Monsanto Company v. United Gas Pipe Line Company

• Decision Date: 25 June 1973
• Docket Number: Civ. A. No. 2545-72.
• Citation: 360 F. Supp. 1054
• Parties: MONSANTO COMPANY, Plaintiff, v. UNITED GAS PIPE LINE COMPANY, Defendant.
• Court: U.S. District Court — District of Columbia

360 F. Supp. 1054

MONSANTO COMPANY, Plaintiff, v. UNITED GAS PIPE LINE COMPANY, Defendant.

Civ. A. No. 2545-72.

United States District Court, District of Columbia.

June 25, 1973.

James J. Bierbower, Washington, D. C., John T. Miller, Washington, D. C., for plaintiff.

W. DeVier Pierson, Peter Levin, Washington, D. C., for defendant.

MEMORANDUM AND ORDER

WILLIAM B. JONES, District Judge.

This civil action arises out of the natural gas shortage now facing the defendant, the United Gas Pipe Line Company United, and other suppliers of natural gas. The plaintiff, the Monsanto Company Monsanto, is a direct industrial user of United's gas at Monsanto's nylon yarn manufacturing facility in Pensacola, Florida. Monsanto has brought this action claiming both several violations by United of its contract to supply gas and a violation of the Sherman Act by United in the formulation, execution, and performance of the contract.

This action was filed on December 22, 1972. On January 4, 1973, United instituted proceedings with the Federal Power Commission FPC to abandon service to Monsanto under section 7(b) of the Natural Gas Act, 15 U.S.C. § 717f(b) (1970). United Gas Pipe Line Company, Docket No. CP 73-179. On January 18, 1973, United moved to stay this action pending the abandonment proceeding before the FPC. At the oral hearing on the motion on March 23, 1973, the Court raised the possibility of a sua sponte transfer of this case to the United States District Court for the Northern District of Florida, and requested the submission of briefs on the propriety of a transfer, which both parties filed. The Court holds that a transfer of this case to the Northern District of Florida would be unwarranted. The Court further holds that proceedings should be stayed in a manner detailed later in this memorandum.

Briefly, the facts, as set forth in the complaint, are as follows. United has supplied the natural gas to Monsanto's Pensacola plant since the plant began operating in 1953. On September 15, 1967, the parties entered into a long-term gas sales agreement for Monsanto's natural gas requirements for both raw materials and fuel at Pensacola. Article XIV(A) of that contract sets rates through January 1, 1973. Article XIV (B) calls for the determination of the price to be paid for the five-year period commencing January 1, 1973. If an agreement is not reached according to the terms of that Article, service is to terminate with a provision for 18 months' temporary service.

On September 22, 1972, within the time prescribed by Article XIV(B), United submitted two proposals for new rates, one purporting to be in compliance with the Article and calling for a 165 percent price hike (proposal A), and the other seeking an amendment to the original contract (proposal B). Monsanto alleges that proposal A is not in accord with the contract because it proposes rates for one year only, rather than five years. Monsanto attempted to get a more definite proposal, but United refused and informed Monsanto that it would terminate service unless a proposal was accepted. Subsequent to the filing of this case, Monsanto accepted proposal A.

Count I of the Complaint seeks a declaratory judgment that proposal A did not meet the requirements of Article XIV(B), that Monsanto had no duty to accept either proposal, and that the old rate should continue until new valid proposals are made. Count II alleges that proposal A was a bad faith attempt by United to capitalize on its past failure to attempt to forestall the current natural gas shortage, or at least warn its customers of the possibility of a shortage, and seeks a declaration that the old rate is in effect because no valid new rate proposal was made. Count III asks for a declaratory judgment that the gas sales contract is unconscionable and void if United's proposal is valid. Count IV requests a declaratory judgment that, in accord with the common law of Florida on public utilities, United may charge only reasonable rates and that those sought under proposal A are not reasonable. Count V asks for an injunction forbidding United from seeking an abandonment of service to Monsanto from the FPC. United has already initiated abandonment proceedings, supra. Finally, Count VI alleges that Monsanto was induced to enter into the long-term gas sales contract for service which would only be available from United. This and other contracts are alleged to have been entered into in order to gain a monopoly on the distribution of natural gas in the area of the Pensacola plant and in violation of the antitrust laws. Monsanto also alleges that potential gas shortages were concealed so that alternative fuel supplies were not developed. Now that competition allegedly has been excluded and Monsanto is totally dependent upon United, United is alleged to be seeking exorbitant rates as an exercise of its monopolistic power.

Although the usual procedure for the transfer of a case under 28 U.S. C. § 1404(a) (1970) would be for one of the parties to file a motion, the Court may initiate consideration of the convenience factors under that section. Fine v. McGuire, 139 U.S.App.D.C. 341, 343, 433 F.2d 499, 501 (1970). After initiating this consideration at the March 23, 1973, hearing, both parties submitted memoranda on the issue. Monsanto, although it did not file a formal motion to transfer, indicated that Florida would be a more convenient forum for its...