# Appendix — Williams v. Overholser > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386408_0055%3A01 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1951 - **Citation:** 340 U.S. 910 ## Text BLEED THROUGH Volume I JOINT APPENDIX BLEED THROUGH i INDEX Vo_ume I Joint and Several Petition of State of Wisconsin and Public Service Com- mission of Wisconsin to Review Or- ders of the Federal Power Commis- sion in Its Docket G-1148, Filed No- vember 20, 1951 2.00... Petition of City of Milwaukee to Re- view an Order of the Federal Power Commission in Its Docket No. G-1148 Relating to an Opinion and Order Entered by the Commission on Au- gust 16, 1951 (Order No. 217, Issued August 22, 1951), Filed November 15, 1951 Petition of City of Kansas City, Mis- souri, for Review of Order of Federal Power Commission, Filed November eee Petition of the City of Detroit, Michi- gan, for Review of Order of Federal Power Commission, Filed November 14, 1951 Motion of Phillips Petroleum Company for Leave to Intervene, Filed Jan- uary 29, 1952 ...... Record Appendix Page Page 44-56 57-72 72-77 ii Order of United States Court of Ap- peals for the District of Columbia Circuit permitting Phi:lips Petrol- eum Company to Intervene, Dated February 9, 1952, Filed February 9, nnn Motion of State of New Mexico, et al for Leave to Intervene, Filed Febru- ary 5, 1952 -....----------- — a Order of United States Court of Appeals for the District of Columbia Circuit permitting State of New Mexico and Oil Conservation Commission of State of New Mexico to Intervene, Dated March 3, 1952, Filed March 3, 1952 ... Motion of the Corporation Commission of the State of Oklahoma for Leave to Intervene, Filed April 9, 1952 -........... Answer of State of Wisconsin and Pub- lic Service Commission of State of Wisconsin to Motion of the Corpora- tion Commission of the State of Okla- homa for Leave to Intervene, Filed April 16, 1952 ............-------------s--esee-ssenes Motion of the State of Texas Through the Railroad Commission of Texas for Leave to Intervene, Filed April 10, Record Page BLEED THROUGH Stipulation With Respect to the Mo- tion to Intervene of the State of Texas Through Its Railroad Commission and the Corporation Commission of the State of Oklahoma and the Motions of the State of Wisconsin and Its Pub- lic Service Cornmission to Dismiss the Aforesaid Motions to Intervene, Filed ee 106-111 Order of the United States Court of Ap- peals for the District of Columbia Circuit Permitting Corporation Com- mission of State of Oklahoma to In- tervene, Dated May 12, }952, Filed Be Bey SE eeeeeenctntnemnnsentenene 111-114 Order of the United States Court of Ap- peals for the District of Columbia Cir- cuit Permitting the State of Texas Through the Railroad Commission of Texas to Intervene, Dated May 12, 1952, Filed May 12, 1952 114-117 WITNESSES Testimony of: Marsh, Edward (Presiding Examiner- opening statement) —..0 7-9 118-119 Record Page Etchieson, W. S. Direct examination by CO ee 150-152 170 173 176-178 184-186 Walters, Mason G. Direct examination by GI LE 225-226 250-252 259-261 Etchieson, W. S. (recalled) SG SE reve 265 292-302 396-311 317-319 325-326 Cross examination by Mr. Sparks.. 327 338-339 BLEED THROUGH Record Appendix Page Page Direct examination (resumed) by seobeehdidbeaieenesiieanieiiad 645-646 170 657-658 171 734-737 171-174 Cross examination by Mr. Sparks 744 174 775-779 186-188 917-919 188-190 Eee 934 190 942-943 190 OAR EEE 993-1001 191-196 Cross examination by Mr. Sparks. 1001 197 Paris, A. W. Direct examination by OB 1002-1004 197-198 1018-1020 198-200 1034 200 1045-1046 200-201 1048-1049 201-202 1082-1084 202-203 1094-1095 204-205 1103-1105 205-206 1108-1112 206-209 1116 209-210 1119-1121 vi Record Appendix Page Page Direct examination (resumed) Rey Bile, FRODGID ccciccecmeencen 1122-1124 213-215 1131-1134 215-217 © 1146-1148 217-218 Cross examination by Mr. Sparks..1157-1183 219-237 1191-1198 238-243 Walters, Mason G. (recalled) Further direct examination by es ED cnidhiccininticcinicewencseceenmminsan 1211 244 1213-1216 244-246 Markley, Howard Direct examination by Bs IID creccencrcsincnsnntnsneninnsitenamecien 1217-1220 246-248 1225 248 1227-1230 249-250 1232 250-251 1269-1274 251-255 1301-1303 256-257 1311-1315 257-261 1341 261 1344-1345 262 Examination by Mr. Torkelson .... 1372 262 1379 262-263 Cross examination by Mr. Sparks..1380-1385 263-267 1395-1396 267-269 1425-1427 269-270 1463-1466 270-273 Redirect examination by I 1473 273 1486-1488 273-275 1541-1542 275-276 BLEED THROUGH Record Appendix Page Page Redirect examination (resumed) by Mr. McAllister -................. 1545 276 1555-1556 276-278 Examination by Mr. Torkelson ....1562-1564 278-279 Examination by Mr. McAllister ....1568-1569 279-280 Recross examination by SE II sedchetiaticteailepadaniciscabnnihs 1569 280 Roth, George C. Direct examination by By IEE sciuseenensivansipedanamansinabaned 1576-1587 281-288 1590-1593 288-290 Cross examination by Mr. Sparks..1602-1604 291-292 1657 292-293 Schumacher, A. H. Direct examination by eprcsunianpnibiaiitincwinmmsdinnnes 1666-1669 293-295 Stewart, Robert Boyd Direct examination by Walters, Mason G. (resumed) Redirect examination by Mr. McAllister ........................ ..--.-1744-1745 296-298 1786-1787 298 1789 298-299 Rippel, A. M. Mr. McAllister Bunn, George P. Mr. McAllister BLEED THROUGH Mr. Purdue .... Direct examination by Page cnsingnmsosemtinninenanen 1796-1797 Markley, Howard (resumed) Examination by Mr. McAllister .... Rippel, A. M. (resumed) Direct examination by Direct examination by 1867 1869-1870 1881-1882 1898, 1902 1973, 1975 1977-1982 1985-1986 1990-1993 2014 2020-2022 2024-2026 2030-2032 2037-2038 2093-2094 2097-2098 2103-2104 2107-2108 2121-2123 2132-2134 2136-2137 2147-2148 Cross examination by Mr. Sparks..2157-2160 Record Appendix Page 303-306 307-208 308-310 310-311 311-312 313-314 314-315 315 315-316 317 317-318 319-320 320-322 322-323 323-324 324-326 326-329 Record Appendix Page 2166, 2172 2176 2178 2181-2185 2221 2256-2261 Stark, C. O. (resumed) Examination by Mr. Torkelson ...... Beall, K. E. Direct examination by RS WHI excicsscctencsststermestntinbesnil Examination by Mr. McAllister 2271-2272 2284-2285 2309 2355-2358 2421-2422 2466 2470-2471 2726 2726-2727 2729, 2732 .-2733-2734 2737 2742, 2747 2752 2759-2760 2812 Page 329 329 329-330 330-334 334 334-339 339 339-341 341 341-343 343-344 344 344-345 345 Record Appendix Page Page Bunn, George P. (resumed) Direct examination by Mr. Sparks 2813 350 2819 350 2923-2926 350-353 2935 353 2939-2940 353-354 2949-2950 354-355 2999-3000 355 3049-3052 355-356 3055-3058 356-359 3094-3096 359-361 3109-3111 361-363 3140-3141 363 3146-3147 363-364 3208 364 3257-3268 364-374 BLEED THROUGH BLEED THROUGH VOLUME 1 JOINT APPENDIX Gnited States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT No. 11247 STATE OF WISCONSIN AND PUBLIC SERVICE COMMISSION OF WISCONSIN, Petitioners versus FEDERAL POWER COMMISSION, Respondent PHILLIPS PETROLEUM COMPANY ET AL., Intervenors. No, 11241 CITY OF DETROIT, MICHIGAN, Petitioner, versus FEDERAL POWER COMMISSION, Respondent PHILLIPS PETROLEUM COMPANY ET AL., Intervenors. No. 11242 CITY OF KANSAS CITY, MISSOURI, Petitioner, versus FEDERAL POWER COMMISSION, R PHILLIPS PETROLEUM COMPANY ET AL., ieteovenens. No. 11245 CITY OF MILWAUKEE, WISCONSIN, a Municipal Corporation, Petitioner, versus FEDERAL POWER COMMISSION, Respondent PHILLIPS PETROLEUM COMPANY ET AL., Intervenors. No. 11252 COUNTY OF WAYNE, MICHIGAN, Petitioner, versus FEDERAL POWER COMMISSION, Respondent PHILLIPS PETROLEUM COMPANY ET AL., Intervenors. Review of An Order of the Federal Power Commission CONTENTS Petitions For Review Orders of Intervention Testimony—Record Pages 1-3268 nd BLEED THROUGH JOINT AND SEVERAL PETITION OF STATE OF WISCONSIN AND PUBLIC SERVICE COMMIS- SION OF WISCONSIN TO REVIEW ORDERS OF THE FEDERAL POWER COMMISSION IN ITS DOCKET G-1148 11,247 To the Honorable, the United States Court of Appeals for the District of Columbia Circuit: The State of Wisconsin and Public Service Commission of Wisconsin file their joint and several petition under Section 19 (b) of the Natural Gas Act to review and set aside an order of the Federal Power Commission issued August 22, 1951 in connection with said Commission’s Opin- ion No. 217, and the Commission’s order denying the appli- cation of these petitioners for rehearing, which latter order was issued September 28, 1951, aJ! of which was in a pro- ceeding before said Commission entitled “In the Matter of Phillips Petroleum Company, Docket G-1148.” For their petition the State of Wisconsin and Public Service Commission of Wisconsin respectfully allege as follows: 1. Identity of Petitioners (1) At all times herein mentioned the State of Wis- consin was and is one of the forty-eight sovereign states forming the United States of America. It appeared before the Federal Power Commission in the proceeding entitled “In the Matter of Phillips Petroleum Company, Docket G-1148” and it petitions and appears herein in its sovereign 1 capacity and by its agency, the Public Service Commission of Wisconsin, to protect a two-fold interest as follows: (a) as the representative of the consuming public which purchases natural gas in the State of Wisconsin from distributing companies located in such states, which com- panies in turn purchase said natural gas in the State of Wisconsin frem Michigan-Wisconsin Pipe Line Company, wuich latter company in turn purchases its entire supply of said natural gas from Phillips Petroleum Company at a point in the State of Texas, and (b) as a user or consumer of natural gas purchased from a distributing company lo- cated in the State of Wisconsin (Madison Gas & Electric Company, Madison, Wisconsin), which distributing com- pany purchases said gas from Michigan-Wisconsin Pipe Line Company as above stated, by virtue of its being the pro- prietor of certain public institutions, schools and buildings. (2) The Public Service Commission of Wisconsin was at all times herein mentioned an agency of the State of Wisconsin created by and deriving its authority and powers from statutory grant by the Wisconsin Legislature. The authority and powers so granted the Public Service Com- mission of Wisconsin appear in Chapters 195 and 196 of the Wisconsin Statutes. Among other powers and authority given to said Commission is that which follows from Sec- tions 195.01, 196.01, 196.02, 196.03, 196.20 and 196.37, Wis- consin Statutes, to regulate rates charged by and the adequacy of service furnished by public utilities located in the State of Wisconsin, including those which sell and deliver natural gas to the public for ultimate consumption for dornestic, commercial, industrial or any other use, to the end that such rates shall be reasonable and just, and that such public utilities furnish reasonably adequate serv- BLEED THROUGH ice and facilities to the public. That the Public Service Commission of Wisconsin is a “state commission” within the meaning of the term as used in Sections 2 (8), 13 and 15 of the Natural Gas Act and Section 1.8 of the General Rules and Regulations and Rules of Practice and Procedure of the Federal Power Commission. 2. Nature of Proceedings As to Which Review Is Sought (3) By order dated October 28, 1948, issued October 29, 1948, pursuant to authority granted it by the Natural Gas Act, the Federal Power Commission instituted an in- vestigation of the natural gas operations of Phillips Petrol- eum Company to determine: (i) Whether it is a “natural-gas company” within the meaning of the Natural Gas Act; and (ii) Whether, in connection with any transportation or sale of natural gas, subject to the jurisdiction of the Commission, any rates, charges, or classifica- tions demanded, observed, charged, or collected, or any rules, regulations, practices or contracts affecting such rates, charges, or classifications are unjust, unreasonable, unduly discriminatory, or preferential. (4) On February 9, 1950 the Federal Power Commis- sion issued another order in which reference was made, among other things, to complaints filed by the City of Detroit and Public Service Commission of Wisconsin and the results of field investigations made by the staff of the Federal Power Commission, as to the relation of Phillips Petroleum Company to a number of pipe line companies. In referring to Michigan-Wisconsin Pipe Line Company, the Commission said: “As stated above, the present annual sales capac- ity of 56,575,000 Mcf is proposed to be increased to 125,195,000 Mcf and it appears from staff estimates that the annual cost to Michigan-Wisconsin of 125,195,000 Mcf of natural gas which Phillips will supply to Michigan-Wisconsin under the contract of December 11, 1945, as amended, and the two new contracts of December 1, 1949, would be increased approximately $5,000,000 annually over the cost under the original contract. Furthermore, such contracts contain other provisions which, upon becoming operative in the fu- ture, may result in further substantial increases in the cost of gas to be svpplied Michigan-Wisconsin. “Phillips has contracted to sell and is selling large volumes of natural gas from the Panhandle and Hugo- ton gas fields to Panhandle Eastern Pipe Line Com- pany, Northern Natural Gas Company, Independent Natural Gas Company, and El Paso Natural Gas Com- pany at various prices substantialiy lower than the base prices specified in its contracts with Michigan- Wisconsin. “Wherefore, it appears to the Commission that: “It is necessary and desirable in the public interest that a public hearing be held to determine all relevant facts and circumstances surrounding the natural gas operations of Phillips Petroleum Company to enable the Commission to determine (a) Whether Phillips Petroleum Company is a ‘natural-gas company’ with- in the meaning of the Natural Gas Act; (b) Whether in connection with any transportation or sale of natural gas subject to the jurisdiction of the Commission, in- 4 BLEED THROUGH cluding sales to Michigan-Wisconsin Pipe Line Com- pany, any rates, charges, or classifications demanded, observed, charged, or collected by Phillips Petroleum Company, or any rules, regulations, practices, or con- tracts affecting such rates, charges, or classifications are unjust, unreasonable, unduly discriminatory or preferential. “The Commission orders: “(A) A public hearing be held commencing at 10 a. m. (CST) on March 20, 1950, in the Federal Court Room, U. S. Post Office Build- ing, Bartlesville, Oklahoma, respecting all matters and issues set forth in this order and the Commission’s order of investigation under date of October 28, 1948. “(B) Interested State commissions may partici- pate as provided by Sections 8 and 37 (f) [18 CFR 1.8 and 1.37 (f)] of the Commis- sion’s Rules of Practice and Procedure.” (5) After a number of adjournments the Federal! Pow- er Commission issued an order on February 28, 1951 setting the matter for hearing in Bartlesville, Oklahoma com- mencing April 3, 1951 at 10 a. m. Prior to said hearing a number of persons, including your petitioners, representing consumer interests, intervened in said proceeding, and are listed as follows: Public Service Commission of Wisconsin State of Wisconsin City of Detroit, Michigan County of Wayne, Michigan City of Kansas City, Missouri 5 City of Milwaukee, Wisconsin Michigan Public Service Commission In addition there were other intervenors including the following: State of New Mexico State Corporation Commission, State of Kansas Corporation Commission, State of Oklahoma Railroad Commission of Texas State of Texas Oil and Gas Commission, State of Arkansas Oil and Gas Board, State of Mississippi Public Service Commission of West Virginia Commissioner of Conservation, State of Louisiana Texas County Land and Royalty Association Texas Independent Producers and Royalty Owners Association Certain Royalty Owners in Old Ocean Field Brasoria County, Texas Old Ocean Royalty Owners Independent Natural Gas Association of America Port Neches Royalty Owners Association (6) Prior to the hearing in Bartlesville, Oklahoma, on April 3, 1951, Phillips Petroleum Company filed a mo- tion with the Federal Power Commission requesting it to amend its order of February 9, 1950 defining the issues so as to limit the issue to be considered at said hearing to a 6 BLEED THROUGH " determination whether it was a “natural gas company” within the meaning of the Natural Gas Act. (7) Upon the opening of the hearing in Bartlesville, Oklahoma on April 3, 1951, the presiding examiner made the following statement (Tr. 7-9): “* * * IT want to announce that I have received from the Secretary of the Commission the following memorandum, and I quote: “March 30, 1951, Memorandum for: Presiding Examiner Marsh, Bureau of Law, Bureau of Accounts, Finance and Rates. “‘For your information, the following is an ex- cerpt from the minutes of a meeting of the Commission held on March 29, 1951: “The Commission had before it the Motion to Limit Issues filed on March 27, 1951, by Phillips Petroleum Company in Docket No. G-1148, but decided to defer action thereon until the other parties to the proceeding have had the opportunity provided for by the Rules to file answers to said motion. Upon motion of Commissioner Draper, seconded by Commissioner Wimberly, the Commission (Commis- sion Buchanan dissenting) directed that, in the mean- time, the Examiner designated to preside at the hearing in said proceeding scheduled to commence on April 3, 1951, be instructed to confine the taking of testimony to Paragraph (A) (i) of the order of the Commission entered October 28, 1948, and issued October 29, 1948.” Signed Leon M. Fuquay, Secretary.’ That memoran- dum was accompanied by a memorandum of transmit- tal, which reads as follows: “Because of time limitations, we will not be able to serve notice of this action upon the participants in the proceeding. I will, therefore, apreciate it if you 7 will have it spread upon tle record at the opening of the hearing.’ ”’ Thereupon your petitioners, the staff of the Federal Power Commission, the Cities of Milwaukee, Kansas City and Detroit, and possibly others, filed objection to said motion with the Federal Power Commission. On April 17, 1951 the Federal Power Commission issued an order (Commis- sioner Buchanan dissenting) limiting the issue at said hear- ing to the so-called “jurisdictional question,” i. e., whether Phillips Petroleum Company is a natural gas company within the meaning of the Natural Gas Act. That said order reads in part as follows: “Upon consideration of the motion to limit issues filed herein by Phillips on March 27, 1951, of the Commission’s orders issued herein, and all of the fore- going, the Commission finds: ms bo *(2) *(3) Although the Commission by order has set forth the issues to be heard herein, the order in which such issues shall be heard has not been prescribed. Orderly procedure requires that the follow- ing issue, heretofore set forth in the Com- mission’s orders issued herein, first be heard at the hearing now in progress, viz: Whether Phillips Petroleum Company is a ‘natural- gas company’ within the meaning of the Natural Gas Act. Orderly procedure requires, and it is in the public interest, that hearing be held upon and a determination made by the Commis- sion of the issue of whether Phillips Petrol- eum Company is a ‘natural-gas company’ 8 BLEED THROUGH within the meaning of the Natural Gas Act, before hearing is held upon any other issue in this proceeding. Hearing upon issues herein other than that set forth in paragraph (2) hereof should be held as soon as practicable after hearing upon said issue, at a time and place to be fixed by further order of the Commission. The motion to limit issues filed by Phillips on March 27, 1951, should be granted to the extent hereinafter ordered, and in all other respects should be denied. “The Commission orders: “(A) The matters to be presented at the public hearing now in progress shall be only those relevant to the following issue set forth in the Commission’s order of investigation is- sued October 29, 1948, to-wit: Whether Phillips Petroleum Company is a ‘natural- gas company’ within the meaning of the Natural Gas Act. A public hearing he held upon the remaining issues set forth in the Commission’s order of investigation issued October 29, 1948, at a time and place to be fixed by further order of the Commission. “(C) The Motion to Limit Issues, filed herein by Phillips Petroleum Company on March 27, 1951, is granted to the extent herein ordered, and in all other respects is denied. “By the Commission. Commissioner Buchanan dissenting.” (8) Following the completion of the hearing on the issue above stated, the so-called intermediate procedure provided for by the Rules of Practice and Procedure of the Federal Power Commission (see sec. 1.30 (c)) was dispensed with, and following the submission of briefs and oral argument before the Commission and order was issued by said Commission on August 22, 1951, based on alleged reasons stated in Opinion No. 217 and purported findings (Commissioner Buchanan dissenting and Commissioner Draper concurring in the result), which order reads as follows: “The Commission orders: “That the proceeding initiated by the Commission’s order of October 28, 1948, in Docket No. G-1148 be, and the same hereby is, terminated. “By the Commission. Commissioner Draper con- curring in the result. Commissioner Buchanan dis- senting.” (9) Thereafter applications for rehearing from said Opinion and order were filed by the following parties on the dates specified: Applicant Date State of Wisconsin and Public Serv- ice Commission of Wisconsin September 17, 1951 City of Milwaukee, Wisconsin September 12, 1951 City of Kansas City, Missouri September 10, 1951 City of Detroit, Michigan September 19, 1951 County of Wayne, Michigan September 19, 1951 10 BLEED THROUGH On September 28, 1951 the Federal Power Commission issued an order (Commissioner Buchanan dissenting) denying each of said applications for rehearing. 3. Facts and Statutes Upon Which Jurisdiction Is Based (10) The proceeding here is to review the aforesaid order of the Federal Power Commission issued August 22, 1951 (Commissioner Buchanan dissenting) and order issued September 28, 1951 denying the applications of your peti- tioners and the others above mentioned for rehearing. Jurisdiction of this court to review said orders is estab- lished by Section 19 (b) of the Natural Gas Act. (11) The State of Wisconsin is aggrieved by the afore- said orders of the Federal Power Commission by which it refuses to assume jurisdiction over Phillips Petroleum Company as a “natural gas company” as defined by Sec- tion 2 (6) of the Natural Gas Act, and particularly by its refusal to assume jurisdiction over its sales of natural gas to (a) Michigan-Wisconsin Pipe Line Company, (b) El Paso Natural Gas Company, (c) Panhandle Eastern Pipe Line Company, (d) Independent Natural Gas Company for sale to Northern Natural, and (e) Cities Service Gas Company. After taking delivery of said natural gas, said pipe line companies carry the gas in pipe lines acgoss state lines to markets in states other than those where Phillips sells and delivers the gas to the Pipe Line Companies, where the gas in turn is sold and delivered by the Pipe Line Companies to others who in turn sell and distribute said gas to the consuming public for domestic, commercial, industrial and other uses. Phillips Petroleum Company 11 concedes, and the Federal Power Commission found, that the sale of natural gas by Phillips to the five Pipe Line Companies above mentioned are each a sale of natural gas in interstate commerce for resale for ultimate consumption for domestic, commercial, industrial or other use. More specifically, so far as the situation in Wisconsin is concerned, the Federal Power Commission by its orders refused to take jurisdiction over the sale of natural gas by Phillips Petroleum Company to Michigan - Wisconsin Pipe Line Company in the State of Texas (which Phillips Petroleum Company admits and the Federal Power Commission found was a sale of natural gas in interstate commerce for pur- poses of resale). The pipe line company then transports the natural gas so purchased in pipe lines to points in the State of Wisconsin (as well as in other states) where it in turn sells said natural gas to distributing companies. Said companies in turn sell and deliver gas to the public for ultimate public consumption for domestic, commercial, industrial or other use in the State of Wisconsin as well as Michigan and other states. Phillips Petroleum Company is the sole supplier of all natural gas transported by Michigan- Wisconsin Pipe Line Company (delivering up to 343,000 Mcf per day) and said pipe line company in turn is the sole supplier of natural gas to local distributing companies serving the Cities of Madison (Madison Gas and Electric Company) and Milwaukee (Milwaukee Gas Light Com- pany), the two principal cities in Wisconsin, as well as those serving other communities along the shore of Lake Michigan and the Fox River Valley Area, the principal industrial areas of the state. Consumers in such areas form a substantial portion of the population of the State of Wisconsin. 12 BLEED THROUGH (12) The price which Michigan-Wisconsin Pipe Line Company pays Phillips Petroleum Company becomes a factor in the amount the ultimate consumer in Wisconsin must pay for natural gas in said state. (13) The State of Wisconsin here petitions and appears in this court in its sovereign capacity to represent and protect as parens patriae the interest of tne consuming public in Wisconsin which uses natural gas transported into the state purchased by Michigan-Wisconsin Pipe Line Company. Georgia v. Pennsylvania Railroad Co., 324 U. S. 439. (14) The State of Wisconsin is also the proprietor of institutions, schools and buildings and by reason thereof is itself a consumer of natural gas purchased from Madison Gas and Electric Company (among other companies) which in turn purchases its entire supply of natural gas from Michigan-Wisconsin Pipe Line Company. In the period from December, 1949, when natural gas was first introduced in Madison, Wisconsin, through March 31, 1951, the State of Wisconsin purchased the following quantities of natural gas from Madison Gas and Electric Company: Amount of Gas _ Cost State of Wisconsin, for Executive IE ciceecssadseecsitheadtibtintenati 1,472.8 Mcf $ 1,558.10 State of Wisconsin, for University RECURS 12,482.7 Mcf $13,479.84 (15) The price which Phillips Petroleum Company charges Michigan-Wisconsin Pipe Line Company was and is excessive and discriminatory. For the year ended De- cember 31, 1950, the natural gas department of Phillips 13 Petroleum Company earned a return in excess of 16.5% on a rate base consisting of a net investment as per its books plus an allowance for materials and supplies and working capital. This is shown by Exhibits 3 to 7 prepared and offered by the staff of the Federal Power Commission in the proceeding before the Commission in said Docket G-1148, which were excluded from the record by the pre- siding examiner on the alleged ground they were not material to the jurisdictional issue. Said exhibits were later adopted by Wisconsin as its own exhibits and an offer of proof made (Tr. 5763) on the ground they were material to the jurisdictional issue as showing the impact of an un- regulated price between Phillips and the pipe line com- panies upon the ultimate consumer, and the latter’s interest in and need for regulation. See Section 1 (a), Natural Gas Act, and Interstate Natural Gas Co. v. Federal Power Commission, 331 U. S. 682, 693. The record in Docket G-1148 further shows that the original contract of December 11, 1945 provided that Phillips supply Michigan-Wisconsin Pipe Line Company up to specified quantities of gas at 5-cents Mcf for the first 5 years beginning July 1, 1948. Then ‘by amendment of August 9, 1948 the price was increased to 814-cents Mcf with a 1-cent increase for each successive 5-year period. Said amendment included an escalator clause which would bring increased revenue to the company in an amount ranging between $15 and $20 million over the life of the contract. There were also sub- sequent amendments, the effect of which nearly doubled the cost of gas to Michigan-Wisconsin. Prior to the amend- ment of August 9, 1948 Phillips expected to realize a return of 9.5%, whereas after the amendment the expected return would be 13.76%. The record in Docket G-1148 also shows 14 BLEED THROUGH that as part of its operations Phillips “farmed out” 100 square miles of proven acreage under a lease of such acre- age to Tascosa Gas Company (Exhibit 60). By this “farm- out” Tascosa drills the wells, and resells the gas to Phillips at a price which produces a handsome profit to Tascosa. Thus we have a superfluous middleman in the picture also taking its profit, which, if eliminated, would decrease the amount which Phillips charges said pipe line companies and still permit a fair return. (16) Undue discrimination as to the price Phillips charges Michigan-Wisconsin Pipe Line Company, as com- pared to the other pipe line companies it sells gas to, is shown by the figures taken from Exhibit 54 in Docket G-1148 as follows: 1950 Gasoline Average Price Plant Mcf. Michigan- Wisconsin Sherman 8.17 cents Panhandle Eastern Hansford 403 “ Borger Residue System 403 “ El Paso Natural Gas Crane 469 “ Co. Eunice — Fullerton 407 “ Goldsmith 4m “ Borger Residue System 506 “ Independent Natural Pampa Residue Gas Co. System 245 “ 15 The average price on the total sales of residue gas by Phillips for the year 1950 was 5.38-cents Mcf. Michigan- Wisconsin paid 8.17-cents. (17) The State of Wisconsin in its sovereign capacity as parens patriae for consumers of natural gas in Wis- consin and also as a consumer of natural gas itself is aggrieved by the failure of the Federal Power Commission, in issuing the orders previously mentioned, to determine that it has jurisdiction over Phillips Petroleum Company as a “natural gas company” as defined in Section 2 (b) of the Natural Gas Act; and is further aggrieved by the failure of said Commission to take jurisdiction over Phillips’ sale of natural gas to the pipe line companies previously men- tioned and by said Commission’s failure to regulate the price or rate charged by Phillips for such gas, and particu- larly the sale to Michigan-Wisconsin Pipe Line Company. By such failure to take jurisdiction, there is precluded any possibility of (1) securing a reduction in the excessive rates and charges which Phillips exacts from Michigan- Wisconsin and the other named pipe line companies; and (2) effecting an elimination of the unduly discriminatory rate or charge which now exists as between the rates or charges exacted by Phillips from Michigan-Wisconsin Pipe Line Company as compared to the other pipe line companies. (18) The Public Service Commission of Wisconsin is an agency of the State of Wisconsin. By statutes enacted by the legislature of the State of Wisconsin (Chapters 195 and 196, Wisconsin Statutes), said Commission is given power and authority to regulate the rates and charges exacted by and the service rendered by public utilities operating in the State of Wisconsin, and specifically has jurisdiction 16 BLEED THROUGH given by Sections 196.01 (1), 196.03 (1), 196.20 and 196.37 to regulate the rates and charges imposed by public utilities jn Wisconsin for sale of natural gas to consumers within said state, to the end that rates and charges for sale of natural gas must be “just and reasonable” and the service rendered by public utilities selling natural gas shall be reasonably adequate. As such it is a “state commission” as defined by Section 2(8) of the Natural Gas Act and has the right (as also does the State of Wisconsin) to file a complaint with the Federal Power Commission against the rate or charge of any natural gas company in connection with the transportation or sale of natural gas. See Sections 5 (a), 4 (e), 13. As a state commission it is authorized to intervene in a proceeding before the Federal Power Com- mission as a matter of right by Section 1.8 of the Federal Power Commission Rules of Practice and Procedure. See Title 15 U.S. C. A. §717n. (19) The Public Service Commission of Wisconsin herein petitions and appears with the State of Wisconsin as a representative of the consumers of natural gas in Wis- consin served by distributing companies which receive gas from Michigan-Wisconsin Pipe Line Company, and also in its capacity as a state regulatory agency having the jurisdiction above mentioned. Said Commission is aggrieved by the orders of the Federal Power Commission previously mentioned in the same manner alleged in paragraph num- bered 17, supra. Said Commission is further aggrieved by reason of the fact that the refusal of the Federal Power Commission to accept such jurisdiction establishes a “gap” in the regulatory scheme (the price at the city gate being regulated by Federal Power Commission and to the ulti- mate consumer in Wisconsin by the Public Service Com- 17 mission of Wisconsin) which impairs and prejudices the regulatory effort by the Public Service Commission of Wis- consin. Excessive and discriminatory charges at that stage, i. e., the sale by Phillips to the pipe line company, become perpetuated in the ultimate cost (see Interstate Natural Gas Co. v. Federal Power Commission, 331 U. S. 682, 693) and necesarily compel the Public Service Commission of Wisconsin to fix a rate to the ultimate consumer which jis higher than would or should otherwise be required. (20) The status of the State of Wisconsin and the Public Service Commission as an aggrieved party also is recognized in Section 19 (a) of the Natural Gas Act which reads as follows: “Any person, State, municipality, or State com- mission aggrieved by an order issued by the Commis- sion in a proceeding under this act to which such person, State, municipality or State Commission is a party may apply for a rehearing within thirty days after the issuance of such order. * * *” (21) The foregoing, taken in conjunction with the provisions authorizing inter alia the filing of complaints by any state, state commission, or municipality (Sections 5 (a), 4 (e) and 13), evidences the intent of Congress that a state regulatory commission (as well as the state or any municipality) is aggrieved as a representative of the consuming public, when, by reason of a ruling of the Federal Power Commission, said consumers are deprived of the benefit of rate reduction and the establishment of a just and reasonable and nondiscriminatory rate. A state regulatery commission is not ordinarily a consumer of natural gas. The possibility that it may be aggrieved is 18 BLEED THROUGH definitely recognized in Section 19 (a). Because of the un- likelihood of a state commission being a consumer of natural gas, it is plain it must be aggrieved in the respects above mentioned. See Federal Communications Commission »v. Sanders Radio Station, 309 U. S. 470; Scripps-Howard Radio Inc. v. Federal Communications Commission, 316 U. S. 4; Associated Industries v. Ickes, 134 F. 2d 694 (C. C. A. 2), vacated and remanded on other grounds, 320 U. S. 707. 4. The Relief Prayed (22) The relief prayed by your petitioners herein is that the aforesaid order of the Federal Power Commission in its Docket G-1148 issued August 22, 1951, and the order dated September 28, 1951 denying the applications of peti- tioners and others for rehearing, be set aside in their en- tirety. 5. The Points Upon Which Petitioners Intend to Rely (23) The points upon which the State of Wisconsin and Public Service Commission of Wiscesin intend to rely in prosecution of their petition for review ia this court are those stated in their joint application and petition for rehearing duly and timely filed with the Federal Power Commission, which will be part of the record which will be filed and certified with the court as provided in Section 19 (b) of the Natural Gas Act, which application and peti- tion for rehearing is incorporated into this petition by refer- ence with the same force and effect as if physically included herein. A concise statement of said points is as follows: 19 ee 1. PHILLIPS PETROLEUM WAS AND IS A NAT. URAL GAS COMPANY AS DEFINED IN SEC. TION 2 (6) OF THE NATURAL GAS ACT, AND THE FEDERAL POWER COMMISSION ERRED IN CONCLUDING CONTRARY. WISE 1. Phillips Petroleum Company admits, and the Fed- eral Power Commission correctly states in its Opinion No. 217, that sales of natural gas by Phillips Petroleum Com- pany to the five pipe line companies involved are sales of natural gas in interstate commerce for purpose of resale for ultimate public consumption for domestic, commercial, industrial or any other use. 2. The Federal Power Commission also correctly found that the movement of natural gas by Phillips Petroleum Company to the points of sale to the five pipe line com- panies involved constitutes transportation of natural gas in interstate commerce as a matter of constitutional law. 3. Such sales and transportation are each subject to Federal Power Commission jurisdiction by reason of the provisions of Section 1 (b) of the Natural Gas Act. Exist- ence of either such sales or such transportation makes Phillips Petroleum Company a natural gas company as de- fined in Section 2 (6) of the Natural Gas Act. a. Section 1 (b) applies to three separate things: (1) The transportation of natural gas in interstate commerce. : (2) Its sale in interstate commerce for resale. 20 BLEED THROUGH (3) Natural gas companies engaged in such trans- ; portation or sale. Transportation and sale are viewed as separate subjects of regulation. They have independent and equally important places in the Act. The Federal Power Commission erred as a matter of law in failing to find that by virtue of the foregoing premises Phillips is a “natural gas company” and subject to the jurisdiction of the Commission in the respects provided in the Natural Gas Act. II. AS A MATTER OF LAW THE SALES IN QUES- TION ARE NOT PART OF “PRODUCTION OR GATHERING” WITHIN THE MEAN- ING OF SECTION 1 (b) OF THE NATURAL GAS ACT, AND THE FEDERAL POWER COMMISSION ERRED AS A MATTER OF LAW IN CONCLUDING TO THE CON. TRARY 1. The above proposition is established beyond all doubt by the decisions of the Federal Power Commission, the Court of Appeals for the Fifth Circuit, and the United States Supreme Court in the Interstate Case. In the Matter of Interstate Natural Gas Co. v. Federal Power Commission, D. C.) 127 F. 2d 153, hearing denied F. 2d 157, certiorari Federal Power Commission, 331 U.S. 682. 2. All hold as a matter of law the sales of natural gas in interstate commerce for purpose of resale are not included in the phrase “production or gathering” contained in Section 1 (b). The same proposition follows from Peoples 21 Natural Gas Co. v. Federal Power Commission, (U. S. App. D.C.) 127 F. 2d 153, hearing denied 127 F. 2d 157, certiorari denied 316 U. S. 700. 3. The basic purpose of the Natural Gas Act was to fill the “gap” created by the decisions of the Supreme Court in Missouri v. Kansas Natural Gas Co., 265 U. S. 298, and Public Utilities Commission v. Attleboro Steam & Elec- tric Co., 273 U.S. 83, and State Corp. Commission v. Wichita Gas Co., 290 U. S. 561, to the effect that the states could not constitutionally regulate sales of wholesale quantities of natural gas (not local in character) at interstate com- merce for purposes of resale even in the absence of con- gressional action. 4. As applied here, this means that the sales of natural gas by Phillips Petroleum Company to the five pipe line companies (i. e., Michigan-Wisconsin Pipe Line Company, El Paso Natural Gas Company, Panhandle Eastern Pipe Line Company, Independent Natural Gas Company for Northern Natural Gas Company, and Cities Service Gas Company) for purposes of resale (involving as they do enormous quantities of gas and being the sole supplier of gas for distributing companies located in distant states), are transactions national, and not local, in character, and hence beyond the constitutional power of the state’s regu- lation even in the absence of congressional action. 5. Because the states cannot constitutionally regulate the sales by Phillips Petroleum Company to the five pipe line companies, such sales cannot fall within the language of “production or gathering” as it appears in Section 1 (b), and the Supreme Court so held in Interstate Natural Gas Company v. Federal Power Commission, 331 U. S. 682, 690. 22 BLEED THROUGH 6. The case of Cities Service Gas Co. v. Peerless Oil & Gas Co., 340 U. S. 179, cannot in any way be construed as holding that the states can now constitutionally regulate the sales by Phillips in interstate commerce to the five pipe line companies involved here for purposes of resale. III. ALTHOUGH UNNECESSARY SO TO CONTEND (SINCE THE QUESTION MUST BE DECID- ED ADVERSELY TO THE COMMISSIC®#S DETERMINATION THAT THE SALES TO THE FIVE PIPE LINE COMPANIES ARE NOT PART OF “PRODUCTION OR GATH- ERING” AS A MATTER OF LAW), THE COMMISSION’S DETERMINATION THAT SUCH SALES ARE PART OF “PRODUCTION OR GATHERING” IS CONTRARY TO SUB- STANTIAL EVIDENCE IN THE RECORD 1. The question as to what is included within the term “production or gathering” as used in Section 1 (b) depends upon the intention of Congress in enacting this section. As shown under previous subheads, the sales by Phillips to the five pipe line companies cannot be included in the term “production or gathering” as a matter of law. 2. In any event, the question is one of application of a legal standard and cannot be concluded by expert testi- mony. 3. Opinion evidence that is inconsistent with undisput- ed facts or with reason and common sense is not adequate to meet the requirements of “substantial evidence.” 23 4. The testimony of witnesses A. R. Rippel and George P. Bunn, employes of Phillips Petroleum Company, to the effect that the sales to the five pipe line companies are included within “production or gathering” are (a) in- consistent with undisputed facts and (b) contrary to reason and common sense, and are inadequate and cannot be considered as substantial evidence. IV. THE DETERMINATION OF THE FEDERAL POWER COMMISSION THAT THE SALES BY THE PHILLIPS PETROLEUM COM. PANY TO THE FIVE PIPE LINE COMPAN. IES ARE SO CLOSELY CONNECTED WITH THE LOCAL INCIDENTS OF “PRODUC. TION OR GATHERING” AS TO RENDER RATE REGULATION BY IT INCONSIST- ENT WITH OR A SUBSTANTIAL INFER- ENCE WITH THE EXERCISE BY THE STATES OF OKLAHOMA, TEXAS AND NEW MEXICO OF THEIR REGULATORY FUNCTIONS IS ERRONEOUS AS A MAT- TER OF LAW 1. In arriving at the above conclusion the Federal Power Commission erroneously assumes that the states could in any event regulate the sales in question. This is not true as a matter of constitutional law. The language of the supreme court at p. 690 of 331 U. S. referring to “sales, though technically consummated in interstate commerce, are made during the course of pro- duction and gathering and are so closely connected with 24 BLEED THROUGH the local incidents of that process as to render rate regu- lation by the Federal Power Commission inconsistent or a substantial interference with the exercise by the State of its regulatory functions, the jurisdiction of the Federal Power Commission does not attach.” It does not and cannot refer to the sales by Phillips to the five pipe line companies, since simple logic decrees that the court in using such language could only mean sales which could constitution- ally be regulated by the states. 2. “Local incidents” of the process of “production or gathering” are not included within sales of natural gas in interstate commerce for purposes of resale. They are wholly different concepts. 3. If Federal Power Commission regulation can be suc- cessfully denied on ground of interference with state regu- lation in the present case, the Federal Power Commission is ousted of jurisdiction in all cases. Such a claim would be contrary to decisions of the supreme court sustaining Fed- eral Power Commission jurisdiction in cases where it is asserted that it does not exist by virtue of interference with state regulatory efforts. Colorado Interstate Gas Co. v. Federal Power Commission, 324 U. S. 581; Canadian River Gas Co. v. Federal Power Commission, 324 U. S. 581; Federal Power Commission v. Hope Natural Gas Co., 320 U. S. 591; Interstate Natural Gas Co. v. Federal Power Commission, 331 U. S. 682, same case C. C. A., 156 F. 2d 949. V. ALTHOUGH UNNECESSARY TO SO CONTEND (BECAUSE THE FEDERAL POWER COM. MISSION’S DETERMINATION THAT ITS JURISDICTION OVER SALE BY PHILLIPS TO THE FIVE PIPE LINE COMPANIES WILL INTERFERE WITH STATE REGULA.- TORY EFFORTS IS ERRONEOUS AS A MATTER OF LAW), THE DETERMINA-. TION OF THE COMMISSION THAT ITS ASSUMPTION OF JURISDICTION OVER SUCH SALES WOULD INTERFERE WITH STATE REGULATORY EFFORTS IS CON. TRARY TO SUBSTANTIAL EVIDENCE IN THE RECORD 1. The Federal Power Commission fails to state valid reasons for a purported finding or conclusion that its as- sumption of jurisdiction over the sale by Phillips to the five pipe line companies will interfere with state regulatory efforts, and also fails to refer to any facts on which such finding could be based. The dissenting opinion of Com- missioner Buchanan correctly suggests that the Commis- sion’s determination rests upon bare assertion—‘“their own ipsi dixit.” 2. All witnesses who testified upon the subject of al- leged conflict between Federal Power Commission juris- diction over the sales in question and interference with state regulatory efforts were unable to point out any actual con- flict. The only mention of conflict was based upon hypo- thetical and assumed situations, none of which were shown to exist. 26 BLEED THROUGH _ 3. The evidence shows without question that the Federal Power Commission has taken jurisdiction over a number of companies which engage in substantial field operations similar to those carried on by Phillips Petroleum Company which are also subject to jurisdiction by regu- latory agencies of the States of Texas, Oklahoma and New Mexico, and no conflict was shown to exist between Federal Power Commission jurisdiction in those cases and that of regulatory commissions. VI. THE ATTEMPT OF THE FEDERAL POWER COMMISSION TO CONSTRUE SEC. 1 (b) OF THE ACT BY RESORT TO LEGISLA- TIVE HISTORY, AND BY REVIEW OF ADMINISTRATIVE AND JUDICIAL DECI- SIONS WAS ERROR AS A MATTER OF LAW, BECAUSE A STATUTE CLEAR AND UN- AMBIGUOUS ON ITS FACE NEED NOT, AND AS A MATTER OF LAW, CANNOT BE “INTERPRETED” BY AN ADMINISTRA- TIVE AGENCY TO CONTRADICT THE CLEAR LANGUAGE OF THE STATUTE A. Resort to Legislative History was Erroneous as Matter of Law In any event, if the legislative history of the Natural Gas Act in any way forms part of the conclusions reached by the Federal Power Commission in the instant case, the Commission has erred in so interpreting such history. The legislative history clearly supports the proposition that the basic purpose of the Natural Gas Act was to fill the “gap” 27 created by decisions of the supreme court above mentioned and to make the sales of natural gas for purposes of resale of the kind made by Phillips Petroleum Company to the five pipe line companies here involved subject to Federal Power Commission regulation. B. Resort to “Administrative Actions” Was Erron- eous as Matter of Law While it is not clear what purpose the Commission had in so doing, we submit that if such purpose was to establish an administrative interpretation claimed to be binding or persuasive in the present case, the Commission has erred. 1. The rule of administrative interpretation is one of many qualifications and in many instances the courts refuse to follow it. In any event, it can have no application here because (a) the material portion of the Natural Gas Act is plain and unambiguous and not subject to construction, and (b) the course followed by the Federal Power Com- mission in administering the portion of the Natural Gas Act material here does not meet the requirements that to make the rule applicable the administrative construction, first, must not be contrary to the language of the statutes or erroneous and, second, must be uniform and of long standing. C. Review of Judicial Decisions Was Error as Matter of Law In support of its several erroneous findings of fact and conclusions of law, the Federal Power Commission, in its 28 BLEED THROUGH Opinion No. 217, has presumed to review the several judicial decisions rendered in cases involving Sec. 1 (b) of the Natural Gas Act, and to apply to the facts of the instant proceeding its erroneous concept of the meaning and effect of said decisions. In so doing said Commission erred in failing to conclude that said decisions compel the legal conclusion that Phillips’ sales of natural gas to the five pipe line companies and the transportation of natural gas in interstate commerce are not part of production and gather- ing within the meaning of Sec. 1(b). VII. THE COMMISSION HAS ERRED IN FAILING TO MAKE PROPER FINDINGS OF FACT AND CONCLUSIONS OF LAW ACCORDING TO STANDARDS LAID DOWN BY CON- GRESS, [15 U. S. C. A. §717r (b), 4 F. C. A. title 15, 717r (b)] AS INTERPRETED BY THE UNITED STATES SUPREME COURT The failure to make proper findings of fact in the re- spects specified herein, in and of itself constitutes error. Colorado-Wyoming Gas Co. v. F. P. C., 324 U. S. 626, 634. VIII. THE COMMISSION ERRED IN ITS RULING LIMITING THE ISSUE TO THE SO-CALLED JURISDICTONAL ISSUE The Commission erred in directing its Trial Examiner by its order of April 6, 1951, to exclude all evidence to 29 determine whether any of Phillips’ rates, subject to the Commission’s jurisdiction, are unjust or unreasonable, and further erred in approving the exclusion of substantial evidence offered by the staff of the Commission at such hearing showing that Phillips’ rates are in fact unjust and unreasonable, because such action of the Commission was arbitrary and capricious, contrary to law and in violation of the express terms of the Natural Gas Act. WHEREFORE, your petitioners, jointly and severally, pray that the court review the orders of the Federal Power Commission in the latter’s Docket G-1148 which are com- plained of, and that the court set aside such orders in their entirety. Dated at Madison, Wisconsin, this 13th day of No- vember, 1951. STATE oF WISCONSIN By Watrter J. Kou.er, Jr. /s/ Walter J. Kohler, Jr., Governor Vernon W. THOMSON /s/ Vernon W. Thomson, Attorney General, and Its Attorney of Record. VERNON W. THOMSON, Attorney General, Stewart G. Honeck, Deputy Attorney General, Attorneys for State of Wisconsin. P. O. Address: State Capitol, Madison, Wisconsin BLEED THROUGH Pue.ic Service COMMISSION OF WISCONSIN Joun C. Doerrer /s/ John C. Doerfer, Commissioner W. F. Wuirney /s/ W. F. Whitney, Commissioner JaMEs R. DurFee /s/ James R. Durfee, Commissioner WiLL1AM E. TorKELSON Attorney for Public Service Commission of Wisconsin P. O. Address: 1 West Wilson Street, Madison, Wisconsin STaTE OF WISCONSIN CoUnty or DANE Water J. Kounter, Jr., being first duly sworn on oath says that he is the duly elected, qualified and acting Gov- ernor of the State of Wisconsin; that he makes this verifi- cation in behalf of said State, being duly authorized so to do; that he has read the foregoing petition and knows the contents thereof and believes it to be true; that the reason that this verification is made by affiant and not by the State of Wisconsin is that said State is one of the sovereign states of the United States and can act only through its duly authorized agents and officers. Water J. Konner, Jr. /s/ Walter J. Kohler, Jr. Subscribed and sworn to before me this 13th day of November, A. D., 1951. E.stz ELLEFSON /s/ Notary Public, Dane Co., Wisconsin My comm. expires April 27, 1952. (NoTARIAL SEAL) 31 STATE oF WISCONSIN County or DaNnE Vernon W. THomson, being first duly sworn on oath says that he is the duly elected, qualified and acting Attor- ney General of the State of Wisconsin; that he makes this verification in behalf of said State, being duly authorized so to do; that he has read the foregoing petition and knows the contents thereof and believes it to be true; that the reason that this verification is made by affiant and not by the State of Wisconsin is that said State is one of the sovereign states of the United States and can act only through its duly authorized agents and officers. Vernon W. THOMSON /s/ Vernon W. Thomson Subscribed and sworn to before me this 13th day of November, A. D., 1951. Iona FARRELL /s/ Notary Public, Dane Co., Wisconsin My comm. expires March 1, 1953. (NoTARIAL SEAL) BLEED THROUGH State or WISCONSIN } County or Dane as Joun C. Doerrer, W. F. Wurtney and James R. Durree, being each duly sworn on oath says for himself that he is a duly appointed, qualified and acting Commissioner of the Public Service Commission of Wisconsin; that he has read the foregoing petition, knows the contents thereof, and be- lieves the same to be true. Joun C. Dorerrer /s/ John C. Doerfer W. F. Wuitney /s/ W. F. Whitney JAMES R. DuRFEE /s/ James R. Durfee Subscribed and sworn to before me this 13th day of November, A. D., 1951. Frepa MILes /s/ Notary Public, Dane Co., Wisconsin My comm. expires October 2, 1955. (NoTARIAL SEAL) PETITION OF CITY OF MILWAUKEE TO REVIEW AN ORDER OF THE FEDERAL POWER COM. MISSION IN ITS DOCKET NO. G-1148 RELAT. ING TO AN OPINION AND ORDER ENTERED BY THE COMMISSION ON AUGUST 16, 195] (ORDER NO. 217, ISSUED AUGUST 22, 1951) 11,245 To the Honorable, the Judges of the United States Court of Appeals for the District of Columbia: The City of Milwaukee files its petition under Section 19 of the Natural Gas Act to review and set aside an order of the Federal Power Commission dated August 16, 1951, and issued by said Federal Power Commission on August 22, 1951, in connection with the Federal Power Commis- sion’s opinion No. 217 and the Federal Power Commission’s order terminating the proceedings initiated by said Com- mission’s order of October 28, 1948, and from an order of the Federal Power Commission denying the petition and application of the above named petitioner, the City of Milwaukee, for rehearing, which latter order was dated September 22, 1951, and issued by the Federal Power Commission on September 28, 1951, all of which were and occurred in a proceedings entitled “In the Matter of Phillips Petroleum Company,” Docket No. G-1148. For its petition, the City of Milwaukee respectfully alleges as follows: 1. Identity of Petitioner That at all times hereinafter mentioned, the City of Milwaukee was and now is a municipal corporation organ- 34 BLEED THROUGH ized and existing under and by virtue of the laws of the State of Wisconsin; that the City of Milwaukee derives its powers from the State of Wisconsin and from the acts of the Legislature of such State; that among its powers it has a right to be represented by counsel in matters which involve the public interest; that it has a population of 632,651. That the City of Milwaukee is a large purchaser of natural gas from the Milwaukee Gas Light Company, a local public utility; that such gas is consumed and used by the City of Milwaukee, and that the City of Milwaukee pays a consideration therefor to the Milwaukee Gas Light Com- pany; that the rates of the Milwaukee Gas Light Company are in some part determined by the rates charged by Phillips Petroleum Company; that a decrease in the rates charged by Phillips Petroleum Company to the Michigan- Wisconsin Pipe Line Company may directly affect the rate to the City of Milwaukee; that the failure to regulate rates by the Federal Power Commission, therefore, has an effect upon the price of natural gas to the City of Milwaukee; that under the provisions of the Natural Gas Act (52 Stat. 833; title 15 U. S. C. 717-717W), Section 2 (3) thereof, a “municipality” is defined to mean a city; that a municipality under the provisions of Section 5 (a) of the Natural Gas Act may file a complaint with the Federal Power Com- mission respecting any rate, charge, or classification de- manded, 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. That under the provisions of Section 13 of the Natural Gas Act, a municipality complaining of anything done or 35 omitted to be done by any natural gas company in contra- vention of the provisions of the Natural Gas Act may apply to the Federal Power Commission by petition; that the City of Milwaukee did properly intervene in the proceed- ings before the Federal Power Commission in the matter of Phillips Petroleum Company, Docket No. G-1148. That as a further basis of interest in the above en- titled proceedings and in the proceedings had before the Federal Power Commission, the City of Milwaukee demon- strates that it has many thousands of inhabitants daily purchasing natural gas from the Milwaukee Gas Light Company, a local utility, which utility purchases its gas from the Michigan-Wisconsin Pipe Line Company, the latter purchasing its gas from the Phillips Petroleum Company; that the public residing within the boundaries of the City of Milwaukee is affected by the rates charged by Phillips Petroleum Company, and that any decrease or increase in rates tends to affect the ultimate price of natural gas to the many thousands of consumers residing within the City of Milwaukee as aforesaid. 2. Nature of Proceedings As to Which Review is Sought That on August 22, 1951, the Federal Power Com- mission, hereinafter referred to as the “Commission,” issued an order in Docket No. G-1148, entitled “In the Matter of Phillips Petroleum Company,” in which said Commission ordered as follows: “That the proceeding initiated by the Commission's order of October 28, 1948, in Docket No. G-1148 be, and the same hereby is, terminated.”; 36 BLEED THROUGH | ——— that said Commission found in said proceedings as follows: “(1) Phillips Petroleum Company is engaged in the ‘production and gathering’ of natural gas within the meaning of Section 1(b) of the Natural Gas Act. “(2) Phillips’ movement of gas in interstate commerce and its sales thereof for resale in interstate com- merce, together with its processing operations, all constitute a part of its gathering business, so that such movement, processing, and sales come with- in the exemption of productio: and gathering in Section 1(b) of the Act. “(3) Phillips Petroleum Company is not a ‘natural-gas company’ within the meaning of Sections 1(b) or 2(6) of the Natural Gas Act.”; that the City of Milwaukee properly and duly intervened in said proceedings before said Commission as aforesaid, and was allowed to intervene by action of said Commission; and that the City of Milwaukee has a vital and real interest in the proceedings and is vitally affected by the determina- tion, ruling, and order of said Commission, and feels itself aggrieved thereby; that contrary to the provisions of law said Commission refused to accept jurisdiction of the sub- ject matter of the proceedings in the matter of Phillips Petroleum Company, Docket No. G-1148, hereinbefore re- ferred to. That on August 22, 1951, as aforesaid, said Commission issued its opinion, No. 217, and its order hereinbefore re- ferred to, and made the findings hereinbefore set forth; that the City of Milwaukee filed timely application and petition for rehearing as is provided for by the provisions of the Natural Gas Act, and that on September 28, 1951, 37 with respect to such application and petition, said Com- mission ruled as follows: “(1) No facts and no principles of law have been pre- sented in said applications or any of them which either were not fully considered by the Com- mission before it entered such opinion and order, or, having now been considered, justify a reversal or modification of the Commission’s opinion and order. “(2) Good cause exists for denying said applications.” 3. Facts and Statutes Upon Which Venue is Based That venue is established by Section 19(b) of the Nat- ural Gas Act, which provides that any party to a proceeding under the Natural Gas Act aggrieved by an order issued by the Commission in such proceeding may obtain a review of such order in the United States Court of Appeals for the District of Columbia by filing in such court within sixty (60) days after the order of the Commission, upon applica- tion for rehearing, and upon written petition praying that the order of the Commission be modified or set aside in whole or in part; that the City of Milwaukee feels itself aggrieved by the aforesaid order of the Commission, and that it therefore seeks a review of such order pursuant to said Act. 4. Relief Prayed For Relief prayed for by your petitioner herein is that the aforesaid order of said Commission in Docket No. G-1148, dated August 16, 1951, and issued by the Commission on 38 BLEED THROUGH August 22, 1951, denying said Commission has jurisdiction under the Natural Gas Act in the aforesaid proceedings, and the order of said Commission of September 27, 1951, issued September 28, 1951, in which said Commission denied the application and petition of the City of Milwaukee, for rehearing, be set aside in their entirety as being contrary to law. 5. The Points Upon Which Petitioner Intends to Rely The points upon which the City of Milwaukee intends to rely in prosecution of its petition for ieview of the afore- said order of said Commission are those stated in its joint application and petition for rehearing timely filed with said Commission, which will be part of the record and which will be certified and filed with this Court, as is provided for by the Natural Gas Act, and which application and petition for rehearing is incorporated into this petition by reference with the same force and effect as though physically and specifically included herein. A concise statement of the conclusions of said Commission in paragraphs (1), (2), and (3), page 69, Opinion No. 217, is as follows: “(1) Phillips Petroleum Company is engaged in the ‘production and gathering’ of natural gas within the meaning of Section 1(b) of the Natural Gas Act. “(2) Phillips’ movement of gas in interstate commerce and its sales thereof for resale in interstate com- merce, together with its processing operations, all constitute a part of its gathering business, so that such movement, processing, and sales come within the exemption of production and gathering in Section 1(b) of the Act. 39. “(3) Phillips Petroleum Company is not a ‘natural-gas company’ within the meaning of Sections 1(b) or 2(6) of the Natural Gas Act.” The Federal Power Commission has erred in making each of the statements or conclusions contained in para- graphs numbered (2) and (3), page 69 of Opinion No. 217, afore set out. The statements or conclusions in said para- graph numbered (1) afore set out, page 69 of Opinion No. 217, are erroneous, if it is intended in any way to imply that all of the activities of Phillips Petroleum Company fall in the category of “production or gathering” within the meaning of Section 1(b) of the Natural Gas Act. The errors in the statements or conclusions afore set out and contained in said paragraphs (1), (2), and (3), page 69 of Opinion No. 217, are as follows: (a) In concluding that the movement of natural gas in interstate commerce by Phillips Petroleum Company, its sales thereof for resale in interstate commerce, together with its processing operations “all constitute part of its gathering business or they are incidents of or activities related to such business, so that such movement, processing, and sales come within the exception of processing and gathering in section 1(b) of the Act.” (b) In concluding that the movement of natural gas in interstate commerce by Phillips Petroleum Company is part of the “gathering business” or an incident or activity related thereto. (c) In concluding that the sale of natural gas by Phil- lips Petroleum Company to pipeline companies such as Michigan-Wisconsin Pipe Line Company and Cities Service 40 BLEED THROUGH Gas Company and other pipeline companies mentioned in said Opinion, for purpose of resale, are part of the “gather- ing business” or an incident or activity related thereto. (d) In concluding that the processing operations of Phillips Petroleum Company prior to the delivery and sale of natural gas to said pipeline companies is part of the “gathering business” or an incident or activity related thereto. (e) In concluding that said movement, sales for resale and/or processing, either singly or together, come within the exception of production or gathering in Section 1(b) of the Natural Gas Act. (f) In concluding that Phillips Petroleum Company is not a “natural-gas company” within the meaning of Section 1(b) or 2(6) of the Natural Gas Act. The basis for and reasons relied on in support of the foregoing specifications of error are as follows: 1. That the aforesaid statements and conclusions of said Commission are contrary to law. 2. That the determination that “sales” are part of pro- duction or gathering is contrary to the evidence. 3. That the determination that jurisdiction over sales will interfere with state regulatory efforts is contrary to law. 4. That the determination that said Commission’s juris- diction will interfere with state regulation is contrary to evidence. 5. That the Commission erred as a matter of law in making an order terminating the proceedings. 4] 6. That the provisions of the Natural Gas Act vest jurisdiction in said Commission. That the foregoing represent the principal points upon which your petitioner urges and seeks relief so that the orders of the said commission previously referred to be reversed; that citations are omitted and subsidiary points and arguments relied upon are not included so as not to constitute this petition a brief, instead of a petition. WHEREFORE, your petitioner prays that the Court review the complained of orders of the said Commission in the latter’s Docket No. G--1148, and that the Court set aside such orders in their entirety. Dated at Milwaukee, Wisconsin, this 8th day of No- vember, 1951. CITY OF MILWAUKEE, a municipal corporation By WaAtrTerR J. Matrison WALTER J. MATTISON, City Attorney HARRY G. SLATER, First Assistant City Attorney Attorneys for Petitioner City of Milwaukee 801 City Hall Milwaukee 2, Wisconsin CHARLES S. RHYNE National Institute of Municipal Law Officers 730 Jackson Place, N. W. Washington 6, D. C. BLEED THROUGH STATE OF WISCONSIN MILWAUKEE COUNTY {°° WattTer J. Martrison, being first duly sworn, on oath deposes and says that he is an officer of the above named petitioner, City of Milwaukee, to-wit: its City Attorney, and makes this verification on its behalf, being thereunto duly authorized; that he has read the foregoing petition of the City of Milwaukee to review an order of the Federal Power Commission in its Docket No. G-1148, knows the contents thereof, and that the same is true of his own knowledge except as to matters therein stated on informa- tion and belief, and as to those matters he believes it to be true; that the source of his knowledge and the grounds of his belief are information obtained by affiant and state- ments made to him by servants and agents of said corpora- tion, all in the regular course of their respective duties, and records on file in the above entitled proceedings. Affiant says further that the reason why this verification is not made by the City of Milwaukee is that said City is a munici- pal corporation. WALTER J. MatTison Subscribed and sworn to before me this 8th day of November, 1951. Evsiz W. SuUTSCHEK Notary Public, Milwaukee County, Wis. My commission expires Dec. 30-1951 (NoTARIAL SEAL) PETITION OF CITY OF KANSAS CITY, FOR REVIEW OF ORDER OF FEDERAL POWER COMMISSION 11,242 To the Honorable, the United States Court of Appeals for the District of Columbia Circuit, and to the Judges thereof: The City of Kansas City, Missouri, hereinafter called the petitioner, believing itself adversely affected and aggrieved by the final Order of the Federal Power Com- mission, hereinafter referred to as “Respondent” or “Re- spondent Commission”, issued August 22, 1951, entered in that certain cause bearing Docket No. G-1148, entitled: “In the Matter of Phillips Petroleum Company”, then pending before said Respondent, respectfully petitions this Honor- able Court to review and set aside such Order, and in support of its Petition, states: I. Petitioner is a municipal corporation duly organized and existing under the Laws of the State of Missouri, and is a “municipality” as defined by Section 2(3) of the Natural Gas Act (15 U.S. C. A., Sections 717, et seq.). II. Respondent is an administrative and regulatory body created by statute, derives its authority and jurisdiction herein under an Act of Congress known as the “Natural 44 BLEED THROUGH Gas Act” (15 U.S. C. A., Sections 717, et seq.), and has its principal office and place of business in the City of Wash- ington, District of Columbia. III. Phillips Petroleum Company, hereinafter referred to as “Phillips”, is a Delaware corporation, with its principal office and place of business in Bartlesville, Oklahoma, and is the “natural-gas company” to which the Order relates that Respondent sought to be reviewed. IV. On October 28, 1948, Respondent ordered an investi- gation to determine whether Phillips is a “natural-gas company”, as that term is defined by Sections 1(b) and 2(6) of the Natural Gas Act, and, if so, whether any of its rates, subject to the Respondent’s jurisdiction are unjust or un- reasonable. Petitioner intervened in such proceeding and showed that in 1950 Phillips sold in interstate commerce to Cities Service Gas Company, a “natural-gas company”, for resale by it, more than 30 billion cubic feet of natural gas, and delivered such gas to Cities Service Gas Company in the State of Oklahoma. Some of this gas was sold and delivered to Petitioner and its inhabitants through the pipe lines of Cities Service Gas Company and the distribution system of The Gas Service Company, a local gas distribut- ing company. The inhabitants of Petitioner also bought certain amounts of natural gas from Central West Utility Company, another local gas distributing company, which 45 purchased such gas from Panhandle Eastern Pipe Line Company, a “natural-gas company”, which in turn pur- chased in interstate commerce for resale and received large quantities of gas from Phillips in the States of Texas and Oklahoma. In 1950, Phillips admittedly transported natural gas in interstate commerce and sold such gas to five “natural-gas companies” in interstate commerce for resale by such com- panies, including said Cities Service Gas Company and Panhandle Eastern Pipe Line Company. Hearings before an Examiner of the Respondent were begun in Bartlesville, Oklahoma, on April 3, 1951, and concluded on May 23, 1951. The staff of Respondent alleged and were prepared to show tiat Phillips’ rates for natural gas were excessive by several million dollars per year. By Respondent’s Order of April 16, 1951, however, the Ex- aminer was directed to confine the hearing to a determina- tion of the first issue hereinbefore mentioned, namely, whether Phillips is a “natural-gas company”, and that a further hearing relative to the remaining issues be held at a later date to be fixed by Respondent. The transcript covers approximately 6000 pages, and 196 exhibits were received in evidence covering many addi- tional thousands of pages. Following the granting of an unopposed request by the Respondent’s staff for omission of intermediate decision procedure, the entire Respondent Commission hear oral argument of the single issue, to-wit, whether Phillips is a “natural-gas company”, for two days, July 9 and 10, 1951. 46 BLEED THROUGH V. As of August 22, 1951, Respondent found that Phillips is not a “natural-gas company”, as defined by the Natural Gas Act, as more specifically set out in this Petition. A true copy of Respondent’s Opinion and Order entered as of said August 22, 1951, marked “Exhibit A”, is attached hereto and by reference made a part hereof. In the event Phillips is found by this Court to be a “natural-gas company”, as defined by Sections 1(b) and 2(6) of the Natural Gas Act, Respondent will have jurisdiction to fix the maximum sell- ing price which Phillips may charge for natural gas sold to the aforesaid interstate pipeline companies that sell and deliver such gas to the named distributing companies for resale to Petitioner and its inhabitants. The price of natural gas charged by Phillips to Cities Service Gas Company and to Panhandle Eastern Pipe Line Company is not now fixed by any regulatory authority. Petitioner states that the Congress intended to protect the ultimate consumer of natural gas when it enacted the Natural Gas Act, but there is no such protection for the ultimate consumers of natural gas, such as Petitioner and its citizens, in the City of Kansas City, Missouri, if the price of gas sold by Phillips remains unregulated. Moreover, every cent paid for natural gas sold by Phillips to the aforesaid pipeline companies is reflected and passed on in the prices for gas charged the ultimate consumers thereof. Hence, Petitioner is adversely affected and aggrieved by the aforesaid final Order of Respondent and is a proper party to petition this Court for review of the Respondent’s Order under the provisions of Section 19(b) of the Natural 47 Gas Act, and Section 1009 of the Administrative Procedure Act (5 U.S.C. A., Sections 1001, et seq.). Vi. As of August 22, 1951, Respondent made and entered its Order which contained concluding findings, reading as follows: (1) Phillips Petroleum Company is engaged in the “production and gathering” of natural gas within the meaning of Section 1(b) of the Natural Gas Act. (2) Phillips’ movement of gas in interstate commerce and its sales thereof for resale in interstate com- merce, together with its processing operations, all constitute a part of its gathering business, or they are incidents of or activities related to such busi- ness, so that such movement, processing, and sales come within the exemption of production and gathering in Section 1(b) of the Act. (3) Phillips Petroleum Company is not a “natural-gas company” within the meaning of Sections 1(b) or 2(6) of the Natural Gas Act. Respondent also entered the following Order: That the proceeding initiated by the Commission’s order of October 28, 1948, in Docket No. G-1148 be, and the same hereby is, terminated. Chairman Wallgreen and Commissioners Smith and Wim- berly concurred in the findings and Order, Commissioner Draper concurred in the result and filed a short concurring opinion, and Commissioner Buchanan filed a lengthy dis- senting opinion. 48 BLEED THROUGH vil. On September 10, 1951, in form and manner and within the time prescribed by the applicable rules and regulations of the Commission, and Section 19(a) of the Natural Gas Act, Petitioner filed with Respondent its “Petition of Inter- yener Kansas City for Rehearing, Reconsideration and Va- cation of the Opinion and Order of the Commission Herein, Issued August 22, 1951.” Thereafter, similar applications for rehearing of Re- spondent’s Opinion and Order issued August 22, 1951, were filed by other interveners, as follows: By the City of Mil- waukee, Wisconsin, on September 12, 1951; by the State of Wisconsin and Public Service Commission of Wisconsin on September 17, 1951; and by the City of Detroit, Michigan, and Wayne County, Michigan, on September 19, 1951; that thereafter on September 28, 1951, Petitioner’s said Petition for Rehearing of said Order of August 22, 1951, was denied, and all of the said applications for rehearing of the other interveners were likewise denied by Respondent; that thereby and thereafter the said Order of Respondent of August 22, 1951, became fixed and is now a final order and judgment of said Respondent; that Petitioner is adversely affected and aggrieved thereby, for the reasons herein stated; and that Petitioner has exhausted its remedies be- fore said Respondent and, therefore, now seeks review of said final Order and judgment of said Respondent Com- mission, all in form and manner as permitted and prescribed by Section 19 of the Natural Gas Act. VIII. The jurisdiction and authority of this Court is invoked under Section 19(b) of the Natural Gas Act aforesaid. IX. SPECIFICATIONS OF ERRORS Respondent Commiss.on, in its said findings and Order, committed errors in the following particulars, upon each of which Petitioner intends to reply: 1. The Commission erred as a matter of law by order- ing the above proceeding to be terminated, because there is substantial evidence on the record that Phillips Petroleum Company (Phillips) is a “natural-gas company” as defined by the Natural Gas Act and, therefore, the Commission does in fact and in law have jurisdiction of Phillips in this proceeding. 2. The Commission erred in failing to find that Phillips is a “natural-gas company” as defined by the Natural Gas Act and as such is subject to the jurisdiction of the Com- mission under such Natural Gas Act, because the record shows and Phillips admits on the record that it is engaged in the transportation of natural gas in interstate commerce and also in the sale in interstate commerce of such gas for resale, and, therefore, Phillips is in fact and in law a “natural-gas company” and subject to the jurisdiction of the Commission. 3. The Commission erred in its formal Finding No. (1) that Phillips is engaged in the “production and gathering” 50 BLEED THROUGH of natural gas within the meaning of Section 1(b) of the Natural Gas Act, indicating thereby that Phillips is exempt from the provisions of the Natural Gas Act, whereas the record shows that Phillips’ operations are not confined to the “production and gathering” of natural gas but Phillips is engaged in the transportation of natural gas in interstate commerce and in the sale in interstate commerce of such gas for resale. 4. The Commission erred in its formal Finding No. (2) that Phillips’ movement of gas in interstate commerce and its sales thereof for resale in interstate commerce, together with its processing operations, all constitute a part of its “gathering” business, or they are incidents of or activities related to such business, so that such movement, processing, and sales come within the exemption of “production and gathering” in Section 1(b) of the Natural Gas Act, because such finding is contrary to and not supported by substantial evidence on the record and is contrary to the law apper- taining thereto. 5. The Commission erred in its formal Finding No. (3) that Phillips is not a “natural-gas company” within the meaning of Sections 1(b) or 2(6) of the Natural Gas Act because such finding is not supported by substantial evi- dence on the record and is contrary to the law appertaining thereto. 6. The Commission erred in its conclusion that the background and legislative history of the Natural Gas Act did not encompass the activities of companies whose opera- tions are confined to “production and gathering”, including the movement and sale of gas as a part of that business, and that Phillips was such a company, because such a con- 51 clusion is contrary to fact and in violation of the express terms of the Natural Gas Act. 7. The Commission erred in its finding that Phillips’ operations, so far as relevant, consist of “production and gathering”, or they are incidents of or activities related to these functions, thus requiring their inclusion within the exemption of the Natural Gas Act, because such finding is not supported by substantial evidence on the record and is contrary to law. 8. The Commission erred in its finding that Phillips’ processing at its various plants and the movement of gas by Phillips to these plants constitute “gathering” within the meaning of Section 1(b) of the Natural Gas Act, be- cause such finding is not supported by substantial evidence on the record and is contrary to law. 9. The Commission erred in its conclusion that the movement of gas through each of the Phillips’ processing plants is a part of Phillips’ “gathering” business or is at least exempt as an incident of or an activity related to its “gathering” process, because such conclusion is not sup- ported by substantial evidence on the record and is contrary to law. 10. The Commission erred in holding that the move- ment of gas through certain large diameter pipe lines leading to Phillips’ processing plants is exempt from the provisions of the Natural Gas Act on the ground that such lines leading to such plants served the function of “gather- ing” and that the movement of gas through these lines and the lines themselves are exempt under the Natural Gas Act, because such conclusions are not supported by substantial evidence on the record and are contrary to law. 52 BLEED THROUGH 11. The Commission erred in its finding that the sales of gas made a short distance after the gas moves through Phillips’ processing plants are the end product of “pro- duction and gathering” and are a part of Phillips’ “gather- ing” business, or at least an exempt incident thereof, because such finding is not supported by substantial evi- dence on the record and is contrary to law. 12. The Commission erred in its finding that such sales of natural gas are so closely connected with the local incidents of the process of “production and gathering” as to render rate regulation by the Commission inconsistent or a substantial interference with the exercise by the af- fected states of their regulatory functions, because such finding is not supported by substantial evidence on the record and is contrary to law. 13. The Commission erred in its finding that the Com- mission’s regulation of sales made by Phillips in the process of “production and gathering” of natural gas would, by its very nature, be inconsistent or constitute a substantial interference with such regulation of producers and gather- ers by the States of Oklahoma, Texas and New Mexico, because such finding is not supported by substantial evi- dence on the record and is contrary to law. 14. The Commission erred in failing to find that Phillips’ sales of gas to the five interstate pipe lines, to- wit: Panhandle Eastern Pipe Line Company, Michigan- Wisconsin Pipe Line Company, Independent Natural Gas Company, El Paso Natural Gas Company and Cities Service Gas Company, were made after the completion of “pro- duction and gathering”, because there was substantial evi- dence on the record to support such a finding, and under 53 the provisions of the Natural Gas Act such finding should have been rade. 15. The Commission erred in failing to find that sales of gas made by Phillips to the aforesaid five interstate pipe lines did not and never had created a conflict of inter. ference with the exercise by the affected states of their regulatory functions, because there was substantial evi. dence on the record to support such a finding, and under the provisions of the Natural Gas Act such a finding should have been made. 16. The Commission erred in its finding that the fixing of maximum rates for the sales of natural gas made by a producer thereof under the Natural Gas Act would run counter to state conservation efforts, through the fixing of minimum well-head prices or otherwise, to insure maxi- mum recovery of gas prior to abandonment of the well, because such finding is not supported by substantial evi- dence on the record and is contrary to law. 17. The Commission erred in directing its Trial Ex- aminer by its order of April 6, 1951, to exclude all evidence to determine whether any of Phillips’ rates, subject to the Commission’s jurisdiction, are unjust or unreasonable, and further erred in approving the exclusion of substantial evidence offered by the staff of the Commission at such hearing showing that Phillips’ rates are in fact unjust and unreasonable, because such action of the Commission was arbitrary and capricious, contrary to law and in violation of the express terms of the Natural Gas Act. BLEED THROUGH _— x. Respondent also erred in overruling and denying said “Petition of Intervener Kansas City for Rehearing, Re- consideration and Vacation of the Opinion and Order of the Commission Herein, Issued August 22, 1951.” WHEREFORE, Petitioner respectfully prays: (1) That upon the filing hereof, the Clerk of this Court serve copy of this petition upon the Honorable Thomas C. Buchanan, Acting Chairman of the Re- spondent Federal Power Commission, and command said Commission, within forty (40) days from the date thereof, to certify and file with this Court transcript of the record upon which the Order complained of was entered, including all pleadings, orders, transcript of testimony, exhibits, findings, conclusions and Order of the Commission of date August 22, 1951, Petitioner’s petition for rehearing, and Order denying said petition for rehearing, all in form and manner prescribed by law. (2) That on final hearing and determination here- of, the said findings, conclusions and Order of said Respondent Commission of date August 22, 1951, be in all things set aside, reversed and held for naught; and that respondent Phillips Petroleum Company be held by this Court to be a “natural-gas company” within the meaning of the aforesaid Natural Gas Act, and, therefore, subject to the jurisdiction of Respond- ent Commission. (3) For such other and further relief as shall ap. pear to be just and equitable in the premises. /s/ Davi M. Proctor David M. Proctor City Counselor /s/ JERomeE M. Jorree Jerome M. Joffee Special Utilities and Legislative Counsel Attorneys for City of Kansas City, Missouri, Petitioner. AFFIDAVIT STATE OF MISSOURI COUNTY OF JACKSON Jerome M. Joffee, of lawful age, being first duly sworn, upon his oath states that he is Special Utilities and Legis- lative Counsel for Petitioner City of Kansas City, Missouri, and as such is duly authorized to and makes this affidavit for and on its behalf; that he has read the within and foregoing Petition for Review and that the facts set out therein are true, according to the best of his knowledge, information and belief. /s/ JEROME M. Jorree Subscribed and sworn to before me this 8th day of November, 1951. /s/ Maurice E. Benson Notary Public within and for Jackson County, Missouri My commission expires February 4, 1955. 56 BLEED THROUGH PETITION OF THE CITY OF DETROIT, MICHI- GAN, FOR REVIEW OF ORDER OF FEDERAL POWER COMMISSION 11,241 To the Honorable, the United States Court of Appeals for the District of Columbia Circuit, and to the Judges thereof: The City of Detroit, a municipal corporation of the State of Michigan, hereinafter called the “Petitioner,” be- lieving itself adversely affected and aggrieved by the final Order of the Federal Power Commission, hereinafter called the “Respondent,” issued August 22, 1951, entered in that certain cause bearing Docket No. G-1148, entitled: “In the Matter of Phillips Petroleum Company,” then pending before Respondent, respectfully petitions this Honorable Court to review and set aside such Order, and in support of its Petition, states: I Petitioner is a municipal corporation duly organized and existing under the Laws of the State of Michigan, and is a “municipality” as defined by Section 2(3) of the Natural Gas Act (15 U. S. C. A., Sections 717, et seq.). II Respondent is an administrative and regulatory body created by statute, derives its authority and jurisdiction herein under an Act of Congress known as the “Natural Gas Act” (15 U.S. C. A., Sections 717, et seq.), and has its 57 principal office and place of business in the City of Wash. ington, District of Columbia. Ill Phillips Petroleum Company, hereinafter referred to as “Phillips”, is a Delaware corporation, with its principal office and place of business in Bartlesville, Oklahoma, and is the “natural-gas company” to which the Order relates that Respondent sought to be reviewed. IV On October 28, 1948, Respondent ordered an investi- gation to determine whether Phillips is a “natural gas company,” as that term is defined by sections 1 (b) and 2(6) of the Natural Gas Act, and, if so, whether any of its rates, subject to the Respondent’s jurisdiction are unjust and un- reasonable. Petitioner intervened in such proceeding and showed that in 1950 Phillips sold in interstate commerce to Michigan-Wisconsin Pipe Line Company, a “natural gas company,” for resale by it, more than several million cubic feet of natural gas, and delivered such gas to Michigan- Wisconsin Pipeline Company in the State of Oklahoma. Some of this gas was sold and delivered to Petitioner and its inhabitants through the pipe lines of Michigan-Wisconsin Pipe Line Company and the distribution system of the Michigan Consolidated Gas Company, a local gas distribut- ing company. The inhabitants of Petitioner also bought certain amounts of natural gas from Michigan Consolidated Gas Company, which purchased such gas from Panhandle 58 BLEED THROUGH — 5 Eastern Pipe Line Company, a “natural gas company”, which in turn purchased in interstate commerce for resale and received large quantities of gas from Phillips in the States of Texas and Oklahoma. In 1950, Phillips admittedly transported natural gas in interstate commerce and sold such gas to five “natural gas companies” in interstate commerce for resale by such companies, including said Michigan - Wisconsin Pipeline Company and Panhandle Eastern Pipe Line Company. Hearings before an Examiner of the Respondent were begun in Bartlesville, Oklahoma, on April 3, 1951, and concluded on May 23, 1951. The staff of Respondent al- leged and were prepared to show that Phillips’ rates for natural gas were excessive by several million dollars per year. By Respondent’s Order of April 16, 1951, however, the Examiner was directed to confine the hearing to a determination of the first issue hereinbefore mentioned, namely, whether Phillips is a “natural gas company,” and that a further hearing relative to the remaining issues be held at a later date to be fixed by Respondent. The transcript covers approximately 6000 pages, and 196 exhibits were received in evidence covering many ad- ditional thousands of pages. Following the granting of a request by the Respondent’s staff for omission of intermediate decision procedure (Coun- sel for this Petitioner not having participated in favor of such request; not having consented to such request nor condoned the same), the entire Respondent Commission heard oral argument of the single issue, to-wit, whether Phillips is a “natural gas company,” for two days, July 9 and 10, 1951. 59 Vv As of August 22, 1951, Respondent found that Phillips is not a “natural gas company,” as defined by the Natural Gas Act, as more specifically set out in this Petition. A true copy of Respondent's Petition and Order entered as of said August 22, 1951, Marked “Exhibit A”, is attached hereto and by reference made a part hereof. In the event Phillips is found by this Court to be a “natural gas company,” as defined by Sections 1(b) and 2(6) of the Natural Gas Act, Respondent will have jurisdiction to fix the maximum selling price which Phillips may charge for natural gas sold to the aforesaid interstate pipeline companies that sell and deliver such gas to the named distributing company for resale to Petitioner and its inhabitants. The price of natural gas charged by Phillips to Michigan Consolidated Gas Com- pany and to Panhandle Eastern Pipe Line Company is not now fixed by any regulatory authority. Petitioner states that the Congress intended to protect the ultimate consumer of natural gas when it enacted the Natural Gas Act, but there is no such protection for the ultimate consumers of natural gas, such as Petitioner and its citizens, in the City of Detroit, Michigan, if the price of gas sold by Phillips remains unregulated. Moreover, every cent paid for natural gas sold by Phillips to the aforesaid pipe line companies is reflected and passed on in the prices for gas charged the ultimate consumers thereof. Hence, Petitioner is adversely affected and aggrieved by the aforesaid final Order of Respondent and is a proper party to petition this Court for review of the Respondent’s Order under the provisions of Section 19() of the Natural 60 BLEED THROUGH eer sere Gas Act, and Section 1009 of the Administrative Procedure Act (5 U. S. C. A., Sections 1001, et seq.). VI As of August 22, 1951, Respondent made and entered its Order which contained concluding findings reading as follows: (1) Phillips Petroleum Company is engaged in the “production and gathering” of natural gas within the meaning of Section 1(b) of the Natural Gas Act. (2) Phillips’ movement of gas in interstate commerce and its sale thereof for re-sale in interstate commerce, together with its processing operations, all constitute a part of its gathering business, or they are incidents of or activities related to such business, so that such movement, processing, and sales come within the ex- emption of production and gathering in Section 1(b) of the Act. (3) Phillips Petroleum Company is not a “natural gas company” within the meaning of Sections 1(b) or 2(6) of the Natural Gas Act. Respondent also entered the following Order: That the proceedings initiated by the Commission’s Order of October 28, 1948, in Docket No. G-1148, be and the same is, terminated. Chairman Wallgren and Commissioners Smith and Wimberly concurred in the findings and Order, Commis- 61 sioner Draper concurred in the result and filed a short concurring opinion, and Commissioner Buchanan filed a lengthy dissenting opinion. VII On September 18, 1951, in form and manner and with- in the time prescribed by the applicable rules and regula- tions of the Commission, and Section 19 (a) of the Natural Gas Act, Petitioner filed with Respondent its “Petition of Intervenor City of Detroit for Rehearing, Reconsidera- tion and Vacation of the Opinion and Order of the Com- mission Herein, Issued August 22, 1951.” Similar applications for rehearing of Respondent's Opinion and Order issued August 22, 1951, were filed by cther intervenors, as follows: By the City of Milwaukee, Wisconsin, on September 12, 1951; by the State of Wiscon- sin and Public Service Commission of Wisconsin on Sep- tember 17, 1951; and by the City of Kansas City, Missouri, on September 19, 1951, and Wayne County, Michigan, on September 19, 1951; that thereafter on September 28, 1951, Petitioner’s said Petition for Rehearing of said Order of August 22, 1951, was denied, and all of the said applications for rehearing of the other intervenors were likewise denied by Respondent; that thereby and thereafter the said Order of Respondent of August 22, 1951, became fixed and is now a final Order and judgment of said Respondent; that Peti- tioner is adversely affected and aggrieved thereby, for the reasons herein stated; and that Petitioner has exhausted its remedies before said Respondent, and, therefore, now seeks review of said final Order and J udgment of said 62 BLEED THROUGH Respondent Commission, all in form and manner as per- mitted and prescribed by Section 19 of the Natural Gas Act. Vill The jurisdiction and authority of this Court is invoked under Section 19(b) of the Natural Gas Act aforesaid. IX SPECIFICATION OF ERRORS Respondent Commission, in its said findings and Order, committed errors in the following particulars, upon each of which Petitioner intends to rely: 1. The Commission erred as a matter of law by order- ing the above proceeding to be terminated, because there is substantial evidence on the record that Phillips Petroleum Company (Phillips) is a “natural gas company” as de- fined by the Natural Gas Act, and, therefore, the Com- mission does in fact and in law have jurisdiction of Phillips in this proceeding. 2. The Commission erred in failing to find that Phil- lips is a “natural gas company” as defined by the Natural Gas Act and as such is subject to the jurisdiction of the Commission under such Natural Gas Act, because the rec- ord shows and Phillips admits on the record that it is engaged in the transportation of natural gas in interstate Commerce and also in the sale in interstate commerce of 63 such gas for resale, and, therefore, Phillips is in fact and in law a “natural gas company” and subject to the jurisdic. tion of the Commission. 3. The Commission erred in its formal Finding No, (1) that Phillips is engaged in the “production and gather. ing” of natural gas within the meaning of Section 1(b) of the Natural Gas Act, indicating thereby that Phillips is exempt from the provisions of the Natural Gas Act, whereas the record shows that Phillips’ operations are not confined to the “production and gathering” of natural gas but Phillips is engaged in the transportation of natural gas in interstate commerce and in the sale in interstate com- merce of such gas for resale. 4. The Commission erred in its formal Finding No. (2) that Phillips’ movement of gas in interstate com- merce, and its sales thereof for resale in interstate com- merce, together with its “gathering” business, or they are incidents of or activities related to such business, so that such movement, processing, and sales come within the exemption of “production and gathering” in Section 1(b) of the Natural Gas Act, because such finding is contrary to and not supported by substantial evidence on the record and is contrary to the law appertaining thereto. 5. The Commission erred in its formal Finding No. (3) that Phillips is not a “natural gas company” within the meaning of Sections 1(b) or 2(6) of the Natural Gas Act because such finding is not supported by substantial evidence on the record and is contrary to the law apper- taining thereto. 6. The Commission erred in its conclusions that the background and legislative history of the Natural Gas Act 64 BLEED THROUGH — did not encompass the activities of companies whose opera- tions are confined to “production and gathering”, including the movement and sale of gas as a part of that business, and that Phillips was such a company, because such a conclusion is contrary to fact and in violation of the express terms of the Natural Gas Act. 7. The Commission erred in its finding that Phillips’ operations, so far as relevant, consist of “production and gathering”, or they are incidents of or activities related to these functions, thus requiring their inclusion within the exemption of the Natural Gas Act, because such finding is not supported by substantial evidence on the record and is contrary to law. 8. The Commission erred in its finding that Phillips’ processing at its various plants and the movement of gas by Phillips to these plants constitute “gathering” within the meaning of Section 1(b) of the Natural Gas Act, be- cause such finding is not supported by substantial evidence on the record and is contrary to law. 9. The Commission erred in its conclusion that the movement of gas through each of the Phillips’ processing plants is a part of Phillips’ “gathering” business or is at least exempt as an incident of or an activity related to its “gathering” process, because such conclusion is not sup- ported by substantial evidence on the record and is con- trary to law. 10. The Commission erred in holding that the moving of gas through certain large diameter pipe lines leading to Phillips’ processing plants is exempt from the provisions of the Natural Gas Act on the ground that such lines leading to such plants served the function of “gathering” and that the movement of gas through these lines and the lines themselves are exempt under the Natural Gas Act, be- cause such conclusions are not supported by substantial evidence on the record and are contrary to law. 11. The Commission erred in its finding that the sales of gas made a short distance after the gas moves through Phillips’ processing plants are the end product of “pro- duction and gathering” and are a part of Phillips’ “gather- ing” business, or at least an exempt incident thereof, be- cause such finding is not supported by substantial evidence on the record and is contrary to law. 12. The Commission erred in its finding that such sales of natural gas are so closely connected with the local inci- dents of the process of “production and gathering” as to render rate regulation by the Commission inconsistent or a substantial interference with the exercise by the affected states of their regulatory functions, because such finding is not supported by substantial evidence on the record and is contrary to law. 13. The Commission erred in its finding that the Com- mission’s regulation of sales made by Phillips in the process of “production and gathering” of natural gas would, by its very nature, be inconsistent or constitute a substantial interference with such regulation of producers and gath- erers by the States of Oklahoma, Texas and New Mexico, because such finding is not supported by substantial evi- dence on the record and is contrary to law. 14. The Commission erred in failing to find that Phillips’ sales of gas to the five interstate pipe lines, to- 66 BLEED THROUGH wit: Panhandle Eastern Pipe Line Company, Michigan- Wisconsin Pipe Line Company, Independent Natural Gas Company, El Paso Natural Gas Company and Cities Service Gas Company, were made after the completion of “pro- duction and gathering”, because there was substantial evi- dence on the record to support such a finding, and under the provisions of the Natural Gas Act such finding should have been made. 15. The Commission erred in failing to find that sales of gas made by Phillips to the aforesaid five interstate pipe lines did not and never had created a conflict of inter- ference with the exercise by the affected states of their regulatory functions, because there was substantial evi- dence on the record to support such a finding, and under such provisions of the Natural Gas Act such a finding should have been made. 16. The Commision erred in its finding that the fixing of maximum rates for the sales of natural gas made by a producer thereof under the Natural Gas Act would run counter to state conservation efforts, through the fixing of minimum well-head prices or otherwise, to insure maxi- mum recovery of gas prior to abandonment of the well, because such finding is not supported by substantial evi- dence on the record and is contrary to law. 17. The Commission erred in directing its Trial Ex- aminer by its order of April 6, 1951, to exclude all evidence to determine whether any of Phillips’ rates, subject to the Commission’s jurisdiction, are unjust or unreasonable, and further erred in approving the exclusion of substantial evidence offered by the staff of the Commission at such hearing showing that Phillips’ rates are in fact unjust and 67 unreasonable, because such action of the Commission wag arbitrary and capricious, contrary to law and in violation of the express terms of the Natural Gas Act. 18. The Commission erred by invoking a procedural device termed “Omission of Intermediate Decision” and therefore deprived the Petitioner of a full and fair hearing, contrary to law and the provisions of the Natural Gas Act and the Administrative Procedure Act in such cases made and provided. The Commission designated Edward B. Marsh as the Trial Examiner, who, for a period of 39 days, conducted the hearing at Bartlesville, Oklahoma. He was not accom- panied by any member or members of the Commission, so that he was the sole trier of the issues in the case. (In effect he was the Federal Power Commission in the matter, (Section 15 Natural Gas Act)). On July 27, 1951, four of the five members of the Commission, by some sort of vote, caused to be issued a “Release” announcing did not follow any Findings of Fact; rather it preceded the determination of fact and as of date August 15, 1951, no findings had been made or filed by the Commission (see Opinion No. 217 dated August 16, 1951). The major issue « the case is whether Phillips is a “natural gas company” within the provisions of the Natural Gas Act. This question is to be resolved in the light of facts and these facts, in turn, are determin- able upon the testimony of witnesses who appeared before the Trial Examiner and testified. In this case the Trial Examiner did not make any Findings of Fact. He was re- lieved of that task and duty by an Order of the Commission which, in-effect, is the process by which the Commission usurps the jurisdiction of the Trial Examiner to decide 68 BLEED THROUGH the facts from the evidence adduced at the trial, hearing or investigation. The Findings of Fact, Conclusions of Law, and the Order contained in and made a part of Opinion No. 217, aforesaid, were promulgated by the majority of the Com- mission in an arbitrary and capricious manner, beyond the scope of their authority and contrary to the principles of law and the Constitution of the United States, in that “due process of law” was not followed and administered by the Commission in the course of the conduct of the hear- ing and investigation affecting said matter, and the Peti- tioner has been deprived thereby of its statutory right to a full and fair hearing. Section 14 of the Natural Gas Act is the statutory authority for the conduct of investigations (52 Stat. 828 (1938); 15 U. S. C. 717-n is the authority for hearings. As a Trial Examiner was designated, as provided by Section 15(a), it must be presumed that the proceeding thus conducted was a “hearing” which, as a matter of law, required that “the one who decides must hear” (Morgan vy. United States, 298 U. S. 468). Contrary to the laws of the United States, the Commission, without power so to do, removed the matter from the hands of the Trial Exam- iner, who had been designated by it; and thereafter under- took to hear arguments of counsel, to make an alleged Finding of Fact, and Conclusions of Law thereon. The Natural Gas Act does not prescribe such a procedure and no power is delegated to the Commission to assume such iegislative authority as to enable it to do so. By reason of the method used by this Commission to decide that it did not have jurisdiction of Phillips, the Find- ings of Fact upon the evidence, by the Trial Exarainer, (who heard the testimony, and by virtue thereof, was the only competent person to make such a finding from the mass of conflicting testimony adduced before him) was dis. pensed with by the Commission by invoking a procedural device termed “Omission of Intermediate Decision”, thereby depriving Petitioner of a full and fair hearing. x Respondent also erred in overruling and denying said “Petition of Intervenor City of Detroit for Rehearing, Re- consideration and Vacation of the Opinion and Order of the Commission herein, issued August 22, 1951.” CONCLUSION WHEREFORE, Petitioner respectfully prays: (1) That upon the filing hereof, the Clerk of this Court serve copy of this petition upon the Honorable Thomas C. Buchanan, Acting Chairman of the Respondent Federal Power Commission, and command said Commission, within forty (40) days from the date thereof, to certify and file with this Court transcript of the record upon which the Order complained of was entered, including all pleadings, orders, transcript of testimony, exhibits, findings, conclu- sions and Order of the Commission of date August 22, 1951, Petitioner’s petition for rehearing, and Order denying said petition for rehearing, all in form and manner prescribed by law. a (2) That on final hearing and determination hereof, the said findings, conclusions and Order of said Respondent 70 BLEED THROUGH Commission of date August 22, 1951, be in all things set aside, reversed and held for naught; and that respondent Phillips Petroleum Company be held by this Court to be a “natural gas company” within the meaning of the afore- said Natural Gas Act, and, therefore, subject to the juris- diction of Respondent Commission. (3) For such other and further relief as shall appear to be just and equitable in the premises. CITY OF DETROIT A municipal corporation of the State of Michigan, Petitioner, Attorneys for said Petitioner 301 City Hall Detroit 26, Michigan Telephone: WOodward 3-9640 (signed) Paut T. Dwyer, Paul T. Dwyer Acting Corporation Counsel (signed) James H. Lez, James H. Lee Assistant Corporation Counsel AFFIDAVIT STATE OF MICHIGAN Ss COUNTY OF WAYNE : JAMES H. LEE of the City of Detroit, Wayne County, Michigan, being duly sworn, deposes and says that he is an Assistant Corporation Counsel of the City of Detroit, a 71 — municipal corporation of the State of Michigan, and as such is attorney for the City of Detroit, Michigan, a munici- pal corporation of the State of Michigan, petitioner herein; that he is authorized to sign the foregoing petition for and and behalf of said petitioner and that he did so sign same; that he knows the contents thereof and that the same is true of his own knowledge except as to those matters there. in stated to be upon information and belief, and as to those matters, he believes it to be true. Further depondent saith not. JAMEs H. Lee James H. Lee Assistant Corporation Counsel Subscribed and sworn to before me This 12th day of November, A. D. 1951. Gorpon N. McKee Notary Public, Wayne County, Michigan (sEAL) My commission expires March 23, 1954. UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT MOTION OF PHILLIPS PETROLEUM COMPANY FOR LEAVE TO INTERVENE Phillips Petroleum Company (hereinafter referred to as “Phillips”) respectfully moves, pursuant to the Rule 38(c) of this Court, for leave to intervene, to be heard upon brief and oral argument and otherwise to participate fully in this proceeding as a party in support of the orders 72 BLEED THROUGH of the Federal Power Commission (hereinafter referred to as “Commission”) which petitioners seek to have reviewed and set aside in this proceeding. In support of this motion, Phillips respectfully states: I. Phillips is a corporation organized and existing under the laws of the State of Delaware, with its principal oper- ating office in Bartlesville, Oklahoma. II. The Commission action sought te be reviewed in this proceeding directly affects Phillips. The proceeding below was styled “In the Matter of the Phillips Petroleum Com- pany, Docket No. G-1148,” and was instituted by an order of the Commission dated October 28, 1948, which provided in part: “The Commission, upon its own motion, orders that: An investigation of Respondent, Phillips Petroleum Company, be and hereby is instituted for the purpose of enabling the Commission: (A) To determine with respect to the Respondent: (i) Whether it is a natural-gas company within the meaning of the Natural Gas Act; and (ii) Whether, in connection with any transporta- tion or sale of natural gas, subject to the jurisdiction of the Commission, any rates, charges, or classifications demanded, ob- 73 — served, charged, or collected, or any rules, regulations, practices or contracts affecting such rates, charges, or classifications are un. just, unreasonable, unduly discriminatory, or preferential; and (B) If it shall find, after hearing, that the Respondent is a natural-gas company within the meaning of the Natural Gas Act, and that any of Respondent’s rates, charges, classifications, rules, regulations, practices, or contracts, subject to the jurisdiction of the Commission, are unjust, unreasonable, un- duly discriminatory or preferential, to determine and fix by order or orders just and reasonable, nondiscriminatory or nonpreferentia! rates, charg- es, classiications, rules, regulations, practices, or contracts to be thereafter observed and in force.” Hearings in said proceeding were begun before an Examiner of the Commission on April 3, 1951, and con- cluded May 23, 1951. By order dated April 16, 1951, the Commission directed that the hearing be limited initially to the issue of whether Phillips is a “ ‘natural-gas company’ within the meaning of the Natural Gas Act,” and that a further hearing as to the remaining issues be held later, if necessary. Counsel for Phillips participated in the pro- ceeding before the Examiner and filed briefs and made an oral argument before the Commission. The record before the Commission included approximately 6,000 pages of oral testimony and 196 exhibits. In its Opinion and Order No. 217, dated August 16, 1951, issued August 22, 1951, the Commission found: “(1) Phillips Petroleum Company is engaged in the ‘production and gathering’ of natural gas within - 14 BLEED THROUGH the meaning of Section 1(b) of the Natural Gas Act. (2) Phillips’ movement of gas in interstate commerce and its sales thereof for resale in interstate com- merce, together with its processing operations, all constitute a part of its gathering business, or they are incidents or activities related to such business, so that such movement, processing, and sales come within the exemption of production and gathering in Section 1(b) of the Act. (3) Phillips Petroleum Company is not a ‘natural-gas company’ within the meaning of Sections 1(b) or 2(6) of the Natural Gas Act.” Pursuant thereto the Commission ordered: “That the proceeding initiated by the Commission’s order of October 28, 1948, in Docket No. G-1148 be, and the same hereby is, terminated.” Petitioners herein thereafter filed with the Commission a petition for rehearing. That petition was denied by the Commission by an order dated September 27, 1951, and issued September 28, 1951. III. Petitioners have filed in this Court a petition to review and set aside (a) the order of the Commission dated August 16, 1951 and issued on August 22, 1951, holding that Phillips is not a “natural-gas company” and that its sales of natural gas and other natural gas operations are not subject to regulation by the Commission, and (b) the order of the Cormmission of September 28, 1951, denying petitioners’ 75 86 FA ARTEL AND Shab A atop hein ae nial eel eae A petition for rehearing. The petition herein asks this Court | to determine generally that Phillips is a “natural-gas com. _ pany” within the meaning of the Natural Gas Act, and, as such, subject to the jurisdiction of the Commission under said Act and, more specifically, to determine that certain | of Phillips’ sales of natural gas are subject to regulation by the Commission. IV. The relief sought by petitioners, if granted, would sub- stantially and directly affect Phillips and its operations, Phillips, therefore, has a direct and immediate interest in the outcome of this proceeding which is not completely represented by any other party. WHEREFORE, Phillips respectfully moves this Court for leave to intervene, to be heard on oral argument and on brief and otherwise to participate fully in this proceed- ing as a party in support of the orders which petitioners seek to have reviewed and set aside. } Respectfully submitted, Hucu B. Cox Union Trust Building Washington 5, D. C. Raysurn L. Foster Harry D. Turner Warren M. Sparks KENNETH HEADY | c/o Phillips Petroleum Company Bartlesville, Oklahoma Attorneys for Phillips Petroleum Company Dated: January 25, 1952 76 ED THROUGH _— BLURRED COPY CERTIFICATE OF SERVICE The undersigned, attorney for Phillips Petroleum Com- pany, hereby certifies that on January 28, 1952, he served a copy of the foregoing motion to intervene upon each of the parties of record in this proceeding by duly mailing a copy thereof by registered mail, properly addressed and with postage prepaid, to counsel of record for each of said parties as follows: Bradford Ross, Esq. General Counsel for Federal Power Commission 1800 Pennsylvania Avenue, N. W. Washington 6, D. C. William E. Torkelson, Esq. 1 W. Wilson Street Madison, Wisconsin Attorney for the State of Wisconsin, Petitioner Stewart G. Honeck, Esq. State Capital Madison, Wisconsin Attorney for Public Service Commission, Petitioner. HUGH B. COX Attorney for Phillips Petroleum Company 77 Bernier an. Sa) oer UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT No. 11,247 JANUARY TERM, 1952 State of Wisconsin and Public Service Commission of Wisconsin, Petitioners, Vv. Federal Power Commission, Respondent. No. 11,241 JANUARY TERM, 1952 City of Detroit, Michigan, Petitioner, Vv. Federal Power Commission, Respondent. No. 11,242 JANUARY TERM, 195? City of Kansas City, Missouri, Petitioner, v. Federal Power Commission, Respondent. No. 11,245 JANUARY TERM, 1952 City of Milwaukee, Wisconsin, a municipal corporation, Petitioner, v. Federal Power Commission, Respondent. 78 BLEED THROUGH BLURRED COPY ——_— eee ——— — No. 11,252 JANUARY TERM, 1952 County of Wayne, Michigan, Petitioner, v. Federal Power Commission, Respondent. Before: Stephens, Chief Judge, in Chambers ORDER Upon consideration of the motion of Phillips Petroleum Company for leave to intervene in the above-entitled cases, to be allowed to file a brief and to be allowed to argue therein, and respondent having informed the Clerk of this Court by letter that it has no objection thereto and it ap- pearing that none of the petitioners herein have filed objections to said motion, it is ORDERED that the motion be, and it is hereby, granted. Dated: FEB 9 - 1952 United States Court of Appeals For the District of Columbia Circuit FILED FEB 9 1952 JOSEPH W. STEWART Clerk 79 Bariccay.. nd UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT MOTION OF STATE OF NEW MEXICO, ET AL. FOR LEAVE TO INTERVENE Comes now the State of New Mexico, and the Oj] Conservation Commission, of the State of New Mexico, by its attorneys, Attorney General, Joe L. Martinez, and Peter N. Chumbris, Special Assistant Attorney General, State of New Mexico, and respectfully move, pursuant to the Rule 38(c) of this Court, for leave to intervene, to be heard upon brief and oral argument and otherwise to Participate fully in this proceeding as a party in support of the order of the Federal Power Commission which petitioner seeks to have reviewed and Set aside in this proceeding. In support of this motion, State of New Mexico, Et al, respect- fully state: I. That the Oil Conservation Commission is an agency of the State of New Mexico. II. The Federal Power Commission action sought to be reviewed in this proceeding affects the State of New Mexico, and the Oil Conservation Commission. The proceeding be- low was styled IN THE MATTER OF THE PHILLIPS PETROLEUM COMPANY, DOCKET NO. G-1148 AND WAS INSTITUTED BY AN ORDER OF THE FEDERAL 80 D THROUGH a BLURRED COPY POWER COMMISSION DATED OCTOBER 28, 1948. The State of New Mexico, and the Oil Conservation Commission of the State of New Mexico, filed a motion for leave to intervene and were permitted to intervene in said matter below. Hearings in said proceeding were begun befor [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386408_0055%3A01. Public record. Not legal advice.