Case Name: The SUPERIOR OIL COMPANY, a Nevada corporation, Plaintiff-Appellee, v. WESTERN SLOPE GAS COMPANY, a Colorado corporation, Defendant-Appellant; CONTINENTAL OIL COMPANY, a Delaware corporation, Plaintiff-Appellee, v. WESTERN SLOPE GAS COMPANY, a Colorado corporation, Defendant-Appellant
Court: United States Court of Appeals for the Tenth Circuit
Jurisdiction: United States
Decision Date: 1985-03-20
Citations: 758 F.2d 500
Docket Number: Nos. 82-2190, 82-2191
Parties: The SUPERIOR OIL COMPANY, a Nevada corporation, Plaintiff-Appellee, v. WESTERN SLOPE GAS COMPANY, a Colorado corporation, Defendant-Appellant. CONTINENTAL OIL COMPANY, a Delaware corporation, Plaintiff-Appellee, v. WESTERN SLOPE GAS COMPANY, a Colorado corporation, Defendant-Appellant.
Judges: Before McKAY, SETH and DOYLE, Circuit Judges.
Reporter: Federal Reporter 2d Series
Volume: 758
Pages: 500–503

Head Matter:
The SUPERIOR OIL COMPANY, a Nevada corporation, Plaintiff-Appellee, v. WESTERN SLOPE GAS COMPANY, a Colorado corporation, Defendant-Appellant. CONTINENTAL OIL COMPANY, a Delaware corporation, Plaintiff-Appellee, v. WESTERN SLOPE GAS COMPANY, a Colorado corporation, Defendant-Appellant.
Nos. 82-2190, 82-2191.
United States Court of Appeals, Tenth Circuit.
March 20, 1985.
James R. McCotter, of Kelly, Stansfield & O’Donnell, Denver, Colo. (Laurence S. Lese, Denver, Colo., with him on the brief), for defendant-appellant.
Robert C. Hawley of Dechert, Price & Rhoads, Denver, Colo. (Gretchen Vander-Werf, Denver, Colo., with him on the brief), for plaintiffs-appellees.
Before McKAY, SETH and DOYLE, Circuit Judges.

Opinion:
SETH, Circuit Judge.
This case was before us and our opinion appears at 604 F.2d 1281 (10th Cir.1979). The Superior Oil Company and Continental Oil Company sued Western Slope Gas Company asserting a breach of a long term gas purchase contract. The gas sold was intrastate gas. The dispute centered on the favored nations clause in the agreement and whether it was triggered. The case was remanded and considered on motions for summary judgment.
The basic issue considered was whether the favored nations provision was against public policy in Colorado. The trial court decided it was not and granted Superior's and Conoco's motions for summary judgment. 549 F.Supp. 463. Western Slope has taken this appeal.
The details of the contract and the facts are described at 604 F.2d 1281 and need not be repeated here. On the first appeal all issues were decided except the public policy question.
We must conclude that the favored nations clause was not against public policy. This issue was considered by this court in Kerr-McGee Corp. v. Northern Utilities, Inc., 673 F.2d 323 (10th Cir.1982), arising in Wyoming, and the clause found to be valid. We apply the analysis there made. There is nothing different in the Colorado setting to lead to a different result.
The Colorado legislature has enacted as part of its Oil and Gas Conservation Act a provision which in substance conforms its pricing policy with that of the Natural Gas Policy Act. Colo.Rev.Stat. § 34-60-102(2) (1984). Thus:
"It is further declared to be in the public interest to assure that producers and consumers of natural gas are afforded the protection and benefits of those laws and regulations of the United States which affect the price and allocation of natural gas and crude oil, including the federal 'Natural Gas Policy Act of 1978'...."
The NGPA permits the continuance of price escalation clauses in intrastate gas contracts. Also the Act allows the states to restrict the operation of escalation clauses in providing that nothing in the Act shall affect state authority to enforce a maximum price for first sales which does not exceed the applicable maximum lawful price (15 U.S.C. § 3432(a)). Colorado has not exercised its authority which would restrict the operation of favored nations clauses. This was a factor also considered in Kerr-McGee v. Northern Utilities, Inc., 673 F.2d at 327. We there observed that Wyoming had not enacted such a statute. In view of the recognition and adoption by Colorado of the NGPA policies, we must conclude that the favored nations clause here concerned is not contrary to the public policy of Colorado. We thus agree with the trial court.
AFFIRMED.