Opinion ID: 365972
Heading Depth: 2
Heading Rank: 2

Heading: The Origin and Course of the Litigation

Text: 20 Petitioners each were issued at times between 1960 and 1962 unconditioned temporary certificates authorizing sales of natural gas within Texas Railroad District Nos. 2, 3 or 4. 28 The temporary certificates prescribed initial rates which were governed by the Commission's 1960 guidelines. Thereafter, in a series of decisions in 1964 and 1965 the Commission determined the in-line rate for each of the sales in question and issued permanent certificates at those rates. 29 In its opinions setting in-line prices the Commission deferred the question whether refunds should be ordered as a condition of the permanent certificates. 30 In opinions in 1966 and 1968, the Commission decided that refunds would in fact be ordered of all amounts collected under temporary certificates in excess of the in-line price, 31 although it declined at that time to order disbursement of the refunds. 21 Later in 1968 the Supreme Court in Sunray DX approved the in-line rates applicable to several of the producers who are parties to this controversy and sustained the one order before it requiring producers to measure refunds on temporarily-certificated sales by the in-line price. 32 Following the decision in Sunray DX, the Commission extended its order to retain refundable payments to all producers having refund obligations arising from the in-line pricing orders, still declining to order disbursement. 33 Then, by orders of 28 November 1968, 34 the Commission directed implementation of the in-line pricing orders and refund orders, but continued its order that refundable monies be retained. 22 Nearly three years later, on 6 May 1971, the Commission issued Opinion No. 595, 35 establishing just and reasonable ceiling prices for the Texas Gulf Coast Area. The opinion provided, Inter alia, that the just and reasonable rates would be applied retroactively to calculate refund liabilities for producers holding permanent certificates subject to § 4(e) refund proceedings and producers who had operated Throughout with temporary certificates (for whom no in-line prices ever were fixed). 36 Upon rehearing of Opinion No. 595, 37 petitioners (holders first of temporary, then permanent certificates) requested that their refund liabilities as well be determined by reference to the just and reasonable price. The Commission rejected petitioners' argument that it was inequitable to require refunds down to the lower, in-line price, believing that that argument would require it in every case to postpone refunds until the just and reasonable prices were fixed. The Commission stated that its previous orders had finally determined petitioners' substantive refund liability, reserving only the administrative determination as to distribution of the refundable amounts. It would not, therefore, alter a final determination of liability on the basis of its subsequent order. 23 This court reviewed the Commission's decision in Opinion No. 595 and on rehearing in No. 595-A. We separated for review and disapproved the Commission's refusal to consider petitioners' contention that their refund liability ought to be measured by the just and reasonable price. 38 We held that petitioners were entitled to have the merits of their argument considered, the Commission apparently having believed incorrectly that it was without jurisdiction to do so. We observed that although the principle of finality in administrative law is important, it was enough uncertain whether the controversy previously had been suitable for judicial review the principal indicium of finality for us to conclude that the matter was still reviewable. We remanded in order that the Commission would consider whether administrative considerations, or other reasons, will justify the . . . distinction between (petitioners) and the producers receiving the benefits of the 'just and reasonable' rates. 39 24 After our decision in Blanco I, two producers who are petitioners here, filed a motion restating their request that the Commission refigure the refund liabilities arising out of the in-line pricing orders. 40 The Commission responded with an order of 3 September 1976 41 in which it found no administrative considerations or other reasons that would justify the Commission in drawing a distinction between (petitioners) and the producers receiving the benefit of the just and reasonable rates. 42 The Commission concluded that in-line prices were merely designed to fill a gap until just and reasonable rates were determined. Consequently, the Commission ordered that all refunds arising from the in-line pricing orders be determined using the just and reasonable prices in Opinion No. 595. 43 Additionally, for the first time, the Commission ordered disbursement of the refunds. 25 In light of the Commission's order of 3 September, certain other producers for whom the just and reasonable price was Below the in-line price requested a rehearing. They argued that use of the Opinion No. 595 prices as a refund floor would increase their refund liabilities in plain contradiction of Sunray DX. On 3 March 1977, the Commission issued an order on rehearing 44 in which it Reversed its decision of 3 September. It stated that in light of the arguments raised in the petition for rehearing and the Supreme Court's decision in Sunray DX, the in-line rates were, as originally held, the appropriate lower bound for figuring refund liability. The Commission felt constrained to employ the In-line prices for all producers covered by the in-line pricing orders, thinking it not equitable to allow producers to take their choice between the just and reasonable rates and the in-line price depending on which method is to their financial advantage. 45 Finally, the Commission disagreed that its order of 3 March was discriminatory insofar as it permitted some producers, Who were not subject to the in-line pricing orders, to use the just and reasonable prices as a refund floor. The Commission was of the opinion that inasmuch as Sunray DX permitted it to order refunds based on the in-line price, the fact that it had postponed fixing refund liability in other cases until the just and reasonable prices had been set did not make it discriminatory to continue to measure petitioners' liabilities by the in-line prices. 46 26 Petitioners sought rehearing and thereby reinstatement of the 3 September order, arguing that producers claiming an initial price refund floor under Sunray DX could be satisfied simply by permitting Them to use the higher in-line price as a floor. In an order of 28 April 1977 the Commission denied a rehearing, 47 reciting its rationales of 3 March. Thereafter, the Commission granted various stays delaying the flow-through of refunds pending judicial review. 48 This suit followed.