Opinion ID: 106611
Heading Depth: 1
Heading Rank: 4

Heading: inconsequential matters.

Text: There are two inconsequential matters that the Court discusses. The first is the escalation clause in several of Phillips' contracts. The Commission has promulgated a series of rule-making orders condemning spiral escalation clauses as being against the public interest. By Orders Nos. 232 and 232A, 25 F. P. C. 379 and 609, respectively, 26 Fed. Reg. 1983 and 2850, it announced that these clauses in contracts executed on or after April 3, 1961, would be without effect. And Order No. 242, 27 F. P. C. 339, 27 Fed. Reg. 1356, announced that contracts containing such clauses would be unacceptable for filing after April 2, 1962. The Commission argues that the contracts under attack here were all dated prior to 1954 and hence its order refusing to find them void should be upheld. This is, of course, a non sequitur. Nor is it understandable how the clauses become effective against the public interest and unacceptable in 1961 but the identical provisions are blessed with validity prior to that date. I cannot subscribe to such a doctrine. However, since the Court requires the producer to establish its lawfulness wholly apart from the [escalation] terms of the contract I cannot become excited over it. Obviously the clauses have no effect whatsoever in determining the reasonableness of a rate from the public standpoint. They do have the effect of triggering the filing of increased rates. They should be completely outlawed by the Commission when the two § 4 (e) proceedings left pending are decided. The other miniscule point when compared to the basic questions in the case is whether Phillips' widely varying rates were on their face unduly discriminatory and preferential, as contended by petitioners in No. 72. The Court refrains from passing on this issue, regarding it as not raised in the court below or on rehearing before the Commission. Section 19 (b) of the Act precludes a court on review from considering an objection not raised in the petition for rehearing before the Commission, but it appears that petitioner Wisconsin adequately raised the issue of discrimination in its rehearing petition, [10] and the Commission in denying rehearing stated that Phillips' rates normally vary greatly . . . and there is nothing to show that these rates are discriminatory or preferential. 24 F. P. C., at 1009. I regret that the Court has chosen this occasion to stand on technicality, compare Federal Trade Comm'n v. Broch & Co., 368 U. S. 360, 363 (1962), when public interest stands the loss. The patently discriminatory nature of the rate increases, resulting in rates varying from 5.5¢ to 17.5¢ per Mcf. cannot seriously be questioned. The Examiner found that on the date of the Phillips decision its prices ranged from 1.2¢ to a high of 15.7¢ per Mcf. He concluded that to continue such a rate structure would preserve for Phillips an unduly discriminatory general rate structure, which would be contrary to the public interest . . . . 24 F. P. C., at 790. The Commission staff also found that Phillips contract rates vary so widely, even as between contracts for the same service from the same producing areas, as to patently contravene the public interest, generating and perpetuating undue preference and undue discrimination. Id., at 790-791. While the issue of discrimination was raised only generally in the Court of Appeals, [11] it was implicit in the broad questions on which we granted certiorari. While the issue is minor as compared to the primary issues here, it certainly results in a miscarriage of justice for the Court, on such a highly technical ground, to permit the Commission's disposition to stand, to the irreparable injury of the consumers of gas.