Pipe Line Co v. United States Panhandle Eastern Pipe Line Co v. United States

• Decision Date: 03 March 1941
• Docket Number: Nos. 268,269,MISSOURI-KANSAS,s. 268
• Citation: 312 U.S. 502,61 S.Ct. 666,312 U.S. 665,85 L.Ed. 975
• Parties: PIPE LINE CO. v. UNITED STATES et al. PANHANDLE EASTERN PIPE LINE CO. v. UNITED STATES et al
• Court: U.S. Supreme Court

312 U.S. 502

61 S.Ct. 666

312 U.S. 665

85 L.Ed. 975

MISSOURI-KANSAS PIPE LINE CO.

v UNITED STATES et al.

PANHANDLE EASTERN PIPE LINE CO.

v. UNITED STATES et al.

Nos. 268, 269.

Argued and Submitted Feb. 12, 13, 1941.

Decided March 3, 1941.

As Modified on Denial of Rehearing Mar. 17, 1941.

Messrs. Arthur G. Logan, of Wilmington, Del., and Robert J. Bulkley, of Washington, D.C., for appellants.

Mr. Douglas M. Moffat, of New York City, for appellee Columbia Gas & Electric Corp.

Mr. William H. Button, of New York City, for appellee Columbia Oil & Gasoline Corp.

Mr. James H. Lee, of Detroit, Mich., for City of Detroit as amicus curiae by Special leave of Court.

Messrs. Robert H. Jackson, Atty. Gen., and Thurman W. Arnold, Asst. Atty. Gen'l, for appellee United States.

Mr. Justice FRANKFURTER delivered the opinion of the Court.

These proceedings grow out of a suit in equity brought by the Attorney General in 1935 to enforce the anti- trust laws. That suit was terminated by a consent decree the terms of which specifically reserved certain rights to the Panhandle Eastern Pipe Line Company. The issues here revolve around the scope of those provisions of the decree.

In its bill the Government charged that Columbia Gas & Electric Corporation and its controlled instrumentality, Columbia Oil & Gasoline Corporation, together with individual defendants, had conspired, for the benefit of Columbia Gas, to shut out operation in the Indiana-Ohio-Michigan area by the Panhandle Company, which had built a natural gas pipe line from the Texas fields to the border of Indiana. Panhandle was an offspring of Missouri-Kansas Pipe Line Company (hereafter called Mokan), which, at the inception of the Government's suit, still owned half of Panhandle's stock and held half its junior debt. Columbia Gas, it was charged, had a practical monopoly of natural gas in the market which Panhandle proposed to enter, and to maintain this monopoly Columbia Gas acquired domination of Panhandle through the acquisition by Columbia Oil of half of Panhandle's stock and junior debt and its whole senior debt. These acts stifled, so it was claimed, Panhandle's potential competition, rendered it insolvent, and forced Mokan into receivership.

The consent decree sought to assure opportunities for competition by Panhandle. Deeming the terms of the decree inadequate for its purpose, the Government in 1939 reopened the proceedings. The defendants proposed modifications of the decree by a plan which the district court referred to a master. After the master's report approving the plan had been submitted but before the district court had acted upon it, two attempts to intervene were made on bahalf of Panhandle. The de- nial of these two motions by the district court is the basis of the appeals here which come to us directly under the Expediting Act, 32 Stat. 823, as amended, 15 U.S.C. § 29, 15 U.S.C.A. § 29. In No. 268 Mokan, as a stockholder of Panhandle, made the appropriate allegations as to the unwillingness of those responsible for the actions of the corporation to protect its interests, and moved to intervene on behalf of Panhandle. In No. 269, the motion purported to be made in Panhandle's name. In addition to the formal parties, the City of Detroit was heard here as amicus curiae because of its interest in the supply of gas by Panhandle.

For clarity's sake, we shall first dispose of No. 268.

Numerous arguments were pressed upon us challenging our jurisdiction over the appeal, or, in the alternative, insisting on the propriety of the action of the district court. Treating Rule 24(a) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, as a comprehensive inventory of the allowable instances for intervention, it is insisted that the present case is not one for intervention as of right, and as an exercise of the district court's discretion is not reviewable here. In any event, the order of the district court is said not to be a 'final decree' within the Expediting Act, compare United States v. California Canneries, 279 U.S. 553, 556, 49 S.Ct. 423, 73 L.Ed. 838, and on this score not reviewable. If the merits be here open, the order was correct because there was not 'timely application', as required by Rule 24(a). Finally, various considerations of controlling public interest are invoked to sustain the district court: the Attorney General is the guardian of the public interest in enforcing the anti-trust laws, compare New York City v. New York Telephone Co., 261 U.S. 312, 43 S.Ct. 372, 67 L.Ed. 673; injection of new issues ought not to be allowed to delay disposition of the main litigation, see United States v. Northern Securities Co., C.C., 128 F. 808, 813; a decree already entered should not be impeached by intervention, see United States v. California Canneries, supra, 279 U.S. at page 556, 49 S.Ct. at page 424, 73 L.Ed. 838.

All of these arguments misconceive the basis of the right now asserted. Its foundation is the consent decree. We are not here dealing with a conventional form of intervention, whereby an appeal is made to the court's good sense to allow persons having a common interest with the formal parties to enforce the common interest with their individual emphasis. Plainly enough, the circumstances under which interested outsiders should be allowed to become participants in a litigation is, barring very special circumstances, a matter for the nisi prius court. But where the enforcement of a public law also demands distinct safeguarding of private interests by giving them a formal status in the decree, the power to enforce rights thus sanctioned is not left to the public authorities nor put in the keeping of the district court's discretion.

That is the present case. Panhandle's right to economic independence was at the heart of the controversy. An important aspect of that independence was the extension of its operations to permit sales in Detroit. The assurance of this extension was deemed so vital that it was safeguarded by explicit provisions in the decree. Section IV, which is in full in the margin,¹ contained those provisions, and by Section V, also set out below,² Panhandle, 'upon proper application', could 'become a party' to the suit 'for the limited purpose of enforcing the rights conferred by Section IV'. Mokan, on behalf of Panhandle, claimed that Columbia Gas had made financial arrangements, which we need not detail, that would in practice defeat the free enterprise of Panhandle.

We are not concerned with the substantiality of this claim. The sole question before us is whether there was standing to make the claim before the district court. We hold there was such standing. To enforce the rights conferred by Section...