Utah Gas Pipelines Corp. v. El Paso Natural Gas Co., C 103-64.

• Decision Date: 05 October 1964
• Docket Number: No. C 103-64.,C 103-64.
• Citation: 233 F. Supp. 955
• Parties: UTAH GAS PIPELINES CORPORATION, Plaintiff, v. EL PASO NATURAL GAS COMPANY, Mountain Fuel Supply Company, and Sinclair Oil & Gas Company, Defendants.
• Court: U.S. District Court — District of Utah

233 F. Supp. 955

UTAH GAS PIPELINES CORPORATION, Plaintiff, v. EL PASO NATURAL GAS COMPANY, Mountain Fuel Supply Company, and Sinclair Oil & Gas Company, Defendants.

No. C 103-64.

United States District Court D. Utah, Central Division.

September 24, 1964.

As Corrected October 5, 1964.

COPYRIGHT MATERIAL OMITTED

Brigham E. Roberts, of Rawlings, Wallace, Roberts & Black, Salt Lake City, Utah, C. Keefe Hurley, Earle C. Cooley, and Hale & Dorr, Boston, Mass., for plaintiff.

Dennis McCarthy, and L. R. Gardiner, Jr., of Van Cott, Bagley, Cornwall & McCarthy, Salt Lake City, Utah, and Gregory A. Harrison, Atherton Phleger, and Robert S. Daggett, of Brobeck, Phleger & Harrison, San Francisco, Cal., for defendant El Paso Natural Gas Co.

Harley W. Gustin, and Edward F. Richards, of Gustin, Richards & Mattsson, Salt Lake City, Utah, Angus A. Davidson, Hunter L. Johnson, Tulsa, Okl., John P. Akolt, and Robert A. Dick, of Akolt, Shepherd & Dick, Denver, Colo., for defendant Sinclair Oil & Gas Co.

Joseph S. Jones, C. E. Henderson, and Donald B. Holbrook, of Ray, Rawlins, Jones & Henderson, Salt Lake City, Utah, for defendant Mountain Fuel Supply Co.

CHRISTENSEN, District Judge.

This is a private antitrust suit brought by plaintiff Utah Gas Pipelines Corporation pursuant to Section 4 of the Clayton Act (15 U.S.C. § 15) to recover treble damages, attorneys' fees and costs for alleged violation by all of the defendants of Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 and 2), and by the defendant El Paso Natural Gas Company, of Section 7 of the Clayton Act (15 U.S.C. § 18).

It is alleged in the complaint, with supporting and explanatory details, in substance that El Paso, in an effort to secure a monopoly in the natural gas pipeline industry in various Western states, had acquired the stock and assets of Pacific Northwest Pipeline Corporation; that with its consequently enlarged base it sought to restrain and eliminate competition for gas supplies in Utah and the remainder of the Mountain States Area, and to monopolize the industry, and with this object and purpose El Paso combined and conspired with Mountain Fuel to delimit their respective spheres of control of the industry, to reserve to Mountain Fuel its monopoly power in Utah while eliminating competition between them and from others for gas supplies, and to exclude competitors and potential competitors from the natural pipeline industry in Utah. It is further alleged that Sinclair later joined this conspiracy, thereby adopting its aims and prior execution and thereupon becoming an active participant.

The plaintiff corporation, according to the complaint, was formed for the purpose of constructing and operating a natural gas pipeline in Utah. Plaintiff partially implemented its plans to construct, own and operate a pipeline for the purpose of transporting natural gas to the Kennecott plant near Salt Lake City, Utah, through tripartite negotiations and tentative or attempted agreements with the Kennecott Corporation and Utah gas producers. It is further alleged that plaintiff was deprived of sources of supply and was twice prevented from completing such agreements by reason of the conspiracy among the defendants.

Although plaintiff asserts its Sherman Act claims against all defendants, against El Paso only the plaintiff claims a violation of Section 7 of the Clayton Act in that El Paso, while engaging in interstate commerce and in the course of such commerce, acquired the stock and assets of Pacific Northwest Pipeline Corporation, engaged also in interstate commerce; and that the effect has been and may be to substantially lessen competition or to tend to create a monopoly in the natural gas pipeline industry in Utah, Colorado, Wyoming and the Ten State Area.

Plaintiff further alleges that El Paso, through the above mentioned conduct of the defendants, has acquired unchallenged dominance of the natural gas pipeline industry in the Ten State Area. The conspiratorial and monopolistic goals of El Paso and Mountain Fuel Supply having thus been achieved, defendants have suppressed competition and monopolized the industry in the mountain states, deprived plaintiff of income and access to assets, destroyed the value of plaintiff's business, restricted competition to the injury of the plaintiff as well as the public, destroyed plaintiff's business and eliminated plaintiff as a competitor, to plaintiff's single damage in excess of $40,000,000.00, the trebling of which amount plaintiff prays for as damages herein, together with attorneys' fees, costs and general relief.

Sinclair Oil & Gas Company has moved to dismiss the complaint both generally and as to the monopolization claim in particular, upon the ground that the complaint fails to state a claim upon which relief can be granted. It has also moved to dismiss the complaint for alleged lack of jurisdiction by the court over the subject matter of the action. As an alternative, said defendant moves the court, pursuant to Rule 21, F.R.C.P., to sever and proceed separately with the alleged claim of violation of Section 7 of the Clayton Act (15 U.S.C. § 18), and to drop the defendant as a defendant thereto. If the latter motion be not granted, said defendant asks that there be stricken from paragraphs 16, 17, 18, 19, 20, 21, and 22, and elsewhere where they may appear in the complaint, all allegations with reference to the acquisition by the defendant El Paso Natural Gas Company of the stock and assets of Pacific Northwest Pipeline Corporation alleged to be in violation of Section 7 of the Clayton Act. If this motion be not granted, said defendant moves that the plaintiff be required in compliance with Rule 10(b) of F.R.C.P. to state in separate counts the several causes of action allegedly commingled in one count, namely (a) the cause of action based upon alleged violation of Section 7 of the Clayton Act; (b) the cause of action for violation of Section 1 of the Sherman Act (15 U.S.C. § 1); and (c) the cause of action based upon alleged violation of Section 2 of the Sherman Act (15 U.S.C. § 2).

The defendant Mountain Fuel Supply Company has moved for dismissal of the complaint upon the grounds that (1) it fails to state a claim upon which relief can be granted, particularly because (a) plaintiff's claim under Section 4 of the Clayton Act (15 U.S.C. § 15) depends upon the solution of issues the determination of which is within the primary administrative jurisdiction of the Public Service Commission of the State of Utah; (b) plaintiff has not been injured in its business or property by reason of anything forbidden in the antitrust laws of the United States; (c) plaintiff's action is a collateral attack on orders of the Public Service Commission of the State of Utah made in the exercise of its exclusion jurisdiction; (d) the complaint does not allege injury to the public; (2) that plaintiff has failed to join an indispensable party, i. e., Trans-Utah Pipelines, Inc., and (3) the court lacks jurisdiction over the subject matter of the action because of the foregoing contentions and because the plaintiff's claims do not arise under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies as provided in Title 15 United States Code. Mountain Fuel Supply also joins in the motion of Sinclair for severance and for separate statements of claims, and adds a motion to strike from the complaint all allegations concerning Trans-Utah Pipelines, Inc., appearing in paragraphs 25, 27, 28, 29, 30 and 31 of the complaint.

El Paso Natural Gas Company has moved to strike from the complaint portions of paragraphs 16, 24, 25, 29, 31, 43, 48, 52, and the whole of paragraphs 17, 18, 19, 20, 21, 22, 23, 27, 28, 30, 45, 46, and 49 of the complaint, relating to the acquisition of common stock and assets of Pacific Northwest Pipelines Corporation by El Paso and the subsequent mandate for divestiture from the Supreme Court, and to Trans-Utah Pipelines, Kennecott Copper Corporation and the "Rock Springs" project.

In addition to the motions directed against the pleadings, defendant Sinclair has asked that its motion to dismiss be considered in effect a motion for summary judgment pursuant to Rule 12(b) F.R.C.P. in view of tendered affidavits going to the merits of the case.

The questions before the court have been fully and ably argued and briefed and are now presented for decision.

It seems inappropriate on the threshold of a case such as this to accept the affidavits of Sinclair as a conversion of the problems to one of summary judgment, without fuller opportunity for exploration, discovery and responses. The Sinclair affidavits, therefore, have been excluded by the court from consideration, as authorized by the rule upon which Sinclair relies. Thus the motions for determination are directed to the complaint as now framed, and depend for determination upon the allegations of the complaint which at this stage must be taken as true, together with reasonable inferences to be drawn therefrom favorably to the pleader.

Sinclair and El Paso contend that the court lacks jurisdiction in one sense or another. Absence of jurisdiction over the subject matter of the action does not appear from the face of the complaint; on the contrary the court's jurisdiction to consider the alleged claims themselves and whether or not they are sufficient in law to require answer, does appear. The general assertions that the court does not have jurisdiction are without merit and the motions insofar as based upon an asserted lack of jurisdiction are denied. What is really meant by the parties, no doubt, is that the power of the court is not sufficiently invoked to authorize relief because of the inadequacy of the complaint to state a claim for relief against particular defendants, the absence of indispensable parties or the insufficiency of alleged facts to entitle the plaintiffs to prevail. See Deseret Apartments,...