Court Opinion

ID: 7850858
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:25:23.87564+00
Date Added: 2024-06-11T16:29:06.096305
License: Public Domain

MIKVA, Circuit Judge,
dissenting:
I.
The outcome of this case turns entirely on a difficult question of statutory construction. If, as the majority concludes, section 10 of the Alaska Natural Gas Transportation Act (ANGTA), 15 U.S.C. § 719h (1982), governs our review of the rate base determinations at issue in this case, we are precluded from reviewing the Federal Inspector’s (OFI) determinations for reasonableness or for substantial support on the record. See Earth Resources Co. v. Federal Energy Regulatory Commission, 617 F.2d 775, 777 (D.C.Cir.1980). Under such circumstances, the result reached by the majority is clearly appropriate. If, on the other hand, section 10 of ANGTA is inapplicable, and OFI rate base determinations may be scrutinized under a substantial evidence standard, see 15 U.S.C. § 717r(b) (1982), it is clear that the procedures afforded petitioner in this case cannot withstand review. See Mobil Oil Co. v. Federal Power Commission, 483 F.2d 1238, 1259 (D.C.Cir.1973). The majority concedes as much. See Majority Opinion at 1574, 1577. Because I find the majority’s analysis with respect to the statute’s applicability strained, I respectfully dissent.
Agency rate determinations have traditionally been subject to judicial review. I cannot agree with my colleagues that in section 10 of ANGTA, Congress sub silentio deviated from this common practice. The majority’s decision today has dramatic implications for consumers of natural gas. Under the majority’s reasoning, OFI rate base determinations on all segments of the Alaska Natural Gas Transportation System. (ANGTS) — determinations that will affect the rates paid by consumers throughout the lifetime of the Alaskan pipeline — are insulated from all but the most perfunctory review. In reviewing costs for inclusion in a rate base, agencies with rate-setting authority are directed to approve only such costs as will result in a “just and reasonable” rate. See 15 U.S.C. § 717c(a) (1982). To prohibit judicial review of the reasonableness of such decisions, as the majority does in this case, is tantamount to eliminating any review. Such a result is not favored in the law. The Supreme Court in Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967), held that “only upon a showing of ‘clear and convincing evidence’ of a contrary legislative intent should the courts restrict access to judicial review.” Id. at 141, 87 S.Ct. at 1511 (citation omitted). See also Harper v. Levi, 520 F.2d 53, 67 (D.C.Cir.1975). Paradoxically, the majority is willing to impute such an intent to Congress in this case on the slimmest of evidence; I am not.
It is beyond peradventure that Congress wanted a “hurry-up” procedure to govern the regulatory aspects of the construction of ANGTS. Section 10 of ANGTA and its legislative history make it clear that Congress did not want the courts to be used to slow down the pipeline’s construction; it wanted the pipeline built “full speed ahead.” Congress did not, however, throw out the baby, the bath water, and the bathtub of natural gas rate regulation. It did not intend that natural gas be exempt from normal ratemaking and review processes merely because it happened to flow through ANGTS’ pipelines. This is my point of tension with the majority’s analysis of section 10.
II.
The majority correctly notes that section 10 of ANGTA applies to two kinds of agency action: (1) actions taken pursuant to section 9 of the Act, and (2) enforcement decisions of the Federal Inspector made pursuant to section 202(a) of Reorganization Plan No. 1 of 1979, 44 Fed.Reg. 33,663, 93 Stat. 1373 (1979) (reprinted in 15 U.S.C. § 719e (1982)). Majority Opinion at 1570. The majority concludes that OFI rate base determinations qualify as agency action under both of these provisions. Consonant *150with the majority opinion, I will examine these provisions in inverse order.
A. Enforcement Activities Under the Reorganization Plan
Pursuant to the Reorganization Plan, President Carter, with the approval of Congress, created the Office of the Federal Inspector and transferred to it “exclusive responsibility” for the enforcement of “Federal statutes ..., regulations and ... terms, conditions, and stipulations of grants, certificates, permits and other authorizations issued by Federal agencies with respect to pre-construction, construction, and initial operation” of ANGTS. Reorganization Plan, supra, § 102. The majority concludes that the ratemaking functions performed by OFI in this case qualify as “enforcement activities” under the Reorganization Plan. This conclusion unduly stretches the plain meaning of the word “enforcement.”
The importance of the designation of an OFI action as an “enforcement activity” is demonstrated by section 202 of the Plan. Under section 202(a), OFI decisions on “enforcement matters” are explicitly characterized as “ ‘action’ for purposes of Section 10” of ANGTA. Section 202(b), in contrast, makes OFI “responsible for coordinating the expeditious discharge of nonenforcement activities by Federal agencies” and authorizes, “[ujpon agreement between the Federal Inspector and the head of any agency,” the delegation “to the Federal Inspector [of] any statutory function vested in such agency related to the functions of the Federal Inspector.” Id. § 202(b). OFI actions taken pursuant to section 202(b) are not characterized as “action” for purposes of section 10. Importantly, despite conflicting interpretations by OFI, the ratemaking authority exercised by OFI in this case was delegated to it from FERC under section 202(b) — a section applicable only to nonenforcement functions. See 45 Fed.Reg. 8511-12 (1980).
In concluding that rate base determinations qualify as enforcement activities under the Reorganization Plan, the majority relies entirely upon a decision and report issued by President Carter in 1977, two years before the issuance of the plan itself. See Executive Office of the President, Energy Policy and Planning, Decision and Report to Congress on the Alaska Natural Gas Transportation System (1977) (hereinafter cited as Decision). The majority reasons that, since the President’s Decision makes the timely submittal of construction costs for approval a “term or condition” of the applicant’s certificate of public convenience and necessity, any action taken by FERC, or its delegatee, to approve or disapprove those costs is an action to “enforce” that submittal requirement. Majority Opinion at 1570, 1571. Based on this assumption, the majority concludes that “since the President’s Decision explicitly makes rate base approval a condition of pipeline operators’ certificates of public convenience and necessity, rate base determinations are also actions to enforce this condition.” Id. at 1571. The assumption and the conclusion are equally unfounded.
The President’s Decision does not, explicitly or otherwise, make rate base approval a condition of the pipeline operator's certificate; it merely requires operators to submit their costs in a timely fashion. When the regulatory authority acts to approve or disapprove the submitted cost it is not “enforcing” the submittal requirement within any common understanding of the meaning of the word; rather, it is making a determination as to the reasonableness of the submitted item. That the President’s Decision does not support such a strained definition of the word “enforcement” is evidenced by its description of the transfer of authority contemplated in the subsequent Reorganization Plan:
This plan will propose a limited, single-purpose transfer of field-level supervisory authority over enforcement of terms and conditions for the duration of the preconstruction and construction phases of the Alcan project. No other transfer of existing authority, or transfer of any coordination function, will be proposed in the reorganization plan.
*151Decision at 204. See also id. at 198-99. Rate base determinations hardly qualify as “field-level • supervisory” functions. Neither the President’s Decision, nor the Reorganization Plan, support the majority’s interpretation. Ratemaking is not an enforcement activity within the meaning of the Reorganization Plan.
B. Section 9 Actions
Independent of the enforcement function analysis criticized above, the majority concludes that the rate base determinations at issue in this case are subject to review only under the terms prescribed in section 10 of ANGTA because the determinations qualify as actions taken pursuant to section 9. Majority Opinion at 1571. I find my colleagues’ reasoning here equally unpersuasive. Section 9 provides that:
To the extent that the taking of any action which is necessary or related to the construction and initial operation of the approved transportation system requires a certificate, right-of-way, permit, lease, or other authorization to be issued or granted by a Federal officer or agency, such Federal officer or agency shall ... issue or grant such certificates, permits, rights-of-way, leases, and other authorizations at the earliest practicable date.
15 U.S.C. § 719g(a) (1982). Thus, in order for the action of a federal officer or agency to qualify as an action “taken pursuant to [section 9],” 15 U.S.C. § 719h(a), that action must involve (1) the issuance or granting of a certificate, right-of-way, permit, lease, or other authorization that is (2) required by the operator of the approved transportation system in order to (3) take an action which is necessary or related to the construction or initial operation of that approved system. Each aspect of this definition must be satisfied in order to invoke the limited review provisions of section 10. I conclude that OFI rate base determinations do not satisfy this three-part definition.
The majority argues that OFI rate base determinations fit within the “or other authorization” language of section 9 — finding support for its broad interpretation of the word “authorization” in this court’s decision in Midwestern Gas Transmission Co. v. Federal Energy Regulatory Commission, 589 F.2d 603 (D.C.Cir.1978). Majority Opinion at 1571. That reliance is misplaced. Midwestern Gas involved challenges to FERC orders granting import applications permitting the importation of natural gas from Canada through the prebuilt portion of ANGTS. It was uncontested that the sought after import permits qualified as certificates, rights-of-way, permits, leases, or other authorizations within the meaning of section 9; the only dispute was whether the importation of Canadian gas was “necessary or related to the construction and initial operation of” ANGTS. 589 F.2d at 614. The court ruled that it was. Midwestern Gas is precedent for the adoption of a broad interpretation of what is “necessary or related to the construction and initial operation” of ANGTS; however, it provides no support for the strained interpretation of “authorization” adopted by the majority. Although one may concede that the obtaining of a permit for the importation of Canadian gas through ANGTS is a requirement for the taking of an action necessary or related to the construction and initial operation of the pipeline, it does not follow that the setting of a rate base which will affect the pricing of that imported gas is also a required “authorization.”
I find it beyond comprehension that Congress intended to include OFI rate base determinations within section 10’s limited judicial review provisions. Agency rate-making decisions are frequent subjects of judicial review. In delegating ratemaking functions to administrative agencies, Congress has traditionally provided for judicial review of the reasonableness of rate decisions. See, e.g., 15 U.S.C. §§ 717c & 717r (1982); 16 U.S.C. §§ 824d & 825l (1982); 49 U.S.C. § 15 (1976). If Congress had intended to deviate from this common practice in ANGTA, I submit, it would have done so explicitly. No such intent is evident. Ratemaking, even if arguably an authorization, is not of the same kind as *152certificates, rights-of-way, permits, and leases. In section 9, Congress demonstrated its ability to list specifically the agency actions it intended to expedite and subject to truncated judicial review. That it omitted ratemaking activities, the most obvious component of pipeline regulation, is not without significance. The congressional reports issued in reference to ANGTA indicate that the delays Congress sought to avoid through ANGTA’s expedited procedures were construction-related, not rate-related. See S.Rep. No. 94-1020, at 7 (1976); H.R.Rep. No. 94-1658, at 23 (1976). There is simply no basis for the majority’s' conclusion that Congress intended ratemaking functions, the largest and most obvious component of pipeline regulation, to be included within the generic category of “other authorizations.”
In fact, the available legislative history is at odds with the majority’s interpretation. The legislative history evidences a recognition on the part of Congress of the seriousness of limiting judicial review and a concern that ANGTA’s limitations be narrowly construed. For example, Senator Jackson stated:
The limitations on judicial review deserve special attention. Under section 10 of S. 3521 as reported, the actions of Federal officers and agencies in issuing necessary authorizations and approvals pursuant to the act may be judicially reviewed only under certain conditions and under certain time limitations____
These limitations are intended to be narrowly construed. Moreover, section 9(b) [9(c)] makes it clear that the existing body of law pursuant to which any authorization is issued must be complied with. This is a procedural bill which, unless otherwise explicitly stated therein, does not modify existing rights and obligations of affected persons. The provisions of the Natural Gas Act apply, for example, to the extent they are not inconsistent with the act.
122 Cong.Rec. 22,023 (1976). The Senate Report on an earlier version of ANGTA evidences Congress’ intent on the precise issue before this court. It notes that:
the provisions of the Natural Gas Act are to apply to the extent that they are not inconsistent, as determined by the Commission, with this Act. Thus, for example, Commission regulation of the rates and charges for natural gas transportation through the Alaska natural gas transportation system will be subject to the Natural Gas Act just as any other natural gas company would be subject to the Natural Gas Act.
S.Rep. No. 94-1020, at 14 (1976) (emphasis added). Although the quoted language refers to a specific section of the Senate-reported bill that was not included in the version ultimately adopted, there is nothing in the subsequent legislative history of ANGTA, or in ANGTA itself, to suggest that the cited example is not equally applicable to the enacted version. In fact, the Senate floor manager of ANGTA, Senator Stevenson, in urging adoption of the House amendments to the bill, enumerated his concerns regarding ‘ the substantive changes made in the Senate bill by the House amendments. None of these concerns involved ANGTA’s judicial review provision. See 122 Cong.Rec. 34,574 (1976) (statement of Senator Stevenson).
The majority dismisses this clear evidence of congressional intent as irrelevant because it occurred prior to the issuance of the President’s Decision. Blind to the explicit references in the legislative history concerning the appropriate scope of section 10’s judicial review provisions, the majority asserts that “[t]he pre-Decision ANGTA simply did not speak to the application of section 9 to rate base determinations.” Majority Opinion at 1572. The majority chooses, instead, to rely on President Carter’s 1977 Decision. The majority opinion does not, however, articulate any line of reasoning, other than that criticized above, or cite to any portion of the Decision which identifies rate base approval as an “authorization” “necessary or related to the construction and initial operation” of ANGTS. As noted above, the President’s Decision did not make rate base approval a condi*153tion on the construction or initial operation of the pipeline. Any conclusion to the contrary is belied by the fact that intervenor Northern Border had been operating the pipeline, under a valid FERC certificate issued in April 1980, for several months prior to the issuance of the rate base determinations involved in this case. See Northwest Alaskan Pipeline Co., 11 FERC (CCH) ¶ 61,088 (April 28, 1980).
III.
Without any evidence of congressional intent, today’s majority takes a position which eviscerates any meaningful review of agency rate base determinations — determinations which, as noted above, will have dramatic and long-term effects on the rates paid by consumers of natural gas, and which traditionally have been subject to plenary judicial review. An agency directed by statute to set “just and reasonable” rates is insulated from any judicial review as to the justness and reasonableness of its determinations. In addition, what little review the court is entitled to conduct, must be performed, and a final decision entered, within 90 days. 15 U.S.C. § 719h(c)(2) (1982). Consumers may take little solace in the majority’s statement that this non-review will be of limited duration, that “[a]fter the Federal Inspector approves a rate base for a segment of ANGTS,” subsequent review of rates filed for that segment will be conducted by FERC “under the usual procedures provided by the Natural Gas Act.” Majority Opinion at 1570-1571 n. 7. These future rates will be based on a rate base arrived at under defective procedures. The rate base will never again be subject to agency or judicial review.
The majority apparently recognizes that its decision today authorizes procedures which are anathema to the normal procedures required for ratemaking. See, e.g., id. at 1574 (“We recognize that this holding leaves the OFI wide discretion in its rate base determinations; nonetheless, this is what Congress apparently wanted”), 1575 (“[Petitioner’s] remaining discontent must be attributed to the reasonableness of the Federal Inspector’s decision on control, which, for good or ill, Congress has decided we cannot review”), 1577 (“Congress apparently desired these proceedings to be expedited at the expense of more traditional guarantees of full and fair hearings”). I do not believe that Congress deserves the culpability for this aberrational result. Rate base determinations are neither “decision^] on enforcement matters” under the Reorganization Plan, nor “authorization[s] ... issued or granted by a Federal officer or agency” which are necessary or related to the construction and initial operation of ANGTS. For the reasons set forth above, I would vacate the challenged orders of the Federal Inspector and would remand this matter to the OFI for further proceedings consistent with the procedures required under the Natural Gas Act. See Mobil Oil Co. v. Federal Power Commission, 483 F.2d 1238 (D.C.Cir.1973).