Source: https://law.justia.com/cases/federal/appellate-courts/F2/591/301/369113/
Timestamp: 2020-07-05 21:41:00
Document Index: 92452347

Matched Legal Cases: ['§ 717', '§ 717', '§ 4', '§ 824', '§ 824', '§ 157', '§ 157', '§ 4', '§ 19', '§ 717', '§ 157', '§ 4', '§ 19', '§ 19', '§ 2', '§ 2', '§ 2', '§ 2', '§ 157']

Pennzoil Company, Petitioner, v. Federal Energy Regulatory Commission, Respondent, 591 F.2d 301 (5th Cir. 1979) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Fifth Circuit › 1979 › Pennzoil Company, Petitioner, v. Federal Energy Regulatory Commission, Respondent
Pennzoil Company, Petitioner, v. Federal Energy Regulatory Commission, Respondent, 591 F.2d 301 (5th Cir. 1979)
US Court of Appeals for the Fifth Circuit - 591 F.2d 301 (5th Cir. 1979) March 15, 1979
Section 4(d) provides that a thirty-day notice of any rate change shall be given by filing new schedules. The Supreme Court has interpreted this provision as "providing . . . for the earliest effectuation of contractually authorized or otherwise permissible rate changes consistent with appropriate Commission review." United Gas Pipe Line Co. v. Memphis Light, Gas & Water Division, 358 U.S. 103, 114, 79 S. Ct. 194, 200, 3 L. Ed. 2d 153 (1958). As a result, in a typical filing, a rate change would become effective after thirty days if no action has been taken by the Commission under section 4(e), 15 U.S.C.A. § 717c(e). Thereafter, the Commission must determine that the rates are unjust under section 5 of the Act, 15 U.S.C.A. § 717d, in order to reject them.
Construing section 4(d) in a case where a producer sought to change its contract simply by filing a rate change, the Supreme Court stated that the section says "only that a change Cannot be made without the proper notice to the Commission; it does not say under what circumstances a change Can be made." The Court found "no basis in the language of § 4(d) for inferring that the mere imposition of a filing-and-notice requirement was intended to make effective action which would otherwise be of no effect at all." United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332, 339, 76 S. Ct. 373, 378, 100 L. Ed. 373 (1956). Indeed, if the Commission fails to reject an improperly filed rate, it may be required to do so by a court. See City of Cleveland v. FPC, 174 U.S.App.D.C. 1, 525 F.2d 845 (1976) (construing identical section of Federal Power Act, 16 U.S.C.A. § 824d(d): if rate filed deviated from actual agreement of parties, Commission must adjust purported rate notwithstanding expiration of thirty-day period). Cf. Indiana & Michigan Electric Co. v. FPC, 163 U.S.App.D.C. 334, 502 F.2d 336 (1974) (Agency regulation under 16 U.S.C.A. § 824d(d): agency's substitution of sixty-day period for statutory thirty-day period invalid).
Pennzoil presents two arguments in opposition to the Commission's reasoning. The first is that the April 6, 1972 order did grant it special relief authorization to charge a rate 5.0 cents per Mcf above the applicable base ceiling rate. We rejected this argument in Part II of this opinion. The second applies only to that portion of the gas which Pennzoil purchases from the small producers and resells to Consolidated. 18 C.F.R. § 157.40(f) (1) provides:
Pennzoil did not argue the applicability of § 157.40(f) (1) to the Commission. It did present a § 4(d) objection on rehearing, but it grounded the objection solely upon its reading of the April 6, 1972 order. FERC argues that under § 19(b) of the Natural Gas Act, 15 U.S.C.A. § 717r, Pennzoil's failure to present the § 157.40(f) (1) argument to the Commission precludes it from raising the argument here. Section 19(b) provides that "no objection to the order of the Commission shall be considered by the court unless such objection shall have been urged before the Commission in the application for rehearing." Pennzoil contends that its general § 4(d) objection satisfied the requirements of § 19 such that it can now argue any theory in support of that objection. We agree with the Commission.
An error asserted in the petition for review need not follow precisely the objection asserted on rehearing so long as the Commission was adequately apprised of the petitioner's contentions. See People of State of California v. FPC, 9 Cir., 1965, 353 F.2d 16; Natural Gas Pipeline v. FPC, 7 Cir., 1941, 120 F.2d 625, Rev'd on other grounds, 315 U.S. 575, 62 S. Ct. 736, 86 L. Ed. 1037. In such circumstances, as noted in People of State of California, supra, 353 F.2d at 18, "the purpose of the rule is satisfied." But that does not mean, as Pennzoil apparently contends, that the petitioner can advance any theory in support of a general objection even though that theory was not presented to the Commission. The purpose of § 19 is "to insure that the Commission has an opportunity to deal with the difficulties presented by its action before the reviewing court intervenes." Rhode Island Consumers Council v. FPC, 1974, 164 U.S.App.D.C. 134, 143, 504 F.2d 203, 212. Where, as here, the theory now urged in support of the objection was not argued to the Commission and it is not reasonable to expect the Commission to have divined the argument from the general objection,6 that purpose is not satisfied. For these reasons, we hold that the argument, whatever its merits,7 cannot be considered here.
Just and Reasonable National Rates for Sales of Natural Gas from Wells Commenced prior to January 1, 1973, Docket No. R-478, Opinion No. 749 issued December 31, 1975; modified, Opinion No. 749-A issued February 27, 1976; modified, Opinion No. 749-B issued March 31, 1976; rehearing denied, Opinion No. 749-C issued July 19, 1976; Aff'd in part, set aside in part, Tenneco Oil Co. v. FERC, 5 Cir., 1978, 571 F.2d 834, Pet. for cert. dismissed, --- U.S. ----, 99 S. Ct. 43, 58 L. Ed. 2d 94. National Rates for Jurisdictional Sales of Natural Gas Dedicated to Interstate Commerce on or After January 1, 1973, for the Period January 1, 1973 to December 31, 1976, Docket No. RM75-14, Opinion No. 770 issued July 27, 1976; rehearing denied, Opinion No. 770-A issued November 5, 1976; Aff'd sub nom. American Public Gas Association v. FPC, 1977, 186 U.S.App.D.C. 23, 567 F.2d 1016, Cert. denied, 435 U.S. 907, 98 S. Ct. 1456, 55 L. Ed. 2d 499. Opinion No. 749-A is codified as § 2.56b of the Commission's General Policy and Interpretations, 18 C.F.R. § 2.56b; Opinion No. 770 as § 2.56a, 18 C.F.R. § 2.56a
(g) Special relief. Prior to the establishment of rates for the 1977-78 biennium . . ., any seller seeking to charge a rate in excess of the adjusted national rates . . . or requesting a change in either the base national rates . . . or the adjusted national rates . . . must file a petition seeking special relief . . . fully justifying the relief sought in light of this order. Such seller may not file for any rate increase which results in a rate in excess of the adjusted national rates . . . unless and until the Commission grants such petition for special relief.
We do observe, however, that Pennzoil's argument is by no means air tight. For one thing, neither the 1930 nor the 1976 Pennzoil-Consolidated contracts appear to set forth a rate to be paid Pennzoil as a gathering allowance except insofar as a gathering allowance has been authorized by the Commission. See text and note at note 1, Supra. Since, under the view we have taken of the April 6, 1972 order, the Commission has never authorized such an allowance, it is somewhat difficult to see how Pennzoil's filing is authorized by § 157.40(f) (1)'s permission to file for the rate specified in the contract for resale