Court Opinion

ID: 9478026
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:37:30.340296+00
Date Added: 2024-06-11T17:46:10.988852
License: Public Domain

JOHNSON, Circuit Judge,
dissenting:
I respectfully dissent from that portion of the majority's opinion which concludes that the presiding AU, and hence the Commission, erred by failing to give the proper evidentiary weight to the contracting parties’ assertion of mutual intent and course of performance evidence in ascertaining the parties’ true intent as to the collection of NGPA rates for stripper well gas. Pursuant to this Court’s previous opinion in Pennzoil II, the Commission, in determining the contracting parties’ intent to collect NGPA rates, is to weigh in its analysis the language of the contracts and all of the extrinsic evidence of intent presented including the parties' assertion of mutual intent. Pennzoil II, 789 F.2d at 1141. In the instant case, the majority concludes that the presiding AU departed from this Court’s mandate in Pennzoil II as set forth above by allowing his construction of the contract language to become the “be-all and end-all” of his intent analysis, thereby effectively ignoring the other extrinsic evidence of intent offered by the parties. The majority’s conclusion, however, is misper-eeived.
In the instant case, the presiding AU did not refuse to consider the contracting parties’ assertion of mutual intent as evidence of that intent; in fact, the presiding AU expressly stated that the extrinsic evidence of intent offered by both parties was considered when making his decision. Only after making credibility determinations and considering all of the evidence presented did the presiding AU then determine that the only reliable evidence, not the only evidence, of the parties’ intent was the contract language due to the ambiguous nature of the extrinsic evidence of intent offered by the parties. Therefore, relying on the language of the contract, the presiding AU determined that the parties did not intend to collect NGPA rates for stripper well gas.
In Pennzoil II, this Court, by requiring the Commission to consider extrinsic evidence of intent in ascertaining the parties’ true intent as to the collection of NGPA rates, did not envision the concomitant of *1243that requirement to be that the Commission accept the veracity of that extrinsic evidence. The majority’s opinion today effectively imposes such a stringent and wholly unwarranted requirement on the Commission. As a result, the Commission is stripped of the discretion which it must enjoy to give greater weight in its intent analysis to certain evidence over other evidence based on the credibility and reliability of that evidence. Certainly, the Commission is never at liberty to fail to consider any evidence offered by the parties of their true intent regarding NGPA rates; however, after receiving the evidence offered, the Commission must be permitted to discount that evidence, if it so determines, as lacking reliability or credibility. Such is the very nature of a factual determination.
In the instant case, the presiding AU considered all of the evidence of intent, deemed some of that evidence unreliable, and only then rendered a conclusion as to the intent of the parties to collect NGPA rates for stripper well gas. This Court does not reverse such a factual determination unless that determination is not supported by substantial evidence. Pennzoil II, 789 F.2d at 1135. While the majority may view the facts as supporting a different conclusion on the intent issue than that reached by the presiding AU, the fact remains that sufficient evidence existed in the form of United’s actions in disavowing its intent to collect NGPA rates to support the presiding AU’s decision to discount the parties’ assertion of mutual intent as unreliable. Thus, constrained to rely on the contract language, the presiding AU then concluded that the parties did not intend to collect NGPA rates for stripper well gas. On the above facts, the presiding AU’s decision was supported by substantial evidence.
Finally and ironically, this Court has previously found the presiding AU’s approach to the intent inquiry to be “emminently reasonable and practical and [one] which might serve as a model [to the Commission] on remand.” Pennzoil II, 789 F.2d at 1145 n. 44. In this vein, the previous panel characterized the presiding AU’s approach as the type of approach contemplated by this Court in Pennzoil I since that approach construes the language of the contracts in light of the extrinsic evidence. Id. at 1141. It is inexplicable how an approach previously extolled by this Court is able to become one fraught with error simply by the sweep of a pen. For all of the above reasons, I dissent from that portion of the majority’s opinion finding fault with the presiding AU’s analysis of the parties’ intent.