Court Opinion

ID: 9444037
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:38:59.700135+00
Date Added: 2024-06-11T09:15:16.642685
License: Public Domain

On Rehearing
HUXMAN, Circuit Judge.
We reversed the Commission’s order in the above entitled cause on the ground that it erred in excluding from the cost of service base the loss resulting from the gasoline operations as set out in the opinion1 and remanded the ease for further consideration.2 We granted the Commission’s petition for rehearing because of its contention that we were without jurisdiction to consider that question sua sponte since it was not first presented to the Commission by Colorado in its petition for rehearing. In support of its position the Commission relies upon 15 U.S.C.A. § 717r(b) which in part provides as follows: “* * * No objection to the order of the Commission shall be considered by the court unless such objection shall have been urged before the Commission in the application for rehearing * *
It is not correct, as stated by the Commission, to say that Colorado did not object to the exclusion of this item. It did object thereto both in the original proceeding and in its petition for rehearing. It is true, however, that it did not place its objection on the legal ground upon which we predicated our conclusions.
 But aside from that we think that in reviewing the Commission’s order we have inherent power to consider and correct manifest and substantial error appearing in the record which leads to an unjust end result and deprives Colorado of the opportunity of earning that which the law says is its right, namely, a fair return on its investment.
As pointed out in our original opinion, the test laid down by the Supreme Court in all its decisions in which orders of the Commission are to be gauged is the end result test. The principle laid down in those decisions is that if after a consideration by a reviewing court of the order the end result is just and gives the company a fair return on the investment the order will stand. To hold that a reviewing court is by technical rules of procedure before the Commission deprived of the opportunity to view a case in the light necessary to bring about a *733just end result is to destroy the rule and such a conclusion should not be reached in the absence of clear express language to that effect.
Neither do we interpret Section 717r(b) to mean that a reviewing court is deprived thereby of its right to consider all relevant matters necessary to determine a just end result. We interpret the pertinent language of the Section to mean that one complaining of the order of the Commission will not be heard and has no standing to urge an objection not first submitted to the Commission. We do not interpret Panhandle Eastern Pipe Line Co. v. Federal Power Commission, 324 U.S. 635, 65 S.Ct. 821, 89 L.Ed. 1241, to hold that a reviewing court may not of its own volition consider fundamental error preventing a just end result. That was not the theory upon which the case was decided in the Circuit Court. It was decided thereupon a consideration of the whole case. The Supreme Court in its opinion did say that the gas company by failing to object in its application before the Commission was precluded from raising the objection in the reviewing court, but it did not expressly hold that the Circuit Court erred in considering the case upon its merits. In fact, the Supreme Court likewise considered the case upon its merits and concluded that the end result was just. It would seem that if the court was without jurisdiction to consider the merits all that was said with respect to the merits was only dicta and should have been omitted from the opinions.
United States v. Hancock Truck Lines, Inc., 324 U.S. 774, 65 S.Ct. 1003, 89 L.Ed. 1357; National Labor Relations Board v. Cheney California Lumber Company, 327 U.S. 385, 66 S.Ct. 553, 90 L.Ed. 739 and Unemployment Compensation Commission v. Aragon, 329 U.S. 143, 67 S.Ct. 245, 91 L.Ed. 136, are urged by the Commission in support of its contention that we lack jurisdiction to consider the question in issue. The Hancock Truck Lines case arose under the Interstate Commerce Act upon an application for a certificate of convenience to operate truck lines. The Commission granted a limited certificate, limiting it in operation to traffic moving on bills of lading of freight forwarders. The applicant filed an application for reconsideration in which it stated, “We do not challenge, nor do we complain against, the restriction to serve only freight forwarders.” [324 U.S. 774, 65 S.Ct. 1004.] The Commission denied the other relief requested. The applicant then brought an action to enjoin only so much of the court’s order as restricted its application to traffic moving on bills of lading of freight forwarders. A three-judge court issued a permanent injunction. The Supreme Court held that having expressly waived any objection to this part of the order, the carrier was estopped from urging it and it was improper for the court to reverse the Commission’s order in respect to a provision therein as to which the litigant had advised that body that it no longer objected but acquiesced.
The Cheney California Lumber Company case arose under the National Labor Relations Act. That Act contains a provision similar to Section 717r(b). Proceedings under the National Labor Relations Act involve problems materially different from those that arise under the Natural Gas Act. That Act concerns itself with facts constituting unfair labor practices. When the facts are once established, the remedy flows as a matter of law. What the court there did was to make a finding of fact with respect to an issue not submitted to the Board and that the Supreme Court said it could not do. But we are not considering for the first time an issue of fact. The loss from the gasoline operation is an established fact and we accept it. We only inquire as to the legal consequences flowing therefrom and what was the Commission’s legal duty after having found the fact. So also in the Aragon case, supra, the reviewing court for the first time made a finding of fact with respect to-a fact issue not submitted to the Employment Compensation Commission.
Furthermore we are of the view that our conclusion that we have inherent *734power to sua sponte note basic erroneous legal conclusions adduced from established facts is strengthened by Section 10 of the Administrative Procedure Act, 5 U.S.C.A. § 1009, which in part provides that “So far as necessary to decision and where presented the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provision * * *. It shall * * * hold unlawful and set aside agency action, findings, and conclusions found to be * * * not in accordance with law; (2) contrary to constitutional right, power, privilege, or immunity; * * To hold that we are precluded from considering the legality or constitutionality of the action of an administrative agency based upon facts found by it and unchallenged in the reviewing court would seem to make nugatory and meaningless these clear and positive mandates of the Section.
It is also of some significance that of the cases relied upon by the Commission, Cheney California Lumber Company and Hancock Truck Lines, Inc., were decided prior to the passage of this Act and, while the Aragon case was decided approximately three months after the effective date of the statute, it did not center around a provision such as we had under consideration. For these reasons, we adhere to the views, expressed in our original opinion.
On the argument on the petition for rehearing it was stressed that prior to the merger order Colorado received all the net revenue from the gasoline operations but that under the merger order it relinquished fifty per cent of such revenues and still bears all the cost thereof and that this is unjust to Colorado’s consumers. Our opinion to remand did not indicate the treatment to be accorded to this item of cost of service. All we required was that it be considered as an element of cost of service in light of all the facts of the case.
The order of the Commission is, therefore, reversed and the cause is remanded for further proceedings in accordance with the views expressed herein.

. The loss as found and deducted by the Commission was fixed at $421,537.

. See opinion filed October 29, 1953.