Opinion ID: 489534
Heading Depth: 2
Heading Rank: 3

Heading: The Commission's Balance

Text: 44 In its initial response to the Commission's central conclusion that Transwestern's minimum bills unreasonably restrained trade, Transwestern charges that the Commission misunderstands the relationship between contracts and competition. Transwestern claims that the Commission has misapplied antitrust concepts in its effort to demonstrate the unlawfulness of Transwestern's minimum bills. Transwestern refers us to Justice Brandeis' words of caution in Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 244, 62 L.Ed. 683 (1918), that [e]very agreement concerning trade, every regulation of trade, restrains. Transwestern apparently feels that the Commission applied a per se rule to strike down any contract which affected competition in natural gas sales. 45 Had the Commission simply determined that Transwestern's contracts with SoCal and Northwest restrained its customers' options to purchase gas from other suppliers, without more, we would be unable to approve the Commission's reasoning. The Commission did not, however, apply such a per se rule to eliminate Transwestern's minimum bill restraints. Instead, it used the very same rule of reason analysis articulated by Justice Brandeis in Board of Trade. The Commission explained its analysis in Opinion No. 238-A: 46 [B]efore we may find a contract term to be an unreasonable restraint of trade we must carefully balance the competitive harm the term causes against the term's objectives in light of the alternatives available for achieving those objectives. Only if on balance the term causes more harm than is warranted in light of the term's objectives and the available alternatives, can we find the term to be an unreasonable restraint of trade. It was only after finding that on balance Transwestern's minimum bills caused more harm than was warranted that we concluded that the minimum bills unreasonably restrained trade and hence were unjust and unreasonable. (footnotes omitted) 47 Transwestern urges that its contracts with its customers constitute a reasonable restraint of trade. Transwestern argues that its minimum bills are considerably less restraining than exclusive dealing contracts or full-requirements contracts which courts have upheld under the antitrust laws. This invocation of court-made antitrust standards is unpersuasive. The Commission does not enforce or apply the antitrust laws. Cf. California v. Federal Power Commission (FPC), 369 U.S. 482, 484-90, 82 S.Ct. 901, 903-06, 8 L.Ed.2d 54 (1962). 48 The Commission's authority to declare a practice unlawful and to prescribe an appropriate remedy stems from Secs. 4 and 5 of the NGA. The fact that the Commission may employ a rule of reason analysis similar to that developed by courts in antitrust cases does not subject its determination to a court rebalancing of the factors it deemed relevant. When we review the Commission's actions we are not free to apply antitrust standards. Rather, our review examines the Commission's order to assure that it has given reasoned consideration to the relevant evidence and factors before it, not to supplant the Commission's balance of these interests with one more nearly to [our] liking. Permian Basin Area Rate Cases, 390 U.S. at 792, 88 S.Ct. at 1373 (1968).