Source: https://law.justia.com/cases/federal/appellate-courts/F2/563/588/31635/
Timestamp: 2020-08-06 23:19:41
Document Index: 203332268

Matched Legal Cases: ['§ 717', '§ 706', '§ 1', '§ 717', '§ 706', '§ 12', '§ 2', '§ 18']

Gulf Oil Corporation, Petitioner, v. Federal Power Commission, Respondent,philadelphia Gas Works, Texas Eastern Transmissioncorporation, Milton Clark, Frederick W. Rose, and St. Regisapartment, Ltd., on Behalf of Themselves and All Otherssimilarly Situated (pgw's Customers), Washington Urbanleague, Public Service Electric and Gas Company, Connecticutpublic Utilities Control Authority, Massachusetts Departmentof Public Utilities, Rhode Island Division of Publicutilities and Carriers, Rhode Island Attorney General Andrhode Island Customers' Council (new England), Publicservice Commission of the State of New York, the Brooklynunion Gas Company, Philadelphia Electric Company, Intervenors.connecticut Public Utilities Control Authority,massachusetts Department of Public Utilities, Rhode Islanddivision of Public Utilities and Carriers, Rhode Islandattorney General, and Rhode Island Consumers' Council, Petitioners, v. Federal Power Commission, Respondent,philadelphia Gas Works, Gulf Oil Corporation, Bay State Gascompany, Boston Gas Company, Bristol and Warren Gas Company,cape Cod Gas Company, Commonwealth Gas Company, Theconnecticut Gas Company, Connecticut Natural Gascorporation, Fall River Gas Company, the Hartford Electriclight Company, Town of Middleborough, Municipal Gas Andelectric Department, New Bedford Gas and Edison Lightcompany, North Attleboro Gas Company, City of Norwich,department of Public Utilities, Pequot Gas Company,providence Gas Company, South County Gas Company, Thesouthern Connecticut Gas Company, Tiverton Gas Company,public Service Electric and Gas Company, Milton Clark,frederick W. Rose and St. Regis Apartments, Ltd. (pgw'scustomers), Algonquin Gas Transmission Company, Philadelphiaelectric Company, Intervenors, 563 F.2d 588 (3d Cir. 1977) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Third Circuit › 1977 › Gulf Oil Corporation, Petitioner, v. Federal Power Commission, Respondent,philadelphia Gas Works, Te...
Gulf Oil Corporation, Petitioner, v. Federal Power Commission, Respondent,philadelphia Gas Works, Texas Eastern Transmissioncorporation, Milton Clark, Frederick W. Rose, and St. Regisapartment, Ltd., on Behalf of Themselves and All Otherssimilarly Situated (pgw's Customers), Washington Urbanleague, Public Service Electric and Gas Company, Connecticutpublic Utilities Control Authority, Massachusetts Departmentof Public Utilities, Rhode Island Division of Publicutilities and Carriers, Rhode Island Attorney General Andrhode Island Customers' Council (new England), Publicservice Commission of the State of New York, the Brooklynunion Gas Company, Philadelphia Electric Company, Intervenors.connecticut Public Utilities Control Authority,massachusetts Department of Public Utilities, Rhode Islanddivision of Public Utilities and Carriers, Rhode Islandattorney General, and Rhode Island Consumers' Council, Petitioners, v. Federal Power Commission, Respondent,philadelphia Gas Works, Gulf Oil Corporation, Bay State Gascompany, Boston Gas Company, Bristol and Warren Gas Company,cape Cod Gas Company, Commonwealth Gas Company, Theconnecticut Gas Company, Connecticut Natural Gascorporation, Fall River Gas Company, the Hartford Electriclight Company, Town of Middleborough, Municipal Gas Andelectric Department, New Bedford Gas and Edison Lightcompany, North Attleboro Gas Company, City of Norwich,department of Public Utilities, Pequot Gas Company,providence Gas Company, South County Gas Company, Thesouthern Connecticut Gas Company, Tiverton Gas Company,public Service Electric and Gas Company, Milton Clark,frederick W. Rose and St. Regis Apartments, Ltd. (pgw'scustomers), Algonquin Gas Transmission Company, Philadelphiaelectric Company, Intervenors, 563 F.2d 588 (3d Cir. 1977)
US Court of Appeals for the Third Circuit - 563 F.2d 588 (3d Cir. 1977) Argued June 7, 1977. Decided Sept. 7, 1977
On review, we are empowered to "affirm, modify, or set aside (the Commission's) order in whole or in part," Section 19(a) of the Natural Gas Act of 1938, 15 U.S.C. § 717r (1970). The scope of our review is defined by the Administrative Procedure Act, 5 U.S.C. § 706 (1970).3 II. GULF'S DELIVERY OBLIGATIONS
Although our concern is with the meaning of the certificate, see Sunray Mid-Contract Oil Co. v. FPC, 364 U.S. 137, 152-54, 80 S. Ct. 1392, 4 L. Ed. 2d 1623 (1960), it is to the Gulf-Texas Eastern contract that we must turn. The reason is that the certificate alone has little substance. At its core is the incorporation by reference of Gulf's application; the application in turn refers to the terms of the precedent agreement and the gas purchase contract. The scope of the certificate, therefore, is in large part defined by the terms of the contract.4
Another important consideration also militates against Gulf's contention that the contract established a "swing" in Gulf's gas delivery obligations rather than an absolute obligation to deliver 125 percent of the DCQ upon demand. Such a construction of the contract is unreasonable since it would render the parties' rights and obligations uncertain and indefinite. A contract should be construed, if possible, so as to sustain it rather than convert it into something vague and unenforceable and we will not strain the language of a vital provision of this contract to create an ambiguity where none exists. See H. K. Porter Company v. Wire Rope Corp. of America, Inc.,367 F.2d 653 (8th Cir. 1966); Ness v. National Indemnity Company of Nebraska, 247 F. Supp. 944 (D.C. Alaska 1965).
We recognize that the question is close. We are particularly disturbed by the failure of the FPC and the intervenors to explain satisfactorily the use of the words "Daily Contract Quantity." Nevertheless, when we weigh that term against the other factors, particularly the warranty of 125 percent of the DCQ, we are persuaded that the Commission's interpretation is more harmonious with the contractual language than is the interpretation urged by Gulf. We therefore accept the Commission's interpretation and we will affirm the Commission's holding that Gulf is obligated to deliver 625,000 MCF every day unless Texas Eastern demands less until the contract expires.6 III. ARBITRATION
Gulf's argument is that its certificate obligation is co-extensive with its contractual obligation, that the extent of its contractual obligation is to be determined by arbitration, and, therefore, that the Commission cannot possibly decide whether Gulf is complying with its certificate until the arbitration board decides whether Gulf's performance is adequate under the contract. Gulf contends that the Federal Arbitration Act, 9 U.S.C. §§ 1-14 (1970),8 evidences a strong Congressional policy favoring arbitration of contract disputes, J. S. & H. Construction Co. v. Richmond County Hospital Authority, 473 F.2d 212 (5th Cir. 1973), and that regulatory agencies are not exempt from this policy. William E. Arnold Co. v. Carpenters Dist. Council, 417 U.S. 12, 16-17, 94 S. Ct. 2069, 40 L. Ed. 2d 620 (1974). In granting a certificate based on the contract, Gulf maintains, the Commission effectively gave its approval to the contract's arbitration clause. In Gulf's view, the Commission should not now be permitted to deny the validity of arbitration as the means for resolving contract disputes. We disagree with Gulf's analysis.
Furthermore, the FPC's finding and order accompanying the issuance of the certificate require that we not interpret the contract as limited to gas from West Delta Block 27. The Commission, although recognizing that Gulf expected to draw most of the gas from Delta Block 27, noted that "Gulf further indicated that it had additional gas available to fulfill the overall contractual requirement." By accepting the certificate which was based on this finding, Gulf became bound by the Commission's interpretation. Cf. Sunray Mid-Continent Oil Co. v. FPC, supra, 364 U.S. at 156, 80 S. Ct. 1392; Atlantic Refining Co. v. PSC of New York, 360 U.S. 378, 389, 79 S. Ct. 1246, 3 L. Ed. 2d 1312 (1959).
The next question is whether Gulf's delivery obligation, although unconditional on the face of the contract, is subject to economic limitations. Gulf cites Dillon v. United States, 156 F. Supp. 719, 722, 140 Ct. Cl. 508 (1975), holding that contract to deliver hay at Ft. Reno, Oklahoma, which the parties contemplated would be grown in nearby Vinita, Oklahoma, did not obligate the seller to purchase hay in Nebraska and ship it to Oklahoma at his expense, and Mitchell Canneries, Inc. v. United States, 77 F. Supp. 498, 502, 111 Ct. Cl. 228 (1948), reaching a similar result with respect to blackberries not available where contemplated due to a crop failure.
Paccon, Inc. v. United States, 399 F.2d 162, 166-67, 185 Ct. Cl. 24 (1968), quoting Dale Constr. Co. v. United States, 168 Ct. Cl. 692, 699 (1964). Accord, Metropolitan Coal Co. v. Howard, 155 F.2d 780, 784 (2d Cir. 1946) (L. Hand, J.); The Fred Smartley, Jr., 108 F.2d 603, 606-07 (4th Cir. 1940). Gulf's warranty "that there will be provided . . . a quantity of gas sufficient to enable Seller to have available for delivery (the contract quantities of gas)" whether it is a warranty of fact or of performance, is subject to the same rule: By warranting, rather than merely promising, the availability of sufficient quantities of gas, Gulf assumed for itself the entire risk that future conditions would raise the cost of gas. As the Restatement says,
The starting point for our analysis is section 7(c) of the Natural Gas Act, 15 U.S.C. § 717f(c):20 (c) No natural-gas company . . . shall engage in the . . . sale of natural gas, subject to the jurisdiction of the Commission . . . unless there is in force with respect to such natural-gas company a certificate of public convenience and necessity issued by the Commission authorizing such acts or operations . . . .
The next question is whether the Commission's refund-recoupment order is an appropriate remedy for the violation by Gulf of section 7(c) and of the terms of its certificate. In order to affirm the order, we need find only that it is appropriate, not that it is the only appropriate or most appropriate remedy which might have been devised. "Once the existence of a rational basis for the Commission's action is ascertained the reviewing power is estopped from further consideration of the Commission's action." Southern California Edison Co. v. FPC, 387 F.2d 619, 621 (3d Cir. 1967), cert. denied, 392 U.S. 909, 88 S. Ct. 2055, 20 L. Ed. 2d 1367 (1968). See also Mesa Petroleum Co. v. FPC,441 F.2d 182, 189 (5th Cir. 1971).
While it is true, as the FPC argues, that Mobil Oil concerned an attempt by the FPC to use section 16 to dispense with procedures mandated by the Act, the quoted language of Mobil Oil suggests that the District of Columbia Circuit would not sanction the expansive reading of section 16 which the Fifth Circuit approved in Mesa. But cf. United States Steel Corp. v. FPC, 533 F.2d 1217, 1222-23 (D.C. Cir. 1976). We think that the interpretations of section 16 in Mesa and Mobil Oil are irreconcilable.
We do not mean to imply that every refund-recoupment order is entitled to a per se affirmation. Any such order must have a "rational basis," Southern California Edison, supra, 387 F.2d at 621, and may be set aside if arbitrary, capricious or an abuse of discretion. 5 U.S.C. § 706(2) (A). We believe that the Commission's refund-recoupment order in the instant case, however, meets these standards.
Given the circumstances of this case and the sound purposes and public interest to be served by the refund-recoupment order in protecting consumers with an adequate supply of natural gas at just and reasonable rates, Sunray Mid-Continent Oil Co. v. FPC, 364 U.S. 137, 80 S. Ct. 1392, 4 L. Ed. 2d 1623 (1960), we hold that the refund-recoupment order has a rational basis and is neither arbitrary nor capricious, nor an abuse of the Commission's discretion.
We find no abuse of discretion in the refund formula. In addition to the Commission's rationale, which we find persuasive, we have considered two other factors. The first is the nature of the refund-recoupment order of which the formula is a part. That order is not intended as a measure of damages but as a method of enforcing compliance with the certificate; the refund is recoverable upon satisfaction of the delivery obligations. Thus, the dispute over the formula is comparable to a dispute over the amount of a security bond. In the case of such a bond, the amount fixed by the district court will not be disturbed absent an abuse of discretion, see, e. g., Stockslager v. Carroll Elec. Co-op Corp., 528 F.2d 949 (8th Cir. 1976); Lektro-Vend Corp. v. Vendo Co., 403 F. Supp. 527 (N.D. Ill. 1975) aff'd, 545 F.2d 1050 (7th Cir. 1976), rev'd on other grounds, --- U.S. ----, 97 S. Ct. 2881, 53 L. Ed. 2d 1009 (1977), and we believe the same standard should pertain here. We cannot say that the Commission's formula is so unreasonable as to constitute such an abuse of discretion. Second, Gulf's assertion that the actual replacement rates were lower than the FPC prescribed area or national rates is not supported by any citation to the record. In the absence of any evidence that the rates differed, we cannot say that the Commission's choice of area or national rates constituted an abuse of discretion. Accordingly, we will affirm the Commission's refund formula.
In Opinion No. 780-A, responding to this contention by Gulf, the Commission stated that it is "now only asking for information of intrastate sales." As Gulf concedes, the collection of such data is not improper, Continental Oil Co. v. FPC, 519 F.2d 31 (5th Cir.), cert. denied, 425 U.S. 971, 96 S. Ct. 2168, 48 L. Ed. 2d 794 (1976), and we will, therefore, affirm this aspect of the Commission's order. Only if and when the Commission attempts actually to regulate Gulf's intrastate sales will the question of the Commission's authority to do so become ripe for decision.
We also do not believe that the legislative intrusions, if any, into the Commission's decisional process in this case come within the Pillsbury rule.30 As we read Pillsbury, the court's concern was with factual prejudice the prejudgment by the FTC of factual questions then pending before it.31 A point of view even bias induced by legislative interference as to questions of law, on the other hand, does not necessarily render invalid an agency's decision, United States v. Morgan,313 U.S. 409, 421, 61 S. Ct. 999, 85 L. Ed. 1429 (1941); 2 Davis, Administrative Law Treatise, § 12.01 (1958). Members of an agency charged by Congress with adjudicatory functions "are assumed to be men of conscience and intellectual discipline capable of judging a particular controversy fairly on the basis of its own circumstances." United States v. Morgan, supra 313 U.S. at 421, 61 S. Ct. at 1004. Moreover, Judicial review is fully capable of correcting bias as to legal questions. See, e. g., Marquette Cement Mfg. Co. v. FTC, 147 F.2d 589, 594 (7th Cir. 1945), affirmed sub nom. FTC v. Cement Institute, 333 U.S. 683, 68 S. Ct. 793, 92 L. Ed. 1010 (1948). The essential adjudicative facts in the instant case are undisputed; all the issues decided by the Commission were entirely legal in nature concerning the interpretation of a contract and a certificate of public convenience. We have considered de novo as we are obligated to do each of the legal issues raised by Gulf; on each, we have independently reached the same conclusion as the Commission. Even assuming arguendo the Commission's decision reflected legislative interference, our decision does not.
Thus, just as our mightiest corporations and industries entities which greatly affect the public interest are bound by arbitration clauses in labor and commercial matters, here the parties and the FPC are bound to the arbitration clause under the dictates of both federal policy and the contract language. The Commission's apparent position that it possesses specialized knowledge gained from experience in the regulation of industry, e. g., Texas Gas Corp. v. Shell Oil Co., 363 U.S. 263, 80 S. Ct. 1122, 4 L. Ed. 2d 1208 (1960); Michigan Consolidated Gas Co. v. Panhandle Eastern Pipeline Co., 226 F.2d 60 (6th Cir. 1955), cert. denied, 350 U.S. 987, 76 S. Ct. 473, 100 L. Ed. 853 (1956), which knowledge entitles its interpretation of contract provisions dealing with natural gas to greater weight than that of a court or a board of arbitrators,4 is of no avail. It misses what I consider to be the controlling issue at bar: it is not whose interpretation of the contract provisions ultimately prevails; rather, it is whether the parties and the Commission should be bound by their agreement as to the procedure for the initial resolution of interpretation conflicts. The Commission's reliance on Sunray Mid-Continent Oil Co. v. F. P. C., 364 U.S. 137, 80 S. Ct. 1392, 4 L. Ed. 2d 1623 (1970), and Sun Oil Co. v. F. P. C., 364 U.S. 170, 80 S. Ct. 1388, 4 L. Ed. 1639 (1960), is, in my view, irrelevant because these cases deal with the interpretation, not the procedure for initial interpretation. Only after the arbitrators' decision is reached should the Commission, and ultimately the courts, be permitted to decide any possible conflict between the legal precept that "(i)t is the arbitrator's construction which was bargained for," United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 599, 80 S. Ct. 1358, 1362, 4 L. Ed. 2d 1424 (1960), and the FPC contention that because the three matters submitted to arbitration are matters requiring special expert knowledge, the arbitrators' interpretation will not be honored.
E. g., William E. Arnold Co. v. Carpenters District Council, 417 U.S. 12, 94 S. Ct. 2069, 40 L. Ed. 2d 20 (1974); United Steelworkers of America v. Warrior and Gulf Navigation Co., 363 U.S. 574, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960); United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564, 80 S. Ct. 1343, 4 L. Ed. 2d 1403 (1960); J. S. & H. Const. Co. v. Richmond County Hospital Authority, 473 F.2d 212 (5th Cir. 1973)
We find it unnecessary to consider the Commission's contention that performance of a Natural Gas Act certificate obligation can be excused only upon a showing that performance would impair the certificate holder's overall financial integrity. Cf. Permian Basin Area Rate Cases, 390 U.S. 747, 822, 88 S. Ct. 1344, 20 L. Ed. 2d 312 (1968); FPC v. Sierra Pacific Power Co., 350 U.S. 348, 350, 76 S. Ct. 368, 100 L. Ed. 388 (1956)
The same result obtains under Article 2 of the Uniform Commercial Code, which we assume is applicable to the Gulf-Texas Eastern contract. Cf., e. g., Amoco Pipeline Co. v. Admiral Crude Oil Corp., 490 F.2d 114 (10th Cir. 1974); Oskey Gasoline & Oil Co. v. OKC Refining Inc., 364 F. Supp. 1137 (D. Minn. 1973). An express warranty under U.C.C. § 2-313 may extend to the quantity of goods to be sold. See, e. g., A. A. Baxter Corp. v. Colt Industries, Inc., 10 Cal. App. 3d 144, 88 Cal. Rptr. 842, 847 (1970).
Gulf's argument rests heavily on Judge Maris' decision in Panhandle Eastern Pipe Lines v. FPC, 236 F.2d 289, 292 (3d Cir. 1956), and its contention that the Commission's determination in Nos. 692 and 692-A as to Gulf's contractual obligations was not necessary to the result of that proceeding i. e., the determination that an amendment of Gulf's certificate was not justified by public convenience or necessity. The Commission supports its use of collateral estoppel with citations to United States v. Utah Const. Co., 384 U.S. 394, 419, 86 S. Ct. 1545, 16 L. Ed. 2d 642 (1966); FTC v. Texaco, Inc., 170 U.S.App.D.C. 323, 329-334, 517 F.2d 137, 143-48 (1975), cert. granted 431 U.S. 974, 97 S. Ct. 2940, 53 L. Ed. 2d 1072 (1977); In Re Federal Water & Gas Corp., 188 F.2d 100, 104-05 (3d Cir.), cert. denied 314 U.S. 953, 71 S. Ct. 1018, 95 L. Ed. 1375 (1951). The question of res judicata and collateral estoppel in the administrative agency context is discussed in 2 K. Davis, Administrative Law Treatise §§ 18.02, 18.03 (1958)
In its brief, Gulf also argues that it was not given adequate notice and an opportunity to be heard on the issue of refunds. At oral argument, however, counsel for Gulf informed the court that Gulf did not wish to press that argument. Under these circumstances, we think it appropriate to limit our discussion of this issue to the following observations: First, the record demonstrates that regardless of possible deficiencies of notice in the original show cause order, subsequent events put Gulf on early notice that the Commission would consider the issue of refunds. Second, the record also reveals that Gulf prepared and presented its position on the matter of refunds with considerable vigor in the FPC proceedings, notwithstanding its alleged lack of notice. Third, all of the cases cited by Gulf for the proposition that midstream notice or late notice cannot be any better than no notice at all concern the adequacy of notice in rule-making proceedings. See, e. g., Consolidated Edison Co. v. FPC, 168 U.S.App.D.C. 92, 512 F.2d 1332 (1975); Mobil Oil Corp. v. FPC, 483 F.2d 1238, 157 U.S.App.D.C. 235 (1973); Buckeye Power, Inc. v. EPA, 481 F.2d 162 (6th Cir. 1973), cert. denied, 425 U.S. 934, 96 S. Ct. 1663, 48 L. Ed. 2d 175 (1976); Texaco Inc. v. FPC, 412 F.2d 740 (3d Cir. 1969). Accordingly, we see no reason to reverse or modify the Commission's order on the ground of inadequate notice and opportunity to be heard
The Commission argues in its brief that any reduction in the quantity of gas delivered constitutes an abandonment of service within the meaning of section 7(b) and requires prior Commission approval. Panhandle Eastern Pipe Line Co. v. Michigan Consolidated Gas Co., 177 F.2d 942, 945 (6th Cir. 1949); cf. United Gas Pipe Line Co. v. FPC, 385 U.S. 83, 86-89, 87 S. Ct. 265, 17 L. Ed. 2d 181 (1966). See also Reynolds Metals Co. v. FPC, 534 F.2d 379, 384 (D.C. Cir. 1976). The Commission argues that Gulf's underdeliveries to Texas Eastern therefore constitute a violation of section 7(b), and that the refund order is a proper exercise of Commission authority under that section combined with section 16.
Attractive as this argument may be, we are not permitted to consider it, for the Commission's reliance on section 7(b) has come too late. In Opinion No. 780-A, the Commission placed exclusive reliance on section 7(c), even after section 7(b) was brought to its attention on the issue of refunds. Since "a reviewing court, in dealing with a determination or judgment which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency," SEC v. Chenery Corp., 332 U.S. 194, 196, 67 S. Ct. 1575, 1577, 91 L. Ed. 1995 (1947), we may review the refund order only by reference to section 7(c), the sole ground invoked by the agency. See also Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168-69, 83 S. Ct. 239, 9 L. Ed. 2d 207 (1962).
Mobil Oil Corp. v. FPC, 157 U.S.App.D.C. 235, 254, 483 F.2d 1238, 1257 (1973); New England Power Co. v. FPC, 151 U.S.App.D.C. 371, 372, 467 F.2d 425, 426 (1972) aff'd 415 U.S. 345, 94 S. Ct. 1151, 39 L. Ed. 2d 383 (1974); City of Chicago v. FPC, 458 F.2d 731 (D.C. Cir. 1971) cert. denied, 405 U.S. 1074, 92 S. Ct. 1495, 31 L. Ed. 2d 808 (1972); Murphy Oil Corp. v. FPC, 431 F.2d 805, 810 (8th Cir. 1970). Gulf also cites FPC v. Texaco, Inc., 417 U.S. 380, 94 S. Ct. 2315, 41 L. Ed. 2d 141 (1974), but the Supreme Court held there only that section 16 "does not authorize the Commission to set at naught an explicit provision of the Act." Id. at 394, 94 S. Ct. at 2325
For an explanation of these rates, see Shell Oil v. FPC, 520 F.2d 1061, rehearing denied, 525 F.2d 1261 (5th Cir. 1976), cert. denied, 426 U.S. 941, 96 S. Ct. 2661, 49 L. Ed. 2d 394 (1976)
We also can discern no error in the rates of interest set by the Commission 7 percent per annum for underdeliveries prior to October 10, 1974, and 9 percent thereafter in the absence of any indication that they are too high other than Gulf's unsupported assertion that they are "plainly excessive." Cf. American Public Gas Assoc. v. FPC, 546 F.2d 983, 987-88 (D.C. Cir. 1976); City of Cleveland v. FPC, 174 U.S.App.D.C. 1, 6-7, 525 F.2d 845, 850-51 n. 38 (1976)
See 354 F.2d at 958; Note, 42 N.Y.U. L. Rev. 127, 128-29 (1967). Pillsbury is also noted in 52 Va. L. Rev. 946 (1966); 66 Colum. L. Rev. 1351 (1966); and 50 Minn. L. Rev. 1136 (1966)
There are before the arbitrators three questions: (1) whether Gulf's obligation for delivery of gas to Texas Eastern is limited to gas produced in the vicinity of the delivery points, (2) whether Gulf by reason of the mistakes as to gas reserves in West Delta Block 27 is excused from delivering the DCQ as provided in the contract, and (3) whether the failure of the Department of the Interior to hold regular general offshore Louisiana lease sales constituted an act of force majeure to relieve Gulf of its obligations. These are largely technical matters relating to Gulf's service under its certificate. Thus the effect of designating a delivery point and defining what might be its vicinity, the effect of a mistake as to gas reserves and the effect of a moratorium on offshore leases on the ability of Gulf to deliver gas are matters peculiarly within the subject matter of this Commission's authority. In Michigan Consolidated Gas Co. v. Panhandle Eastern Pipeline Co., 226 F.2d 60 (CA6-1955), certiorari denied, 350 U.S. 987, 76 S. Ct. 473, 100 L. Ed. 853 (1956), cited by Gulf, the Court said that intricate problems of service and problems of changing industrial conditions and growing needs of natural gas do not lend themselves in the first instance to hearing before a court and require the expertise of the Commission. The court contrasts these matters with the usual questions of law and fact which a court is authorized to handle and which require no special expert knowledge. The questions here belong in the first category and are properly considered by the Commission prior to submission to an arbitration board or a court. While our certificate accepted the contract with its arbitration provision, this did not mean that questions within the peculiar competence of the Commission must be first put before the board but rather the contractual matters that a court would handle.