Opinion ID: 365972
Heading Depth: 3
Heading Rank: 2

Heading: The Impermissible Choice Argument

Text: 48 In its order of 3 March, the Commission justified still using the in-line rates as petitioners' refund floor in part as follows: 49 On further consideration of this situation in our opinion the basis of the refunds should be the in-line rates. It is true that the in-line rates were an interim device pending determination of the just and reasonable rates, but the parties had every right to count on them as a refund floor. Any other result under these conditions would be contrary to Sunray DX. Even where the just and reasonable rate is higher we must properly require the use of the in-line rate because we do not believe it equitable to allow producers to take their choice between the just and reasonable rate and the in-line price depending on which method is to their financial advantage. 64 50 The putative choice which the Commission finds objectionable is the natural consequence of having two independent refund floors. The ordinary and statutorily favored floor is the just and reasonable price. The other is the final initial price factors afforded by Sunray DX. The apparent have it both ways aspect of having two price floors May in fact be regrettable. But it is so only insofar as it permits variation from the just and reasonable price. This was the plain opinion of the Supreme Court in Sunray DX itself. In a passage referred to earlier the Court said:(i)n view of the fact that an initial price and a refund floor might be used to achieve distinct regulatory goals . . . it seems regrettable that the Commission and courts apparently have never entertained the possibility of separating these two aspects of an in-line price in particular cases. 65 51 Had the Commission bifurcated the price ceiling and refund floor functions of the in-line price as suggested in Sunray DX, the apparent unfairness of a double floor might have been eliminated. Conceivably the Commission might have selected a refund floor more likely to approximate the just and reasonable price. Alternatively, it might have imposed a contingent liability to refund down to a later fixed just and reasonable price. Thus the choice which exists arose from the failure of imagination on the part of the Commission in setting the in-line price. 52 Moreover, the Commission's solution to the choice is fairly extraordinary. By insisting that all producers who have used the in-line prices make refunds on this basis, the Commission maximizes the variance away from just and reasonable prices and leaves undisturbed the prices which are most objectionable on statutory grounds the excessive prices allegedly insulated by Sunray DX. Concededly, our holding does contemplate two independent refund floors. But we simply have been told of no reason why petitioners should be compelled to accept less than the ascertained just and reasonable price. The other floor exists, as we have said, for want of more imaginative use of § 7(e) conditions. 66