Court Opinion

ID: 185036
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:26:53+00
Date Added: 2024-06-11T17:26:12.794185
License: Public Domain

198 F.3d 266 (D.C. Cir. 1999)
Panhandle Eastern Pipe Line Company, Petitionerv.Federal Energy Regulatory Commission, RespondentSemco Energy Gas Company, et al., Intervenors
No. 98-1409
United States Court of AppealsFOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 12, 1999Decided December 14, 1999

On Petition for Review of Orders of the Federal Energy Regulatory Commission
Lawrence G. Acker argued the cause for petitioner. With  him on the briefs were Mary A. Murphy and Merlin E.
Remmenga.  F. Nan Todd Wagoner and Richard J. Kruse,  Jr., entered appearances.
Judith A. Albert, Attorney, Federal Energy Regulatory  Commission, argued the cause for respondent.  With her on  the brief were Jay L. Witkin, Solicitor, and Susan J. Court,  Special Counsel.
Before:  Edwards, Chief Judge, Silberman and Rogers,  Circuit Judges.
Opinion for the Court filed by Chief Judge Edwards.
Edwards, Chief Judge:

1
Petitioner, Panhandle Eastern Pipe  Line Co. ("Panhandle"), implores this court to vacate two  opinions of the Federal Energy Regulatory Commission  ("FERC" or the "Commission") that have been rendered  moot by a settlement entered into between Panhandle and a  group of its customers.  Panhandle argues that, because  FERC concedes that the two opinions do not reflect final  orders and because the settlement ensures that the challenged opinions will never become final, this court should  remand the opinions to FERC with instructions to vacate  them.

2
FERC responds that, because Panhandle is not an "aggrieved" party, as required by Section 19(b) of the Natural  Gas Act ("NGA"), see 15 U.S.C. § 717r(b) (1994), the court  has no jurisiction over the instant case.  In other words,  FERC claims that the now moot opinions are nothing more  than general statements of policy that give rise to no justiciable claims.  Alternatively, FERC contends that, under U.S.  Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S.  18 (1994), absent extraordinary circumstances, a federal court  will not vacate a judgment that has been rendered moot by  voluntary settlement.  FERC is right on the first count; accordingly, we deny Panhandle's petition for review.

3
We reject FERC's alternative argument resting on U.S.  Bancorp.  This case differs from U.S. Bancorp, because the  disputed issues here were rendered moot while the case was  still before the agency and before any jurisdiction was found in federal court.  U.S. Bancorp and other such cases apply  only to determine the jurisdiction of Article III courts, not  administrative agencies, and to instruct when an opinion must  be vacated after a federal court loses its jurisdiction.  For  example, in American Family Life Assurance Co. v. FCC,  129 F.3d 625 (D.C. Cir. 1997), we held that "federal courts  should vacate agency orders they decline to review on  grounds of mootness."  Id. at 630.  Here, however, no federal  court has had jurisdiction over the instant case, because the  agency never issued a final, appealable order.  In short, there  are no "unreviewed administrative orders" extant.  Id. Therefore, U.S. Bancorp and American Family Life have no  sway in the resolution of this matter.

I.  Background

4
In September 1991, Panhandle initiated a rate proceeding  under Section 4 of the NGA.  FERC accepted and suspended  the filing, and set the proposed rates for hearing.  In August  1994, an Administrative Law Judge issued an initial decision  relating to numerous issues concerning Panhandle's proposed  rates.  Unhappy with many of the judge's conclusions, "[v]arious parties filed exceptions to most of the [Administrative  Law Judge's] rulings."  Panhandle Eastern Pipe Line Co., 83  F.E.R.C. p 61,353, at 62,419 (1998).  On May 25, 1995, the  Commission addressed these exceptions in Panhandle Eastern Pipe Line, 71 F.E.R.C. p 61,228, at 61,819 (1995) ("Opinion No. 395"), the first of the two challenged opinions.  Panhandle and several of its customers were dissatisfied, and  they requested rehearing.

5
In May 1992, while the fate of its first filing was still  pending, Panhandle initiated a second Section 4 rate filing. Just as it had with the first filing, the Commission accepted  and suspended the filing, and set the proposed rates for  hearing.  In December 1994, the Administrative Law Judge  in this second case issued an initial decision, which, like its  predecessor, met with exceptions.  On February 5, 1996,  FERC issued Panhandle Eastern Pipe Line Co., 74 F.E.R.C.  p 61,109, at 61,351 (1996) ("Opinion No. 404"), the second of  the challenged opinions.  A petition for rehearing followed.

6
The Commission never had the opportunity, however, to  address either of the pending requests for rehearing.  In September 1996, while both requests were still pending, and  before any final orders were issued by the agency, Panhandle  and a group of its customers filed a settlement aimed at  resolving both of the previous rate cases and related proceedings.  On December 20, 1996, the Commission approved the  settlement "as a fair and equitable resolution."  Panhandle  Eastern Pipe Line Co., 83 F.E.R.C. p 61,353, at 62,419.  On  December 2, 1997, Panhandle filed a motion to vacate the  challenged opinions.  On April 1, 1998, the Commission denied Panhandle's motion to vacate, holding that, because  vacatur is an equitable remedy, it is unjustified when the  party seeking vacatur has settled the underlying case and  thus rendered it moot.  See Panhandle Eastern Pipe Line  Co., 83 F.E.R.C. p 61,008, at 61,029-31 (1998) (citing U.S.  Bancorp, 513 U.S. at 18).  The Commission also noted that it  had invested significant resources in conducting hearings and  that the challenged opinions offered useful discussions of  recurring issues.  See id. at 61,030.  On May 1, 1998, Panhandle sought rehearing on FERC's refusal to vacate the opinions.  On June 30, 1998, FERC denied Panhandle's request. See Panhandle, 83 F.E.R.C. p 61,353, at 62,418.  This petition  for review followed.

II. Analysis

7
Section 19(b) of the NGA requires a party seeking judicial  review to be "aggrieved."  See 15 U.S.C. § 717r(b);  see also  El Paso Natural Gas Co. v. FERC, 50 F.3d 23, 26 (D.C. Cir.  1995) ("[O]nly a party that is 'aggrieved' by an order issued  under the Act may obtain judicial review thereof.").  Because  such a party must also satisfy the requirements of constitutional standing, a petitioner must establish "at a minimum,  'injury in fact' to a protected interest."  El Paso, 50 F.3d at  26 (quoting Shell Oil Co. v. FERC, 47 F.3d 1186, 1200 (D.C.  Cir. 1995)).  A party establishes an injury-in-fact under Article III by alleging "an invasion of legally protected interests  that is both (a) concrete and particularized and (b) actual or  imminent, not conjectural or hypothetical."  Id.  In addition,  "[j]udicial review is limited to 'orders of definitive impact,  where judicial abstention would result in irreparable injury to  a party.' "  CNG Transmission Corp. v. FERC, 40 F.3d 1289, 1292 (D.C. Cir. 1994) (quoting Papago Tribal Util. Auth. v.  FERC, 628 F.2d 235, 238 (D.C. Cir. 1980)).

8
Panhandle's problem in this case is twofold:  It is not an  aggrieved party under the NGA, and it lacks standing to  appear in federal court.  There is no aggrievement in this  case, because FERC never issued final judgments disposing  of Panhandle's rate filings.  Both filings were pending rehearing when Panhandle voluntarily entered into a settlement  that rendered moot the claims before FERC.  Thus, there  was no "order issued by the Commission" from which Panhandle could obtain judicial review under 15 U.S.C. § 717r(b).

9
Panhandle resists this conclusion by arguing that it was  "injured" enough to satisfy both section 19(b) and Article III  standing requirements when FERC refused to vacate the  contested opinions that were pending rehearing.  FERC, in  turn, contends that the disputed opinions are nothing more  than "policy statements," binding on no party and having no  precedential effect.  On this view, FERC asserts that the  mere existence of the disputed opinions causes Panhandle no  harm.  FERC surely has the better argument.

10
In Pacific Gas & Electric Co. v. Federal Power Commission, 506 F.2d 33 (D.C. Cir. 1974), this court delineated the  distinction between a substantive rule and a policy statement. The court noted that 5 U.S.C. § 553(b)(A) allows an agency to  issue a general statement of policy, which differs from a  substantive rule in that a policy statement is "neither a rule  nor a precedent but is merely an announcement to the public  of the policy which the agency hopes to implement in future  rule makings or adjudications."  Id. at 38.  In this sense, a  policy statement is "like a press release" in that it "presages  an upcoming rule making or announces the course which the  agency intends to follow in future adjudications."  Id.;  see  also American Hosp. Ass'n v. Bowen, 834 F.2d 1037, 1046-47  (D.C. Cir. 1987) (analyzing the nature of policy statements).

11
This advance-notice function of policy statements yields  significant informational benefits, because policy statements  give the public a chance to contemplate an agency's views  before those views are applied to particular factual circumstances.  This opportunity to anticipate the agency's actions  "facilitates long range planning within the regulated industry  and promotes uniformity in areas of national concern."  Pacific Gas, 506 F.2d at 38.  This period of foreshadowing is  made even more useful by the fact that, unlike substantive  rules,

12
[a] general statement of policy ... does not establish a 'binding norm.'  It is not finally determinative of the issues or rights to which it is addressed.  The agency cannot apply or rely upon a general statement of policy as law because a general statement of policy only announces what the agency seeks to establish as policy.  A policy statement announces the agency's tentative intentions for the future.  When the agency applies the policy in a particular situation, it must be prepared to support the policy just as if the policy statement had never been issued.  An agency cannot escape its responsibility to present evidence and reasoning supporting its substantive rules by announcing binding precedent in the form of a general statement of policy.

13
Id. at 38-39 (footnotes omitted).  In other words, a policy  statement has neither the force of a substantive rule adopted  pursuant to rule making nor the binding effect of an order  following an adjudication.

14
The Commission has confused matters somewhat in this  case by noting the "ongoing precedential value" of the challenged opinions, Br. for Respondent FERC at 16, as if to  suggest that the opinions serve as binding precedent.  See  also Panhandle Eastern Pipe Line Co., 83 F.E.R.C. p 61,353,  at 62,420 (noting that the parts of the challenged opinions  that "contain discussions of issues that appear before the  Commission time and time again ... can and do serve as  precedent").  More telling, however, is FERC's failure to  issue final judgments on the merits of Panhandle's claims and  the agency's acceptance of the settlement to moot the pending claims.  In its brief to this court, FERC conceded that  the challenged opinions serve only as policy statements that  have no binding effect.  See Br. for Respondent at 17 ("[T]he  only colorable effect, if any, of Opinion Nos. 395 and 404 is that they leave in public view statements of Commission  policy which would not be judicially reviewable until the  Commission has applied it in a concrete situation.").  And,  during oral argument, Government counsel acknowledged  unhesitatingly that the disputed opinions have no precedential  value.  In short, for the most part, the Commission has been  unwavering in explaining that the challenged opinions are  "the functional equivalent of a Commission policy statement."Id. at 27;  see also Panhandle Eastern Pipe Line Co., 83  F.E.R.C. p 61,008, at 61,031 ("In future cases, Panhandle or  any other person may seek an outcome contrary to Opinion  Nos. 395 and 404, either based on arguments similar to those  contained in the requests for rehearing of Opinion Nos. 395  and 404 or for other reasons, and the Commission will  consider those contentions.").

15
In light of the record at hand, it is clear that Panhandle can  cite no injury-in-fact in support of standing.  Panhandle's  rates for the relevant time periods were set by the settlement  agreement, so they were unaffected by the challenged opinions.  And there is no recognizable residual harm that can  result from FERC's continued publication of the opinions as  policy statements.  FERC concedes that the challenged opinions now serve only as policy statements that have no binding  effect on Panhandle.  Thus, because Panhandle can point to  no harm that can be redressed by this court, it fails to satisfy  the requirements of section 19(b) of the NGA and Article III  standing.

III.  Conclusion

16
The challenged opinions are non-binding policy statements.As a result, Panhandle is not aggrieved and has not suffered  an injury-in-fact.  We therefore deny Panhandle's petition for  review.