Mobil Alaska Pipeline Co. v. U.S., s. 77-2392

• Citation: 557 F.2d 775
• Decision Date: 29 July 1977
• Docket Number: 77-2421 and 77-2437,Nos. 77-2392,77-2412,s. 77-2392
• Parties: MOBIL ALASKA PIPELINE COMPANY, Petitioner, v. UNITED STATES of America and the Interstate Commerce Commission, et al., Respondents, and Sohio Pipe Line Company, Amerada Hess Pipeline Corporation, Union Alaska Pipeline Company, Intervening Petitioners, State of Alaska and Arctic Slope Regional Corporation, Intervening Respondents. BP PIPELINES INC., Petitioner, v. UNITED STATES of America and the Interstate Commerce Commission, Respondents. EXXON PIPELINE COMPANY, Petitioner, v. UNITED STATES of America and the Interstate Commerce Commission, Respondents, and Union Alaska Pipeline Company, Intervening Petitioner. ARCO PIPE LINE COMPANY, Petitioner, v. UNITED STATES of America and the Interstate Commerce Commission et al., Respondents, State of Alaska, Intervening Respondent.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 775

557 F.2d 775

MOBIL ALASKA PIPELINE COMPANY, Petitioner, v. UNITED STATES of America and the Interstate Commerce

Commission, et al., Respondents,

and

Sohio Pipe Line Company, Amerada Hess Pipeline Corporation,

Union Alaska Pipeline Company, Intervening Petitioners,

State of Alaska and Arctic Slope Regional Corporation,

Intervening Respondents.

BP PIPELINES INC., Petitioner, v. UNITED STATES of America and the Interstate Commerce

Commission, Respondents.

EXXON PIPELINE COMPANY, Petitioner, v. UNITED STATES of America and the Interstate Commerce

Commission, Respondents,

and

Union Alaska Pipeline Company, Intervening Petitioner.

ARCO PIPE LINE COMPANY, Petitioner, v. UNITED STATES of America and the Interstate Commerce

Commission et al., Respondents,

State of Alaska, Intervening Respondent.

Nos. 77-2392, 77-2412, 77-2421 and 77-2437.

United States Court of Appeals Fifth Circuit.

July 29, 1977.

Andrew J. Kilcarr, Washington, D. C., Maureen O'Bryon, James R. Kinzer, Gen. Counsel, Mobil Alaska Pipeline Co., Dallas, Tex., John Lansdale, Jr., Cox, Langford & Brown, Washington, D. C., for Sohio.

Rush Moody, Jr., Washington, D. C., for Amerada Hess.

Kenneth L. Riedman, Jr., Los Angeles, Cal., for Union Alaska.

Griffin B. Bell, Atty. Gen., U. S. Dept. of Justice, Washington, D. C., Mark L. Evans, Gen. Counsel, Interstate Commerce Commission Washington, D. C., Charles H. White, Jr., Assoc. Gen. Counsel, Donald A. Kaplan, Atty., Anti-Trust Div., Dept. of Justice, Washington, D. C., Robert Lewis Thompson, John J. Powers, III, Attys., Appellate Section, Dept. of Justice, Washington, D. C., for respondents.

O. Yale Lewis, Jr., Seattle, Wash., for Arctic Slope.

John M. Cleary and Edward J. Twomey, Donelan, Cleary, Wood & Maser, Washington, D. C., for State of Alaska.

Paul M. Haygood, New Orleans, La., Richard J. Flynn, Lee A. Monroe, Joseph B. Tompkins, Jr., Washington, D. C., Frank L. Heard, Jr., Houston, Tex., B. J. Caillouet, New Orleans, La., Kenneth L. Riedman, Jr., Los Angeles, Cal., for Union Alaska.

William R. Connole, Quinn O'Connell, Eugene E. Threadgill, Washington, D. C., Marvin Schwartz, Michael Winger, New York City, Jack Vickrey, Houston, Tex., Glen E. Taylor, George H. Hagle, San Francisco, Cal., for petitioner.

Robert E. Jordan, III, James H. Pipkin, Steven H. Brose, Michael P. Berman, Washington, D. C., John T. Updegraff, Independence, Kan., for petitioner.

On Petitions to Review an Order of the Interstate Commerce Commission.

Before BROWN, Chief Judge, GODBOLD and RONEY, Circuit Judges.

PER CURIAM:

Four petitions seeking injunctive relief and review of a June 28, 1977 Order of the Interstate Commerce Commission are before us, together with the United States' motion to dismiss. ¹ For reasons discussed below, we grant the government's motion.

Background Of The Case

This controversy arose on the eve of the flow of crude oil through the Trans Alaska Pipeline System (TAPS) ² which stretches from oil fields in Alaska's North Slope at Prudhoe Bay to Valdez, Alaska, some 800 miles distant. The pipeline was constructed by the Alyeska Pipeline Service Corporation, an agent for its eight owners. ³

Between May 27, 1977 and June 15, 1977, seven TAPS owners filed the tariffs ⁴ which are at issue here, ⁵ having effective dates ranging from June 20 to July 1, 1977. Protests were filed by the Department of Justice, the State of Alaska, ⁶ the Arctic Slope Regional Corporation, ⁷ and the ICC's Bureau of Investigations and Enforcement. The Commission heard oral argument on June 27, 1977 ⁸ without making any formal evidentiary record. ^8a The ICC's June 28 Order ⁹ instituted an investigation into the lawfulness of the tariffs pursuant to 49 U.S.C.A. §§ 15(1) ¹⁰ and 15(7). ¹¹ The rates filed were suspended for seven months without prejudice to the filing of interim rates during the suspension period. The Commission additionally authorized the filing, upon not less than one day's notice, of interim rates which were not to exceed certain levels, subject, however, to the condition that the carriers keep account and that (i) the interim tariffs contain a refund provision to the effect that if the new rates exceed those subsequently authorized or prescribed by the ICC, the carriers will refund the excess with interest; and (ii) the carriers file a similar refund provision applicable to the original proposed rates. The Order thus had the following effect on the carriers' proposed rates per barrel:

The carriers estimate that the Order will result in an irretrievable $340 million loss over the seven-month suspension period.

The suspension left the pipeline companies without tariffs on file, and they are forbidden by § 6(7) of the Act to engage or participate in the transportation of oil unless they file new tariffs. The carriers thus had two alternatives open to them. They could file new tariffs within the ICC guidelines or they could shut down the TAPS system for the seven-month suspension period. Unhappy with either choice, the pipeline companies filed their petitions and motions and the United States moved to dismiss. ¹³ This Court heard oral argument on July 19, 1977.

The major issues raised by the parties are (i) whether we have jurisdiction to review the ICC order; (ii) whether the Commission has the authority under 49 U.S.C.A. § 15(7) to suspend the first and only ("initial") rate of a carrier; (iii) whether as part of a purported suspension order the ICC may prescribe or suggest optional maximum interim rates; (iv) whether the ICC's order authorizing the filing of maximum interim rates without a full hearing amounted to a prescription of rates within the meaning of 49 U.S.C.A. § 15(1); (v) whether the Commission acted outside its statutory authority in ordering the refund provisions in the tariffs; (vi) whether the Commission's action was arbitrary, capricious or constituted an abuse of discretion; (vii) whether the maximum interim rates authorized were confiscatory in violation of the Fifth Amendment.

1. Reviewability and the authority of the Commission

The government has moved to dismiss the petitions for review on the ground that this court has no jurisdiction to review suspension orders of the ICC issued pursuant to 49 U.S.C.A. § 15(7). True, courts do not have jurisdiction to review ICC suspension orders. Congress has committed the decision to suspend or not to suspend proposed rates exclusively to the discretion of the Commission. U. S. v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973); Arrow Transportation Co. v. Southern Railway Co., 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed.2d 52 (1963); K. Davis, ADMINISTRATIVE LAW TREATISE 966 (1970 Supp.). As a panel of this circuit noted:

The Interstate Commerce Commission . . . is vested with power to suspend, at its discretion, for a period of seven months, rates filed with it pending hearing and decision on their lawfulness. 49 U.S.C. § 15(7). The existence of this power in the ICC, it has been held, evinces the deliberate decision of Congress to extinguish judicial power to grant any injunction which interferes with the Commission's discretionary decision to suspend rates filed with it at anytime before the Commission finally determines the lawfulness of the rates.

Texas v. Seatrain International, 518 F.2d 175 at 178 (CA5, 1975). But the rule of unreviewability presupposes an affirmative answer to a preliminary inquiry into whether the Commission has acted within the authority granted to it by § 15(7). A suit to enjoin a suspension order may be entertained if the complaint shows that the agency lacked the basic statutory authority to issue such an order. Great Western Packers Express, Inc. v. U. S., 246 F.Supp. 151, 154 (D.Colo., 1965) (three-judge court); Long Island Railroad Co. v. U. S., 193 F.Supp. 795, 800 (E.D.N.Y., 1961) (three-judge court).

Section 15(7) gives the ICC the power to suspend "any schedule stating a new individual or joint rate, fare, or charge, or any new individual or joint classification, or any new individual or joint regulation or practice affecting any rate, fare, or charge" for a period not to exceed seven months, and to order an investigation and full hearings on those new charges. The above language has no plain meaning. The term "new" can refer to both changed and initial rates or only to changed rates. The statutory history of the Mann-Elkins Act (1910), which added § 15(7) to the Interstate Commerce Act, yields little insight on whether the ICC is empowered to suspend initial rates since no one seems to have debated or even discussed this specific question. However, our examination of statutes modeled on § 15(7) and of the legislative policy underlying that section convinces us that it was Congress' intention that the Commission have the power to suspend initial as well as changed rates.

Section 15(7) has served as the prototype of other agency rate suspension provisions in the Interstate Commerce Act and in other regulatory acts as well. In many of these acts, when Congress has wished to exclude initial rates, either in part or across the board, it has done so in specific language. In the Interstate Commerce Act itself, there are provisions modeled on 49 U.S.C.A. § 15(7) giving the ICC authority to suspend new rates, proposed by motor carriers, 49 U.S.C.A. § 316(g), by water carriers, 49 U.S.C.A. § 907(g)(i), and by freight forwarders, 49 U.S.C.A. § 1006(e). Each of these provisions contains a grandfather clause exempting certain initial rates from suspension. If initial rates were not covered there would have been no need for the grandfather clauses. Another example is 49 U.S.C.A. § 1482(g), which gives the Civil Aeronautics Board suspension powers similar to those granted to the ICC with one significant difference: it specifically provides that "(t)his subsection shall not apply to any initial tariff filed by any air carrier." Thus, we conclude...