the overlap between the two clauses inherent in its construction but resolved its doubts in favor of Tenth Circuit venue because the gas sold by Texaco under the contested contracts was produced in that circuit and the performance of the contract took place there.

The Act with which we deal was enacted August 26, 1935. At that time and down to the 1948 amendment of § 1391 of the Judicial Code, 28 U.S.C. § 1391(c), the only residence of a corporation for purposes of federal venue was the State and district in which it had been in-

Page 39

corporated. See 9 Fletcher, Cyclopedia Corporations (1931), § 4385. That theme runs through the cases. See, e.g., Shaw v. Quincy Mining Co., 145 U.S. 444, 449—450, 12 S.Ct. 935, 36 L.Ed. 768. We conclude that, although 'located' sometimes is used as indicating a place of business (Mercantile Nat. Bank v. Langdeau, 371 U.S. 555, 83 S.Ct. 520, 9 L.Ed.2d 523), in the setting of this Act 'is located' and 'resides' are equated and that 'is located' refers in the case of Texaco to its State of incorporation. There is symmetry in that construction as the choice, so far as circuits are concerned, is then left between that State, the 'principal place of business' (with no penumbra of other places of business, as here), or the District of Columbia where the Commission sits.

Texaco is a Delaware corporation and there is no claim that its principal place of business is within the Tenth Circuit. The Court of Appeals therefore erred in failing to dismiss its petition for lack of venue. There is, however, another respondent, Pan American, whose principal place of business is within the Tenth Circuit. We therefore proceed to the merits of its application.

II.

The main issue in the case is whether the 'hearing' granted under § 4(b) of the Administrative Procedure Act is adequate, so far as the price clauses are concerned, for purposes of § 7 of the Natural Gas Act. We think the Court of Appeals, erred that the present case is governed by the principle of United States v. Storer Broadcasting Co., 351 U.S. 192, 76 S.Ct. 763, 100 L.Ed. 1081, and that the statutory requirement for a hearing under § 7 does not preclude the Commission from particularizing statutory standards through the rulemaking process and barring at the threshold those who neither measure up to them nor show reasons why in the public interest the rule should be waived.

In Storer the Federal Communications Commission, pursuant to its general rulemaking authority, limited

Page 40

permissible multi le ownership for radio and television stations. Storer, which had seven radio stations and five television stations, was under that rule automatically disqualified for further licensing. To surmount that barrier it argued that the Act required a license to issue where the public interest would be served and that before an application could be benied, a hearing must be held. We said:

'We read the Act and Regulations as providing a 'full hearing' for applicants who have reached the existing limit of stations, upon their presentation of applications conforming to Rules 1.361(c) and 1.702, that set out adequate reasons why the Rules should be waived or amended. The Act, considered as a whole, requires no more. We agree with the contention of the Commission that a full hearing, such as is required by § 309(b) * * * would not be necessary on all such applications. As the Commission has...

To continue reading

Request your trial
138 practice notes
  • United States v. Consolidated Mines & Smelting Co., Ltd., No. 25164
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • December 12, 1971
    ...such situations, the rationale is that Congress does not intend administrative agencies to perform meaningless tasks. See FPC v. Texaco, 377 U.S. 33, 39-44, 84 S.Ct. 1105, 12 L.Ed.2d 112 (1964); United States v. Storer Broadcasting Co., 351 U.S. 192, 205, 76 S.Ct. 763, 100 L.Ed. 1081 (1956)......
  • In re Permian Basin Area Rate Cases. &#8212 102, 105 117, 181 261, 262 266, 388, Nos. 90
    • United States
    • United States Supreme Court
    • May 1, 1968
    ...*.' Order No. 232, 25 F.P.C. 379, 380. Indeed, this Court has already entirely sustained the Commission's 1962 order. FPC v. Texaco, Inc., 377 U.S. 33, 84 S.Ct. 1105, 12 L.Ed.2d 112. The producers do not suggest that the Commission and Court were there mistaken; they ruge instead that the C......
  • Public Systems v. Federal Energy Regulatory Commission, Nos. 76-1609
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 30, 1979
    ...example of this is the areawide ratemaking program first upheld in the Permian Basin Area Rate Cases, supra. See also FPC v. Texaco, Inc., 377 U.S. 33, 84 S.Ct. 1105, 12 L.Ed.2d 112 31 E. g., American Public Gas Ass'n v. FPC, 178 U.S.App.D.C. 217, 220-221, 546 F.2d 983, 986-87 (1976) ("the ......
  • Prudhoe Bay, Alaska Natural Gas, Matter of
    • United States
    • California Court of Appeals
    • July 11, 1978
    ...in determining adequacy" of a pipeline company's gas supply (id., § 157.14(a)(10)(v); see Federal Page 420 Power Comm'n v. Texaco (1964) 377 U.S. 33, 35-36, 84 S.Ct. 1115, 12 L.Ed.2d 112.) In Superior Oil Company v. Federal Power Commission (9th Cir. 1963) 322 F.2d 601, this exercise of the......
  • Request a trial to view additional results
135 cases
  • United States v. Consolidated Mines & Smelting Co., Ltd., No. 25164
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • December 12, 1971
    ...such situations, the rationale is that Congress does not intend administrative agencies to perform meaningless tasks. See FPC v. Texaco, 377 U.S. 33, 39-44, 84 S.Ct. 1105, 12 L.Ed.2d 112 (1964); United States v. Storer Broadcasting Co., 351 U.S. 192, 205, 76 S.Ct. 763, 100 L.Ed. 1081 (1956)......
  • In re Permian Basin Area Rate Cases. &#8212 102, 105 117, 181 261, 262 266, 388, Nos. 90
    • United States
    • United States Supreme Court
    • May 1, 1968
    ...*.' Order No. 232, 25 F.P.C. 379, 380. Indeed, this Court has already entirely sustained the Commission's 1962 order. FPC v. Texaco, Inc., 377 U.S. 33, 84 S.Ct. 1105, 12 L.Ed.2d 112. The producers do not suggest that the Commission and Court were there mistaken; they ruge instead that the C......
  • Public Systems v. Federal Energy Regulatory Commission, Nos. 76-1609
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 30, 1979
    ...example of this is the areawide ratemaking program first upheld in the Permian Basin Area Rate Cases, supra. See also FPC v. Texaco, Inc., 377 U.S. 33, 84 S.Ct. 1105, 12 L.Ed.2d 112 31 E. g., American Public Gas Ass'n v. FPC, 178 U.S.App.D.C. 217, 220-221, 546 F.2d 983, 986-87 (1976) ("the ......
  • Prudhoe Bay, Alaska Natural Gas, Matter of
    • United States
    • California Court of Appeals
    • July 11, 1978
    ...in determining adequacy" of a pipeline company's gas supply (id., § 157.14(a)(10)(v); see Federal Page 420 Power Comm'n v. Texaco (1964) 377 U.S. 33, 35-36, 84 S.Ct. 1115, 12 L.Ed.2d 112.) In Superior Oil Company v. Federal Power Commission (9th Cir. 1963) 322 F.2d 601, this exercise of the......
  • Request a trial to view additional results
2 books & journal articles
  • Administering the National Environmental Policy Act
    • United States
    • Environmental Law Reporter Nbr. 45-4, April 2015
    • April 1, 2015
    ...States v. Storer Broad. Co., 351 U.S. 192, (1956); Frozen Food Express v. United States, 351 U.S. 41, 41-42 (1956); FPC v. Texaco, Inc., 377 U.S. 33 (1964); Federal Trade Comm’n v. Colgate-Palmolive Co., 380 U.S. 374, 384-92 (1965); Superior Oil Co., v. FPC, 322 F.2d 601 (9th Cir. 1963); Am......
  • Two Sherman Act Section 1 Dilemmas: Parallel Pricing, the Oligopoly Problem, and Contemporary Economic Theory
    • United States
    • Antitrust Bulletin Nbr. 38-1, March 1993
    • March 1, 1993
    ...location and work-force organization of those hospi-tals save in extraordinary circumstances); Federal Power Comm'n v. Tex-aco, Inc., 377 U.S. 33 (1964) (agency may promulgate a rule prohibitingacross-the-board certain contractual provisions in agreements betweengas suppliers and pipelines,......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT