# Petition — Arkansas Louisiana Gas Co. v. Hall > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0039%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1979 - **Citation:** 440 U.S. 904 ## Text ¢ | RECEIVED etal 18 1978 Nee Supreme Court of the United State Ocroper TERM, 1978 No. —15- Pho ARKANSAS DOUISIANA Gas Company, Petitioner, Vv FRANK J. HALL, Mrs. W. E. Hay, Se., THe H. M. HARRELL TESTAMENTARY TRUST, JAMES E. HARRELL, JOHN K. HARRELL, Sr., ASA BENTON ALLEN, SIDNEY G. Myers, Jr., W. O. CocHran, THomas F. PHILYAW, Mrs. ELaInet ALLEN, JAMES A. Nor, D. B. MCCONNELL, Mrs. Eva L. Wertss, Sot Kapitan and NATIONAL AMERICAN BANK, New Orleans, Co-Testamentarv Executors of the Succession oF SEYMOUR WEISS, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE COURT OF APPEAL, SECOND CIRCUIT, STATE OF LOUISIANA. Rospert Roserts, JR. MARLIN RISINGER, JR. W. MIcHAEL ADAMS BLANCHARD, WALKER, O’QUIN & ROBERTS Post Office Drawer 1126, Shreveport, Louisiana 71163 Counsel for Petitioner EUBEN GOLDBERG GLENN W. LETHAM GoLpBERG, FELDMAN & LETHAM, P.C. 1700 Pennsylvania Ave., N.W. Washington, D.C. 20006 Of Counsel Press or Byron S. ADAMS PRINTING, INC., WASHINGTON, D. C. — lee Page Dee ac Gaehecoseees il I. SE ISIE ee 2 NEE 2 Er 3 IV. Statutes anp Recuiations INVOLVED .......... 4 V. STATEMENT OF THE CASE .........cccccccescecs 4 Proceedings in the Trial Court ........... 6 Opinion and Judgment of Trial Court ..... 7 Opinion of the Court of Appeal ......... a> Federal Questions Raised in Lower Courts. 10 VI. Reasons Way A Writ or Crrtiornari SHouLp Bg ee Ee eee yee bibe 12 Dee Bes evn abebedewsces eee 24 ee cee sa babenes la ii TABLE OF AUTHORITIES CasEs: Page Appalachian Power Co., 49 F.P.C. 387 (1973) ....... 20 Appalachian Power Co. v. FPC, 529 F.2d 342 (D.C. Cir. 1976), cert. den. 429 U.S. 816 (1976) ........ 20 Burnet v. Harmel, 287 U.S. 103 (1932) .............. 19 Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975) .. 3 Far East Conference v. United States, 342 U.S. 570 DO a iw ks xs PADDR ANA Shee sh td RRE Ee cK es 13 FPC v. Louisiana Power ¢ Light Co., 406 U.S. 621 GaN E Fines chance heed Keee bane bt GAM KE 4 21 FPC v. Mobil Oil Corp., 406 U.S. 976 (1972) ........ 19 FPC v. Sierra Pacific Power Co., 350 U.S. 348 (1956) . 13 FPC v. Tennessee Gas Transmission Co., 371 U.S. 145 SP Pa is ce aces hee adv oak sy Mahone aks.» 21 FPC v. Transcontinental Gas Pipe Line Corp., 365 Oe oo co eka Bika vices i: 21 Great Northern R. Co. v. Merchants Elevator Co., 259 Sh ee A AGS Gin Ok kis ik web ota FOS 15,17 Interstate Natural Gas Co. v. Mississippi River Fuel Corp., 220 La. 43, 55 So.2d 775 (1951) ........... 8 Morris Mizel, et al., Op. No. 407, 30 F.P.C. 1103 (1963) . 16 Mobil Oil Corporation v. FPC, 364 F.2d 256 (D.C. Cir. 1971), cert. den. sub. nom. FPC v. Mobil Oil Corpo- PORE, GOS Si. OVO COTE bn cei vciscwancacicucs 19 Montana-Dakota Util. Co. v. Northwestern Public Serv- OO Tra, UR Cts Oe COUOED acm censccecscieds 12 NAACP v. FPC, 425 U.S. 662 (1976) ................ 21 Natural Gas Pipeline Co. v. Panoma Corp., 349 U.S. 44 SS SS tn Sah aay Sick kiw ga xn nv weno ae WANS 12 Northern Natural Gas Co. v. State Corporation Co., Ee ERD 55d boo ws 0 Sas 0 08s 50 Wales Oh 13, 19 O’Meara v. Union Oil Co., 212 La. 745, 33 So.2d 506 DPE Uiroas sok ckatenbess bana vecdieeynueuns 18 Phillips Petroleum Co. v. Wisconsin, 374 U.S. 672 ree ae See as 5, 20 Port of Boston Marine Terminal Assn. v. Rederiaktie- bolaget Transatlantic, 400 U.S. 62 (1970) ........ 18 Porter v. O’Neal, 205 La. 445, 17 So.2d 622 (1944) .... 18 Shell Oil Co., et al., Memo. Op. No. 382, 29 F.P.C. 498 PED 5 kaa b-ee phases HORA eae HAA atan 00k 16 Shell Oil Co. v. FPC, 334 F.2d 1002 (3rd Cir. 1964) .... 16 Socony Mobil Oil Co. v. Brooklyn Union Gas Co., 299 fs Bg OR er eee 12 —. v. Lawyers Title Insurance Corporation, 329 Oe Cae See OR, OTOP: hina c co vccccncccess 18 ee ee Se Table of Authorities Continued iii Page Sunray Mid-Continent Oil Co. v. FPC, 364 U.S. 137 SE ok bc cE Raa ks ouak bh ebs> bes cases tas 21 Tenneco Oil Co. v. FERC, 580 F.2d 722 (5th Cir. 1978) . 18 Texas & Pacific R. Co. v. American Title € Timber Co., ey ao ike. a ion’ ewan x veh b's ese we 13 United Gas Improvement Co. v. Continental Oil Co., GE Gt | er ere rere 17, 20, 21 United Gas Pipe Line Co. v. Mobile Gas Service Corp., Be RN I Es ok OR edwin ne Cee bescppncns 13 United Gas Pipe Line Co. v. Memphis Light, Gas & Water Division, 358 U.S. 103 (1958) ............ 13 United States v. Western Pacific R. Co., 352 U.S. 59 CEE Set Fad £366 OCA bs Chota EAA sae aed 15-16, 18 United States Navigation Co. v. Cunard Steamship Co., SE AE I SEE 6 Ck 6 xc nadine soo cucu eheen sun West Texas Gathering Co., 29 F.P.C. 510 (1962) ..... 16 STATUTES: Code of Federal Regulations, Title 18, §§ 154.92, 154.93, I 3 5s ek Gang 6 eRe N Na oe 4 DEE L0G inv hs ceed POETS Ss ene heaei 21 Federal Power Act, 41 Stat. 1063, as amended, 16 USC fk Re ee er eee ye rer Tee 12 Mineral Leasing Act, 30 USC §§ 226, et seq. .......... 7 Natural Gas Act, 52 Stat. 821, as amended, 15 USC _ eg SE GE SP eee eee er ES Tes ee ee passim Natural Gas Act, 52 Stat. 821, as amended, 15 USC § 717, et seq. ED. son gdh KOSS Wis ko eeeh tds dion 4,5 NE i Nak hi a kee cach w edie aheeen 4, 23 RSE, AP Rete Sree arene ere an rene 3 DEEL -s Vv. Arkansas Louisiana Gas Company Opinion on Defendant's Motion for New Trial Limited To Reargument and Supplement To Motion for New Trial and Opinion on Plaintiffs’ Motion for New Trial Limited To A Rehearing and Motion for Modification of Judgment The defendant in its motion and supplemental motion for a new trial strenuously argues that it did not breach Section 8(d) of the contract with plaintiffs. After carefully considering the arguments made, it is still my opinion that insofar as 8(d) is concerned the effect is (and should be) the same regardless of whether P-45 was executed by the United States as lessor or had been executed by a private party as lessor; that P-45 gave the lessor, the United States, the right to exercise every inci- dent of ownership of its royalty and when it elected to be paid in value it had the unusual right to fix the value of the production upon which its royalty payments were cal- culated, all of which rights are consistent with ownership of thd royalty by the lessor and a purchase of gas by de- fendant-pipeline operator; that this Court is dealing with the construction of the Louisiana law, Section 8(d) of Exhibit P-1, which was intended to have a broad applica- tion, to apply to gas from ‘‘any’’ wells located in the Sligo Gas Field purchased by defendant, and with the purpose of protecting plaintiffs against a rise in the purchase price of gas that might be paid by defendant within the Sligo Field during the long twenty-eight year term of the con- 40a tract by cutting across some of the traditional lines usually associated with such contracts; the lease from the United States, Exhibit P-45, is to be construed in the light of such intent and purposes and, insofar as Section 8(d), in accord- ance with Louisiana law. Defendant relies on the case of Wallis v. Pan American Petroleum Corporation, 384 U.S. 63; 16 L.Ed 2d 368; 86 Sup.Ct. 1301, but that ease specifically held that the federal common law does not govern the dealings of private par- ties in an oil and gas lease validly issued by the United States under the Mineral Leasing Act of 1920, and that the decision of the case would depend upon state law. The court refused to extend the application of federal law be- yond the initial grant of the lease therein involved and even refused the argument ‘‘that federal law retains its initial hold on the lease until existing equities are re- solved.’’ Cases cited in that decision which did extend federal law to govern the outstanding equities existing at the time of an original grant of land were distinguished and ‘‘explained by a specific federal interest found in con- flict with local law.’’ Other cases were distinguished where there was no specific federal interest, because ihere was no conflict with local law. See 16 L.Ed 2d 369, at page 375. In the instant case there is also no specific federal interest in the construction of the contract between plaintiff and de- fendant and Section 8(d) thereof and, as stated in this Court’s previous opinion, there is a conflict with local law. The defendant here has relied on the case of Miree v. United States, 538 F. 2d 643, in arguing that federal law should control in the construction of the lease from the United States, P-45, insofar as its effect on Section 8\d). The facts of that case were that DeKalb County, Georgia, entered into an agreement with the Federal Aviation Ad- ministration whereby in return for a grant of money by that agency DeKalb County gave the FAA certain assur- ances, among which were its promises that it would oper- ate its airport for the use and benefit of the public, main- 4la tain it in a safe and serviceable condition, and limit use of adjacent land so that it would not interfere with the safe use of the airport. Thereafter, a jet aircraft crashed after ingesting birds swarming over the airport and feeding on the adjacent county garbage dump. The persons injured and representatives of the persons thus killed filed suit against DeKalb County as third-party beneficiaries under the county’s agreement under the FAA. The United States Court of Appeals, Fifth Circuit, held in an en banc decision held that the Federal Common Law would apply, not the law of Georgia. Five judges of the court joined in a dis- senting opinion. The dissent in the above cited case sets forth principles and authorities which apply to the facts of the instant case. The facts of the instant case are at least two steps removed from those in the above cited case: (1) because plaintiffs here are not suing as third-party beneficiaries of the agree- ment with the United States, but are seeking to enforce an entirely Louisiana contract and provision 8(d) thereof. (2) the Federal Government is not a party to this suit and should have no particular interest in the outcome of this lawsuit. The interest of the Federal Government in the construction of Exhibit P-1 and Section 8( d) thereof is too remote to require the application of federal law, but the State of Louisiana has an interest in construing this Loui- siana contract and Section 8(d) thereof in the same fashion regardless of whether the triggering mechanism be a pur- chase of gas from a private individual or the United States. Defendant likewise relies on the case of Murphy Corpo- ration v. Fontenot, 225 La. 379; 73 So.2d 180, for the prop- osition that the Supreme Court of the State of Louisiana has held that ‘‘the fugitive oil and gas when captured did not belong to the Federal Government but to private own- ers’’. The case did not involve an attempt to collect sever- ance tax on the entire 8/8ths of the production from the 42a lease, but only that 6/8ths portion belonging to the lessees. The opinion states on Page 182 ‘‘protective measures from the drainage were sought and secured by the Government’s selling exploratory rights to private purchasers and lessees who became the owners of all the severed minerals when they were captured, except a 2/8th royalty paid the U.S. Government.’’ At Page 183 the opinion used the following language ‘‘—and the Government retained 2/8ths royalty rights in the oil and gas produced—’’. Actually the opinion did not address the question of the legal title of the 2/8ths production, but if so then the opinion excepts the ‘‘2/8ths royalty paid the U. S. Government”’ and seems contrary to defendant’s contentions. The plaintitfs in their motion contend that the case of Interstate National Gas Company, Inc., et al v. Mississippi River Fuel Corporation, 220 La. 43; 55 So.2d 775, was not the authority for the proposition cited by the Court in this ease. The decision of the Louisiana Supreme Court there construed a gas purchase contract, the question being whether or not the contract and the amendment thereto resulted in a debt which accrued before 1938, the date the National Gas Act went into effect, or whether or not the result was a price increase that was to go into effect in 1944. The Court found that it was not an accrued debt, but rather a part of a price increase and plaintiffs had failed to apply to the Federal Power Commission as required by the National Gas Act (and even though the parties had contracted therefor), plaintiff was denied recovery. For this reason the decision does have an application to the facts of this case. Plaintiffs also contend that the decision of this Court is contrary to that of other state judges and the federal court in this case in recognizing a defense under the National Gas Act, but my understanding of those decisions is that those courts looked to see whether or not plainiiff stated a cause of action and permitted the case to go to trial. De- 43a fenses based upon the National Gas Act, which are affirma- tive defenses, were to be pled and proved by the defense, as was done in this case. Plaintiffs properly point out that one plaintiff, S. G. Myers, did not acquire his interest in the properties until December 1, 1972, and would not be subject to the reduction of 68% imposed by the Court. For this reason it is my opinion that Mr. Myers is entitled to his total damages of $130,215.91, but all other damages were properly calcu- lated and are to remain the same. The motion for new trial and supplemental motion for new trial filed by defendant is denied. The plaintiffs’ motion for new trial limited to a re-hear- ing and motion for modification of judgment is granted limited to re-argument and, the re-argument having been had, let there be judgment in favor of plaintiffs and against defendant all as previously granted, except that the amount of damages awarded to Sidney G. Myers is fixed at $130,215.91, instead of the amount originally stated. December 2nd, 1977. /8/ C. J. Bourn, Jr. C. J. Bolin, Jr. District Judge 44a APPENDIX H FIRST JUDICIAL DISTRICT COURT CADDO PARISH, LOUISIANA NuMBER 225,699 Frank J. HALL, ET AL VERSUS ArKansas Louisiana Gas CoMPANY Judgment This case having come on regularly for trial on its legal merits on September 27, 1976, and the trial of said case having been concluded on January 14, 1977; and the case having been submitted for decision on June 20, 1977, after the completion of oral arguments and the filing of written briefs, the Court having found the law and the evidence to be in favor thereof and for reasons assigned in written Opinions dated October 14, 1977 and December 2, 1977, which have been filed in the record herein; Ir Is OnpERED, ApsupGEep AND Decreep that there be judg- ment herein in favor of the following Plaintiffs against the Defendant, Arkansas Louisiana Gas Company, awarding to said Plaintiffs the sums as hereinafter set forth, to wit: Frank J. HALL — $135,413.44 Vira. J. Haut, widow — 36,930.88 Cartyte W. Ursan, Trustee under Will of H. M. Harre.u — 202,954.56 Joun K. Harre.u, Sr. — 25,368.96 James E. HarreELi — 25,368.96 Exva L. Weiss, widow — 56,853.12 45a NationaL AMERICAN Bank, Executor under Will of Seymour Weiss — 56,853.12 T. F. Paityaw — 1,187.84 W. O. CocHran — 4,644.16 D. B. McConnetu — 42,301.76 James A. Nor, Jr. and C. T. MuNHOLLAND, Testamentary Executors under Last Wills of Mr. and Mrs. James A. Nog — 153,128.96 S. G. Myers — 130,215.91 Asa Benton ALLEN — 21,530.24 ELAINE ALLEN — 20,874.88 Ir Is FurtHer Orperep, ApyupGED AND Decreep that the above and foregoing Plaintiffs are awarded legal interest on the above and foregoing sums from January 1, 1976, until paid and for all costs of this proceeding. It Is FurtHer Orperep, ADJupGED AND Decreep that there be judgment in favor of the Defendant, Arkansas LovuisIANA Gas Company, rejecting the demands of the Plaintiff, W. E. Hau, Jr., at his cost. JupGMENT Renverep herein by virtue of written Opinions dated October 14, 1977 and December 2, 1977, respectively, which are filed in the record of this proceeding. JupGMENT Reap anv Sianep on December 5, 1977, at Shreveport, Louisiana. /s/ C. J. Bouin, Jr. C. J. Bolin, Jr. District Judge 46a APPENDIX I FIRST JUDICIAL DISTRICT COURT CADDO PARISH, LOUISIANA NuMBER 225,699 Frank J. Hats, ET AL VERSUS ArxKansas LovisianA Gas CoMPANY Opinion For decision is defendant’s exception to the jurisdiction of this Court. The plaintiffs seek damages for defendant’s alleged breach of contract. Plaintiffs contend that in 1961 defendant began buying Sligo Field gas from the United States government at a price higher than was being paid to plaintiffs for their gas under the 1952 contract entered into between defendant and plaintiffs or plaintiffs’ prede- cessors in title. Plaintiffs contend that this activated the Favored Nations clause of the contract, Section (D), which would require defendant to pay to plaintiffs a price equal to the highest price paid the government. Defendant con- tends that this Court does not have jurisdiction. This Court clearly has jurisdiction under the United States Supreme Court decision in Pan-American Petroleum Corporation vs. Superior Court of Delaware, 81 S. Ct. 1303 (1961). There the Court held that claims arising under state law, in that case a claim sued in contract or quasi-contract, were a proper subject for a state court to exercise jurisdic- tion. The Court further stated that this jurisdiction was not abrogated by the Natural Gas Act. Defendant’s declinatory exception is without merit and is therefore overruled. This Court has carefully read the briefs which able coun- sel for plaintiffs and defendant have filed, as well as the supplemental letters and attachments. We mention this for 47a the purpose of making it clear to counsel that we have con- sidered all points which have been raised, since the briefs filed by counsel will not be part of the record which will be considered by an appellate court. July 30, 1975. /s/ James E. Cuark Judge “ 48a APPENDIX J NATURAL GAS ACT United States Code, Title 15 §717c. Rates and Charges: Schedules: Suspension of New Rates (a) All rates and charges made, demanded, or received by any natural-gas company for or in connection with the transportation or sale of natural gas subject to the juris- diction of the Commission, and all rules and regulations affecting or pertaining to such rates or charges, shall be just and reasonable, and any such rate or charge that is not just and reasonable is declared to be unlawful. (b) No natural-gas company shall, with respect to any transportation or sale of natural gas subject to the juris- diction of the Commission, (1) make or grant any undue preference or advantage to any person or subject any per- son to any undue prejudice or disadvantage, or (2) main- tain any unreasonable difference in rates, charges, service, facilities, or in any other respect, either as between locali- ties or as between classes of service. (ce) Under such rules and regulations as the Commission may prescribe, every natural-gas company shall file with the Commission, within such time (not less than sixty days from June 21, 1938) and in such form as the Commission may designate, and shall keep open in convenient form and place for public inspection, schedules showing all rates and charges for any transportation or sale subject to the juris- diction of the Commission, and the classifications, practices, and regulations affecting such rates and charges, together with all contracts which in any manner affect or relate to such rates, charges, classifications and services. (d) Unless the Commission otherwise orders, no change shall be made by any natural-gas company in any such rate, charge, classification or service, or in any rule, regulation or contract relating thereto, except after thirty days’ notice to the Commission and to the public. Such notice shall be 49a given by filing with the Commission and keeping open for public inspection new schedules stating plainly the change or changes to be made in the schedule or schedules then in force and the time when the change or changes will go into effect. The Commission, for good cause shown, may allow changes to take effect without requiring the thirty days’ notice herein provided for by an order specifying the changes so to be made and the time when they shall take effect and the manner in which they shall be filed and published. (e) Whenever any such new schedule is filed the Com- mission shall have authority, either upon complaint of any State, municipality, State commission or gas distributing company, or upon its own initiative without complaint, at once, and if it so orders, without answer or formal pleading by the natural-gas company, but upon reasonable notice, to enter upon a hearing concerning the lawfulness of such rate, charge, classification, or service; and, pending such hearing and the decision thereon, the Commission, upon filing with such schedules and delivering to the natural-gas company affected thereby a statement in writing of its rea- sons for such suspension, may suspend the operation of such schedule and defer the use of such rate, charge, classi- fication, or service, but not for a longer period than five months beyond the time when it would otherwise go into effect; and after full hearings, either completed before or after the rate, charge, classification, or service goes into effect, the Commission may make such orders with refer- ence thereto as would be proper in a proceeding initiated after it had become effective. If the proceeding has not been concluded and an order made at the expiration of the sus- pension period, on motion of the natural-gas company mak- ing the filing, the proposed change of rate, charge, classifi- cation, or service shall go into effect. Where increased rates or charges are thus made effective, the Commission may, by order, require the natural-gas company to furnish a bond, to be approved by the Commission, to refund any 50a amounts ordered by the Commission, to keep accurate ac- counts in detail of all amounts received by reason of such increase, specifying by whom and in whose behalf such amounts were paid, and, upon completion of the hearing and decision, to order such natural-gas company to refund, with interest, the portion of such increased rates or charges by its decision found not justified. At any hearing involving a rate or charge sought to be increased, the burden of proof to show that the increased rate or charge is just and rea- sonable shall be upon the natural-gas company, and the Commission shall give to the hearing and decision of such questions preference over other questions pending before it and decide the same as speedily as possible. June 21, 1938, c. 556, § 4, 52 Stat. 822; May 21, 1962, Pub.L. 87-454, 76 Stat. 72. §717d. Fixing Rates and Charges: Determination of Cost of Production or Transportation | (a) Whenever the Commission, after a hearing had upon its own motion or upon complaint of any State, munici- pality, State commission, or gas distributing company, shall find that any rate, charge, or classification demanded, ob- served, charged, or collected by any natural-gas company in connection with any transportation or sale of natural gas, subject to the jurisdiction of the Commission, or that any rule, regulation, practice, or contract affecting such rate, charge, or classification is unjust, unreasonable, unduly dis- criminatory, or preferential, the Commission shall deter- mine the just and reasonable rate, charge, classification, rule, regulation, practice, or contract to be thereafter ob- served and in force, and shall fix the same by order: Pro- vided, however, That the Commission shall have no power to order any increase in any rate contained in the currently effective schedule of such natural gas company on file with the Commission, unless such increase is in accordance with a new schedule filed by such natural gas company; but the Commission may order a decrease where existing rates are 5la unjust, unduly discriminatory, preferential, otherwise un- lawful, or are not the lowest reasonable rates. (b) The Commission upon its own motion, or upon the request of any State commission, whenever it can do so without prejudice to the efficient and proper conduct of its affairs, may investigate and determine the cost of the pro- duction or transportation of natural gas by a natural-gas company in cases where the Commission has no authority to establish a rate governing the transportation or sale of such natural gas. June 21, 1938, c. 556, § 5, 52 Stat. 823. 52a Federal Power Commission Regulations Under The Natural Gas Act, Code of Federal Regulations, Title 18 § 154.92 Filing of Rate Schedules By Independent Producer. (a) Every independent producer who on or since June 7, 1954, has engaged in the interstate transportation or sale of natural gas subject to the jurisdiction of the Commission shall on or before December 1, 1954, filed with the Commis- sion rate schedules, as defined in § 154.93, setting forth the terms and conditions of service and all rates and charges for such transportation or sale effective on June 7, 1954. To each such rate schedule there shall be attached a statement showing actual billing for a recent month in sufficient de- tail to show how the billing amount is determined. (b) Every independent producer who subsequent to the effective date of this part, proposes to initiate an interstate transportation or sale of natural gas subject to the juris- diction of the Commission to an existing or new customer shall file with the Commission not less than 30 days nor more than 90 days prior to the date such transportation or sale is proposed to be initiated a rate schedule as defined in § 154.93, setting forth the terms and conditions of service and all rates and charges for such transportation or sale. To each such rate schedule there shall be attached a state- ment showing estimated sales a.d billing for the first month of service, in sufficient detail to show method of billing and prices used. The statement shall also give the proposed date of commencement of service. A complete copy of all material shall be furnished to each purchaser under the rate sched- ule. With each such filing there shall be submitted a list of parties to whom such material has been mailed. (c) Every independent producer who transports or sells less than 100,000 Mcf annually of natural gas subject to the jurisdiction of the Commission may, in lieu of the require- ments of paragraphs (a) and (b) of this section file a state- 53a chaser, and (4) the geographical location (field, county, and State) at which delivery is made. (d)(1) Every independent producer seeking authority to render natural gas service previously authorized by the Commission, as successor in interest in all the properties or other rights covered by a particular rate schedule, shall file three copies of the instrument of assignment whereby the assignee acquired the properties (or rights therein) in- volved, along with a request that the assignor’s rate schedule be redesignated as the rate schedule of the assignee. He shall also file three copies of an informational summary, in the form prescribed in § 250.8 of this chapter, for each con- tract of sale or transportation of gas involved in the assign- ment. (2) Where the authority being sought under subpara- graph (1) of this paragraph relates only to an assigned por- tion of the rights covered by the rate schedule of the as- signor, the assignee shall file, as his rate schedule, three copies of the assignor’s basic contract of sale, as amended, and of the instrument of assignment together with the in- formational summary required by subparagraph (1) of this paragraph. (3) If the rate schedule of the assignor relating to the rights assigned is in effect subject to refund or if the sale is being made by the assignor under temporary authoriza- tion subject to a rate refund condition, authority to render service will be granted to the assignee only upon condition that he file assurance by way of bond or undertaking that he will refund, at such times and in such amounts to such persons as the Commission may find to be entitled thereto any portion of the rate which had been permitted to become effective pursuant to 4 154.102 or the rate condition in the assignor’s temporary authorization as may be found by the Commission not to be justified. Assignee’s obligation to refund, in the absence of his voluntary assumption of some greater proportion of assignor’s liability, shall attach as of 54a the effective date of the Commission’s order granting the assignee a certificate or temporary certificate as the base may be unless otherwise ordered or provided. (e) Any jurisdictional natural gas company that main- tains a rate schedule on file with the Commission or makes application to have a rate schedule approved by this Com- mission or modifies any existing or proposed rate schedule must, in addition to the requirements of this or any other section, complete and submit Form No. 108, or applicable schedules thereof, pursuant to the direction of § 260.6 of this chapter. [Order 174-B, 19 F.R. 8808, Dec. 23, 1954, as amended by Order 278, 29 F.R. 3699, Mar. 25, 1964; Order 556, 41 F.R. 52443, Nov. 30, 1976] § 154.83 Rate Schedule Defined. For the purpose of §§ 154.92 through 154.101 ‘‘rate schedule’’ shall mean the basic contract and all supple- ments or agreements amendatory thereof, effective and applicable on and after June 7, 1954, showing the service to be provided and the rates and charges, terms, conditions, classifications, practices, rules and regulations affecting or relating to such rates or charges, applicable to the trans- portation of natural gas in interstate commerce or the sale of natural gas in interstate commerce for resale subject to the jurisdiction of the Commission: Provided, That in contracts executed on or after April 3, 1961, for the sale or transportation of natural gas subject to the jurisdiction of the Commission, any provision for a change of price other than the following provisions shall be inoperative and of no effect at law; the permissible provisions for a change in price are: (a) Provisions that change a price in order to reimburse the seller for all or any part of the changes in production, severance, or gathering taxes levied upon the seller; 55a (b) Provisions that change a price to a specific amount at a definite date; (b-1) Provisions that permit a change in price to the applicable just and reasonable area ceiling rate which has been, or which may be, prescribed by the Commission for the quality of the gas involved; and (c) Provisions that, once in five-year contract periods during which there is no provision for a change in price to a specific amount (paragraph (b) of this section), change a price at a definite date by a price-redetermination based upon and not higher than a producer rate or producer rates which are subject to the jurisdiction of the Commis- sion, are not in issue in suspension or certificate proceed- ings, and, are in the area of the price in question: Provided further, That any contract executed on or after April 2, 1962, containing price-changing provisions other than the permissible provisions set forth in the proviso next above shall be rejected. [Order 174-B, 19 F-.R. 8807, Dec. 23, 1954; as amended by Order 232, 26 F.R. 1983, Mar. 8, 1961; Order 232-A, 26 F.R. 2850, Apr. 6, 1961; 242 27 F.R. 1356, Feb. 14, 1962; Order 329, 31 F.R. 15485, Dec. 8, 1966] § 154.94 Changes In Rate Schedules. (a) No change shall be made in any rate, charge, or serv- ice in effect on and after June 7, 1954, for the interstate transportation or sale of natural gas in interstate com- merce subject to the jurisdiction of the Commission by any independent producer required to file rate schedules pur- suant to § 154.92, without first filing a change in rates pur- suant to section 4(d) of the Natural Gas Act and in ac- cordance with this section. (b) Every change in any rate schedule, rate, charge, classification or service effective or applicable to a sale 56a subject to the jurisdiction of the Commission as of June 7, 1954, and on file with the Commission, or required to be filed pursuant to 4 154.92, or in any rate schedule, rate, charge, classification or service effective or applicable to a sale subject to the jurisdiction of the Commission initiated subsequent to June 7, 1954, on file with the Commission, or required to be filed with the Commission pursuant to § 154.92 shall be filed with the Commission in triplicate not less than 30 days nor more than 90 days prior to the date such change in rate schedule is proposed to be made effec- tive. (ec) The operation of any provision of the rate schedule providing for future or periodic changes in the rate, charge, classification, or service after June 7, 1954, or the operation of any like provision in any initial rate schedule filed after June 7, 1954, shall constitute a change in rate schedule. (d) Any change in any rate schedule, rate, charge, clas- sification, or service provided in a rate schedule in effect on June 7, 1954, which by the terms of said rate schedule is to be operative after June 7, 1954 and prior to September 15, 1954, may be filed on less than thirty days’ prior notice, subject nevertheless to the right of the Commission to sus- pend any such proposed change, if the Commission in any ease shall, within thirty days after the date of filing, find it necessary to suspend such proposed change. If any such proposed change is suspended, the suspension period will begin with the designated effective date of such change. (e) With each change in rate schedule not constituting a change in rate level by any means there shall be submitted reasons, nature and basis for the proposed change and the date upor which the change is proposed to be made effec- tive. Changes in service such as compression, dehydration, etc., by either seller or buyer shall be considered as a change in the existing rate level. 57a (f) Notice of change in rate level. (1) An independent producer who has sold in interstate commerce 5,000,000 Mcf of gas or less annually in each year of his operations during the preceding five years and who is proposing a contractual change in rates, charges, etc., shall file the in- formation called for in the following form: Notice or INDEPENDENT Propucer Rate CHANGE FiLine 1. Producer (Name) ay aa SN OO ee ay a ORE 2. Buyer : ee 3. Location of sale ies ace aaa 4. (a) FPC gas rate schedule No. .......... (b) Basic contract date 5. (a) Type of increase (Periodic, favored-nation, renegotiated, etc.) (b) Contract basis e©e2@0 6:8 © SOG 0 O88 26088 FCOFBH4COHHTEHEKCOKEOS CO 68 SIF O82 O10 Ce bE OO *eeeneeve adit Bde ede de he te ee Ee er eT. OE eS a 2 eee oe oe a aes (Proposed Effective Date) 58a 6. Rates in cents per Mcf at ...... oo psia: (Specify) Present effective rate: tg ” Ble rate Tax Reimbursement yeuwese ds eee (specify separately ) Total rate (b) Proposed rate: di Bass rate Tax Reimbursement se ia he Pe (specify separately ) T otal rate ** 480080686 0:9 8 ©¢ 2 sth comes Sea eeasD aes eS > eres OC e,© “ere 7. Statement of estimated sales volume and comparative revenues for the twelve-month period succeeding the proposed effective date (shown with volume and rates at the same psia as in Item 6): Estimated volume Revenues at present (Mcf) eff ective rate ate Revenues at Difference in proposed rate revenues *e oeereveeeevee ra. Qe eb ee SS TRO Oe St 8 SS Pee BP eS he Ee PAD “ee 8. Average Btu content per cubic foot of the gas sold dur- ing the last twelve-month period Spyate: ; estimated for the succeeding twelve-month period .. teens (Date) (Signed) neve Rieter ka: x40) Seliereten reo eee eee eee enereeeee eee e ee ee Fie #8 1 Dehydration, compression, Btu adjustment, ete. 59a (2) An independent producer who has sold in interstate commerce more than 5,000,000 Mef of gas annually in any year during the preceding five years and who is proposing a contractual change in rate level to a price below or equal to the applicable area price level for increased rates as set out in the Statements of General Policy No. 61-1, as amended (§ 2.56 of this chapter), shall file the information required in subparagraph (1) of this paragraph and may, at his option, submit a statement in support of the pro- posed change but shall, in any event, submit additional in- formation in explanation of any pertinent circumstance not specifically required by the form. (3) An independent producer who has sold in interstate commerce more than 5,000,000 Mcf of gas annually in any year during the preceding five years and is proposing a contractual change in rate level to a price higher than the applicable area price level for increased rates set out in the Statement of General Policy No. 61-1, as amended (§ 2.56 of this chapter), and any independent producer (re- gardless of the quantity of annual sales) proposing an ex parte or unilateral rate change shall file, in addition to the information required by subparagraph (1) of this para- graph, a full statement in support of the proposed change in rate. (g) A complete copy of all material filed pursuant to this section shall be furnished to each party to the rate schedule. With each such filing there shall be submitted to the Commission a list of the parties to whom such material has been furnished. {Order 174-B, 19 F.R. 8807, Dec. 23, 1954; as amended by Order 202, 23 F.R. 3715, May 29, 1958; Order 217, 24 F.R. 9469, Nov. 25, 1959; Order 240, 27 F.R. 252, Jan. 10, 1962] 60a § 154.95 Oral Agreemenis. If any rate schedule or change in a rate schedule is not in writing, its terms shall be reduced to writing and filed with the Commission. If the parties are not able to agree to the precise terms within a reasonable time, the applicant shall file, in triplicate, a statement of his understanding of the agreement, serving a copy thereof on the other parties to the agreement. Such other parties, in the latter event, may subsequently file, in triplicate, their understanding of the agreement. [Order 174-B, 19 F.R. 8809, Dec. 23, 1954, as amended by Order 202, 23 F.R. 3716, May 29, 1958] § 157.40 Exemption of Small Producers From Certain Filing Requirements. (a) Definitions. (1) A “Small Producer” is an independ- ent producer of natural gas as defined in § 154.91 of this chapter, who is not affiliated with a natural gas pipeline company and whose total jurisdiction sales on a nationwide basis, together with such sales of “affiliated producers” are not in excess of 10,000,000 Mef at 14.65 p.s.i.a during any calendar year. As used in this section, the term “jurisdic- tional sales” include: volumes of gas paid for but not taken under prepayment clauses or otherwise, and volumes of gas sold under other independent producer rate schedules in the proportion that the independent producers seeking to come within this section has an interest in such sales, but does not include sales made pursuant to percentage sales contracts. (2) “Affiliated producers” are persons who, directly or in- directly, control, or are controlled by, or are under com- mon control with, the applicant producer. Such control exists if the producer has the power to direct or cause the direc- tion of, or as a matter of acual practice does direct, the 6la management and policies of another producer, whether such power is exercised alone or through one or more inter- mediary companies, or pursuant to an agreement, and whether such power or practice is established through a ma- jority or minority ownership or voting of securities, com- mon directors, officers 0: stockholders, voting trusts, hold- ing trusts, associated companies, relationship of blood or marriage, or any other direct or indirect means. For the further purposes of this section, the term “agreement” she!! not include any agreement for the operation of a nat- urai ss producing property or a plant processing natural gas or any joint venture, partnership, nominee, or other type of agreement pertaining to the joint exploration for and development and operation of oil and gas properties, unless such agreement otherwise establishes the power of one producer to direct or cause the direction of the manage- ment and policy of another producer. Also, for the further purposes of this section, the existence of one or more di- rectors of an applicant producer in common with another producer shall be deemed a conclusive presumption of affili- ation and control. (3) “Small producer sales” are (i) sales by a small pro- ducer of his own interests under his own contracts; (ii) sales of all interests under a small producer’s contract if producers not qualifying as smail producers have interests which in the aggregate are no greater than 12% percent; and (iii) sales of a small producer’s interests under another producer’s contract. (b) Procedure for securing blanket’ small producer cer- tificate. (1) Small producers may apply for a blanket cer- tificate to cover all existing and all future jurisdictional sales that do not raise the producer’s total jurisdictional sales on a nationwide basis above 10,000,000 Mcf during any calendar year. Applications by these producers shall in- clude the following information: (i) Total jurisdictional sales on a nationwide basis for the year preceding the ap- ~ 62a plication; (ii) a list of outstanding certificates and rate schedules together with names and percentage of interest of other interest owners under such rate schedules; (iii) a list of outstanding rate schedules of others in which ap- plicant owns an interest together with applicant’s percent- age of interest; and (iv) the names of all owners (stock- holders, partners, joint venturers, etc.) of the applicant with an interest of 10 percent or more, their percentage of own- ership in the applicant and in any other natural gas com- pany, and any positions such owners may hold with an- other natural gas company. (2) An applicant for a blanket certificate who has no outstanding certificate issued by, or rate schedule filed with, this Commission for the sale of natural gas shall include the following information in his application: (i) A list of all contracts to sell natural gas in interstate commerce. (ii) Source of production, total rate and the annual vol- ume delivery obligations of the producer under each such contract, together with names and percentage of interest of other interest owners under each such contract, and (iii) A list of owners of the applicant with an interest of 10 percent or more, their percentage of ownership in the applicant and in any other natural gas company and any position such owners may hold with another natural gas company. (3) The application shall contain the information re- quired by the form set out in § 250.10 of this chapter. A con- formed copy shall be served upon each of the applicant’s purchasers. (c) Rate and certificate regulation under blanket certifi- cate. Small producers certificated hereunder shall be au- thorized to make small producer sales pursuant to existing and future contracts at the following rate levels: 63a ( 1) All sales of natural gas by small producers for re- sale in interstate commerce made in accordance with, and under the provisions of Opinion Nos. 699, et seq., shall be made at a maximum base rate of 130 percent of the appli- cable base ceiling rate established by the Commission in Opinion No. 699, et seq. ( 2) All sales of natural gas by smal! producers for resale in interstate commerce made in accordance with, and under the provisions of Opinion Nos. 749, et seq., shall be made at a maximum base rate of 35.0¢ per Mef except as provided for below: , (i) For gas produced in the Permian Basin Area, as de- fined by Opinion Nos. 662 and 662-A, and sold pursuant to contracts dated on or after October 1, 1968, small producers shall be entitled to collect a maximum base rate of 40.5¢ per Mef. (ii) For gas produced in the Rocky Mountain Area, as defined in Section 154.109(b) of the Commission’s Regula- tions and Opinion No. 699, et seq., small producers shall be entitled to collect a maximum base rate of 40.5¢ per Mef. The above rates are subject to any adjustments permitted or required under the particular order of general appli- eability involved. Such rate may be charged and received by the small producer and paid by the purchaser, as the lawful, just and reasonable rate approved by the Commis- sion pursuant to sections 4, 5, and 7 of the Act. However, no small producer shall be relieved from compliance with sec- tion 7(b) of the Natural Gas Act with respect to any small producer sale regulated hereunder. Rate regulation as pre- scribed herein shall not apply to any jurisdictional sales made by a small producer where the gas reserves relating thereto were acquired by the purchase of developed reserves in place from a large producer. Nothing done hereunder shall be recognized by the Commission as triggering any escalation clause in an existing contract involving a pro- 64a ducer not covered by a small producer certificate, except as provided in paragraph (f) of this section. (3) All sales of natural gas by small producers for resale in interstate commerce that qualify for the base ceiling rate of 93 cents per Mef set in Opinion No. 770-A shall be made at a maximum rate of 130% of that ceiling rate. (4) All sales of natural gas by small producers for resale in interstate commerce that qualify for the base ceiling rate of $1.42 per Mcf set in Opinion No. 770 shall be made at that ceiling rate. (d) Duration of the exemption. The exemption author- ized hereunder shall remain in effect for each small pro- ducer until the Commission on its own motion or on appli- cation terminates such certificate because the producer no longer qualifies as a small producer or fails to comply with the terms of the exemption. Upon such termination the pro- ducer will be required to file separate certificate applica- tions and individual rate schedules for future sales but the exemption will still be effective as to those made under contracts dated prior to such termination. (e) [Reserved] (f) Filings by large producers with respect to related resales. A large producer may file for the price specified in its related contract for the resale of any natural gas sold to it by a small producer pursuant to the exemption authorized hereunder. In determining whether to accept or suspend such a filing, we shall be guided by the rate level sought and the size of the differential between the purchase and resale price. A large producer under an area rate clause in its resale contract may file for the rate paid by it for gas purchased from a small producer as long as the rate does not exceed the just and reasonable rate prescribed in para- graph (c) of this section. (g) Filing of contracts and notification of abandonment. Pipeline purchasers and large producer purchasers shall 65a file, within 60 days of the execution thereof, each new con- tract and each contract amendment dated on or after March 18, 1971, for the sale of natural gas to them by a small producer pursuant to the exemption authorized hereunder, together with an estimate of the purchase volumes and the rate to be charged for the first full year after the com- mencement of deliveries with respect to each new contract and each contract amendment dedicating additiona! natural gas, and shall notify this Commission of the cessation of deliveries made by a small producer pursuant to the exemp- tion authorized hereunder within 60 days of such cessation. (h) Resale authorization for large producer. A large producer who has filed on or after July 15, 1971, an appli- cation for a certificate of public convenience and necessity for the resale of natural gas purchased from a small pro- ducer authorized to sell such gas pursuant to the blanket certificate provisions in paragraph (c) of this section may resell such gas at any time after the filing of its certificate application pending final Commission action thereon. Any amounts collected by a large producer for resales made pur- suant to this paragraph in excess of the rate finally deter- mined to be required by the public convenience and neces- sity for such resales shall be subject to refund with interest at 7 percent per annum. [Order 428, 36 F.R. 5601, Mar. 25, 1971, as amended by Order 428B, 36 F.R. 13384, July 21, 1971; Order 428-C, 37 F.R. 7591, Apr. 18, 1972; Order 428-E, 39 F.R. 26631, J uly 22, 1974; Opinion No. 742, 40 F.R. 41772, Sept. 9, 1975; Order 553, 41 F.R. 32213, Aug. 2, 1976; Order 553-A, 41 F.R. 40100, Sept. 17, 1976; 41 F.R. 50242, Nov. 15, 1976; 41 F.R. 56792, Dec. 30, 1976] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0039%3A1. Public record. Not legal advice.