Petition for Writ of Certiorari — Pennzoil Co. v. Associated Gas Distributors

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y, Office-Supreme Court, us |

85-139. FILED

JUL 25 1985

No. 85- ——

| ALEXANDER |. STEVAS,

| CLERK ~—

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

PENNZOIL COMPANY, et al.,

Petitioners,

ASSOCIATED GAS DISTRIBUTORS, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

CHARLES ALAN WRIGHT

727 East 26th Street

Austin, Texas 78705

(512) 471-5151

R. GORDON GOOCH

CHARLES M. DARLING, IV

THOMAS J. EASTMENT

BAKER & BOTTS

1701 Pennsylvania Ave., N.W.

Washington, D.C. 20006

(202) 457-5500

[Additional Of Counsel Listed Inside]

EARNEST OS: SL ATT Te A TE ST SR AEC

WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

AMOCO PRODUCTION COMPANY

William T. Benham

200 East Randolph Drive

Chicago, Illinois 60601

ARCO OIL AND GAS COMPANY

DIVISION OF ATLANTIC

RICHFIELD COMPANY

Michael G. Maloney

P.O. Box 2819

Dallas, Texas 75221

CHAMPLIN PETROLEUM COMPANY

B.J. Zimmerman

Kerry R. Brittain

Constance D. Coleman

801 Cherry Street, M.S. 4010

P.O. Box 7

Forth Worth, Texas 76101

CHEVRON U.S.A. INC.

James B. Atkin

Pillsbury, Madison & Sutro

1050 17th Street, N.W.

Suite 900

Washington, D.C. 20036

CITIES SERVICE OIL AND GAS

CORPORATION

Carmen Chidester Farrell

P.O. Box 300

Tulsa, Oklahoma 74102

CONOCO INc.

Ernest J. Altgelt, III

Carolyn S. Hazel

William G. Robb

P.O. Box 2197

McLean Building

Houston, Texas 77252

EXXON CORPORATION

Douglas W. Rasch

P.O. Box 2180

Houston, Texas 77001

GULF OIL CORPORATION

Anthony V. Sorrentino

David R. Stevenson

P.O. Box 3725

Houston, Texas 77253

MOBIL OIL CORPORATION

MOBIL OIL EXPLORATION &

PRODUCING SOUTHEAST INC.

MOBIL PRODUCING TEXAS &

NEW MEXxIco INC.

THE SUPERIOR OIL COMPANY

Robert D. Haworth

Robert A. Luettgen

Jay G. Martin

Nine Greenway Plaza

‘Suite 2700

Houston, Texas 77046

Carroll L. Gilliam

J. Paul Douglas

Kevin M. Sweeney

Grove, Jaskiewicz, Gilliam

and Cobert

1730 M Street, N.W.

Washington, D.C. 20036

MONSANTO OIL COMPANY

Kenneth R. Satterly

Walter L. Brignon

5051 Westheimer

1300 Post Oak Tower

Housten, Texas 77056

PENNZOIL COMPANY

John M. Young

John B. Chapman

Pennzoil Company

P.O. Box 2967

Houston, Texas 77001

PHILLIPS PETROLEUM COMPANY

PHILLIPS OIL COMPANY

C.J. Roberts

Larry Pain

Jennifer A. Cates

1258 Adams Building

Bartlesvilie, Oklahoma 74004

PLACID OIL COMPANY

Ronald D. Hurst

3900 Thanksgiving Tower

Dallas, Texas 75201

SHELL OFFSHORE INC.

SHELL WESTERN E&P INC.

Thomas G. Johnson

Eugene V. Callaway

One Shell Plaza

P.O. Box 2463

Houston, Texas 77001

SUN EXPLORATION AND

PRODUCTION COMPANY

Charles L. Spann

P.O. Box 2880

Dallas, Texas 75221-2880

TENNECO OIL COMPANY

HOUSTON OIL & MINERALS

CORPORATION

Glen E. Taylor

Phyllis G. Rainey

P.O. Box 2511

Houston, Texas 77001

TEXACO INC.

Karen A. Berndt

P.O. Box 52332

Houston, Texas 77052

UNION OIL COMPANY OF

CALIFORNIA

Lois Ellen Gold

Albert Sylvia III

P.O. Box 7600

Los Angeles, California

90051

QUESTIONS PRESENTED

1. Whether a court of appeals may use a motion filed

under the All Writs Act as a method of circumventing

the statutorily prescribed procedures for review of agency

orders.

2. Whether the court of appeals, by ignoring the statu-

tory procedures governing orderly judicial review, has

contravened the mandate of Section 506(a) of the Nat-

ural Gas Policy Act, 15 U.S.C. § 3416(a), and of 28

U.S.C. § 2112, which require review of orders of the Fed-

eral Energy Regulatory Commission on the record and

preclude piecemeal review of such orders in different

courts of appeals.

3. Whether the court of appeals, in circumventing stat-

utory procedures and reviewing only one aspect of an

agency order and leaving all other aspects of that order

subject to review in a separate proceeding in a separate

court of appeals, denied petitioners here their due process

rights to be heard at a meaningful time and in a mean-

ingful manner.

4. Whether the court of appeals impermissibly in-

truded upon the discretion of the Federal Energy Regu-

latory Commission to prescribe refund remedies and,

without the benefit of the complete agency record, va-

cated refund procedures prescribed by that agency to

effect such remedies.

LIST OF PARTIES TO THE PROCEEDING

The petitioners filing in this petition for a writ of

certiorari are: Amoco Production Company; ARCO Oil

and Gas Company, Division of Atlantic Richfield Com-

pany; Champlin Petroleum Company; Chevron U.S.A. Ine. ;

Cities Service Oil and Gas Corporation; CONOCO Inc.;

Exxon Corporation; Gulf Oil Corporation; Mobil Oil Cor-

poration; Mobil Oil Exploration & Producing Southeast

Inc.; Mobil Producing Texas & New Mexico Inc.; Pennzoil

Company; Phillips Oil Company; Phillips Petroleum Com-

pany; Placid Oil Company; Shell Offshore Inc.; Shell

Western E&P Inc.; Sun Exploration and Production

Company; Tenneco Oil Company; Texaco Inc.; The Su-

perior Oil Company; and Union Oil Company of Cali-

fornia.*

The respondents are American Iron and Steel Insti-

tute; American Paper Institute, Inc.; Associated Gas

Distributors; E] Paso Natural Gas Compar.; Interstate

Natural Gas Association of America; Laclede Gas Com-

pany; Lone Star Gas Company; Louisiana Land & Ex-

ploration Company; Michigan Wisconsin Pipeline Com-

pany (now ANR Pipeline Company); Mississippi River

Transmission Corporation; Natural Gas Pipeline Com-

pany of America; Northern Natural Gas Company;

Process Gas Consumers Group; Texas Gas Transmis-

sion Corporation; Transcontinental Gas Pipeline Corpo-

ration; United Gas Pipe Line Company; Valero Trans-

mission Company; and the Federal Energy Regulatory

Commission.

* Pursuant to Sup. Ct. Rule 28.1, a list of all parent companies,

subsidiaries (other than wholly-owned subsidiaries), and affiliates

of Petitioners is included in the Appendix at 153a-165a. This list is

limited to entities with stock or debt securities publicly traded in

the United States or Canada.

TABLE OF CONTENTS

Page

py se iy yt yy | -. en epee iv

Sr I I nc ac icasicichises ina Sia dui seca caoneietniohegbhcianal 1

IT UII sss benstdieicaeniepiteccdcetconisnrausasmebasiaideammsteiumbdccal 2

Se NU steiciinicsgsbicias dah Nicanceedihsindiccdebldeateagpleticciean Ce ial cle 2

STATEMENT OF THE CASB..Q.......c.cccsecencencesesses 2

REASONS FOR GRANTING THE WRIT .................... 7

A. The Decision Below Conflicts With Statutory

Provisions Governing Judicial Review and Well-

Settled Principles Approved By This Court And

The Courts Of Appeals ....................-..c.ccc-cccc-c0.. 10

B. The Action Of The Court Of Appeals Results In

Piecemeal Review Of The Same Agency Order

In Different Courts Of Appeals, In Contraven-

tion Of The Statute And The Interests Of Judi-

I IN haciicdibeceee eae oe 15

C. The Action Of The Court Of Appeals Denied

Producers Due Process Of Law .................. 19

D. The Court Of Appeals Failed To Defer To The

FERC’s Discretionary Authority To Fashion

Sune: OOO oo 21

i: Ree Geo e. 21

2. The court of appeals improperly substituted

its judgment for that of the agency 22

SSRN Scchlctinecesdsereiciuaise tee eter eee on 24

SUPPLEMENTAL APPENDIX ..................0. lb

(iii)

TABLE OF CITATIONS

Cases

Aetna Life Insurance Co. v. Haworth, 300 U.S.

A a calicsonsstencantecsnenssiamnicneinmnsancensnntenscasanh

American Farm Lines v. Black Ball Freight Serv-

Se BT TEE, GOR CID TO) nea ccennrinencnscercsrserissvscceeseenn

American Public Gas Association v. FPC, 555 F.2d

BE CE, GU. BTID eens snsccesesccasenessinnssaseinbincrcennses

Boston Gas Co. v. FERC, 575. F.2d 975 (1st Cir.

ao snes naieinananniiananinbadgtana

Buckley v. Valeo, 424 U.S. 1 (1976) ....................--,

Burlington Truck Lines Inc. v. United States, 371

Bi > MEER... snareninnnnmshinsennsnenseanniapannaanenn

CARB v. Delta Airlines, Inc., 367 U.S. 316 (1961)....

California Co. v. FPC, 411 F.2d 720 (D.C. Cir.

I nL scans celine pieenneelgaaieaiogs

Cerro Wire & Cable Co. v. FERC, 677 F.2d 124

1 a E.R er ee ee eer ere eure.

Cities of Anaheim and Riverside v. FERC, 692

pf hy ai © oll 3. ) EES EmeCrrr Es Deeeenes

Citizens te Preserve Overton Park, Inc. v. Volpe,

I a leseneabannans

City of Tacoma v. Taxpayers of Tacoma, 357 U.S.

I saa buansananaetens

Cleveland Board of Education v. Loudermill, ——

US. , 105 S.Ct. 1487 (1985) —._.____..

Dayton Power & Light Co. v. FPC, 251. F.2d 875

TI cc scalded

Department of Fish and Game v. FPC, 359 F.2d

165 (9th Cir.), cert. denied, 385 U.S. 932

a lenlae

Ecee, Inc. v. FERC, 611 F.2d 554 (5th Cir. 1980}...

Estate of French v. FERC, 603 F.2d 1158 (5th

i aS cep neaiaminedabenbuadilis

FPC v. Colorado Interstate Gas Co., 348 U.S. 492

EE ce one en ne eR

FPC v. Metropolitan Edison Co., 304 U.S. 375

i ll emia niainns

FTC v. Standard Oil Co. of Calif., 449 U.S. 232

OE SRE RE a IO oe Be Oe ert

General American Oil Co. of Texas v. FPv, 409

F.2d 597 (5th Cir. 1969)

Page

5, 13

12, 13

TABLE OF CITATIONS—Continued

Page

Goldberg v. Kelly, 397 U.S. 254 (1970) _............... 19

Interstate Natural Gas Association of America v.

FERC, 716 F.2d 1 (D.C. Cir. 1983), cert. denied,

—- US. , 104 S.Ct. 1615 (1984) _.............. passim

Interstate Natural Gas Ass’n of America v. FERC,

. £ BB BS yal Se: EA Recenpemcemen 6

Jordan v. United States District Court for Dist. of

Col., 233 F.2d 362 (D.C. Cir. 1956) ................... 14

Kerr v. United States District Court, 426 U.S. 394

2 BAAR IRR NERS ..<c (SAREE tng en 22

Mathews v. Eldridge, 424 U.S. 319 (1976) 19

Mazaleski v. Treusdell, 562 F.2d 701 (D.C. Cir.

DUET anictinisasathaceainndeates adeiiea tices taastuacaiinath cael tae a 19

Michigan Consolidated Gas Co. v. FPC, 167 F.2d

en MO 12

Mobil Oil Corp. v. FPC, 417 U.S. 283 (1974) ........ 22, 23

Motor Vehicle Manufacturers Association v. State

Farm Mutual Automobile Insurance Co., 463

ME BPRRIS Ma Rprrcmoertes Ne eae RP BO cine ees 20

National Organization for Reform of Marijuana

Laws v. Ingersoll, 497 F.2d 654 (D.C. Cir.

I Sa i a 14, 20

North Carolina v. Rice, 404 U.S. 244 (1971) _...... 18

Pan American Petroleum Corp. v. FPC, 268 F.2d

I A I, a 11

Pennzoil Co. v. FERC, 742 F.2d 242 (5th Cir.

i TERCERA SASS ar oe Peg LCE Te in TRE 16

Permian Basin Area Rate Cases, 390 U.S. 747

RRP EIR arc Re SARI SEC rence ROI eect LNG are 22

Public Service Comm’n of N.Y. v. FPC, 543 F.2d

ee i I I incite chkcictele ct iet 12

Southern Union Gathering Co. v. FERC, 687 F.2d

I a I 11

United States v. Green, 499 F.2d 538 (D.C. Cir.

Aaa REA REE ee ee Peo ON eT Om 14

United States ex rel. McLannan v. Wilbur, 283

I 20, 22

Utah Power & Light Co. v. FPC, 339 F.2d 436

i MPR E en NER Dk ee ee 11

Vermont Yankee Nuclear Power Corp. v. NRDC,

435 U.S. 519 (1978) 00... 23

TABLE OF CITATIONS—Continued

Page

Whitney National Bank v. Bank of New Orleans

& Trust Co., 379 U.S. 411 (1965) -....... eaidientoa 12

Will v. Calvert Five Insurance Co., 437 U.S. 655

ESN AEE Eek ae eo ne ee ee 22

Will v. United States, 389 U.S. 90 (1967) _............. 22

Statutes

Federal Power Act, 16 U.S.C. § 791, et seq.

RE I RN 5 RCAC eR CR Ae 7,8

Section $318, 16 U.S.C. § S208 ............................ 1l

Section 313(b), 16 U.S.C. § 8257(b) —........... 8

Natural Gas Act, 15 U.S.C. § 717, et seq. (1982).... 3, 7,8

RR BE oR: RES na 13

Section 19(b), 15 U.S.C. § 717r(b) —.......... 8, 12,15

Natural Gas Policy Act, 15 U.S.C. § 3301-3432

RUTTEN chien nics cieacetiniidlnscagiedhaiacepaliaddanindatteceeainscitaitisiin tin 3

Section 102-109, 15 U.S.C. §§ 3312-3319 _........ 3

Section 116, 15 U.S.C. § SBR0 .............................. 4

Section 504, 15 U.S.C. § 3414 ow. 17

Section 506(a), 15 U.S.C. § 3416 (a) —.............. passim

Section 506(a) (2), 15 U.S.C. § 3416 (a) (2) ....passim

Section 506(a) (4), 15 U.S.C. § 3416 (a) (4) ....passim

Section 506(b), 15 U.S.C. § 3416(b) —............. passim

Title 28, United States Code

ik FoR G tt) | SeneeeemneenN 2

The All Writs Act, 28 U.S.C. § 1651 (1982) ....passim

28 U.S.C. $2112(a) (1962) ............................... passim

28 U.S.C. $2112(b) (1962) ............................... 16, 23

Administrative Authorities and Regulations

Final Rules for Part 270, et al., 46 Fed. Reg. 49077

(July 23, 1980) (Order No. 93), on reh’g, 46 Fed.

Reg. 24537 (May 1, 1981) (Order No. 93-A),

reh’g denied, 47 Fed. Reg. 614 (Jan. 6, 1982),

vacated in part, Interstate Natura! Gas Associa-

tion of America v. FERC, 716 F.2d 1 (D.C. Cir.

1983), cert. denied, —— U.S. ——, 104 S.Ct.

EE SEITE isc sacshaticeehiptudanaesannidianipaphsaiicnetiniandibalsaegilingipaiio 2

vii

TABLE OF CITATIONS—Continued

Page

Interpretative Rule For Btu. Measurement Stand-

ard Under The Natural Gas Policy Act of 1978,

Order No. 356, 49 Fed. Reg. 3072 (Jan. 25,

IEEE tech daaledesnleaieddeeincapibnaiiaddeanttce tate a ices ee Lee 3

Refunds Resuiting From Btu Measurement Ad-

justments, Order No. 399, 49 Fed. Reg. 37735

(Sept. 26, 1984), on reh’g, Order No. 399-A, 49

Fed. Reg. 46353 (Nov. 26, 1984), petitions for

review pend’g sub nom. Mobil Oil Exploration &

Producing Southeast Inc., et al. v. FERC, No.

tS ER ee pent ee passim

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

No. 85- —_——

PENNZOIL COMPANY, et al.,

Petitioners,

ASSOCIATED GAS DISTRIBUTORS, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COU ‘T OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Petitioners Pennzoil Company, et al. (“Producers’’)

pray that a writ of certiorari issue to review the decision

of the United States Court of Appeals for the District of

Columbia Circuit in Nos. 81-1690, et al., entered on

March 5, 1985.

OPINIONS BELOW

The opinion of the court of appeals (App. la-15a) is

reported at 756 F.2d 166 (D.C. Cir. 1985). The orders

denying rehearing (App. 132a-135a (Scalia, J., dissent-

ing) ) and suggestions for rehearing en banc (App. 136a

(Bork, Tamm, and Wright, J.J., not participating) ) are

not reported.

The orders of the Federal Energy Regulatory Commis-

sion (“FERC”) (App. 16a-80a and 81la-126a) are re-

ported at 49 Fed. Reg. 37735 (Sept. 26, 1984) and 49

Fed. Reg. 46353 (Nov. 26, 1984).’

JURISDICTION

The judgment of the court of appeals (App. 130a-

131a) was entered on March 5, 1985. The court of ap-

peals denied petitions for rehearing on May 6, 1985

(App. 132a-185a (Scalia, J., dissenting) ) and sugges-

tions for rehearing en danc on May 15, 1985 (App. 136a

(Bork, Tamm, and Wright, J.J., not participating) ).

The jurisdiction of this Court is invoked under 28

U.S.C. § 1254(1) (1982) and 15 U.S.C. § 3416(a) (4)

(1982).

STATUTES

Sections 506(a) and (b) of the Natural Gas Policy

Act (NGPA), 15 U.S.C. §$ 3416(a) & (b) (1982), gov-

ern judicial review of FERC orders issued under the

NGPA; those provisions are set forth at App. 141a-144a.’

The All Writs Act, 28 U.S.C. § 1651 (1982), and 28

U.S.C. § 2112 (1982) also are germane to the instant

case and are reproduced at App. 144a-148a.

The regulations affected by the decision of the court of

appeals below are set forth at App. 53a-56a, 120a.

STATEMENT OF THE CASE

This case involves an instance in which a court of ap-

peals utilized a motion filed under the All Writs Act to

effect judicial review. In so doing, it undertook prema-

ture review at the request of a party that had no statu-

tory standing to invoke the jurisdiction of the court as to

issues that were not ripe for judicial review.

1 Refunds Resulting From Btu Measurement Adjustments, Order

No. 399, 49 Fed. Reg. 37735 (Sept. 26, 1984), on reh’g, Order No.

399-A, 49 Fed. Reg. 46353 (Nov. 26, 1984), petitions for review

pend’a sub nom. Mobil Oil Exploration & Producing Southeast Inc.,

et al. v. FERC, No. 84-4775 (5th Cir.).

2 The NGPA is codified at 15 U.S.C. §§ 3301-3432 (1982).

The orders reviewed by the court of appeals arose in

the aftermath of the D.C. Circuit’s decision in Jnter-

state Natural Gas Association of America v. FERC

(“INGAA I’).* There, the court of appeals vacated

FERC’s regulation allowing the heat (Btu) content of

natural gas to be determined on a “dry” basis for pur-

poses of applying the maximum lav,ful prices prescribed

in Sections 102-109 of the NGPA, 15 U.S.C. §§ 3312-

3319.4

Thereafter, the FERC amended its regulations in ac-

cordance with the court’s order;* no challenge to that

amendment is presented here. The FERC also issued

Order No. 399, directing that producers make refunds of

any amounts coliected pursuant to its vacated regulations.

Pursuant to Section 506(a)(2) of the NGPA, 15

U.S.C. § 3416(a) (2), various parties, including Produc-

ers, filed applications for rehearing of Order No. 399.

Producers objected to, inter alia, the method adopted by

the FERC for effecting refunds and the procedure for

3716 F.2d 1 (D.C. Cir. 1983), cert. denied, U.S. , 104

S. Ct. 1615 (1984), vaacting in part Final Rules For Part 270, et al.,

45 Fed. Reg. 49077 (July 23, 1980) (Order No. 93), on reh’g, 46 Fed.

Reg. 24537 (May 1, 1981) (Order No. 93-A), reh’g denied, 47 Fed.

Reg. 614 (Jan. 6, 1982).

*716 F.2d at 4, 16. The NGPA prescribes maximum lawful prices

on heat content basis, i.e., in amounts per “MMBtu” (million

Btu’s). A question arose whether, for applying the NGPA’s

maximum lawful prices, the heat content should be determined on

the “wet” (water saturated) basis used to adjust ceiling rates es-

tablished under the Natural Gas Act or on a “dry” basis, which

reflected the actual, higher Btu content of the gas when delivered.

In Order No. 93, the FERC concluded that the Btu content of gas

should be determined on the “dry” basis. The court of appeals re-

versed the FERC, holding that the “wet” method must be employed.

5 Interpretative Rule For Btu Measurement Standard Under The

Natural Gas Policy Act of 1978, 49 Fed. Reg. 3072 (Jan. 25, 1984)

(Order No. 356).

calculating the amount of those refunds. Respondent As-

sociated Gas Distributors (“AGD”’) did not file an appli-

cation for rehearing of Order No. 399.°

In Order No. 399-A, the FERC denied in part and

granted in part the applications for rehearing that had

been filed by the Producers and others. The FERC

granted these applications for rehearing in part by pro-

viding that Btu refund obligations could be offset against

sum-certain debts owed to producers under rulemaking

orders prescribing adjustments to applicable maximum

lawful prices for production-related costs.’ In so acting,

the FERC did not reduce the refund obligations; rather,

it provided more flexible procedures for satisfying those

obligations by permitting offsets of mutual debts in lieu

of cash transfers. App. 90a-9la, 106a.

On the day that Order No. 399-A was issued, Mobil

Oil Exploration & Producing Southeast Inc., one of the

Producers, filed a timely petition for review of Order

Nos. 399 and 399-A with the Fifth Circuit. Mobil Oil

Exploration & Producing Southeast Inc. v. FERC, No.

84-4775 (5th Cir.) (“Mobil”). No party disputes that

Mobil’s petition was the first timely filed petition for re-

view of Order Nos. 399 and 399-A; indeed, the court of

appeals below acknowledged this in its opinion. App. 9a.

6 AGD is an informal association of approximately forty local

distribution companies that sell and distribute natural gas in the

eastern United tates. AGD’s members purchase most of their

supplies of natural gas from interstate pipelines, which, in turn,

purchase most of their supplies from numerous sellers, including

Producers.

7In a series of rulemakings, the FERC adopted regulations im-

plementing Section 110 of the NGPA, 15 U.S.C. § 3320 (1982).

Under those regulations, producers are entitled to collect from their

purchasers reimbursement for “production related costs” as an addi-

tion to the maximum lawful price.

On the next day, AGD filed with the D.C. Circuit a

“Motion for Order Directing Compliance with Mandate”

(“Motion”). In its Motion, AGD argued that the offset

mechanism adopted in Order No. 399-A constituted a re-

fusal by the FERC to implement the mandate of that

court of appeals in INGAA J. AGD urged the court of

appeals to exercise its extraordinary power under the All

Writs Act, 28 U.S.C. § 1651 (1982), to issue a writ of

mandamus directed against the FERC to compel it to

implement what AGD viewed as the mandate of the

court of appeals in the earlier case.

When it filed its Motion, AGD had not applied for re-

hearing of either Order No. 399 or Order No. 399-A.

Thereafter, AGD filed with the Commission a timely

application for rehearing of Order No. 399-A. The FERC

then issued an order granting, inter alia, AGD’s and

other applications for rehearing for purposes of further

consideration.* App. 127a-129a. Notwithstanding that

its application for rehearing was then still pending be-

fore the FERC, AGD on January 18, 1985 filed a peti-

tion for review of Order No. 399-A in the D.C. Circuit.°

Producers, the Interstate Natural Gas Association of

America, and the FERC filed responses in opposition to

AGD’s Motion before the D.C. Circuit. In their re

sponses, they addressed the lack of merit of AGD’s re-

8 Such an order tolls the statutory time established for denying

rehearing and is not a final, reviewable order. See, e.g., California

Co. v. FPC, 411 F.2d 720 (D.C. Cir. 1969).

® Associated Gas Distributors v. FERC, No. 85-1043 (D.C. Cir.).

Conoco Inc., one of the parties to the proceedings before the Com-

mission, the D.C. Circuit, and the Fifth Circuit, filed a motion in the

D.C. Circuit, pursuant to 28 U.S.C. § 2112 (1982), to transfer AGD’s

petition to the Fifth Circuit where the first petition for review of

Order No. 399-A had been filed by Mobil. On May 17, after denying

rehearing, the court of appeals dismissed AGD’s petition for review

as duplicative of AGD’s Motion, which was the subject of the

March 5 opinion.

quest for a mandamus against implementation of the

offset mechanism. The court of appeals never requested

full briefing on the merits of all challenges to Order Nos.

399 and 399-A. Further, the court cf appeals gave no

notice that AGD’s Motion would be treated as a petition

for judicial review rather than as an emergency motion

under the All Writs Act. Nor had the agency record

been filed with the court, a prerequisite to judicial re-

view under Section 506(a) (4) of the NGPA.”

On March 5, 1985, the court of appeals acted upon

AGD’s Motion and issued a decision vacating the offset

refund mechanism of FERC Order No. 399-A. Interstate

Natural Gas Association of America v. FERC, 756 F.2d

166 (D.C. Cir. 1985). App. la-15a. Therein, the court

of appeals did not address the merits of AGD’s Motion

under the All Writs Act. Rather, it determined that it

would treat AGD’s Motion as a petition for judicial re-

view of Order No. 399-A under Section 506(a) of the

NGPA, stating:

We need not enter the debate over the propriety of

resort to mendamus in this case, because, in any

event, Associated Gas Distributors’ motion to en-

force the mandate may be treated as a petition to

review that order.

. . . Because the parties to the instant case have

amply addressed the merits, no one will be preju-

diced by considering Associated Gas Distributors’

motion to enforce the mandate as a petition for re-

view.

App. 9a, lla.

Timely petitions for rehearing and suggestions for

rehearing en banc were filed by Producers, the Interstate

10 The FERC had not filed the record with a court of appeals be-

cause the Fifth Circuit—the court of first filing—had deferred the

filing of the agency record pending the D.C. Circuit’s disposition of

AGD’s All Writs Act motion. App. 137a.

Natural Gas Association of America, and the FERC. On

May 6, 1985, the panel denied those petitions in a per

curiam order. App. 132a & 135a. Circuit Judge Scalia,

who had originally concurred in the opinion of the court,

withdrew his concurrence and entered a dissent in its

place. In his dissent, Judge Scalia concluded that a writ

of mandamus did not lie because the mandate of the

court in INGAA I did not prescribe a particular refund

| mechanism, leaving the manner of effecting refunds to

the FERC’s discretion; that the petition for writ of man-

damus could not be treated as a petition for review be-

cause AGD had not met the express and unequivocal

statutory prerequisites to its seeking judicial review, as

set out in NGPA Section 506(a) (2); and that if the

petition for a writ were treated as a valid petition for

review, it had to be transferred to the Fifth Circuit,

where the first petition for judicial review of the orders

had been filed. App. 133a-135a.

Thereafter, on May 15, 1985, the court of appeals

denied the suggestions for rehearing en banc. App. 186a.

Circuit Judges Wright, Tamm and Bork did not partici-

pate in the consideration of the suggestions for rehearing

en bane.

On July 18, 1985, the FERC issued Order No. 399-B,

attached hereto as a supplemental appendix. In that Or-

der, issued in response to the D.C. Circuit’s opinion, the

FERC granted AGD’s application for rehearing of Order

No. 399-A. On that same day, one of the Producers,

Mobil Producing Texas & New Mexico Inc., filed the first

timely petition for review in the Fifth Circuit in No.

85-4485.

REASONS FOR GRANTING THE WRIT

The decision of the court of appeals subverts the integ-

rity of the prescribed statutory procedure for obtaining

judicial review of FERC orders issued under the NGPA,

as well as under the Natural Gas Act and the Federal

Power Act. These statutes require a party to file an

EEE TTT

application for rehearing with the FERC and to have it

denied, at least in part, as jurisdictional prerequisites to

that party seeking judicial review. Thus, these statutes

give the FERC the first opportunity to address a party’s

objections to its orders before a court of appeals may

consider that party’s petition for review.

Upon the filing of a petition for judicial review, fur-

ther statutory provisions govern venue as between the

several courts of appeals. Pursuant to 28 U.S.C. § 2112

(a), the agency “shall file the record in that [court] in

which a proceeding with respect to [the agency’s] order

was first instituted.” The filing of the full agency record

with a particular court of appeals, under Section 506(a)

of the NGPA, as well as equivalent provisions of the

Natural Gas Act and the Federal Power Act, vests that

court with exclusive jurisdiction and venue to review the

agency’s order, which review must be had on the basis

of the record made before the agency.'! Thereby, review

ean only occur in a single court of appeals; piecemeal

review of a single agency order is statutorily precluded.

The court of appeals below ignored these statutory

limits to its jurisdiction in order to impose its will on an

administrative agency in a proceeding of interest to the

court. In so doing, it granted judicial review to a party

‘ that had no statutory standing, to the prejudice of those

who had properly perfected their right to judicial review

before another court of appeals.

Under the decision of the court of appeals, a party

seeking review of FERC orders under either the Natural

Gas Act, the Federal Power Act, or the NGPA may now

simply file a motion under the All Writs Act. It need

not apply for rehearing before the agency; it need not

1115 U.S.C. § 3416(a) (4), id. at § 717r(b), 16 U.S.C. § 8251 (b).

28 U.S.C. § 2112(a) gives the court in which exclusive jurisdiction

and venue vests discretion to transfer the petition to another court

of appeals where convenience of the parties or the interest of justice

so requires.

await the agency’s denial of the application; it need

not have statutory standing to seek judicial review; it

need not file a formal petition for review; and it need

not await the filing of the agency record upon which

review must be undertaken. Once filed, the All Writs

Act motion takes precedence over all otherwise timely

and proper petitions for review filed by parties having

proper standing in other courts of appeals, and grants

the filing party substantive review of its challenge wholly

independent of the consideration of other parties’ chal-

lenges. Further, by using the All Writs Act motion to

effect review of the agency order, a court of appeals can

evade the statutory requirements that (i) such review

must be based on the record compiled before the agency,

and (ii) such review of the agency’s order must be un-

dertaken by a single court of appeals.

The decision of the court of appeals, however, is not

limited to those three acts administered by the FERC.

Exhaustion of administrative remedies is a generally ap-

plicable principle of administrative law. Similarly ap-

plicable are the provisions of 28 U.S.C. § 2112, which in-

vest a single court of appeals with the authority to re-

view agency decisions on the record. Under the decision

of the court of appeals, a party can secure preferential,

substantive review of its particular challenge to an

agency order by filing an All Writs Act motion, irrespec-

tive of the ripeness of the challenge or the potential for

piecemeal review.

If this is to be the law, then all parties will, perforce,

seek judicial review pursuant to the All Writs Act prior

to exhaustion of their administrative remedies to ensure

that their statutory right to judicial review is not fore-

closed by similar motions of other parties. If the decision

below is allowed to stand, it will fundamentally change

the relationships among federal agencies and reviewing

courts, among the various courts of appeals, and among

parties before agencies. Thus, its result will have a

broad, deleterious effect on judicial review of adminis-

trative decisions generally.

Further, the court below violated the due process

rights of the Producers. Producers have properly pre-

served challenges to the amount of refunds ordered by

the FERC and have those objections pending before the

Fifth Circuit. The court of appeals here granted prefer-

ential review of one party’s objections to the agency’s or-

ders. Based upon that selective:and limited review, the

court below ordered the agency to amend its orders to

require additional cash payments by Producers. Thereby,

Producers were deprived of their property rights by the

order of the court of appeals without a meaningful and

timely opportunity to be heard in accordance with the

statutory requirements on all matters relating to whether

such additional cash payments should be ordered.

Finally, the court of appeals impermissibly encroached

upon the discretionary authority of the FERC to struc-

ture refund plans. The court of appeals ordered the

FERC, which was considering on rehearing the very

objection to its order that was being urged by AGD

before the court, to replace its refund procedures with

a procedure that the court of appeals preferred, even

though the court never had before it the complete record

that the FERC had considered.

This Court should issue a writ of certiorari and review

the decision below in order to maintain the integrity

of the explicit statutory procedures and the continued

viability of the controlling precedent relating to review

of agency orders.

A. The Decision Below Conflicts With Statutory Provi-

sions Governing Judicial Review And Well-Settled

Principles Approved By This Court And The Courts

Of Appeals.

Sections 506(a) (2) and (4) of the NGPA, 15 U.S.C.

$§ 3416(a) (2) and (4), prescribe the procedure for ob-

taining judicial review of FERC orders issued under

that Act.’? Section 506(a) (2) provides in pertinent part:

No person may bring an action under this section to

obtain judicial review of any order of the Commis-

sion unless— :

(A) such person shall have made application

to the Commission for a rehearing under this

subsection; and

(B) the Commission shall have finally acted

with respect to such application.

Section 506(a) (4) then provides that judicial review is

to be obtained by filing a written petition for review with

an appropriate court of appeals “within 60 days after

the final action of the Commission on the application for

rehearing required under paragraph (2)[,]” and that

“'njo objection to such order of the Commission shall

be considered by the Court if such objection was not

urged before the Commission in the application for

rehearing....” 15 U.S.C. § 3416(a) (4).

The courts of appeals have consistently “recognized

that a petition for rehearing is a jurisdictional prerequi-

site to judicial review of both NGPA and NGA [Natural

Gas Act] claims.” '* Even the D.C. Circuit, until now,

12 Section 506(b), 15 U.S.C. §3416(b), provides for judicial re-

view of rulemaking orders like Order Nos. 399 and 399-A. Both the

District of Columbia Circuit and the Fifth Circuit have held that

the procedures set forth in Sections 506(a) (2) and (4) govern judi-

cial review of such rulemaking orders. JNGAA I, supra, 716 F.2d

at 15; Ecee, Inc. v. FERC, 611 F.2d 554 (5th Cir. 1980).

13 Southern Union Gathering Co. v. FERC, 687 F. 2d 87, 91 (5th

Cir. 1982). Accord, e.g., Ecee, Inc. v. FERC, supra, 611 F.2d at

565-66; Boston Gas Co. v. FERC, 575 F.2d 975 (1st Cir. 1978) ;

Pan American Petroleum Corp. v. FPC, 268 F.2d 827 (10th Cir.

1959). See also, e.g., Utah Power & Light Co. v. FPC, 339 F.2d 486,

487-438 (10th Cir. 1964) (construing similar provisions of Section

318 of the Federal Power Act, 16 U.S.C. § 8251).

Le a

has embraced this proposition of law and has recognized

that it lacks jurisdiction to review a FERC order unless

the petitioner has strictly observed the rehearing re-

quirement.**

Unless statutory prerequisites for review have been

satisfied, a court has no jurisdiction to undertake review

of administrative orders. In Whitney Nat’l Bank v. Bank

of New Orleans & Trust Co., 379 U.S. 411, 420 (1965),

this Court stated: “{W]here Congress has provided stat-

utory review procedures designed to permit agency ex-

pertise to be brought to bear on particular problems,

those procedures are to be exclusive.” Accord, City 0°

Tacoma v. Taxpayers of Tacoma, 357 U.S. 320, 336

(1958) (Federal Power Act); FPC v. Colorado Inter-

state Gas Co., 348 U.S. 492, 497, 499 (1955) (Natural

Gas Act).

In the case below, the party seeking review, AGD, had

not followed the prescribed statutory procedure. Rather

than first filing an application for rehearing of Order

No. 399-A and waiting for the Commission to deny that

application, as required by Sections 506(a) (2) and (4),

AGD immediately sought judicial review under the aegis

of an All Writs Act motion. It then sought agency re-

hearing.

Because AGD’s Motion was not predicated upon an

application for rehearing that had been denied by the

FERC, the statutory provisions expressly precluded the

court of appeals from treating AGD’s Motion as a peti-

14 See, e.g., Cerro Wire & Cable Co. v. FERC, 677 F.2d 124 (D.C.

Cir. 1982); Public Service Comm'n of N.Y. v. FPC, 543 F.2d 757

(D.C. Cir. 1974) ; Dayton Power & Light Co. v. FPC, 251 F.2d 875

(D.C. Cir. 1958) ; Michigan Consolidated Gas Co. v. FPC, 167 F.2d

264 (D.C. Cir. 1948).

tion for review.” In these circumstances, both AGD’s

motion and its later filed petition for review were pre-

mature and jurisdictionally defective attempts to obtain

judicial review of Order No. 399-A. Therefore, they

“should [have been] dismissed.’ *®

The statutory review procedures set out in Section

506(a) of the NGPA codify the well-established principle

of administrative law repeatedly enunciated by this Court

that:

an administrative order is net “final,” for the pur-

poses of judicial review, until outstanding petitions

for reconsideration have been disposed of. See, e.g.,

Outland v. Civil Aeronautics Board, 109 U.S. App.

D.C. 90, 284 F.2d 224; Braniff Airways, Inc. v. Civil

Aeronautics Board, 79 U.S App. D.C, 341, 147 F.2d

152."

More recently, in American Farm Lines v. Black Ball

Freight Service, 397 U.S. 582, 541 (1970), this Court

reiterated that: “[u]nless Congress provides otherwise,

15 The corollary of the rehearing requirement in NGPA Section

506(a) (2) is the principle set out in Section 506(a) (4) that an

objection not raised or considered on rehearing may not be raised

before a court of appeals on review. This Court has held that the

provisions of Section 19 of the Natural Gas Act, 15 U.S.C. § 717r

(the basis for Sections 506(a) (2) and (4) of the NGPA), and

the related exhaustion doctrine preclude the courts of appeals

from considering objections to an order that have not been pre-

sented to, and passed on by, the FERC. FPC v. Colorado Inter-

state Gas Co., supra, 348 U.S. at 498-500. The Court there held that

even sua sponte consideration is precluded because it “would seri-

ously undermine the purpose of the explicit requirements of § 19(b)

that objections must first come before the Commission.” Jd. at 499.

16 California Co. v. FPC, supra, 411 F.2d at 722; General Amer-

ican Oil Co. of Texas v. FPC, 409 F.2d 597, 599 (5th Cir. 1969).

17 CAB v, Delta Airlines, Inc., 367 U.S. 316, 326 (1961) (emphasis

in original). Accord, FTC v. Standard Oil Co. of Calif., 449 U.S.

232, 242-48 (1980); FPC v. Metropolitan Edison Co., 304 U.S. 375,

388-386 (19388).

‘fw]here a motion for rehearing is in fact filed there

is no final action until the rehearing is denied.’ ”

Here, Congress has not provided otherwise. To the

contrary, NGPA Sections 506(a) (2) and (4) specifically

provide that a party may not seek judicial review until

after the FERC has finally denied that party’s applica-

tion for rehearing.

The court of appeals attempted to validate its treat-

ment of AGD’s Motion as a petition for review by citing

other cases where courts of appeals had done so. How-

ever, none of the cases cited by the court of appeals in

support of its treatment of AGD’s motion as a petition for

review arose under a statute like the NGPA, which re-

quires final agency action denying a party’s application

for rehearing as a jurisdictional prerequisite to that party

seeking judicial review. Rather, because the party in each

of those cases could have initiated a review proceeding

under the governing statute when it filed a petition for

a writ of mandamus, its mandamus petition was treated

as sufficient to constitute a notice of appeal under the

governing statute.’®

Here, however, AGD could not have filed a valid peti-

tion for review when it filed its Motion. Thus, AGD’s

Motion under the All Writs Act could not, under the

18 For example, the court below cited National Organization for

Reform of Marijuana Laws v. Ingersoll, 497 F.2d 654 (D.C. Cir.

1974) (“NORML’’). There, a petition for mandamus filed within the

time specified for seeking judicial review was treated as a petition

for review under 21 U.S.C. § 877; Section 877 does not require an

application for rehearing and agency action thereon as jurisdictional

prerequisites to judicial review. The other cases relied upon by the

court below were both criminal cases and have no possible applica-

tion to review of agency determinations. See United States v.

Green, 499 F.2d 538, 540 n.5 (D.C. Cir. 1974) (a petition for

mandamus is adequate as a notice for appeal), and Jordan v. United

States District Court for Dist. of Col., 283 F.2d 362, 365 (D.C.

Cir.), vacated on other grounds, 352 U.S. 904 (1956) (a petition for

mandamus filed by a pro se criminal defendant is adequate as a

notice of appeal).

cases cited by the court below, be treated as a petition

for judicial review under the NGPA.”

In sum, the court of appeals below ignored the express

statutory restrictions on judicial review under the NGPA

| and well-settled principles announced by this Court and

the courts of appeals. A court of appeals is not free to

disregard statutory procedures for judicial review, to the

prejudice of petitioners who have followed such proce-

dures, simply to impose its will upon an administrative

agency in a proceeding of interest to it.°° Whether the

courts of appeals must observe explicit statutory and

judicial principles governing judicial review of agency or-

ders is an issue appropriate for this Court’s consideration.

B. The Action Of The Court Of Appeals Results In Piece-

meal Review Of The Same Agency Order In Different

Courts Of Appeals, In Contravention Of The Statute

And The Interests Of Judicial Economy.

Section 506(a) of the NGPA establishes a procedure

whereby FERC orders properly subject to judicial re-

view are reviewed on the record by a single court of

appeals. This statutory scheme for effecting orderly stat-

utory review is complemented by the venue provisions of

28 U.S.C. § 2112(a). The decision of the court of appeals

19 Cf. American Public Gas Ass’n v. FPC, 555 F.2d 852 (D.C. Cir.

1976). There, the court below recognized the limitations on treating

a petition for a writ of mandamus as a petition for review. The

court he'd that a mandamus petition filed by a party prior to denial

by the agency of its application for rehearing could not be treated

as a petition for judicial review for purposes of 28 U.S.C. § 2112(a)

in determining the first filed petition for judicial review under

Section 19(b) of the Natural Gas Act, 15 U.S.C. §717r(b). Thus,

under that court’s own precedent, AGD’s Motion could not be

treated as the equivalent of a petition for review.

2» That the issue presented was whether the FERC had complied

with the court’s earlier mandate in INGAA I did not relieve AGD of

the statutory rehearing requirements. Cf. Department of Fish and

Game v. FPC, 359 F.2d 165 (9th Cir.), cert. denied, 385 U.S. 932

(1966).

below violated the mandatory requirements of both statu-

tory provisions.

Section 506(a) (4) grants the court of appeals in which

_ the agency record is filed exclusive jurisdiction and venue

to review that order. Under 28 U.S.C. § 2112(a), the

agency, in the first instance, must file the record in that

court in which the first timely petition for judicial re-

view of the agency’s order was filed. The record must

include the “order sought to be reviewed” and the plead-

ings, evidence, and other documents filed with the agency.

28 U.S.C. § 2112(b) (1982).

The courts of appeals, including the court of appeals

below, have recognized “the importance of avoiding judi-

cial review of ‘piecemeal proceedings’ and having ‘one

comprehensive judicial review proceeding, based on a

full record.’ ” Cities of Anaheim and Riverside v. FERC,

692 F.2d 773, 779 (D.C. Cir. 1982). Accord, Pennzoil

Co. v. FERC, 742 F.2d 242 (5th Cir. 1984). Indeed, the

procedure for judicial review crafted by Congress in

NGPA Section 506(a) and 28 U.S.C. §2112(a) pre-

cludes piecemeal review of a single agency order. Yet the

decision of the court of appeals in this case compels such

piecemeal review, in direct contravention of the statu-

torily prescribed procedure and applicable precedents.

The first petition for review of Order Nos. 399 and

399-A was filed in the Fifth Circuit. The objections of

the Producers to those orders are still pending before

that court. Nevertheless, the D.C. Circuit undertook judi-

cial review of only the objections raised by AGD to only

one aspect of the refund orders without affording Pro-

ducers any opportunity to argue the merits of their

objections on appeal, and without undertaking any re-

view on the basis of the agency record. Thereby, as a

matter of law, the court of appeals violated the provi-

sions of Section 506(a) of the NGPA and of 28 U.S.C.

§ 2112(a). Thus, as Judge Scalia observed in his dissent

(App. 135a):

The majority’s action frustrates the Congressional

policy of preventing piecemeal review and placing

review in the court of first filing.. If we do not dis-

miss this case as a meritless petition for mandamus

(as we should), we must transfer the so-called ap-

peal to the Fifth Circuit.

The piecemeal review compelled by the action of the

court of appeals also violates fundamental policy consid-

erations crucial to the administration of cases by the fed-

eral courts. Three basic objections have been presented

to Order Nos. 399 and 399-A by different petitioners—

or “deemed“ petitioners such as AGD. The first objec-

tion to the orders, raised by Pitts Oil Company, is the

question of whether refunds should have been ordered by

the FERC at all. The second objection, raised by Pro-

ducers, is whether the FERC has correctly determined,

as a matter of law, the amount of refunds due.** The

third objection, raised by AGD, is whether, assuming the

amount of refunds determined by the FERC to be due

is correct the method of payment for those refunds estab-

lished by the FERC is appropriate—+.e., the offset issue.

In an orderly review proceeding before a single court

of appeals, the first objection would be decided, then

the second, then the third. This order is required because

a decision on the second and third objections could be

rendered unnecessary if the first objection is sustained.

Similarly, in the circumstances here presented, sustain-

ing the objections of the Producers could largely, if not

totally, moot the third objection.

21 Producers have challenged the legality of FERC’s refund cal-

culation. Section 504 of the NGPA, 15 U.S.C. § 3414 (1982), pro-

hibits the FERC from ordering refunds of amounts collected which

do not exceed the applicable maximum lawful price, plus all allowed

adjustments and add-ons. Producers in their challenge have raised

the issue of whether the FERC has attempted to order such repay-

ments here.

The result is that the decision of the court of appeals

below may be nothing mure than an advisory opinion,

depending upon the Fifth Circuit’s resolution of the first

two objections. At the same time, the court’s decision

could taint the review proceedings before the Fifth Cir-

cuit because the D.C. Circuit already has determined that

refunds are to be made in cash, perhaps thereby im-

plicitly predetermining the Fifth Circuit’s consideration

of the first two issues. This situation has been aggra-

vated now that the FERC has, in light of the D.C. Cir-

cuit’s opinion, granted AGD’s request for rehearing and

ordered immediate cash payments, plus interest, by Pro-

ducers.

The rendering of such an advisory opinion, particularly

in light of its potentially prejudicial impact on another

court’s consideration of the remaining merits of the case,

not only is inconsistent with sound principles of judicial

administration but also violates the “case or controversy”

requirements of Article III of the Constitution.** By com-

parison, effecting review of ail objections to an order

of the FERC before a single court of appeals in con-

formance with the requirements of Section 506(a) of

22 In their “Application for a Stay of Enforcement of a Judgment

of the United States Court of Appeals for the District of Columbia

Circuit” filed with Chief Justice Burger on May 23, 1985, in No.

A-885, Producers argued that the decision of the court of appeals

could foreclose their right to obtain judicial review on their objec-

tions at all. In response, as well as in subsequent pleadings filed

with the Fifth Circuit, AGD argued that the D.C. Circuit’s decision

had not foreclosed Producers’ opportunity to present their objec-

tions on appeal to the Fifth Circuit. If so, this is the very type of

piecemeal review proscribed by the statutes. However, if AGD is

wrong in its assertions, then a fundamental denial of Producers’ due

process rights has occurred. See Part C, infra.

23 Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 241 (1937)

(jurisdiction of federal courts is limited to cases which present “a

real and substantial controversy admitting of relief through a

decree of a conclusive character, as distinguished from an opinion

advising what the law would be upon a hypothetical state of facts’’).

See Buckley v. Valeo, 424 U.S. 1, 13 (1976); North Carolina v.

Rice, 404 U.S. 244, 246 (1971).

the NGPA and 28 U.S.C. § 2112(a) eliminates any po-

tential violation of either sound judicial policy or the

Constitution.

C. The Action Of The Court Of Appeals Denied Producers

Due Process Of Law.

The Due Process Clause of the Fifth Amendment guar-

antees all persons an opportunity to be heard at a mean-

ingful time and in a meaningful manner before being

deprived of any property right.2* This Court only re-

cently reiterated that “the root requirement” of due

process is a meaningful opportunity to be heard before

being “deprived of any significant property interest.” *°

Moreover, as the D.C. Circuit has noted, where statutory

or regulatory procedures designed to afford timely and

meaningful review are in place, due process requires

“scrupulous compliance” with those procedures.”®

As previously set out, the court of appeals did not fol-

low the procedures prescribed in Section 506 of the

NGPA and 28 U.S.C. § 2112(a) for review of FERC or-

ders. This failure to observe statutoriiy mandated proce-

dures governing judicial review has infringed won

Producers’ Fifth Amendment right to secure meaningful

and timely review of Order Nos. 399 and 399-A.?"

*4 Mathews v. Eldridge, 424 U.S. 319, 333 (1976); Goldh-rg v.

Kelly, 397 U.S. 254, 266 (1970).

25 Cleveland Board of Education v. Loudermill, US. , 105

S.Ct. 1487, 1493 (1985).

26 Mazaleski v. Treusdell, 562 F.2d 701, 719 (D.C. Cir. 1977).

27 Whether due process rights have been violated frequently in-

volves an ad hoc balancing of private and governmental interests,

weighing the procedural protections that may be afforded to sub-

stantive private interests against the costs such protections would

impose upon governmental interests. See Mathews v. Eldridge, su-

pra, 424 U.S. at 335-36. However, in enacting Section 506 of the

NPGA, Congress itself has weighed the competing interests and has

declared that specified statutory procedures are required to protect

the procedural interests of litigants, agencies and reviewing courts.

Therefore, this Court should not countenance any departure from

this statutory scheme.

The court of appeals attempts to gloss over this denial

by baldly asserting that “because the parties to the in-

stant case have amply addressed the merits, no one will

be prejudiced by considering Associated Gas Distributors’

motion to enforce the mandate as a petition for review.”

App. lla. However, this attempt must fail.

Pending before the court was a motion under the All

Writs Act claiming that Order No. 399-A violated the

mandate of the court of appeals in INGAA I. The Pro-

ducers and others—including the FERC—responded and

opposed AGD’s Motion, arguing that relief under the All

Writs Act did not lie. The focus of the legal issues ad-

dressed by such response was substantively different

from the legal issues that would have to be briefed under

Section 506(a) of the NGPA in determining whether the

FERC order must be sustained under standards governing

review of agency orders.** Indeed, the limited focus of

the motion papers is underscored by the fact that the

court of appeals never had before it the full agency rec-

ord, precluding by definition substantive review on that

record as required by NGPA Section 506(a) (4).

Further, the fundamental fairness required by due

process was not afforded Producers by reviewing only the

28 Compare United States ex rel. McLannan v. Wilbur, 283 U.S.

414, 420 (1931) (setting out the standards for obtaining All Writs

Act relief) with Motor Vehicle Mfrs. Ass’n v. State Farm Mutual

Automobile Ins. Co., 463 U.S. 29 (1983), and Burlington Truck

Lines Inc. v. United States, 371 U.S. 156, 168 (1962) (setting out

general standards for review of agency orders).

22In NORML, relied upon by the court below as supporting the

proposition that a “petition for mandamus can do service as a peti-

tion for review” (App. 1la), the court of appeals treated a petition

for mandamus as sufficient to effect an appeal only after first deny-

ing mandamus and ordering further consideration of the motion as

. a petition for judicial review. NORML, 497 F.2d at 656 n.3, 660.

_ Thus, the court of appeals there implicitly acknowledged what it

here refuses to admit: consideration of mandamus papers is not

adequate to dispose of a case on the merits.

MPL eh ami

hn 06s hl hea thet nh tn bi nas par

ae ae ee ee ee Ut Seer eee eae

objection of one party to the FERC’s order. Based on

this selective review, the court of appeals required the

FERC to amend its orders and to provide for additional

cash refunds in lieu of offsets. Producers were given no

meaningful opportunity to be heard at that time on

their objections, which if sustained would largely negate,

if not totally eliminate, the basis for an order for addi-

tional refunds by them of some $450 million. In denying

Producers a timely opportunity to be heard, the court of

appeals deprived them of their property rights without

due process of law.

Accordingly, the decision of the court of appeals re-

quiring Producers and others to make cash payments in

lieu of offsets, without affording Producers any oppor-

tunity to be heard at a meaningful time and in a mean-

ingful manner in accordance with the statutory require-

ments of Section 506 of the NGPA and 28 U.S.C.

$ 2112(a), constituted a denial of their fundamental due

process rights in contravention of the Fifth Amendment.

D. The Court Of Appeals Failed To Defer To The FERC’s

Discretionary Authority To Fashion Refund Pro-

cedures.

The court of appeals could not have issued a writ of

mandamus in the instant case. This is not an instance

where the court of appeals, in harmless error, simply

misnamed the action that it was taking. Rather, seeing

that mandamus did not properly lie, the court improperly

attempted to secure the same result indirectly by vacat-

ing FERC’s Order No. 399-A offset provisions under a

“deemed” petition for judicial review. However, without

regard to whether the court’s action is viewed as arising

under the All Writs Act or under a petition for review,

the court impermissibly intruded upon the broad discre-

tion of the FERC to devise refund remedies.

1. Mandamus did not lie.

This Court has held that a writ of mandamus will not

issue when the person to whom the writ is to be directed

has discretion to act.*°° The writ cannot be used to com-

pel adoption of a particular remedy when the agency

possesses broad discretion to determine what remedy, if

any, is appropriate.*! Because nothing in INGAA I either

directed the FERC to order refunds or established the

method for effecting any refunds ultimately ordered by

the FERC, resort to mandamus was legally precluded.

Congress has invested in the FERC broad discretion-

ary authority to regulate the natural gas industry. As

this Court stated in Permian Basin Area Rate Cases,

390 U.S. 747, 790 (1968) :

[T]he breadth and complexity of the Commission’s

responsibilities demand that it be given every rea-

sonable opportunity to formulate methods of regula-

tion appropriate for the solution of its intensely

practical difficulties.

This Court has affirmed that FERC’s discretion is equally

broad in the specific context of its power to fashion ap-

propriate procedures to effect the manner and timing of

refunds.”

As observed by Judge Scalia in his dissent, AGD’s

request for mandamus was without merit because the

FERC “retains discretion to determine both the amount

and the manner of the refund.” App. 133a. Nothing in

30 Will v. Calvert Fire Insurance Co., 437 U.S. 655, 661-662, 665-

666 (1978) ; Kerr v. United States District Court, 426 U.S. 394, 402-

403 (1976); Will v. United States, 389 U.S. 90, 95-96 (1967).

31 See, e.g., United States ex rel. McLannan v. Wilbur, supra, 283

U.S. at 420 (‘the writ of mandamus cannot be made to serve the

purpose of an ordinary suit. It will issue only where the duty to be

performed is ministerial and . . . plainly defined. The law must not

only authorize the demanded action but require it; the duty must

be clear and indisputable.”’).

82 See, e.g., Mobil Oil Corp. v. F PC, 417 U.S. 283, 314-17 (1974)

(FPC has great flexibility in ordering refunds; refund workoff

credit procedure is within agency discretion.). See also Estate of

French v. FERC, 603 F.2d 1158, 1162-63 (5th Cir. 1979) (“FERC

is to explore and give due weight to considerations of equity when

imposing refund obligations.”’).

Co me atin ORL at

INGAA I abridged this discretion. Accordingly, man-

damus did not lie.

2. The court of appeals substituted its judgment for

that of the agency.

This Court has admonished the reviewing courts that

they may not “substitute [their own] judgment for that

of the agency.” Citizens To Preserve Overton Park, Inc.

v. Volpe, 401 U.S. 402, 416 (1971). As this Court em-

phasized in Vermont Yankee Nuclear Power Corp. v.

NRDC, 435 U.S. 519, 549 (1978), the reviewing court

must “not stray beyond the judicial province to explore

the procedural format or to impose upon the agency its

own notion of which procedures are ‘best’ or most likely

to further some vague, undefined public good.” Further,

this Court has specifically emphasized the FERC’s dis-

cretion to design appropriate refund procedures. Mobil

Oil Corp. v. FPC, supra, 417 U.S. at 314-17.

By comparison, the court below ignored the admoni-

tion of this Court and, without foundation, intruded into

the discretion reserved to the FERC by ordering that the

FERC implement a refund remedy preferred by the

court of appeals, which the FERC has now done in Order

No. 399-B. This unfounded intrusion into the expertise

of the FERC is even more egregious when considered in

light of the absence of the full agency record before the

court of appeals.

Because the court of appeals did not follow the or-

derly, statutorily mandated procedures set forth in Sec-

tions 506(a) (2) and (4) of the NGPA and sua sponte

treated AGD’s Motion as a petition for review, the rec-

ord compiled before the FERC was never filed with the

court of appeals. Judicial review on the complete record

compiled before the FERC is required by Section 506

(a) (4), which provides that “[t]he finding of the Com-

mission as to the facts, if supported by substantial evi-

dence, shall be conclusive,” and by 28 U.S.C. § 2112(b).

Because the agency record had not been filed with it,

the court of appeals had no basis for determining the

propriety of the FERC’s orders.

Of equal importance, by failing to have the complete

record before it, and by failing to allow full briefing of

all relevant objections and issues, the court of appeals

resolved the issue of how refunds were to be undertaken

without first determining the legal validity of the refunds

ordered.** Thereby, the court’s decision was rendered in

a vacuum without consideration of the significant legal

issues that had to be addressed before the validity of

the FERC’s offset mechanism could ever be reached.

Accordingly, a writ of certiorari should issue in this

case to preserve the proper equilibrium between the au-

thority of FERC and that of the court of appeals. This

balance must be maintained to prevent the intrusion of

the court of appeals into matters squarely within the

expert discretion of administrative agencies.

CONCLUSION

Petitioners respectfully urge that a petition for writ

of ceritorari be granted and that the decision of the court

of appeals be vacated and remanded, with instructions to

transfer the case to the United States Court of Appeals

for the Fifth Circuit.

Respectfully submitted,

JOHN M. YOUNG CHARLES ALAN WRIGHT

JOHN B. CHAPMAN 727 East 26th Street

Pennzoil Company Austin, Texas 78705

Post Office Box 2967 (512) 471-5151

Houston, Texas 77001 R. Gorpon Goocu

(713) 546-8859 CHARLES M. DARLING, IV

GLEN E. TAYLOR THOMAS J. EASTMENT

PHYLLIS G. RAINEY BAKER & BOTTS

Tenneco Oil Company 1701 Pennsylvania Ave., N.W.

Post Office Box 2511 Washington, D.C. 20006

Houston, Texas 77001 (202) 457-5500

(713) 757-3961

33 See n. 21 & accompanying text, supra.

AND ON BEHALF OF:

William T. Benham

Attorney for

Amoco Production Company

Michael Maloney

Attorney for

ARCO Oil and Gas Company,

Division of Atlantic

Richfield Company

B.J. Zimmerman

Kerry R. Brittain

Constance D. Coleman

Attorneys for

Champlin Petroleum Company

James B. Atkin

Attorney for

Chevron U.S.A. Inc.

Carmen Chidester Farrell

Attorney for

Cities Service Oil and Gas

Corporation

Ernest J. Altgelt, ITI

Carolyn S. Hazel

William G. Robb

Attorneys for

CONOCO Inc.

Douglas W. Rasch

Attorney for

Exxon Corporation

Anthony V. Sorrentino

David R. Stevenson

Attorneys for

Gulf Oil Corporation

Robert D. Haworth

Robert A. Luettgen

Jay G. Martin

Carroll L. Gilliam

J. Paul Douglas

Kevin M. Sweeney

Attorneys for

Mobil Oil Corporation

Kenneth R. Satterly

Walter L. Brignon

Attorneys for

Monsanto Oil Company

C.J. Roberts

Larry Pain

Jennifer A. Cates

Attorneys for

Phillips Petroleum Company

Phillips Oil Company

Ronald D. Hurst

Attorney for

Placid Oil Company

Thomas G. Johnson

Eugene V. Callaway

Attorneys for

Shell Offshore Inc.

Shell Western E&P Inc.

Charles L. Spann

Attorney for

Sun Exploration and

Production Company

Karen A. Berndt

Attorney for

Texaco Inc.

Lois Ellen Gold

Albert Sylvia III

Attorneys for

Union Oil Company of

Califorinia

Mobil Oil Exploration &

Producing Southeast Inc.

Mobil Producing Texas &

New Mexico Inc.

The Superior Oil Company

SUPPLEMENTAL

APPENDIX

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Raymond J. O’Connor, Chair-

man; A. G. Sousa and Charles

G. Stalon.

Docket Nos. RM84-6-015 through RM84-6-028

REFUNDS RESULTING FROM BTU

MEASUREMENT ADJUSTMENTS

ORDER NO. 399-B

ORDER ON DIRECTION OF THE COURT

VACATING, IN PART, ORDER NO. 399-A,

AND ON PETITIONS FOR REHEARING

AND RECONSIDERATION

(Issued July 18, 1985)

I. INTRODUCTION

The Federal Energy Regulatory Commission (Com-

mission) is implementing the court’s decision in /nter-

state Natural Gas Association of America v. Federal

Energy Regulatory Commission,’ by vacating the offset

mechanism required by Order No. 399-A? and by grant-

ing five petitions for rehearing. The Commission other-

wise denies all other petitions for rehearing, reconsidera-

tion and stay of Order No. 399-A.

1Interstate Natural Gas Association of America v. Federal

Energy Regulatory Commission, 756 F.2d 166 (D.C. Cir. 1985)

(INGAA-II).

2 Refunds Resulting from Btu Measurement Adjustments, 49

Fed. Reg. 46,353 (Nov. 26, 1984).

II. BACKGROUND

On November 20, 1984, the Commission issued Order

No. 899-A, which granted rehearing in part of Order

No. 399.2 Order Nos. 399 and 399-A implemented the

decision of Interstate Natural Gas Association of Amer-

ica v. Federal Energy Regulatory Commission * by estab-

lishing refund procedures for overcharges resulting from

adjustments to the calculation of the Btu content of gas

sold under the Natural Gas Policy Act of 1978 (NGPA).

On March 5, 1985, the United States Court of Appeals

for the District of Columbia directed the Commission to

vacate the portion of Order No. 399-A that required first

sellers to offset Btu refunds against costs permitted un-

der section 110 of the NGPA.’ Order No. 399-A also

permitted first sellers to seek a waiver of that portion

of a first seller’s refund obligation to the extent it is

attributable to royalty interest owners and is uncollec-

tible. The Commission received nine timely petitions for

rehearing of Order No. 399-A.°

3’ Refunds Resulting from Btu Measurement Adjustments, 49 Fed.

Reg. 37,735 (Sept. 26, 1984) (issued Sept. 20, 1984) (Final Rule).

#716 F.2d 1 (D.C. Cir. 1983), cert. denied, 104 S. Ct. 1616

(1984) (INGAA-I) (charges for gas must be determined by

measurement of Btu’s (British thermal units) under “wet” condi-

tions rather than the “as delivered” basis promulgated by the

Commission).

5 See n.1, supra. 18 C.F.R. § 271.1104(e) (1984); see generally,

Regulations Implementing Section 110 of the Natural Gas Policy

Act of 1978 and Establishing Policy Under the Natural Gas Act,

48 Fed. Reg. 5152 (Feb. 3, 1983) (Order No. 94-A) (Final Rule and

Order on Rehearing of Order No. 94). Appeal pending sub nom.,

Texas Eastern Transmission Corp., et al. v. Federal Energy Regu-

latory Commission, No. 83-4390 (argued March 8, 1985, 5th Cir.).

® American Paper Institute, Inc., Industrial Users (i.e., Process

Gas Consumers Group and American Iron & Steel Institute),

Florida Cities, Pitts Oil Company, et u!., Stauffer Chemical Company,

Associatea Gas Distributors, Memphis Light, Gas & Water Division,

BTA Oil Producers, and a group of Indicated Producers.

The Commission also received five requests for an extension of the

deadline for large first sellers to make refunds and a request to

III. DISCUSSION

A. The Court’s Decision Prohibiting the Offset of

Section 110 Allowances

The Court of Appeals quoted with approval the Com-

mission’s rationale in Order No. 399 for disallowing the

offset of Btu refund obligations and section 110 charges.

The court directed the Commission to vacate the offset

portion of Order No. 399-A.’

As required by Order No. 399-A, many first sellers

offset hundreds of millions of dollars of Btu refund obli-

gations against uncontested section 110 charges in pay-

ment of Btu refunds. The Commission is now reversing

that order, consistent with the instructions of the United

States Court of Appeals.* Those first sellers that paid

the Btu refund obligation by offsetting section 110

charges must now pay the Btu refund obligation in full.®

modify the refund procedures. The Commission did not extend the

deadline, or modify the refund procedures, because the petitions

failed to present sufficient grounds for an extension.

In addition, five petitioners sought a stay of Order No. 399-A.

These requests were not granted because the Commission did not

believe “justice so require[d],” 5 U.S.C. § 705 (1982).

TINGAA-II, supra, at 171. The American Paper Institute, In-

dustrial Users, Florida Cities, the Associate Gas Distributors and

Stauffer Chemical Company objected to the requirement that first

sellers’ undisputed billings to pipeline-purchasers for section 110

allowances be offset against the first sellers’ Btu refund obligation.

Since the Court of Appeals’ decision has afforded these petitioners

the relief they sought in their petitions for rehearing, the Commis-

sion grants these petitions.

8 The mandate issued May 20, 1985, the date of the Court of

Appeals denial of the “Indicated Producers” motion for a stay.

On June 3, 1985, Chief Justice Burger denied a petition for stay

of the mandate.

* This refund payment may be in the form of one or more cash

payments, or in the form of billing adjustments (if such billing

adjustments are agreed to by the first seller), or a combination of

these methods, as long as full payment is made by August 30, 1985.

Refunds must be made by August 30, 1985.'° In all cases,

interest accrues on the amount to be refunded until the

date of payment, in accordance with Order No. 399."' In

addition, interstate and intrastate pipelines are required

to file refund reports similar to those required in Order

Nos. 399 and 399-A. These additional reports are neces-

sary to better monitor the payment of refunds by first

sellers and interstate pipelines.

B. Refund Obligations Attributable to Royalty Inter-

est Owners

Memphis Light, Gas and Water Division, (Memphis)

protests the Commission’s assertion of authority in Order

No. 399-A to waive payment by first sellers of that por-

tion of a Btu refund obligation attributable to royalty

interest owners that is uncollectible. Memphis argues

that the Commission lacks authority to waive the imposi-

tion of strict liability for the refund on first sellers. Al-

ternatively, Memphis argues that there is no reason to

waive this refund obligation because it derives from a

first seller’s payment of excessive royalties.

In Order No. 399, first sellers were made guarantors

of payment of the portion of the Btu refund obligation

attributable to royalty interest owners, primarily because

the first seller, not royalty interest owners, collected

10 The disallowance of offsets does not affect the right of first

sellers to defer payment of that portion of the Btu refund obliga-

tion attributable to royalty interest owners until actually collected

or until November 5, 1986, whichever occurs first.

11 The Indicated Producers argue that pipelines should pay the

same interest rate on section 110 charges as the interest rate ap-

plicable to the Btu refunds. This issue is also mooted by the deci-

sion in INGAA-II because Btu refunds must be paid separately

and distinct from section 110 charges. In any event, the interest

rate applicable to Btu refunds was set by the Commission based

upon public policy considerations. In contrast, the interest rate for

section 110 charges is set by contract. For this reason, these

interest rates may differ.

prices in excess of NGPA ceiling prices. On review, the

Commission still believes it has discretion to waive pay-

ment of those portions of the refund obligation attributa-

ble to royalty interest owners, if the first seller demon-

strates that the refund is uncollectible.* As stated in

Order No. 399-A, the Commission will consider requests

for a waiver on a case-by-case basis.’*

C. Responsibility of Operators

Order No. 399 designated the operator as the one re-

sponsible for repayment of the entire refund for the

time period it operated a well.’* Specifically, the order

required operators to notify aii of the working interest

owners of their refund chbiigations and to collect the re-

funds and pay them over to the pipelines. In addition,

the Commission required operators to pay refunds owed

by a defaulting working interest owner.

The Indicated Producers complain about the imposi-

tion of strict liability on a first seller that is the operator

of a well for those refunds that are attributable to other

working interest owners. They argue that an operator

should not have to serve as a guarantor of refunds from

other working interest owners that default on their por-

tion of the refund.

The Commission recognizes that each working inter-

est owner is a first seller and individually liable for the

refund attributable to its interest in a well during the

time the refund obligation accrued, as well as that por-

tion of its refund obligation attributable to royalty inter-

est owners. But, after further consideration of the issue,

the Commission still believes it is necessary to designate

12 See Consumer Federation of America v. FPC, 515 F.2d 347,

359 (D.C. Cir. 1975).

13 As established in Order No. 399-A, to the extent a filing fee

exists for such a waiver, the Commission is waiving this filing fee.

1449 Fed. Reg. 37,735, 37,740 (Sept. 26, 1984).

the operator as the one responsible for the payment of

the entire refund for the time period that the operator

operated a well in order to facilitate expeditious refunds

as required by the court in INGAA-I and INGAA-II.

D. Other issues

Pitts Oil Company, Sage Energy Company, and Clay-

ton W. Williams, Jr., Co. filed a petition requesting re-

consideration of the same issues on which they sought

rehearing of Order No. 399, asserting that Order No.

399-A and its predecessors failed to articulate a rea-

soned explanation for requiring refunds to implement the

court’s decision in INGAA-I.

As discussed in Order No. 399-A, the Commission be-

lieves that substantial equitable considerations support a

discretionary order of refunds. Primarily, the consumers

who paid excessive gas prices because of the incorrect

measurement of the Btu content of that gas should bene-

fit through the refund of overcharges. In any event, the

opinion of the Court of Appeals in INGAA-II leaves no

doubt that refunds were required to implement that

Court’s earlier decision in INGAA-I.*

To the extent petitioners have raised issues other than

discussed above, the Commission believes those issues

were previously considered and fully addressed in prior

orders in this proceeding.

IV. EFFECTIVE DATE AND CLEARANCE BY THE

OFFICE OF MANAGEMENT AND BUDGET

The refund reporting requirements established in this

rule are information collection requirements under the

Paperwork Reduction Act ** and subject to Office of Man-

agement and Budget (OMB) approval.’’ Hence, the re-

15 INGAA-II, supra at 171.

16 44 U.S.C. §$§ 3501-3520 (1982).

175 C.F.R. Part 1320 (1985).

porting requirements established in paragraph (F) be-

low and § 154.38(h) (3) (viii) of the Commission’s regu-

lations are effective [insert date that is sixty days after

publication in the First Register]. If OMB clearance has

not been received by this effective date, the Commission

will issue a notice temporarily suspending the effective

date of ti.e refund reporting requirements. The remain-

ing portions of this order are effective [insert date that

is thirty days after publication in the Federal Register].

V. THE COMMISSION ORDERS:

(A) That portion of Order No. 399-A that required

the offset of Btu refund obligations and section 110

charges is vacated, and those petitions for rehearing that

requested this relief are granted.

(B) First sellers must make refund payments for those

amounts of Btu refund obligations that were previously

paid by means of offsetting section 110 charges, by Au-

2” . 80, 1985, in accordance with Order No. 399.

choose the method of payment of this refund, except that

pipelines and first sellers may not offset Btu refunds and

production-related costs permitted under section 110 of

the NGPA. Those pipelines that have already begun to

collect refunds by using billing adjustments without the

consent of the seller can continue this method of pay-

ment only if the seller agrees. If the parties cannot

agree, payment must be made in a lump-sum cash pay-

ment.

(D) Interest on Btu refunds must be calculated in ac-

cordance with §§ 154.102(c) and (d) of the Commis-

sion’s regulations, except that any interest on money

paid into escrow is the actual interest accrued in the

escrow account on the amount required to be refunded.

(E) Any filing fee applicable to a request for a waiver,

as described herein, is waived.

(F) By October 15, 1985, interstate and intrastate

pipelines must file a refund report with the Commission

detailing (1) the first sellers that made refunds, the

refunded amounts that each pipeline has received, sep-

arately stated for each first seller, and indicating the

principal amount and interest; and (2) the first sellers

that have not made refunds, and the refund amounts due

but not received by the pipeline, for each first seller, sep-

arately stating the principal amount and interest due

from each first seller and the reason for nonpayment.

Intrastate pipelines must file a copy of this report with

the state regulatory agency having jurisdiction over such

pipeline.

(G) All other petitions for rehearing, reconsideration,

extension of time, and stay of Order No. 399-A are de-

nied.

(H) In consideration of the foregoing, Part 154, Chap-

ter I, Title 18, of the Code of Federal Regulations, is

amended as set forth below.

List of Subjects: 18 C.F.R. Part 154

Natural gas

By the Commission.

(SEAL)

/s/ Kenneth F. Plumb,

KENNETH F. PLUMB,

Secretary.

1. The authority citation for Part 154 continues to

read as foliows:

AUTHORITY: Department of Energy Organization

Act, 42 U.S.C. §§ 7101-7352 (1982); Executive Order

12,009, 3 C.F.R. 142 (1978); Administrative Procedure

Act, 5 U.S.C. $§ 551-557 (1982); Natural Gas Act, 15

U.S.C. §$ 717-717w (1982); Federal Power Act, 16

U.S.C. $$ 791la-828e (1982); Natural Gas Policy Act, 15

U.S.C. §§ 3301-3432 (1982); Public Utility Regulatory

Policies Act, 16 U.S.C. $$ 2601-2645 (1982); Interstate

Commerce Act, 49 U.S.C. §§ 1-27 (1976).

2. In § 154.38(h), paragraph (h) (3) (viii) is redesig-

nated as paragraph (h) (3) (ix), and a new paragraph

(h) (8) (viii) is added to read as follows:

$ 154.88 Composition of rate schedule.

* * * *

(h) Pipeline recovery of Btu measurement adjustments.

x * * *

(3) * * *

(viii) The pipeline must submit, not later than Octo-

ber 15, 1985, a refund report describing, for each source

from which Btu refunds are obtained, those refunds

received or paid (including deferred amounts paid) since

filing the report under paragraph (h) (8) (vii) of this

section. For these refunds subject to this paragraph,

this report should show all the information enumerated

in paragraph (h) (3) (vi).

* * ” *

3. In § 154.38(h), newly-redesignated paragraph (h)

(3) (ix) is amended by removing the phrase “para-

graphs (h)(3)(vi) and (vii)”, and inserting, in its

place, the phrase “paragraphs (h) (3) (vi), (vii), and

(viii)”’.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.