# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 10, 2005 Decided June 10, 2005

No. 04-1135

T HE T OCA P RODUCERS

, ET AL

., P ETITIONERS

v.

F EDERAL E

NERGY R

EGULATORY C OMMISSION

, R ESPONDENT

S OUTHERN C OMPANY S ERVICES

, I NC

., ET AL

.,

I NTERVENORS

On Petition for Review of Orders of the

Federal Energy Regulatory Commission

Katherine B. Edward

s argued the cause for petitioners.

With her on the briefs were John Paul Floom, F rederick T.

Kolb , and Charles J. McClees

.

Dav id H. Coffman , Attorney, Federal Energy Regulatory

Commission, argued the cause for respondent. With him on the

brief were Cynthia A. Marlette

, General Counsel, and Dennis

Lane , Solicitor.

Patrick B. Pope

, R. David Hendrickson

, Roy R. Robertson,

Jr.

, Jeffrey D. Komarow

, and Joshua L. Menter were on the brief2

for intervenors Southern Natural Gas Company, et al.

Before: G

INSBURG

, Chief Judge , and S ENTELLE and T ATEL

, Circuit Judges

.

Opinion for the Court filed by C hief Judge G INSBURG

.

G INSBURG

, Chief Judge :

Several natural gas producers

petition for r eview of three orders of the Federal Energy

Regulatory Commission denying their request, pursuant to §§ 4

a nd 5 of the Natural Gas Act, 15 U.S.C. §§ 717c, 717d(a), that

Southern Natural Gas Co. be ordered to revise its tariff to

include a safe harbor gas quality standard that specifies a

hydrocarbon dewpoint at which Southern will guara ntee the

transportation of gas. Because the producers may yet secure that

very relief in a proceeding now pending before the Commission,

we dismiss the present petition as unripe.

I. Background

The produ

cers operate upstream from three natural gas

p rocessing plants located near Toca, Louisiana and owned in

part by affiliates of

some of the producers. All the producers

tender to South

ern’s pipeline, at receipt points also upstream of

the plants , gas with a relatively high liquefiable hydrocarbon

content. A natural gas stream with a high content of liquefiable

hydrocarbons, h

owever, threatens the reliable operation of a

pipeline. For that reason § 3.1(b) of Southern’s tariff provides

that Southern will not accept gas containing more than 0.3

g allons per thousand cubic feet of isopentane and heavier

hydrocarbons.

Ordinarily § 3.1(b) is of no consequence because it is in the

producers’ economic interest to extract h ydrocarbons at the3

processing plants for t

he purpose of selling them as liquid

natural gas. Accordingly, Southern typically waives

enforcement of the tariff provision at the pro ducers’ receipt

points, relying upon

processing at the plants downstream to

render the gas compliant.

In December 2000, however, the price of natural gas rose to

a level at which the producers found it more profitab le to leave

t he hydrocarbons in their gas than to extract and sel l them

because hydrocarbons r aise the heat content, and hence the

value, of the gas. The operators of the processing plants at Toca

therefore informed

Southern they would shut down the plants by

the end of the mont h. Concerned about the effect upon the

reliability of its pipeline, Southern notified all producers that:

In the event the processing capacity is r educed significantly

... Southern may commence enforcement of Sect ion 3.1(b)

.... Individual producers that do not meet the quality

spec ification will be ... required to reduce or shut-in their

production.

On January 5, 2001 the p roducers petitioned the

Commission for a

temporary restraining order to prevent

Southern from refusing their gas and requested that an

emergency technical conference be held. The Commission did

not issue a temporary restra ining order but it did convene the

requested conference. A moco Prod. Co. , 94 F.E.R.C. ¶ 61,026

(2001). Neither the conference nor subsequent settlement

discuss i ons, however, resolved the producers’ concerns. In May

2003 the C ommission directed the parties to identify outstanding

issues and their po sitions thereon. A moco Prod. Co.

, 103

F.E.R.C. ¶ 61,175 (2003).4

The producers responded by filing a complain t before the

Commission, asserting Southe rn’s threatened refusal to accept

their gas was discriminatory within the meanin g of §§ 4 and 5

because, at receipt points downstrea m from the processing

plants, it had accepted gas with a higher liquefiable h ydrocarbon

concentration t

h an gas processed at the Toca plants. The

producers claimed such discrimination arose because there was

no safe harbor gas quality specification standard in Southern’s

tariff, and asked that Southern’s tariff be revised accordingly.

To that end they requested an evidentiary hearing.

The Commission

dismissed the producers’ complaint as

well as their earlier petition. T oca Producers v. S. Natural Gas

Co.

, 104 F.E.R.C . ¶ 61,300 (2003). Section 4, explained the

Commission, applies only to a tariff change initiated by a

pipeline. I

d. at 62,130. As for § 5, the Commission held the

producers had not carried their “subst antial burden” of showing

Southern’s tariff was “unjust and unreasonable,” id.

, and

because they had adduced “no genuine issues of material fact”

on that score, the Commission declined to hold an evid entiary

hearing, id. at 62,129-6 2,130. The Commission did, however,

condition its dismissal of the producer s’ complaint upon

Southern’s making a § 4 filin g to include in its tariff an

“aggre gation methodology, including [a] flexible [gas quality

specification] standard.” Id. at 62,128, 62,130.

Southern duly filed a proposal to revise its tariff, s ee S.

Natural Gas Co.

, 105 F.E.R.C. ¶ 61,254 (2003) (Docket No.

RP04-42-00), and that proceeding, in which the producers have

intervened, is still pend ing. Meanwhile, the Commission denied

both the producers’ petition for rehearing, see 106 F.E.R. C

. ¶

61,158 (2004), and their subsequent motion for clarification o r

rehearing, see 107 F.E.R.C. ¶ 61,009 (2004), and the producers

peti tioned this court for review of all three of the Commission’s5

* We not e the “[r]ipeness doctrine is responsive to

constitutional as well as prudential considerations,” Action Alliance of

Senior Citizens of Greater Phila. v. Heckler , 789 F.2d 931, 940 n.12

(D.C. Cir. 1986), but we need not decide which type of consideration

predominates here. The Supreme Court has said the prudential

standing doctrine, like the abstention doctrine, “represents the sort of

‘threshold question’ [that] may be resolved before addressing

jurisdiction,” Tenet v. Doe , 125 S. Ct. 1230, 1234 n.4 (2005), and we

infer that, because the ripeness requirement, even in its prudential

aspect, likewise calls for a thre shold inquiry that does not involve an

adjudicat ion on the merits, it likewise may be resolved without first

addressing whether the producers have Article III standing. S ee orders.

II. Analysis

Before addressing the merits of the producers’ petition we

must be satisfied it meets the requirements of a “Case” or a

“Contro versy” within the meaning of Article III of the

Constitution of the United States, see Steel Co. v. Citizens for a

Better Env’t

, 523 U.S. 83 (1998), including the requirement that

their claim

be ripe for judicial resolution, s ee Nat’l Park

Hospitality Ass’n v. Dep’t of Interior , 538 U.S. 803, 807-08

(2003)

. To that end, we must “evaluate both the fitness of the

issues for judicial decisio n and the hardship to the parties of

withholding court consideration.” Abbott Labs. v. Gardner

, 387

U.S. 136, 149 (1967). “In applying the ripeness doctrine to

agen c y action we balance the interests of the court and the

agency in delaying review against the petitioner’ s interest in

prompt consideration of allegedly unlawful agency act ion.”

Fed. Express Corp. v. Mineta

, 373 F.3d 112, 118 (D.C. Cir.

2004); Friends of Keeseville, Inc. v. FERC

, 859 F.2d 230, 235

(D.C. Cir. 1988). Balancing those interests here, we conclude

the producers’ petition is not ripe for review. *6

Ruh rgas AG v. Marathon Oil Co. , 526 U.S. 574, 583 (1999) (“It is

hardly novel for a federal court to choose among threshold grounds for

denying audience to a case on the merits”). The interests of the co urt and of the agency in withholding

judicial review ordinarily depend upon “the fitness of the issues

for judicial decision,” Abbott Labs.

, 387 U.S. at 149, which, in

turn, depends upon whether the issue s are “purely legal,”

whethe r their consideration “would benefit from a more concrete

setting, and whe ther the agency’s action is sufficiently final.”

Atl. States Legal Found. v. EPA , 325 F.3d 281, 284 (D.C. Cir.

2003). Here the gravamen of the producers’ petition – that

S outhern’s tariff is unjust and unreasonable

– presents a “purel y legal” issue , and it arises from a “concrete setting.” The

challenged orders also appear to present a “ final agency action”

within the m

eaning of the Administrative Procedure Act, 5

U.S.C. § 704, but in the pe c uliar circumstances of this case we

do not think the agency’s action is “sufficiently final.”

The Commission has yet to pass conclusively upon whether

the produce rs are entitled to the only relief they now seek,

namely, that Southern’s tariff be revised to include an objective

gas quality

specification standard. As the Commission portrays

the situation in i

ts brief – and the producers do not disagree –

“[t]he proceeding in FER C Docket No. RP04-02 could result in

a tariff modificati

on that [the producers] seek, thus resolving the

issues ra ised in this appeal.” There is therefore a substantial

“judicial interest in deferring resolution” of the petition because,

if the producers’ entitlement to such a standard is not presently

adjudicated, then it “may not require adjudication at all.”

Friends of Keeseville , 859 F.2d at 235; see also Wyo. Outdoor

Council v. U.S. Forest Serv. , 165 F.3d 43, 50 (D.C. Cir. 1999)

(“Prudence

... restrains courts from hastily intervening into

matters th at may best be reviewed at another time or another7

setting”). If the producers do not get the relief they seek in the

proceeding now

before the Commission, then they may, of

course, seek judicial review of the fin a l order issued in that

docket. S ee Friends of Keeseville , 859 F.2d at 236-37 (“In

determining whether a controversy is ripe, one relevant factor is

the availability of judicial review at a later stage ”). Staying our

h and until the conclusion of the ongoing administrat ive

proceeding could therefore avoid a “piecemeal, duplicative,

tactical and unnecessary appeal[] which [is] costly to t h e parties

an d consume[s] limited judicial resources.” M ount Wilson FM

Broad., Inc. v. FCC , 884 F.2d 1462, 1467 (D.C. Cir. 1989); see

also Friends of Keeseville , 859 F.2d at 236 (court “may properly

give weight to the interests i n judicial economy that are

furthered by the avoidance of unnecessary adjudication”).

The institutional interest in deferring a judicial resolution

must, of course, be weighed against “the hardship to the parties

of withholding court consideration” at this t ime. A bbott Labs.

, 387 U.S. at 149. The producers, however, have not shown they

will endure any cognizable hardship at all. They do say they

“will continue to be injured because there is no certainty with

regard to

... their processing obligations” under Southern’s tariff,

but the S upreme Court has squarely rejected the proposition that

“uncer tainty as to the validity of a legal rule constitutes a

hardship for purposes of the ripeness analysis”; were it

otherwise “courts would soon be overwhelme d with requests for

what essentially wo uld be advisory opinions because most

business transactions could be priced more accurate ly if even a

small portion of existing legal uncer tainties were resolved.”

Nat’l Park Hospitality Ass’n

, 538 U.S. at 811.

The producers belatedly (that i s, in their reply brief) claim

“[t]here is a significant risk that FERC will rely on its findings

in the [orders under review] to deny [the producers’] arguments8

in the [pending] case or other future cases. ” We do not

ordinarily notice an argument first raised in a reply brief because

the other side had no opportunity to re spond in its brief, s ee

Amgen, Inc. v. Smith , 357 F.3d 103, 117 (D.C. Cir. 2004), and

we have no cause to ma

ke an exception here. In any event, we

doubt th e producers’ bald assertion regarding the possibility the

orders will be given preclusive effect woul d carry their burden

of showing the issue in this case is ripe. See Friends of

Keeseville

, 859 F .2d at 235 (“It is not this court’s job ... to

speculate as to p ossible impacts of possible outcomes of existing

lawsuits upon f

uture litigation; it is the petitioner’s

responsibility to show

the specifics of the aggrievement

alleged”).

In sum, because the public interes t in judicial economy

counsels against our now considering the producers’ petition,

and because the producers have pointed to no hardship from

waiting until the administrative process has run its cou rse, we

hold their petition is not ripe for review.

III. Conclusion

For the foregoing reasons, the producers’ petiti o n for review

is

Dismissed

.