Northwest Pipeline Corp. v. F.E.R.C., 87-1502

• Decision Date: 13 December 1988
• Docket Number: No. 87-1502,87-1502
• Parties: NORTHWEST PIPELINE CORPORATION, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent. et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 73

863 F.2d 73

274 U.S.App.D.C. 167

NORTHWEST PIPELINE CORPORATION, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent.

No. 87-1502 et al.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 4, 1988.

Decided Dec. 13, 1988.

John T. Ketcham, Washington, D.C., with whom Stephen K. Schroeder, Steven W. Snarr, Salt Lake City, Utah, Alan J. Statman and Joseph S. Koury, Washington, D.C., were on the brief for petitioner in Nos. 88-1069, 88-1070 and 88-1133.

Dale A. Wright and James T. McManus, Washington, D.C., also entered appearances for Northwest Pipeline Corp.

Timm Abendroth, Atty., F.E.R.C., with whom Catherine Cook, General Counsel, and Jerome M. Feit, Solicitor, F.E.R.C., Washington, D.C., were on the brief, for respondent in Nos. 87-1133, 87-1502, 88-1069 and 88-1070.

Hanford O'Hara, Washington, D.C., and Samuel Soopper, Atty., F.E.R.C. also entered an appearance for respondent.

Ted P. Gerarden, Washington, D.C., for intervenor Cascade Nat. Gas Corp. in Nos. 87-1503, 88-1069, and 88-1070. Robert J. Haggerty, Washington, D.C., also entered an appearance for Cascade Natural Gas Corp. in No. 87-1502.

Allan Garten with whom, Edward A. Finklea, Portland, Or., was on the brief for intervenor, James River II Inc. in Nos. 87-1502, 88-1069, 88-1070 and 88-1133.

Michael C. Dotten, Portland, Or., was on the brief for intervenor Oregon Sheet Mills in No. 87-1502.

Daniel F. Collins, Katherine L. Henry, Washington, D.C., and Donald C. Shepler, Salt Lake City, Utah, entered appearances for intervenor, Colorado Interstate Gas Co. in Nos. 87-1502, 88-1069 and 88-1133.

David J. Meyer, Spokane, Wash., entered an appearance for intervenors Development Assoc. Inc. and the Washington Water Power Co. in No. 87-1502.

William I. Harkaway, Steven J. Kalish and Douglas M. Canter, Washington, D.C., entered appearances for intervenor, Southwest Gas Co. in Nos. 87-1502, 88-1069, 88-1070 and 88-1133.

Thomas F. Brosnan and Andrea J. Ercolano, Washington, D.C., entered appearances for intervenor Washington Natural Gas Co. in Nos. 87-1502, 88-1069, 88-1070 and 88-1133.

Gary G. Sackett, Salt Lake City, Utah, entered an appearance for intervenor, Mountain Fuel Resources in Nos. 87-1502 and 88-1133.

Steven F. Greenwald and Lindsay How-Downing, San Francisco, Cal., entered appearances for intervenor Pacific Gas & Elec. Co. in No. 87-1502.

David J. Evans, Washington, D.C., entered an appearance for intervenor, Chevron Chemical Co. in No. 88-1069.

Before WALD, STARR and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge STARR.

STARR, Circuit Judge:

Northwest Pipeline Corporation seeks review of ten Federal Energy Regulatory Commission orders, five of which imposed a rate condition on Northwest's certificates of public convenience for the transportation of natural gas, and five of which denied petitions for rehearing on these certificates. For the reasons stated below, we deny the petitions for review.

I

This case arises out of a multi-pronged rate system crafted by Northwest. Our story begins on the last day in May, 1985. On that day, the Commission approved a settlement of Northwest's general rate proceedings. Northwest Pipeline Corp., 31 FERC p 61,263 (1985). The settlement established four new transportation rate schedules, dubbed T-2 through T-5 inclusive. The structure of those rates, which need not detain us here, are helpfully described in Northwest's opening brief. Brief for Petitioner at 4-5. With those rates thus established, Northwest thereafter sought authorization under section 7(c) of the Natural Gas Act, 15 U.S.C. Sec. 717f(c) (1982), to provide transportation services to various shippers at the rates established under three of the four schedules (all save for T-3). Much to Northwest's chagrin, the Commission thought the better of it and conditioned the Sec. 7(c) certificates on Northwest's charging yet another rate, namely T-6. As we are led to understand, Rate Schedule T-6 embodied Northwest's transportation rate for services rendered pursuant to section 311 of the Natural Gas Policy Act of 1978, 15 U.S.C. Sec. 3371 (1982). Northwest describes its T-6 rate in the following way: "Northwest filed its Rate Schedule T-6 for the limited purpose of governing a very few NGA Section 311 transportation services which were then in progress and were expected to continue for very limited contract terms." Brief for Petitioner at 6 n. 10.

Northwest decried the Commission's action, suggesting that its intermingling of rates had created an unwanted (an unlawful) mutant. As Northwest saw it, a deal was a deal, and yet the Commission was seeking to unscramble the eggs (of the May 31, 1985 settlement omelet) by imperiously requiring Northwest to charge a different rate (T-6) than those agreed to by the customers (T-2, T-4 and T-5). To make matters worse, Northwest complained, "[t]he condition was imposed without any hearings or record evidence relating to Rate Schedule T-6 and without any claim that the T-2, T-4 and T-5 transportation rates approved in [the settlement proceedings] were no longer just and reasonable." Brief for Petitioner at 7. The real (and obvious) fly in the ointment was that T-6 was lower than the T-5 rate (although, in fairness, it was higher than either the T-2 or T-4 rate). Id. As Northwest viewed the situation, the Commission had unilaterally imposed this rate in violation of the structural protections afforded by sections 4 and 5(a) of the Natural Gas Act, 15 U.S.C. Secs. 717c(c), 717d(a). To make bad matters worse, Northwest complained, FERC had acted in high-handed fashion without pausing to consider the effect of the unwanted rate condition on Northwest's take-or-pay costs. Here is the way Northwest puts it:

The Commission's willful disregard of this "particularly vexing problem in the natural gas industry with which [this Court has] expressed ... concern," is especially egregious because the Commission-approved T-5 Settlement rate included a component providing for the recovery of increased revenues to reimburse Northwest for a reasonable portion of take-or-pay costs resulting from sales replacement transportation.

Brief for Petitioner at 11 (internal citation omitted).

But this only sets the stage for what was then to come. With the battle lines thus drawn between Northwest and the Commission, the section 7(c) certificates threw off their mortal coils in June 1988. It was then that Northwest accepted a blanket certificate under FERC's seminal Order No. 436. See Associated Gas Distributors v. FERC, 824 F.2d 981 (D.C.Cir.1987), cert. denied sub nom. Southern California Gas Co. v. FERC, --- U.S. ----, 108 S.Ct. 1469, 99 L.Ed.2d 698 (1988). Upon that development, as FERC succinctly puts it, "all of the certificates along with their rate terms, expired by their own terms." Brief for Respondent at 13. For that rather fundamental reason, FERC, joined by two intervenors, ¹ contends that the case is now moot. Another intervenor, however, purports to support Northwest. ² The parties are in further disaccord as to whether, if the case is indeed moot, FERC's orders should be vacated under the Munsingwear doctrine. United States v. Munsingwear, 340 U.S. 36, 71 S.Ct. 104, 95 L.Ed. 36 (1950). Among other contentions, James River II, Inc. contends that it will suffer harm in separate, independent antitrust litigation which it has initiated against Northwest out in the Pacific Northwest. Of this we shall presently say more, but we must first turn to the potentially case-killing question of mootness vel non.

II

A

The doctrine of mootness is founded on the "case or controversy" requirement of Article III, Sec. 2 of the Constitution. See, e.g., Honig v. Doe, --- U.S. ----, 108 S.Ct. 592, 601, 98 L.Ed.2d 686 (1988); Nebraska Press Assn. v. Stuart, 427 U.S. 539, 546, 96 S.Ct. 2791, 2796, 49 L.Ed.2d 683 (1976); Gulf Oil Corp. v. Brock, 778 F.2d 834, 838 (D.C.Cir.1985). But see Honig, 108 S.Ct. at 607-09 (Rehnquist, C.J., concurring) (suggesting an attenuated connection between mootness doctrine and Article III that can be overridden by compelling circumstances). This requirement forbids federal courts from issuing advisory opinions or "decid[ing] questions that cannot affect the rights of litigants in the case before them." Better Gov't Ass'n v. Department of State, 780 F.2d 86, 90-91 (D.C. Cir.1986) (quoting North Carolina v. Rice, 404 U.S. 244, 246, 92 S.Ct. 402, 404, 30 L.Ed.2d 413 (1971)). Unless we are presented with a " 'real and substantial controversy admitting of specific relief through a decree of conclusive character,' " we are obliged to find the case moot. Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 2334, 45 L.Ed.2d 272 (1975) (quoting Aetna Life Ins. v. Haworth, 300 U.S. 227, 241, 57 S.Ct. 461, 464, 81 L.Ed. 617 (1937)). Our obligation is no less pressing in the context of agency action. See Tennessee Gas Pipeline Co. v. Federal Power Com'n, 606 F.2d 1373, 1379 (D.C.Cir.1979) (citing Mechling Barge Lines v. United States, 368 U.S. 324, 328-330, 82 S.Ct. 337, 340-41, 7 L.Ed.2d 317 (1961)).

Here, Northwest seeks elimination of the T-6 rate condition in each of five challenged certificates. In addition to the rate condition, however, these certificates contained a condition limiting their duration to the earlier of one year "or the date on which Northwest accepts a blanket certificate under Order No. 436." See, e.g., 39 FERC paragraphs 61,092, 61,247-88 (1978). ³ In June 1988, Northwest voluntarily accepted this blanket transportation certificate, thereby terminating the earlier Sec. 7(c) certificates. Obviously, the challenged rate terms disappeared into the regulatory netherworld when the certificates themselves entered the archives. ⁴ Since Northwest now operates under the Order 436 blanket certificate, it is abundantly evident that no prospective relief is available with respect to the now-rescinded Sec. 7(c) certificates. ...