Municipal Light Boards, etc., Mass. v. Federal Power Com'n
| Decision Date | 14 October 1971 |
| Docket Number | No. 24450.,24450. |
| Citation | 450 F.2d 1341 |
| Parties | MUNICIPAL LIGHT BOARDS OF READING AND WAKEFIELD MASSCHUSETTS, Petitioners, v. FEDERAL POWER COMMISSION, Respondent, Boston Edison Company, Intervenor. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
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Mr. George Spiegel, Washington, D. C., with whom Mr. James F. Fairman, Jr., Washington, D. C., was on the brief, for petitioners.
Mr. Peter H. Schiff, Solicitor, Federal Power Commission at the time of oral argument, with whom Messrs. Gordon Gooch, General Counsel, Leonard D. Eesley, Asst. General Counsel, Miss Sandra J. Strebel and David F. Stover, Attys., Federal Power Commission, were on the brief, for respondent.
Mr. Thomas M. Debevoise, Washington, D. C., with whom Mr. George F. Bruder, Washington, D. C., was on the brief, for intervenor.
Mr. Richard A. Solomon, Washington, D. C., filed a brief on behalf of Boston Gas Company as amicus curiae.
Mr. Charles F. Wheatley, Jr., and Mrs. Grace Powers Monaco, Washington, D. C., filed a brief on behalf of the Towns of Concord, Norwood and Wellesley, Massachusetts, as amici curiae.
Before BAZELON, Chief Judge, FAHY, Senior Circuit Judge, and LEVENTHAL, Circuit Judge.
This case involves a challenge to the preliminary treatment accorded by the Federal Power Commission to a rate increase filing by Boston Edison Company ("Edison"). The petition to review the Commission's order has been filed by the Municipal Light Boards of Reading and Wakefield, Massachusetts ("Towns"), which own and operate municipal electrical distribution systems and purchase their total power supply from Edison, their wholesale supplier.
On January 29, 1970, Boston Edison submitted for filing to the FPC a rate schedule, intended to supersede the company's existing rate schedule, which proposed an increase of rates, yielding an addition of some $2.7 million annually, and also making changes in the terms of service.
On February 24, 1970, the Towns filed a motion to reject the Edison filing contending (a) that it contained provisions in the terms of service prima facie contrary to national antitrust policy, and (b) that the filing failed to provide the required functional classifications both as to accumulated depreciation and current depreciation expense. Two days later the Towns sent a letter to the FPC which referred to its contentions and added other alleged deficiencies in the filing, and which urged that if the rate filing were not rejected it be suspended for the maximum five month period permitted by the Federal Power Act and made the subject of an investigation and hearing.
On April 22, 1970, following Edison's answer to the motion to reject, the Towns filed another motion to reject the filing on the ground that Edison was failing to provide a utility grade of service.1
On April 29, 1970, the FPC issued an order which denied the Towns' motions to reject, suspended the Edison filing for one day after which it was to go into effect subject to refund, and set the various issues presented for a hearing. Commissioner Carver dissented from the decision to suspend the filing for only one day.
On May 8, 1970, the Towns filed a Motion for Emergency Amendment of Order requesting an interim postponement of the effective date of rate increase in order to give them time, under local law, to properly redesignate their retail rates so as to pass on the increases to their retail consumers. Boston Gas Co., another wholesale customer of Edison, intervened on May 12, 1970, and moved for an emergency amendment of the April 29 order on the ground that the FPC's Rules require that a utility complete its documentary submission 60 days before the changed rate becomes effective and that the FPC had found in its April 29 Order that Edison had not completed its filing until March 30, 1970. On May 26, 1970, the FPC denied the motions.
The Towns' application for rehearing was denied by order of June 26, 1970. A separate order issued the same day required consideration in the rate proceeding of the service inadequacies alleged by the Towns and their effect on the proper rate for the service rendered.
The Towns' claim that the changed terms of service violated national antitrust policy has been mooted.2 The issue before us is whether the FPC was required to reject the filing because of alleged (a) inadequacies of Edison's prior service, a contention that has generated a dispute as to facts as well as standards, and (b) failure to comply with rules requiring functional classification for accumulated depreciation and depreciation expense, a claim that will be considered further in due course.
We begin our consideration with some general reflections concerning the significance in administrative law terms of an agency's "rejection" of a filing. The FPC's regulations under the Federal Power Act provide that the Commission's Secretary shall reject any filing "which patently fails to substantially comply" with applicable requirements of the Commission's regulations and rules of practice.3
There is a sound use, and indeed requirement, of an agency "rejection" of a party's filing. But it should mark the clear case of a filing that patently is either deficient in form or a substantive nullity.
The general thrust of the Administrative Procedure Act is the requirement of a proceeding for the presentation of conflicting contentions for resolution by the agency.4 There are occasions when an agency may dispose of a controversy on the pleadings without an evidentiary hearing when the opposing presentations reveal that no dispute of fact is involved, but only a question of law or administrative policy of such a nature that there is neither a dispute as to material facts nor a need to ventilate the underlying facts to aid in policy determination. Citizens for Allegan County, Inc. v. F.P.C., 134 U.S.App.D.C. 229, 414 F.2d 1125 (1969). These matters present to the agency a procedure that may readily be likened to the motion for summary judgment contemplated by Rule 56 of the Federal Rules of Civil Procedure.
A "rejection" of a filing, in contrast, is more like a motion to dismiss on the face of the pleading, and indeed goes even beyond that. It is appropriate where the filing is so deficient on its face that the agency may properly return it to the filing party without even awaiting a responsive filing by any other party in interest.
It is "a peremptory form of response to filed tariffs" which classically is used not to dispose of a matter on the merits but rather as a technique for calling on the filing party to put its papers in proper form and order.5 Its use is not limited to defects of form. It may be used by an agency where the filing is so patently a nullity as a matter of substantive law, that administrative efficiency and justice are furthered by obviating any docket at the threshold rather than opening a futile docket. The pertinent considerations may go beyond mere administrative choice in docketing techniques, as appears from the statutes governing rate filings, where a filing once lodged is permitted to go into effect, either at once, if not suspended, or at any rate after a suspension period subject to a time limit. In these situations a rate filing may be rejected both when the governing statute explicitly provides for rejection6 and when it does not. The Commission had the authority to issue a regulation like 18 C.F.R. § 35.5 (supra note 3) for the rejection of filings that patently fail to establish substantial compliance with duly issued regulations.
This rests on its basic statutory authority to issue regulations "necessary or appropriate to carry out the provisions of the Act."7 This authority is "not restricted to procedural minutiae" and provides latitude for administration in furtherance of Congressional purposes,8 including this "rejection" regulation. Thus in Federal Power Commission v. Texaco, Inc., 377 U.S. 33, 84 S.Ct. 1105, 12 L.Ed.2d 112 (1964), the Court upheld the rejection without hearing of an application for a certificate of convenience and necessity to supply gas to a pipeline, when the application was supported by a contract containing an "indefinite escalation" pricing clause and outstanding regulations provided that such clauses would result in summary rejection. The Court upheld the summary rejection as avoiding a "vast proliferation of hearings."9
In United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332, 76 S.Ct. 373, 100 L.Ed. 373 (1956) the Court held that the FPC erred in failing to exercise its authority to reject a rate filing that was a nullity, because the natural gas company had sought unilaterally to change a rate set by contract, and in issuing an order "permitting" the new rates to become effective.
These Supreme Court precedents under the Natural Gas Act are plainly applicable to the Federal Power Act, involved in the case at bar.10 And in the context of their doctrines we take up the issues presented by petitioners.
Neither the Commission's regulations nor general principles required rejection of Edison's rate filing on the basis of objections to Edison's prior service. Edison disputed as a factual matter the number and duration of voltage reductions set forth in the Towns' motion and claimed that some of the reductions were not due to problems in its own system but were area-wide in nature. The June 26, 1970, order granted the Towns' motion of April 22 insofar as it requested "an investigation into whether the quality and adequacy of electrical service rendered by Edison to its wholesale customers may affect the lawful rates to be charged for such service," pursuant to the FPC's finding that "It is appropriate that we consider in this...
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