Freeport-McMoRan Oil & Gas Co. v. F.E.R.C., FREEPORT-M

• Decision Date: 24 April 1992
• Docket Number: Nos. 90-1499,90-1526,FREEPORT-M,s. 90-1499
• Parties: cMoRAN OIL & GAS COMPANY, American Production Partnership-V, Ltd., and Ninian Oil Finance Corp., Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent. K N ENERGY, INC., Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 45

962 F.2d 45

295 U.S.App.D.C. 236

FREEPORT-McMoRAN OIL & GAS COMPANY, American Production Partnership-V, Ltd., and Ninian Oil Finance Corp., Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent.

K N ENERGY, INC., Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent.

Nos. 90-1499, 90-1526.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 7, 1991.

Decided April 24, 1992.

Petition for Review of Orders of the Federal Energy Regulatory commission.

John T. Miller, with whom William F. Demarest, Jr., Adelia S. Borrasca and B.J. Becker were on the joint brief, for petitioners in Nos. 90-1499 and 90-1526.

John M. Cockrell, Atty., F.E.R.C., with whom William S. Scherman, Gen. Counsel, Jerome M. Feit, Solicitor, and Joseph S. Davies, Deputy Solicitor, were on the brief, for respondent.

Paul K. Sandness, Robert T. Hall, III and Stephen L. Huntoon were on the brief, for intervenor, Williston Basin Interstate Pipeline Co. in Nos. 90-1499 and 90-1526.

Adelia S. Borrasca and William F. Demarest, Jr., entered appearances, for petitioners, Freeport-McMoRan Oil and Gas Co., American Production Partnership-V, Ltd., and Ninian Oil Finance Corp. in No. 90-1526.

Before MIKVA, Chief Judge, SILBERMAN and RANDOLPH, Circuit Judges.

Opinion for the court filed by Chief Judge MIKVA.

MIKVA, Chief Judge:

This case is plainly moot. The challenged orders of the Federal Energy Regulatory Commission were superseded by a subsequent FERC order, and while the challenged orders were in effect petitioners suffered no injury this court can redress. At oral argument, for the first time, FERC's counsel said the Commission had no objection to petitioners' request that we vacate the challenged orders. Accordingly, we vacate them. See Mechling Barge Lines v. United States, 368 U.S. 324, 328-30, 82 S.Ct. 337, 340-41, 7 L.Ed.2d 317 (1961); Northwest Pipeline Corp. v. FERC, 863 F.2d 73, 76 (D.C.Cir.1988).

Ordinarily, we would handle such a matter in an unpublished order. We write, however, to express our displeasure with FERC counsel's failure to take easy and obvious steps to avoid needless litigation. We also pause to address FERC counsel's remarkable assertion at oral argument that government attorneys ought not be held to higher standards than attorneys for private litigants.

* * *

K N Energy, a pipeline company and a petitioner here, gathers gas in Montana from three gas producers, Freeport-McMoRan, American Production Partnership, and Ninian Oil, the other petitioners. K N delivers the gas in Montana to the pipelines of Williston Basin Pipeline Company, which redelivers an equivalent volume of gas in Wyoming to K N for transport to end users. K N and Williston have a contract that governs the exchange of gas between them, a 20-year-old agreement approved by FERC and identified in Williston's tariffs as rate schedule X-3. K N and the producers maintain that the contract entitles K N to firm--rather than interruptible--service. Williston disagrees, and so, in the challenged orders, does FERC.

FERC issued the first of the challenged orders on August 17, 1990, accepting tariffs filed by Williston and finding that the X-3 contract service was essentially interruptible--that service to K N was superior to all other interruptible service, but subordinate to Williston's firm service. Two orders denying rehearing, issued September 20, 1990, and October 17, 1990, reaffirmed that decision. K N and the other petitioners petitioned for review in this court on October 22, 1990, five days after FERC issued the last denial of rehearing; petitioners filed their joint brief on schedule on July 19, 1991.

Meanwhile, FERC was considering an open-access tariff that Williston had filed in 1988. On July 23, 1991, a few days after petitioners filed their brief in this case, the Commission issued an order in that proceeding, finding again that K N's service was not firm. That open-access order superseded the earlier orders, meaning that the challenged orders governed the relationship between Williston and K N only from August 17, 1990, until July 23, 1991. During that period, K N purchased and received firm service from Williston under an agreement reached before FERC issued the first of the challenged orders. K N has refused to pay added charges for the firm service it has received from Williston, and Williston has filed a complaint with FERC seeking to recover those charges. But the priority of K N's service from Williston is appropriately resolved either upon review of FERC's open-access order (petitions for review are now pending), or in the complaint proceeding. Petitioners have not shown that they "have suffered some actual injury that can be redressed by a favorable judicial decision" in this court, and their challenge is therefore moot. Iron Arrow Honor Society v. Heckler, 464 U.S. 67, 70, 104 S.Ct. 373, 375, 78 L.Ed.2d 58 (1983).

Nevertheless, despite issuance of the open-access order, petitioners had reason to press ahead with their challenge to the superseded orders. Leaving the old orders on FERC's books might affect ongoing litigation between petitioners and Williston. Petitioners understandably wanted to render the challenged orders legally irrelevant--either by having this court reject them on the merits, or by having them vacated. To FERC, meanwhile, the challenged orders were meaningless and could painlessly be vacated, as FERC's counsel acknowledged at oral argument.

At several points before oral argument, FERC's counsel should have seen...