United Gas Pipe Line Co. v. Federal Power Com'n

• Decision Date: 05 April 1950
• Docket Number: No. 10125,10126.,10125
• Citation: 86 US App. DC 314,181 F.2d 796
• Parties: UNITED GAS PIPE LINE CO. v. FEDERAL POWER COMMISSION. MICHIGAN CONSOLIDATED GAS CO. v. FEDERAL POWER COMMISSION.
• Court: U.S. Court of Appeals — District of Columbia Circuit

86 US App. DC 314, 181 F.2d 796 (1950)

UNITED GAS PIPE LINE CO. v. FEDERAL POWER COMMISSION.

MICHIGAN CONSOLIDATED GAS CO. v. FEDERAL POWER COMMISSION.

Nos. 10125, 10126.

United States Court of Appeals District of Columbia Circuit.

Argued January 19, 1950.

Decided April 5, 1950.

Mr. C. Huffman Lewis, Shreveport, La., with whom Mr. W. Scott Wilkinson, Shreveport, La., was on the brief, for petitioner United Gas Pipe Line Company.

Mr. Charles V. Shannon, Washington, D. C., with whom Messrs. Donald R. Richberg and Stanley M. Morley, Washington, D. C., were on the brief, for petitioner Michigan Consolidated Gas Company.

Mr. William S. Tarver, Assistant General Counsel, Federal Power Commission, Washington. D. C., with whom Messrs. W. Bradford Ross, General Counsel, Louis W. McKernan and Bernard A. Foster, Jr., counsel, all of the Federal Power Commission, Washington, D. C., were on the brief, for respondent. Mr. W. Russell Gorman, Washington, D. C., also entered an appearance for respondent.

Before PRETTYMAN, PROCTOR and BAZELON, Circuit Judges.

BAZELON, Circuit Judge.

Petitioners seek direct review in this court of a rule issued by the Federal Power Commission pursuant to Sections 4(c) and 16 of the Natural Gas Act, 15 U.S.C.A. §§ 717c (c), 717o. Section 4(c) authorizes the Commission to prescribe rules and regulations for filing "* * * in such form as the Commission may designate * * * schedules showing all rates and charges for any transportation or sale subject to the jurisdiction of the Commission, and the classifications, practices, and regulations affecting such rates and charges, together with all contracts which in any manner affect or relate to such rates, charges, classifications, and services." 15 U.S.C. A. § 717c (c).

Section 16 gives the Commission, inter alia, the general authority to issue "* * * such orders, rules, and regulations as it may find necessary or appropriate to carry out the provisions of this act." 15 U.S.C. A. § 717o

Since both petitions involve closely-related problems of fact and law, it was agreed by counsel that they might be argued and decided together. We will first discuss the contentions of petitioner, United Gas Pipe Line Company.

The regulation issued by the Commission, Order No. 144, requires the United Gas Pipe Line Company and all other companies similarly situated to file their rates in tariff-schedule form instead of as percentage contracts or as amendments to existing contracts, as has heretofore been done.¹ Since the Commission considered Order No. 144 a valid exercise of its rule-making power and hence legislative in nature, it did not hold a quasi-judicial hearing. It did, however, satisfy the requirements for rule-making established by Section 4 of the Administrative Procedure Act, 5 U.S.C.A. § 1004. Thus, the proposed regulations were published in the Federal Register before they were promulgated, interested persons were given an opportunity to submit written comments, a public hearing was held and oral argument heard, but no evidence was taken.

As petitioner views the case, although the regulations are procedural in form and superficially prospective in nature, they will in reality work a change in rates, cause certain provisions to be eliminated from its contracts, and will be retroactive in effect.² Thus, the argument proceeds, a quasi-judicial hearing has been denied where it should have been granted for, under Section 5(a) of the Natural Gas Act, 15 U.S. C.A. § 717d(a), rates may be changed by the Commission only after a hearing is held and they have been found to be unjust and unreasonable. Since Commission acceptance of this view would have resulted in an order reviewable under Section 19(b), 15 U.S.C.A. § 717r(b), it is contended that, even absent such acceptance, review may be obtained here under that section. Petitioner also appears to make an alternative argument — that since Order No. 144 operates upon it particularly and causes it irreparable injury, review may be obtained in this court under the authority of Columbia Broadcasting System v. United States, 1942, 316 U.S. 407, 62 S.Ct. 1194, 86 L. Ed. 1563.

Petitioner has mistaken its remedy. Although the distinction between rule and order is not always clearly definable, our authority to review orders of the Federal Power Commission under the Natural Gas Act does not suffer the same weakness. Not all orders were made reviewable under Section 19(b). As in the analogous provision of the Federal Power Act, Congress set out "a distinctive formulation of the conditions under which resort to the courts may be made."³ On its face, the Act contemplates review of a decision based on evidence presented in a quasi-judicial proceeding before the Commission.⁴ It specifies that the Commission shall file with the proper circuit court of appeals "a transcript of the record upon which the order complained of was entered * * *." "The finding of the Commission as to the facts, if supported by substantial evidence, shall be conclusive", etc. Unless the case comes to us after such a proceeding, we are given no authority to directly review the Commission's action.

Review provisions such as 19(b) evidence Congressional recognition that an appellate court has no intelligible basis for decision unless a subordinate tribunal has made a record fully encompassing the issues. The wisdom of thus circumscribing the authority to review is readily apparent in this particular case. For we are asked to pierce form and find substance, to make an important decision concerning the scope of the Commission's regulatory authority, merely on the basis of allegations in a Petition for Review. The central question here is the effect of Order No. 144 on certain contracts of petitioner. Yet we do not even have such contracts before us as part of the record. Nor do we have the aid of testimony, affidavits, etc. It is clear to us that decisions of this kind cannot be made in vacuo; and that Congress realized it when it made our review dependent upon the sort of conditions contained in Section 19(b).

This is not a case where the Commission has asserted authority under one of the many sections of the Act which specifically require a hearing. If a hearing had been denied under such circumstances, we would have no difficulty in ordering one to be held. Nor would we hesitate to ignore labels and take jurisdiction if this were a case where it was clear that the administrative order (denying treatment of certain documents as confidential) operated "particularly rather than generally * * * and was a judgment entered on a state of facts and affecting only one person."⁵

The present case is quite different. We have before us a rule directed to all companies similarly situated, and we have the Commission's binding assurance that the regulations will operate only prospectively.⁶ Under such circumstances, there is at the very least a strong presumption that the Commission has merely promulgated regulations of general applicability and not orders reviewable under Section 19(b).

We do not hold, however, that petitioner is left entirely without a remedy if, as it alleges, the regulations are merely a veiled way of striking at it without granting a hearing. Several remedies remain available. First, the regulations themselves make provision for an application for exception.⁷ If this furnishes only a partial remedy, or no remedy at all, as petitioner asserts, then the proper forum is the district court. The very case upon which petitioner relies most strongly, Columbia Broadcasting System v. United States, 1942, 316 U.S. 407, 62 S.Ct. 1194, 86 L.Ed. 1563, points to that court. There, as here, it was alleged that a rule issued by the Federal Communications Commission caused such irreparable injury and operated so particularly that it was, in effect, an order reviewable under Section 402(a) of the Federal Communications Act, 47 U.S.C. A. § 402(a). The Supreme Court held that Section 402(a) conferred upon a statutory three-judge court the sort of equity jurisdiction long established for the Interstate Commerce Commission under the Urgent Deficiencies Act. The proceeding, however, was in a court of original jurisdiction exercising certain enumerated equity powers. Where no provision has been made for a three-judge court, there is abundant authority that a similar suit, to enjoin the action of an administrative agency acting illegally and threatening irreparable injury, will lie in the district court.⁸ Section 10(b) of the Administrative Procedure Act, 5 U.S. C.A. § 1009(b), has not changed preexisting law in this regard. It merely makes injunctions and certain extraordinary legal remedies available in a proper action instituted in a court of original jurisdiction.⁹

Even if petitioner is unable to prove the irreparable injury necessary in a suit for injunction, he may raise the invalidity of the Commission's action as a defense to an enforcement proceeding instituted against him for violation of the rule in question. Of course, it is possible that the unsuccessful defense of the enforcement proceeding might leave a petitioner open to penalties of fine or imprisonment, if it is determined that he had not acted in good faith.¹⁰ But that would merely go to the question of irreparable injury which, as we have indicated, would be a factor in determining the availability of an injunction.

These same considerations apply to the second petitioner, Michigan Consolidated Gas Company, which purchases gas from a pipeline company under the contracts here involved. It contends, inter alia, that these rules authorize companies selling to petitioner to restate and hence change their contracts with it without its consent, that such authorization is unlawful and affects it adversely, and hence that it is an "aggrieved" party within the meaning of Section 19(b). Since we hold that we have no jurisdiction to review the regulations in question at this time, we need...