Opinion ID: 394102
Heading Depth: 2
Heading Rank: 1

Heading: Reviewability of Mississippi Valley's Challenge to the October 31st Filing.

Text: 27 The Commission raises the threshold issue of reviewability, maintaining that its order accepting the October 31st filing is not reviewable. Of course, if material issues of fact remained to be resolved, we would not have jurisdiction as there would be no finality. However, Mississippi Valley's arguments raise no factual issues, but rather assert that the Commission should have rejected the October 31st filing as a matter of law. We, therefore, must decide whether we have jurisdiction under § 19(b) of the NGA, 15 U.S.C.A. 717r(b) (West 1976), to review this Commission order denying Mississippi Valley's motion to reject the October 31st filing. Section 19(b) provides in pertinent part: 28 Any party to a proceeding under this chapter aggrieved by an order issued by the Commission in such proceeding may obtain a review of such order in the court of appeals of the United States 29 .... 30 15 U.S.C.A. § 717r(b) (West 1976). Although this statute does not impose a requirement of ripeness on the Commission's orders to establish jurisdiction for judicial review, the courts have long held that orders under this provision must be ripe for judicial review before they will address the merits of any petition. FPC v. Metropolitan Edison Co., 304 U.S. 375, 58 S.Ct. 963, 82 L.Ed. 1408 (1938); Pennzoil Company v. FERC, 645 F.2d 394 (5th Cir. 1981); ECEE, Inc. v. FERC, 611 F.2d 554 (5th Cir. 1980). 31 A determination of ripeness is by no means easy. The Supreme Court in Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967), held that the issue of ripeness for judicial review requires a court to evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration. 387 U.S. at 149, 87 S.Ct. at 1515. The Supreme Court set out four important factors: (1) whether the issues presented are purely legal; (2) whether the challenged agency action constitutes final agency action within the meaning of § 704 of the Administrative Procedure Act, 5 U.S.C.A. § 704 (West 1977); (3) whether the challenged agency action has or will have a direct and immediate impact upon the petitioner; and (4) whether resolution of the issues will foster, rather than impede, effective enforcement and administration by the agency. Abbott Laboratories v. Gardner, 387 U.S. at 149-54, 87 S.Ct. at 1515-18; Pennzoil Co. v. FERC, supra; ECEE, Inc. v. FERC, supra. 32 To better understand whether these claims made by Mississippi Valley are reviewable, a brief explanation of the procedure for implementing changes in terms and rates on file with the Commission would be helpful. Under the NGA, a gas pipeline subject to the Commission's jurisdiction must adhere to the rates and terms on file. To change these rates and terms, the utility must file a proposed change with the Commission 30 days before the change is to take effect. Section 4(d). The Commission has the authority to reject summarily those filings which are grossly defective in form, or are so patently a nullity as a matter of substantive law, that administrative efficiency and justice are furthered by obviating any docket at the threshold rather than opening a futile docket. Municipal Light Boards v. FPC, 450 F.2d 1341, 1346 (D.C.Cir.1971), cert. denied, 405 U.S. 989, 92 S.Ct. 1251, 31 L.Ed.2d 445 (1972). Once the Commission accepts a filing, it may suspend the proposed change for up to five months, during which time the Commission may conduct hearings to determine whether the proposed change is just and reasonable. If the Commission has not reached such a determination at the end of the suspension period, the proposed change takes effect. If the change is an increase in rates, the Commission may require a refund if the rates are ultimately determined to be excessive. 33 Rejection of a rate filing is clearly a final order. It is conceded by Commission's counsel that rejection of a rate filing is reviewable and this concession is echoed in the case law. Appalachian Power Co. v. FPC, 529 F.2d 342 (D.C.Cir.), cert. denied, 429 U.S. 816, 97 S.Ct. 58, 50 L.Ed.2d 76 (1976). See also FPC v. Texaco, Inc., 377 U.S. 33, 84 S.Ct. 1105, 12 L.Ed.2d 112 (1964); Papago Tribal Utility Authority v. FERC, 628 F.2d 235, 241 n.16 (D.C.Cir.), cert. denied, --- U.S. ----, 101 S.Ct. 784, 66 L.Ed.2d 604 (1980) (Papago II ). However, the determination to accept a rate filing is interlocutory. It merely initiates the proceeding which typically involves an extensive hearing. Acceptance of a rate filing implies nothing concerning the merits of the case. It is only after a hearing that the merits are resolved. Yet, although the Commission's acceptance of the October 31st filing at issue is interlocutory, it may nevertheless be reviewable under the Mobile-Sierra doctrine. 34 The Mobile-Sierra doctrine applies where a contract between parties purports to limit the legality of the filing. See Richmond Power & Light Co. v. FPC, 481 F.2d 490 (D.C.Cir.), cert. denied, 414 U.S. 1068, 94 S.Ct. 578, 38 L.Ed.2d 473 (1973). If a utility has bargained away its right to file unilaterally revised rate schedules, then it may not file a change in rates under § 4 of the NGA. More importantly, the Commission must reject a rate filing made in contravention of such contractual obligations upon timely motion of another party to the contract. The primary rationale for the Mobile-Sierra doctrine is that it enables a purchaser of gas to enter into a fixed-price contract with the assurance that those rates will not change absent a Commission determination under § 5(a) that the contractual rate is unjust or unreasonable. 35 The District of Columbia Circuit has consistently reviewed orders of the Commission accepting a rate change filing despite a Mobile-Sierra objection. Papago Tribal Utility Authority v. FERC, 610 F.2d 914 (D.C.Cir.1979) (Papago I ); Borough of Lansdale, Pa. v. FPC, 494 F.2d 1104 (D.C.Cir.1974); see also, Papago II (dictum). In this circuit, the question of reviewability has not been expressly addressed. 17 Although the District of Columbia's analysis in Papago II on the reviewability of orders accepting filings despite Mobile-Sierra objections is dictum, it is the most thorough exegesis of this question. We have reviewed carefully that reasoning and find it convincing. 36 We agree with the District of Columbia Circuit that four factors, corresponding to the four factors of Abbott Laboratories, 18 point toward the reviewability of a rate filing over an objection based on Mobile-Sierra grounds. First, the issue here is purely legal, involving merely an interpretation of Stipulation I. No factual findings need be made by the Commission to resolve this issue. Second, the Commission's decision on this issue is effectively final at this point. Mississippi Valley's Mobile-Sierra claim will ordinarily not be an issue in the § 4(e) hearings to determine whether Southern's new method of transportation allocation is just and reasonable. Third, the Commission's decision will have a direct and immediate impact upon Mississippi Valley. We indicated in Atlanta Gas Light Co. v. FPC, 476 F.2d 142 (5th Cir. 1973), that an immediate impact meant the order of the Commission must be definitive, that is, that the order must have some substantial effect on the parties which cannot be altered by subsequent administrative action. 476 F.2d at 147. 19 The improper rejection by the Commission of a motion that a filing is barred by Mobile-Sierra denies the movant his valuable bargained-for right to have rates charged at the agreed-upon amount for the contractual period. Moreover, the denial of a claim that a rate change is barred under the Mobile-Sierra doctrine may eliminate the only effective weapon the movant has to attack a filing. This is graphically illustrated in the petitions before us. The Commission has found Southern's proposed change in method of allocation to be just and reasonable in Docket No. ER78-36, a finding we affirm in Part IV of this opinion. There is nothing in the record to indicate that the result with respect to the October 31st filing should be any different. Thus, the Commission's rejection of Mississippi Valley's Mobile-Sierra claim may well end Mississippi Valley's attack on this filing. Fourth, resolution of a claimed Mobile-Sierra bar will foster, rather than impede, effective administration by the agency. The court will decide an issue not ordinarily to be decided again by the agency, and its decision affirming the Commission need not interfere with proceedings before the Commission. A judicial determination that there does exist a Mobile-Sierra bar to a filing, on the other hand, may result in the elimination of unnecessary proceedings before the agency. 37 Applying the four Abbott Laboratories factors, and following the rule of the District of Columbia Circuit, we conclude that Mississippi Valley's Mobile-Sierra claim is reviewable. 38