Court Opinion

ID: 185435
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:32:03+00
Date Added: 2024-06-11T13:07:21.878750
License: Public Domain

252 F.3d 456 (D.C. Cir. 2001)
Baltimore Gas and Electric Company, Petitionerv.Federal Energy Regulatory Commission, RespondentColumbia Gas Transmission Corporation, et al., Intervenors
No. 00-1031 Consolidated with 00-1034, 00-1035, 00-1041, 00-1051, 00-1052
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 4, 2001Decided June 15, 2001

On Petitions for Review of Orders of the Federal Energy Regulatory Commission
Peter C. Lesch argued the cause for petitioners.  With him  on the briefs were Jennifer N. Waters, Stanley W. Balis,
John F. Harrington, Kevin J. McKeon, John K. Keane, Jr.  and Paul S. Buckley.  Jeffrey A. Gollomp and Lillian S.  Harris entered appearances.
Beth G. Pacella, Attorney, Federal Energy Regulatory  Commission, argued the cause for respondent.  With her on  the brief was Dennis Lane, Solicitor.
Marilyn L. Doria, Sanford M. Saunders, Jr., Stephen R.  Melton and Kurt L. Krieger were on the brief for intervenors  Columbia Gulf Transmission Corporation and Columbia Gulf  Transmission Company.  Robin M. Nuschler entered an appearance.
Before:  Edwards, Chief Judge, Sentelle and Randolph,  Circuit Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Sentelle, Circuit Judge:

1
Baltimore Gas & Electric and  several other petitioners (collectively "BG&E") challenge the  Federal Energy Regulatory Commission's ("FERC") agreement to settle an enforcement action against Columbia Gas  Transmission and Columbia Gulf Transmission (collectively  "Columbia"), two natural-gas vendors.  The Commission initially had alleged that Columbia violated the Natural Gas Act,  ("NGA"), 15 U.S.C.          717 et seq., by engaging in unauthorized  service abandonment.  Because FERC's decision to settle is  committed to the agency's nonreviewable discretion under  Heckler v. Chaney, 470 U.S. 821 (1985), we conclude that we  lack jurisdiction to hear petitioners' claim.

I. BACKGROUND

2
The NGA requires all vendors of natural gas in interstate  commerce to obtain from FERC a certificate authorizing  service at specified "certificated" levels.  15 U.S.C.          717f(c). Having obtained such authority, a natural-gas vendor must  obtain Commission approval before abandoning a portion, or  all, of its certificated service.  Id.          717f(b).

3
In 1992, FERC discovered that the available capacity on  one of Columbia's pipelines was lower than the level at which  it had been certificated.  FERC suspected that the decline in the pipeline's capacity was due to Columbia's failure to replace deteriorated compressor units.  The Commission therefore ordered Columbia to show cause why it had not abandoned capacity without prior authorization.  It also directed  its General Counsel to begin a formal, non-public investigation into whether Columbia had unlawfully abandoned service  without first obtaining FERC approval.  See Columbia Gas  Transmission Corp., 64 FERC p 61,365 (1993).

4
After a four-year investigation, FERC in August 1997  approved a settlement between Columbia and the Commission's Enforcement section.  The settlement expressly declined to resolve whether Columbia had violated the Natural  Gas Act.  Instead Columbia, "without admitting or denying  that any violation of the NGA or the Commission's regulations occurred, agree[d] to the remedies" the settlement  contained.  Columbia Gas Transmission Corp., 80 FERC  p 61,220, 61,867 (1997).  The centerpiece remedy was the  requirement that Columbia conduct a 30-day "open season"  to determine whether there was any demand for additional  capacity on its pipeline, and to make that capacity available  (up to its certificated level) to customers that desired it.  Id. The settlement stopped short of requiring Columbia to pay  money damages to customers that may have incurred higher  costs as a result of the decline in its pipeline's capacity.

5
In September 1997, BG&E, one of Columbia's customers,  moved to intervene in the administrative proceedings, and  also petitioned for rehearing.  BG&E argued both that  FERC should not have settled with Columbia without submitting the agreement's terms to public notice and comment, and  that the 30-day open season was inadequate to remedy the  damages it had suffered from Columbia's capacity decline.

6
In December 1998, FERC permitted BG&E to intervene  but denied its request for rehearing.  See Columbia Gas  Transmission Corp., 85 FERC p 61,437 (1998).  The Commission explained that it was entitled to settle without notice and  comment because the settlement was reached in the course of  an agency investigation, and third parties have no right to  participate in investigations.  Because the investigation had now concluded, and because of BG&E's interests, FERC  granted its motion to intervene.  However, the Commission  declined BG&E's invitation to reconsider its decision on rehearing.  FERC cited its broad discretion to impose sanctions, which "includes the discretion not to order remedies for  past violations in appropriate circumstances."  Id. at 62,642. In particular, FERC explained that monetary relief was  unwarranted because the magnitude of BG&E's asserted  injuries was speculative, and because of Columbia's poor  financial condition (it had been in bankruptcy from 1991 to  1995).  Id. at 62,642-43.

7
Later that month BG&E filed another motion for rehearing.  BG&E again complained that FERC had unlawfully  excluded it from the investigation of Columbia, and that  FERC was required to award it monetary relief for the losses  it suffered.  In December 1999, the Commission again denied  rehearing.  FERC explained that BG&E had no right to  participate in its investigation of Columbia.  FERC further  claimed that its decision to proceed against Columbia through  a settlement was "well within [its] discretion."  And money  damages against Columbia were unwarranted because calculating them would require "an undetermined expenditure of  Commission ... resources" that FERC preferred to devote  to "its current regulatory programs and initiatives."  Columbia Gas Transmission Corp., 89 FERC p 61,325, 61,992  (1999).

8
BG&E then filed a petition for review with this Court.  It  maintains that FERC abused its discretion by approving the  Columbia settlement without first giving BG&E an opportunity to participate in the proceedings.  BG&E further argues  that the Commission abused its discretion by remedying  Columbia's assertedly unlawful conduct with a prospective  open season, and not with money damages.1  Intervenor  Columbia moved to dismiss BG&E's petition.  FERC and  Columbia claim that this Court lacks jurisdiction to consider  FERC's decision to settle, which is committed to the agency's  nonreviewable discretion pursuant to Heckler v. Chaney, 470  U.S. 821 (1985).  In a similar vein, they argue that, since this  Court has no power to issue an order that could redress  BG&E's claimed injury, BG&E lacks standing.

II. DISCUSSION

9
The Administrative Procedure Act ("APA") both authorizes  and limits judicial scrutiny of the actions of administrative  agencies.  While there is a strong presumption of reviewability under the APA, Abbott Labs. v. Gardner, 387 U.S. 136, 140  (1967), that statute expressly provides that no judicial review  is available of an "agency action [that] is committed to agency  discretion by law."  5 U.S.C.          701(a)(2).  The ban on judicial  review of actions "committed to agency discretion by law" is  jurisdictional.  See, e.g., Fort Sumter Tours, Inc. v. Babbitt,  202 F.3d 349, 357 (D.C. Cir. 2000) (explaining that "the  nonreviewability of a similar kind of agency decision is not  simply a question of deference to agency discretion, but of the  absence of jurisdiction").  That is, Congress has not given the  courts the power to hear challenges to an agency's exercise of  the discretion with which Congress has entrusted it.

10
In Heckler v. Chaney, the Supreme Court announced one  specific application of          701(a)(2)'s denial of jurisdiction. Chaney sets forth the general rule that an agency's decision  not to exercise its enforcement authority, or to exercise it in a  particular way, is committed to its absolute discretion.  Such  matters are not subject to judicial review.  470 U.S. at 831; see also American Gas Ass'n v. FERC, 912 F.2d 1496, 1505  (D.C. Cir. 1990) (remarking that "nonenforcement decisions  are ordinarily unreviewable by virtue of ... the Administrative Procedure Act").  This Court has held that the Chaney  presumption of nonreviewability extends not just to a decision  whether to bring an enforcement action, but to a decision to  settle.  New York State Dep't of Law v. FCC, 984 F.2d 1209,  1214 (D.C. Cir. 1993) (concluding that "an agency's decision to settle or dismiss an enforcement action is nonreviewable  under Heckler v. Chaney").

11
The Chaney Court identified three reasons why agency  enforcement decisions generally are nonreviewable.  First, an  agency's decision not to enforce "often involves a complicated  balancing of a number of factors which are peculiarly within  its expertise," including the allocation of agency resources  and the likelihood of success.  Chaney, 470 U.S. at 831. Second, an agency's refusal to act generally does not involve  the exercise of "coercive power over an individual's liberty or  property rights, and thus does not infringe upon areas that  courts often are called upon to protect."  Id. at 832.  Third,  and perhaps most importantly, an agency's decision not to  enforce resembles a prosecutor's constitutional prerogative  not to indict--"a decision which has long been regarded as  the special province of the Executive Branch"--and so is  entitled to similar deference.  Id.

12
Indeed, Chaney's recognition that the courts must not  require agencies to initiate enforcement actions may well be a  requirement of the separation of powers commanded by our  Constitution.  The power to take care that the laws be  faithfully executed is entrusted to the executive branch--and  only to the executive branch.  See U.S. Const. art. II,          3. One aspect of that power is the prerogative to decline to  enforce a law, or to enforce a law in a particular way.  See,  e.g., Hotel and Rest. Employees' Union v. Smith, 846 F.2d  1499, 1519 (D.C. Cir. 1988) (en banc) (Silberman, J., separate  opinion) ("The extrastatutory decision to withhold enforcement is an exercise of the Executive Branch's discretion to  decide whether to prosecute a case that flows from the  Constitution's admonition that that Branch 'take Care that  the Laws be faithfully executed.'  U.S. Const. art. II,          3."). When the judiciary orders an executive agency to enforce the  law it risks arrogating to itself a power that the Constitution  commits to the executive branch.

13
This is not, of course, to suggest that the Congress may not  restrict an executive agency's enforcement discretion.  Indeed, as we discuss below, the Chaney Court itself recognized

14
that the presumption of nonreviewability may be overcome by  congressional limitations.  Unlike a judicial command to initiate an enforcement action, Congress's authority to impose  discretion-curtailing limitations is fully consistent with the  executive's power to take care that the laws be faithfully  executed.  Such restrictions are simply an instance of lawmaking, a power committed to Congress by the Constitution. See U.S. Const. art. I,          1.  The executive, in turn, is charged  with enforcing the law as it has been defined by the legislature.

15
The present case falls squarely within the Chaney presumption.  In 1993, FERC began an investigation of Columbia's alleged service abandonment.  Columbia Gas Transmission Corp., 64 FERC p 61,365 (1993).  Four years later, the  Commission announced that it would not prosecute an enforcement action against Columbia, but rather that the parties had agreed to settle.  Columbia Gas Transmission  Corp., 80 FERC p 61,220 (1997).  FERC's decision to settle  with Columbia, and its consequent decision not to see its  enforcement action through to fruition, is a paradigmatic  instance of an agency exercising its presumptively nonreviewable enforcement discretion.  This Court recognized as much  in New York State Department of Law v. FCC, 984 F.2d 1209  (D.C. Cir. 1993), where we confronted a strikingly similar fact  pattern.  In that case, the FCC issued a show-cause order in  an enforcement proceeding and then, without any public  notice, agreed to settle with the companies it was investigating.  A group of third parties objected to the FCC's settlement, and sought to force the Commission to reopen the  proceedings.  We rejected their suit, finding that the FCC's  decision to settle was "a legitimate exercise of that agency's  enforcement discretion" and hence was presumptively nonreviewable under Chaney.  Id. at 1215.  Just so here.

16
Of course, Chaney established only a presumption, not a  categorical rule.  470 U.S. at 832 (explaining that an agency's  enforcement "decision is only presumptively unreviewable"); see also Block v. SEC, 50 F.3d 1078, 1082 (D.C. Cir. 1995)  ("The presumption against judicial review in Chaney is not  irrebuttable.").  The Supreme Court went on to identify three circumstances in which the presumption of nonreviewability  may be overcome:  (1) where "the substantive statute has  provided guidelines for the agency to follow in exercising its  enforcement powers";  (2) where the agency refuses "to institute proceedings based solely on the belief that it lacks  jurisdiction";  and (3) where the agency "has conspicuously  and expressly adopted a general policy that is so extreme as  to amount to an abdication of its statutory responsibilities." Chaney, 470 U.S. at 833 & n.4 (citation and internal quotation  marks omitted).2

17
None of those three circumstances is presented here. First, although this Court has recognized that the Commission's discretion is "at [its] zenith" when enforcing the Natural Gas Act, Niagara Mohawk Power Corp. v. FPC, 379 F.2d  153, 159 (D.C. Cir. 1967), we have not yet had occasion to hold  that the NGA--the "substantive statute" here--lacks guidelines against which to measure FERC's exercise of its enforcement discretion.  We do so now.  At every turn the  NGA confirms that FERC's decision how, or whether, to  enforce that statute is entirely discretionary.  Nowhere does  the act place an affirmative obligation on FERC to initiate an  enforcement action, nor does it impose limitations on FERC's  discretion to settle such an action.  "Certainly the statute  does not lay out any circumstances in which the agency is  required to undertake or to continue an enforcement action." New York State, 984 F.2d at 1215.

18
The closest approximation of a guideline BG&E identifies is  what it describes as the Commission's "affirmative responsibility to protect consumer interests."  Reply Brief of Petitioners at 7 (citing 15 U.S.C. §§ 717c, 717f).  This is not sufficient.  A recitation of the boilerplate truism that FERC must  advance "consumer interests"--which phrase appears no  where in the Natural Gas Act--hardly amounts to a discretion-restricting guideline.  In addition, none of the cited NGA  provisions relate specifically to enforcement.  They instead  impose restrictions on the primary conduct of both FERC  and certain natural gas companies.  Granted these provisions  deny FERC the discretion to, say, permit natural gas companies to charge unreasonable rates, 15 U.S.C.          717c(a), or  permit companies to distribute natural gas without obtaining  a certificate of public convenience and necessity, id.          717f(c). But they are utterly silent on the manner in which the  Commission is to proceed against a particular transgressor.

19
The NGA's lack of standards by itself is fatal to BG&E's  claim.  But the Natural Gas Act goes even further, and  expressly confirms the breadth of the Commission's enforcement discretion.  The NGA states that FERC "may in its  discretion bring an action" against a violator of the act.  Id.           717s(a) (emphasis added).  It also provides that the Commission "may investigate" any possible violations.  Id.           717m(a) (emphasis added).  FERC's regulations contain  equally discretionary language:  the Commission "may initiate administrative proceedings ... or take other appropriate  action."  18 C.F.R.          1b.7 (emphasis added).  If Congress  had intended to cabin FERC's enforcement discretion, it  could have used obligatory terms such as "must," "shall," and  "will," not the wholly precatory language it employed in the  act.

20
The other two Chaney circumstances are even more easily  dismissed.  FERC's decision to settle with Columbia did not  proceed from the Commission's mistaken belief that it  "lack[ed] jurisdiction" to bring an enforcement action.  470  U.S. at 833 n.4.  On the contrary, FERC initiated an enforcement action in 1993 and then decided not to pursue it further.

21
Similarly, we cannot say that settlement is an "extreme"  policy that amounts to "an abdication of [FERC's] statutory  responsibilities."  Id.  Like other federal agencies, FERC  routinely approves settlement agreements in enforcement  proceedings.  See, e.g., H. Bruce Cox, 90 FERC p 61,239  (2000);  Transcontinental Gas Pipe Line Corp., 79 FERC p 61,008 (1997).  In this case the Commission decided to settle  with Columbia for reasons that the Chaney Court expressly  held to be legitimate.  Compare Chaney, 470 U.S. at 831  (recognizing agencies' need to determine whether a "particular enforcement action requested best fits the agency's overall  policies, and, indeed, whether the agency has enough resources to undertake the action at all"), with Columbia Gas  Transmission Corp., 85 FERC p 61,437, 62,642-43 (1998),  and Columbia Gas Transmission Corp., 89 FERC p 61,325,  61,992 (explaining that the Commission had decided to settle,  and not to award money damages, because it chose to devote  its resources to current regulatory initiatives).

22
We conclude, therefore, that FERC's decision to settle its  enforcement action against Columbia was within the agency's  nonreviewable discretion.  Because we have no jurisdiction  under 5 U.S.C.          701(a)(2) as illuminated by Heckler v.  Chaney, we need not reach FERC's alternative argument  that BG&E lacks standing. Nor need we evaluate the substantive reasonableness of FERC's decision to settle.

III. CONCLUSION

23
The Administrative Procedure Act provides that no judicial  review may be had of agency actions that are "committed to  agency discretion by law."  Heckler v. Chaney clarifies that  one type of presumptively nonreviewable action is an agency's  decision to enforce the law in a particular way.  Because  FERC had this nonreviewable discretion to settle its enforcement action against Columbia, we lack jurisdiction to consider  BG&E's challenge to it.  BG&E's petition for review therefore is dismissed.

Notes:

1
  In a related case before this Court, No. 00-1138, BG&E  argued that FERC unlawfully approved a later request by Columbia to increase the certificated capacity on its natural-gas pipeline. We rejected that claim in an order dated May 14, 2001.

2
 In Chaney, the Court endorsed only the first of these three  exceptions but noted the possibility of the other two, "express[ing]  no opinion on whether such decisions would be unreviewable" but  "not[ing] that in those situations the statute conferring authority on  the agency might indicate that such decisions were not 'committed  to agency discretion.' "  470 U.S. at 833 n.4.