Brief Amicus Curiae — United States v. El Paso Natural Gas Co.

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MOTION FILED. Hay 1 3 962. | (SUPREM

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In the Moai ee of the -

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"Bi PAso NATURAL Gas Company, etal. .

aK Appellees

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On Appeal from the United States Dinirict Court

- for the District of Utah 3

otion for Leave to File Brief and

Curiae in Support of Jurisdictional

of the ‘United States of Ameri

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WILLIAM M. BENNETT

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San Francisco 2, Califorma

Special Counsel for the State

' of California :

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. TABLE OF CONTENTS

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Motion for Leave to’File Brief ‘Amicus Curiae’ in ‘ae of Jurisdi

tional Statement of the United Semen ef America. Blak ed sooo geveee “a

Affidavit in’Suppart of Motion... none soventnneneeanonsesengnees wy Y earanen 3

_ Brief Amicus Curae jn Suppor of the Jurisica! Statement of the

United States of seated IB SAE nn clones apie Mecano 5

so pr ger wa el

x TABLE OF AUTHORITIES :

) ? /CASES * Pages ey

California v. F Federal Power Commission, 369,U.S. 482 40982) 3, 6,8

Panhandle Eastern Pipe Line Company, 169 Fed 881 eget Cir.

1948), cert. denjed 335 US. 854 (1948)... Sta tincrininean i

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Srarues x

Clayton Act (Act of October 15, 1914, c. 323, 38 Stat. 730, 15 bs.c.

; B12, eb 906.) oivrreneeneveveeiernsnssenncentsnnsntaninsbeccenoeatnnnnnnnndinesseToneentsst9 9

_ Natura! Gas Act (Act of June 21, 1938, c. 556 52.Stat. 821, 15 U.S.C.

§ 717, et seq), ‘Section 7 (g) (56 Stat. 84; 15 U.S.C. § 717f (g)) 7

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3 In the Sapiens Court of the

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-Ocroper TERM, 1962

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No. 944

: UNrTep STATES OF AMERICA,

- Appellant,

_@ VS, i, BS

Et Paso NATURAL Gas Cosmaien, etal., . “ |

oe : Appellees. |. of

Motion for Leave to File Brief Amicus Curiae | Peds

in Support of Jurisdictional Statement fe

of the United States of America — «

Comés now the State of California (California) by its Special

Counsel, William.M. Bennett, and requests leave to file a brief

9 amicubcuriae in support of the United States of America; appel-

* lant, for the below stated interest of the amicus. curiae.

INTEREST OF AMICUS *CURIAE

California consumers of natural ‘gas rely upon El Paso Natural

Gas Company (El Paso) for approximately ‘three quarters of

their needs. The decision of the United States District Court for

the District of Utah, frony which this appeal is being taken,

directly’ affects these present neetls as well.as the future require-

ments of the ever growing California natural gas market.

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California was an intervenor in the proceeding before the |

vy Federal Power Commission wherein El Paso received administra-

tive authorization to acquire the assets of Pacific Northwest Pipe-

line Corporation (Pacific) This Court, upon petition. for certiorari

initiated by California, reversed the detision of the Federal Powér

Commission. -California v. Federal Power Commission, 369 U.S.

482 (1962). The same interests which prompted California to

participate in the. prior proceeding also induce California to

support the srapinanees casks appeal. from the District Court's deci-

sich. |

The decision of the District Court, by Sonia the Govern-

ment’s complaint against the merger of El Paso, the giant inter-

state pipelirie .company, with Pacific, its cormpetitor for the

California market, has greatly weakened the protection provided

sh _the consumers of the nation by the Federal ‘Anti-trust Laws. _

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California submits that it has a direct, immediate and sub-

stantial interest in this matter. which is not represented by other

parties. °

For’ these reasons, California respectfully requests leave to ©

file the attached brief amicus curiae»

“s | _ Respectfully submitted.

Wituiam M. BENNETT

Special Counsel for the State

of California

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_ AFFIDAVIT IN SUPPORT OF MOTION

State of Colibomnia

City and County of San Francisco—ss.

‘William M. Bennett, being first duly sworn, dances and says:

‘1. That he is the Special Counsel of the State of California -

appointed as such by thesGovernor of the State of California,

Edmund G, Brown, and by the Attorney General of the State of

California, Stanley Mosk, to represent California in all proceed-

ings arising out of the stock acquisition and merger of the Pacific

Néithwest | Pipeline Corporation and the E! Ane’ Natural Gas

- (Company. A

2. That as Special Counsel the affiant represented the State

of California before: the Federal Power Commission, before the

United States ‘Court_of Appeals for the District of Columbia

Circuit, and beforé the Supreme Court of the United States of

America in those proceedings ge, California v. Federal

Power Commission; 369 US. 482 (1962).

3. That California, .although not a party to the proceeding

in United States of America v. El Paso Natural Gas Compan)

and Pacific Northwest Pipeline Corporation. Civil Action No.

C. 143-157 in the United States District Court, District of Utah,

| i -eca nonetheless maintains its great interest in such :

* proceeding...

4. Afhant states that California views: with favor:the Sa

from the, judgment of the lower court in such proceeding and

the affiant intended heretofore to request ‘permBsion of this Court

-for the filing of a brief in support of the Jurisdictional Statement

filed herein by the-Governmgnt. ag

-5. Affiant, states, ‘however, that he was required t6- be in

‘attendance before the Supreme Court ‘of the United States to

make oral argument in that” proceeding entitled Wiscongin, et.

al.. v. Federal Power Commission, et al., Nos. 72, 73 and’ 74,

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Fg ee ees

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October Term, 1962, during the early part’ of January, 1963.

. During that period affiant became seriously ill with bronchial

pneumonia visited upon him int the opinion of a medical: expert .

_ by the: harsh climate of - -Washington,” D.C. Affiant was most

_ Seriously ill, requiring constant medi attention and care for

a period of approximately six weeks, following which a period

of complete rest was prescribed. Only recently did affiant.return

to his duties_and only recently has affiant obtained copies of the

Jurisdictional Statement filed’ in. this peoceeding = the Govern-

‘ment.

Accordingly, ‘lian requests ob this Court tat it excuse the

a failure to file the motion and supporting ‘brief herein until now,

and affiant requests that the court take into consideration the

sari inability tado: so until this date.

WILLIAM M. BENNETT :

"Special Counsel for the State

of California -

“ Subscribed and sworn to before f me on a May 10, 1963.

GORDON B.. ‘Denoee |

Notary Public’ in and for said County oni State.

. My Commission. Expires November 9, 1966

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In the. ‘aes Court of the

United States yee.

OcTosER TRRM, 1962

?

: No. 944 -

UNITED STATES OF AMERICA, , ee

; Appellant, |

; VS. - ‘ At

__ Ex Paso Naturat Gas CoMPANy, et al., -

Appellees..

On Appeal from the United Stbies ‘District Court

Sih » for the District of Utah .

Brief Kisii Curiae i in ies of the

Jurisdictional Statement of the

United States of America

oe: PRELIMINARY STATEMENT Pain

California adopts as though set forth herein that. portion of ©

the Jurisdictional Statement of the United States of America,

: appellant, filed in this cause wherein. is sei forth the Opinion —

Below, the gJurisdiction, the Question Presénted, the Statute In-

Be volved and the Statement of Facts.

At such time as the Court notes jurisdiction herein, California

will then set forth its own factual. narration relevant to this

appeal as well as its own compelling réasons,in support of the

" position of the Government herein.

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ee THE SPECIAL INTEREST OF THE

STATE OF CALIFORNIA

This team: comes tatin Ahapubaliiaai-haoin after the deter-

mination of this Court in/ California v. Federal Power. Commis-

"sion, 369 US. 482 (1962). In that case the Court recognized

* the validity of the position. California had long urged as to the -

disability of the’ Federal Power ‘Commission to° approve this

particular transaction. ‘The position of California in opposition

"to the assumed jurisdiction by the Federal Power Commission was

prompted by its grave concern for the consequences of creating

and perpetrating upon California and the entire West a merger |

which would result in an irrevocable las caii

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California and the West. -are uniquely dependent upon ‘natural

gas as a source of, energy. California, particularly, lacking: coal

- deposits dnd-the use of fuel oil being impracticable, if not illegal

“because of air pollution laws, is almost totally dependent upon

this form of energy. Because California does not rank as one of

the major producers of oil and gas it must import this energy-

fuel. The growth of California and the growth of its energy

" requirements have made the El Paso Natural Gas Company the

largest of the natural gas pipelines sharing this place from time

‘to time with the Tennessee Natural Gas Company. Fl Paso domi-

* nates the gas markets of the West. The judgment approving this |

merger further tightens and makes absolute this mionopoly ,con-”

dition. The judgmentwef the court below hands to El Paso for-

"evermore the privilege of being the dominant supplier of natuval

‘gas to the West. It requires little imagination to predict that

unless this merger be set aside for the social and economic vice’

phat-it 38, EL Paso will have been given a license td assert its

af full monopolyspower over sources of Supply* over possible and

potential competitors, all to the further agerandizement of its

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own great position and to the detriment of the gas consumers

| of the West. The giving of such a power must not be lightly

considered partitularly in view of the fact that Congress never.

- intended that a monopoly should exist as to natural gas companies. 7

_ Seé Section 7{g) of the Natural Gas Act*; Parhandle Eastern *

. Pipe Line Company v. Federal Power Commission, 169 F.2d”

i 881, 883-884 (D.C. Cir, 1948), cert. are US. 854 (1948).

mit CALIFORNIA'S GROWTH AND NATURAL GAS

~e ‘The expected population growth of California is a matter of

common knowledge. The expected population growth of the

West is likewise a matter of common knowledge. The industrial

_ and commercial growth which will accompany suctt increase will

oi. demand more and more natural gas for energy. It is the position _

of California that its energy needs now. and in the future will

. be far better served in terms of gas availability and in%erms of |

just and reasonable rates if the benefits of competition are retained

or permitted. This merger, in the. judgment of California, effec-

tively forecloses real competition.

Already the stock acquisition and merger of Pacific by E! Paso

has-had its harméul impact upon Cafifornia, The Pacific pipe-

- line could have been operated as an independent natural gas

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the Pacific Northwest ran té the City of Portland, Oregon. i

would have been quite feasible to extend the Portland line a.

_ to @ into California. Such a proposal, in fact, as the record herein

will show, was discussed and California, itself, as a State, through

"this counsel on behalf of the Attorney Generai of the State, of

*Section 7(g) of the Natural Gas Act (56 ‘Stat. aa. ISU SC. gr

(z)y provides as follows:

“Nothing contained in this section shal! be loan as a limita-

tion upon the power of the Commission to grant certificates of public

convenience and necessity for service of an area already bemg served

by. another natutal-gas company’.

tions to that end. In. the midst of such negotiations El Paso

_acquired the controlling interest of Pacific thus causing the ter-

_ mination of ‘such negotiations. This was’ the first, act of the

monopolists to keep California as its priGate preserve.

,. Even presently El Paso is opposing new supplies of natural gas

tq, California ‘from other sources. Transwestern Pipeline Company

is today seeking authority from the Federal Power Commission

to-sell a firm supply to certain California natural gas distributi

_ companies. Transwestern Pipeline Co., FPC Docket No. CP

_ 63-204. The gas is available and the customers dre. willing to

. buy, but El Paso is opposing the project. This is evidencé of El

Paso’s coristant activity directed toward. domination. of the Cali-

fornia. market. -

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THE CONTINUING INTEREST OF CALIFORNIA

California today: maintains the same strong opposition to the

merger of these two pipeline corporations as it has since the

inception of the stock acquisition negotiations. California origi-

nally based its opposition to such a merger on a strong conviction

_ and: belief that it violated the monopoly ‘laws of the United

States of America and California.takes the same position today.

‘The reasons beyond the principal ones here -given will not be

articulated at this time but the attention’ of. the Court is directed

- to the Previous proceedings in California v. Federal Power Com-

mission, 369 US. 482, (1962) and the briefs of California * -

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Wherefore California states that because of the grave economic |

_ Consequences inerept in this case and because it presents ‘the, -

“first instance as to the relevancy of the Clayton Act* to two

major natural gas companies, that the Court should note juris-

diction herein. The Apestion presented is substantial, it is of

public importance and it presents the last opportunity to undo

the harmful consequences already Visited upon a great body of,

the nation’s gas consumers as well. as to prevent future harm

to them.

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e : ‘Respectfully submitted,

_- WitwiaM M. BENNETT

Special Counsel for the State °°

ne of California -

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* Act of October 15, 1914, c. 323, 38 Stat. 730315 U.S.C. § 12, et seq.