Amicus Curiae Brief — FPC v. Louisiana Power & Light Co.

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SUPREME COURT, TS Serer, Sa 12: \9T2

{ : Nod. 71- 1016 Awp 71-1040 paca ae oe 2 eet}

Res Tae =

_ OoTOBER TERM, 1971. SS ; aoa

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7 EDERAL PowER CoMMISSION, PETITIONER |

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Lourstana PowEr.& Licnt CoMPANY, ET AL.

- Unrrep Gas Pree. Live CoMPANY: AND PENNZOIL

Untrep; Inc., Petrrioners

— | *

~ Louisiana Power & Licut Company

Pi. On Warts oF Certionant To THE UNITED rates

-_ ; - Qourr or Appears For Tae Fira Crreurt

an BRIEF OF TEXACO INC. AMICUS CURIAE. ~

<3 : 7 J. DonaLp ANNETT

| nae 1001 Connecticut Avenue, N.W.

| : “eo _. |. Washington, D.C. 20036

| = a ee Kirk W. WEINERT |

‘ ‘ Pa Joun M: Younc _ .

oo ; _ . P. O. Box 52332

| | . - - .. Houston, Texas 77052

Attogneys For Texaco-Inc. _

¢ FIDELITY PRINTING COMPANY, INC., HOUSTON |

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- TABLE OF CONTENTS

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STATEMENT OF INTEREST 0o.o.oo.occcccccccccccoeees hiteeaecnseewleasiien 1°

OPINIONS BELOW, JURISDICTION AND STATUTES ‘%~

INVOLVED svetrannesicnneaiia Lpiecacinwesadeanbatesits esctitessetadluasadPesiusinse 4

QUESTION PRESENTED ~ see ore daticsaicteanncenus 4

a STATEMENT fieeecisinh sidan secyany eden vSinse-esarasteunuaianras +

ws SUMMARY OF ARGUMENT sbnaedasiaphiicea gers ctl ieslenynseestbtasieas oben x «OO

ARGUMENT ay

I. EXHAUSTION OF ADMINISTRATIVE REME-

\ DIES IS NOT REQUIRED IN EVERY CASE IN-

VOLVING AGENCY idideiedecs: | MATTER JURIS-

DICTION csrasensievectenaesdeneeedesscensenesase encosesbbecependteseveecerosazeeees 7

6 A. LP&EL Would Sights Substantial Pnjury From

| Pursuit Of Its Adininistrative Remedies ..........:..... 10

= _

ere Is Litile Doubt That The Onan Juris-

tion Does Not Extend Over United’sGreen Sys-

seeeSonnsesnnediegs eps DnatacaaieiReaietindt atancea Sgeeees 13

- C, No Specialized ‘Administrative ‘Understanding Of

: ‘The Question-Of J urisdiction Over The Green .

— System - ARVOIVOO orien oe ee eee i

$ . ,

I. THE. INSTANT PROCEEDINGS HAVE IN No

' WAY INTERRUPTED THE COMMISSION’S CER-:

TIFICATE PROCEEDING .CONCERNING

. _UNITED’S GREEN SYSTEM OR RHE: ‘PROCED: .

URES FOR ORDERLY REVIEW OF THE COM-: .

MISSION’S OPINION NO, 610 ISSUED THEREIN 19

CONCLUSION | oa ene ae ake ee ee ee “99

. Q

| TABLE OF AUTHORITIES

CASES =...»

ox : te _ eas

> Allen v. Grand Central Aircraft Co., 347 U.S. 585 (1954) 2 8

" Bethlehem Steel Co. ¥. New York State Labor Relations |

_* Board, 330 U.S: 167 :(194T) cavaisneneitnneneunanninenanengs Bo”

California v. Lo-Vaca Gathering Co, 379.U.S, 366

(TIES) - .cccciscosrcesecctscecscnseMensinescecnioseeey iEmicwmeibayly 10, 16, 15. -

City of Teeens v. Taxpayers of Tacoma, 357 US. 320 (1958) 7, 20

Connecticut Light and Power Co. v. Folica Power Commis- .

- sion, 324 U.S. 515 (1945) seeseieou opishecd cates nee 15

Federal. Power Commission v. Amerada. Petroleum Corp.,

379 US. 687 (1965) ecsaheiincnnwniensedessesacsiaswnssaccessevsinn ‘Oy Atty AO, 15,

Federal Power Commission v: : Artonsed Power é Light Co.,

' 330 U.S. 802, rev’g per ae 156. F.2d 821 (D.C. Cir.

_ 1946) © pchivicincatitatbes seculin seer piemenaucnsver xpeideigedesboesssixadseuiccsiaexeiizsecdunas 7

Federal: Power Commission v. East Ohio Gas Co., 338 US.

cE |) een a CTC Oe en eee ae 15

. Federal _Power_Commission * VW. Florida Power &- Light Ge - --—

sas US ....:...., No. 70-38, decided January 12, 1972 «00.0... 15

Féderal Power Commission v. Panhandle Eastern Pipe Tine

£o.,337 U.S. 498 (1949) secrets Saeasteseeicciee Rae es aas cases 3

Gonzales v. Willams, 192 NOs BOON ene cls 8

Illinois Commerce Commission + v.. Thompson, 318-U.8. 675

(1948) sssseeecsnsescensnecsssnneoninns Sessesocsean Bceseteigcs Pic teases: a

Lone Star: Cement ee Vv. Federal Trade Comes, 339 |

F.2d SOG 10 ie TON puscctocetobtoceeass 9

* Louisiana Public Service Cimon. v. Feaera Power

Commission, 359 F. 2d 525 (5th Cir. 1966) cert. denied,

385 U.S. 838 ....... Et ee . 614,15

got “\ ‘ | iii | |

i = toe, 8 | Page

| McKart v. U.8., 395 U.S. 185 (1969) . see a

, Myers.y. Bethlehem Shipbuilding Corp., 303 U.S. 41 (1938) 7,19 -

Ol Shale Corp. v..Udall, 235 F.Supp. 606 (D. Colo. 1964) 1 @-

Order of Railway Conductors of America v. Swan, 329 U.S.

820 (1947) vee cestoneaesecevensesesenegececcesenscnscseesnecseeseeatces 28 «

-, Public Service Electric & Gas Company v. . Federal Power |

Commission, 371 F.2d 1 (8rd Cir. 1967) wo scone A

Public Utilities Commission of Ohio v. United Fuel Gas

Co.; 317 US. 456 FI) eateecaciedisisiinsneastinenssnsinseriencccnten aa 8

. “Secretary of the Army v. Federal Power Commission, 425 - Page

F.2d (D.C. Cir. 1969)“ cscvrgurwincenenensumeensenginsnion ue

Skinner & Eddy Corp. v. United States, 249 US. 557 (1919) a:

“United States v. Rockland Steamship Corp. - 218 F. Supp. 8

509 (S.D.N.Y. 1963)

~ Virginia Petroleum Jobbers Ass’n. v. Federal Power Com-

—, 265 F.2d 364 (D.C. Cir. 1959)

——— STATUTES

Natural Gas Act of June: 21, 1938, 'c.556, 52 Stat 821, as

amended, 15 U. S. C. 7 17, et. -“ Sections 1(e),

19(D) * ceccssessseciessenceccie er sewusee 8, 15, 16,19.

Federal Power Act, 16 USC. §§ 800, a ee

Py 7 . ° a

MISCELLANEOUS

3 K. hava, Administrative Law Treatise § 20.03 wt. 5, 9

Senate Report No. 817 (July 30, 1953), accompanying H.R.

5976, 1954 U.S. Code’ eels and Administrative

News, p. 2102

foe

, -

nnn ——— ;

In Tue

| Sap Coit of the Hnited Sti |

- —— — 1971 -

No. 71-1016. _

’ Feperit Power Coxeass10%, Permowes

- Lovusaxa Powin & Licut Coad ET AL.

“No. 71- 1040

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oe ——_—_ + :

Untrep Gas Pree Lixe Company anv: Pennzon.

_ Unrtep, Inc., Petrrioners *

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‘Louisiana Power & Licut Company

at os

On Warts OF Canringa: To THE Tae Sraris

-Counr oF Appgats For Tue Firra rated 7

_ BRIEF OF TEXACO ra AMICUS CURIAE

STATEMENT OF INTEREST ‘

Recess Ine. (“Texaco”), pursuant to Bule 42(2) of rn

- Court, respectfully submits its brief amicus curtae. The

Solicitor General on behalf of the Federal. ‘Power Commis-

sion (“Commission”), United Gas Pipe Line Company and

Pennzoil United, Inv. ( “United”), and Lousisana Power

- and Light’ Company (“LP&L”), the parties to this case,

have consented to-the filing by Texaco of this brief. Letters

oS -

of consent are on file with the Clerk of the Court.

Texacb’s interest in this proceeding stems from the fact |

that it sells ‘substantial quantities of natural gas to United

in the vicinity of ‘New Orleans, Louisiana, which gas is

taken by United into its New Orleans District pipeline

facilities which have come to be known as the “Green

” System”, serving LP&L’s Nine-Mile Point electrical gener-

- . ating station, among other ciastomers. This pipeline his- -

torically has been operated by United as a separate facility .

: from its interstate pipeline network also located in the area. ..

United represented to its Green System gas suppliers, such

as Texaco, that this system was a nonjurisdictional intra-

‘state pipeline, and agreed i in its gas purchase contracts with -

Texaco and: other gas suppliers to utilize the gas sold

United entirely within the o Louisiana (R.204-19).

; | 8

on Commencing in 1968, United, Without. Texaco’s knowledge .

; or for that matter without'the knowledge or authorization

from tke, Commission, began to. inject limited quantities of

gas. from, its interstate pipeline system into the Green -

_ System:? On October 1, 1970, United filed with the Commis-

sion an application seeking certification of the Green Sys-

tem and the sales and services rendered therefrom. Texaco

intervened i in that proceeding, F.P.C. Docket No. CP71- 89, .

and actively ‘opposed the assertion ‘of Commispi ion juris-

diction over the Green’ System. 7

The contt below found on the basis of an uncontested :

record developed by United, the Commission and LP&L,

that the Commission’ S jurisdiction under the Natural Gas

3 . . .

1 Considerable doubt exists as to United’s motives in commencing

these unauthorized and therefore unlawful gas flows. See Com- .

missioner ‘Carver’s dissent in Opinion No. 610, reproduced as -

Appendix F, p. 127a in United’s Petition filed herein in. No.

71-1040. © .

| +3

. Act? does. not ovtend over the Giend System. The Commis- *

“sion and United have not challenged this conelusion on its

merits, but have asked this Court to.consider the limited

issue of whether or: not LP&L should have exhausted its ;

‘administrative remedies‘ before. seeking the help of. the

| courts, by awaiting the outcome of United’s certificate case.

Uncertainty exists.in this proceeding, as well as in the law

generally, between the. application of the closely -related

"doctrines of primary jurisdiction and exhaustion of. admini-

‘ strative remedies. .The fine line between the two need not: .

be drawn in this case. in.that.the Fifth Circuit’s decision

- as to the Green System is proper under either theory. Tex- . ;

aco believes. that other briefs herein will adequately set _

forth the arguments respecting the primary jurisdigtion

issue. In that the attorneys for the Commissioh and United

_ have attempted to characterize this issue as-one of exhaus-

tion of administrative remedies, Texaco will show herein

that under this theory. the Fifth Cireuit reachéd the correct

result in finding that LP&L’s suit’ was properly taken and

' that LP&L -was not required to resort to administrative

procedures.’ It i is to this point that Texaco addresses itself

herein.‘ ,

Any decision by this Court ffecting the jurisdictional

status of United’s Green System could have a substantial

15 U.S.C. 66.717, A seq.

8 Throughout this brief when Texaco : uses the term CeRigial sie of

administrative remedies” it does not assume that LP&L had an ©

administrative remedy to pursue at the time of filing of its

suit below. Indeed, the Co on has no power to grant in-

junctive relief or “lamages as covet by LP&L. Seé Federal

Power Commi ston v. Panhandle Eastern Pipe Tine Co., 337 U.S.

498 (1949). \ . Ry

4 Texaco takes no position on the otinatpal 3 issue here before the

Court concerning the Commission’s continuiry authority over

curtailments of interstate. natural gas to direct industri}

| with which Texaco

he Me Bogie eRe STATEMENT.

impact upon Texaco’s gas sales to, United. ‘This is the basis

of Texaco’s interest in this case and the reason ‘it has. sought

‘to participate Qmicus curiae.

P “ ae

- OPINIONS BELOW, J URISD{CTION AND |

STATUTES INV. OLVED

‘The Commissiof’s brief adequately sets:forth the opinions

below, the jurisdiction of the Court, and-the statutes in-

volved insofar these ‘dre-relevant to: the issue herein

en Dagocerned. 4 | *

_, &

‘

. QUESTION PRESENTED

Whether LP&L was required to await the outcome. of

- United’s certificate case before the Commission prior to

seeking: relief from the courts for United’s failure to deliver

its contract quantity of gas to LP&L’s Nine-Mile- Point

electrical generating: station.

Texaco adopts the statement of the ‘case contained in

- the Commission’s brief with two additions. In LP&L’s

injunctive action, in’ the aistriot court the fyomimitiaaion was

ees: It should be noted, however, that this question is Giger

_ separate and may be decided independently of the Courts con-

. sideration. of the Green System’s jurisdictional status. ogi, OD

Sterlington Station is served from a eoncededly interstate pipe-"-

line and clearly poses the issue concerning curtailment authority .

of direct independent sales. This question raises substantial pal. 4

‘ley. consideration# i in this time of national gas shortage;

the question of the jurisdictional status of the Green System i . :

of importance to the customers thereon and the natural gas pro- .

ducers, ‘like Texaco, selling gas to such system, this issue applies |

only to one of the nation’s pipelines and does not involve wide-

spread significance. is eg

’

on.

an active participant, introducing evidence and cross-exam-

Se Se | ining witnesses on the flows of’ gas in United’s Green Sys-

tem (R. M7 7- rit manos United introduced as an exhibit .

by the Cunniisinien’s in ite Opinion

ee a ‘examined. (B.138-43)._

. SUMMARY OF ARGUMENT ~

fBtrative remedies in all cases involving administrative j juris-

a * . ing text in the field (3 K. Davis, Administrative Law Treat-

ky » — - ise § 20:03). The use of this approaeh was baer in

re’ circumstances pf” this case’and properly

. °° *Saing by the Fifth Circyit that,LP&L was not required to

recy resort, to. edministrative action prior ‘to seeking | aid from

the courts. ret ye.

The first of: the three element of the test utilized by |

“the court was a determinatiog on LP&L’s irreparable

‘injury by awaiting the outcome of United’s certificate

, | us % eenins. The court correctly found that LP&L, has not -

* xet been given an opportunity | to prove the extent of its

| injury, but that the. present record does not demonstrate

Poe that such injury is not likely to occur. :

; he a second part of Professor Devis* test, ‘the court:

Contrary to the assertions of the Codiitnission and United, ;

no hard and fast. rule exists. requiring. exhaustion of admini-

“diction. The opinions below recognized thigg-and analyzed —

“this issue by’ using the three-part test suggested i in a lead-

sulted in a as

tion over the Green System, appeared and was cross- oe

‘ ¥

: found that there is little doubt that the Commission’s juris- __

~ diction does not extend ‘over United’s Green System. which

serves LP&L’s, N ine-Mile Point station, An undisputed Ds

ve ? ° ‘ ¢

ee le ype

ek BN

factual record developed by ‘United, the Commission and

- LH&L clearly indicates the limited flows of gas involved

from United’s interstate’ pipeline system into the self-con-

tained Green System. -All gas within ‘the Green System,

including the_snsall percentage introduced therein from

. United’s interstate lines, ‘is: consumed entirely within the

State of Louisiana. Utilizing these basic faets the Fifth

‘Circuit properly reviewed the existing legal precedents on.

- commingling of jurisdictional and nonjurisdictional gas and

found therm inapplicablé.’ Of particular significance is the

fact that the court below distinguished the instant situation

from. that considered in ‘its. earlier “Florida . Parishes”

decision, Louistama Public Service Commission v. F.P.C.,

(359 F. 2d 525 (5tlr Cir..1966), upori which United principally

relied in seeking certification of the Green System fromm the

Commission.

"The court. below properly concluded that exhaustion of —

administrative remedies was not required of LP&L because _

in these cireumstances the’ Commission could contribute -

. little of its special expertise’ to the. determination of its

jurisdiction. The Commission had already helped in the

development of the record before the ‘court on the gas

flows involved. Consideration of the jurisdictional status of

‘the Green ‘System ultimately ‘involved the application of

existing law to the undisputed and reasonably uncompli-

cated facts of the case. The court below, it is submitted, is

perfectly capable of determining the legal consequences

of United’s operation of its Green System.

Finally United has suggested as an additional reason

5 California v. Lo-Vaca eta Co., 379 U.S. 366 (1965) ;

| F.P.C. v. Amerada Petrokeum Corp., 379 U.S. 687. (1965) ;

Loutsiana Public Service Commission v. FPLC. 359 F.2d 525

(5th Cir. it ‘

’ a

for requiring exhaustion of administrative .remedies that

_ LP&L’s suit disrupted the Commission’s tonsideration of

United’s certificate case, and will interrupt the normal

course of judicial review of the. Commission’s Opinion No.

. 610 issued therein. LP&L has never sought to enjoin the ©

Commission’s proceedings, but rather directed its action

_* against United. Further Opiriion No. 610 makes elear that

_ the Commission was completély aware of the Fifth Cireuit’s 7

-. decision but proceeded irrespectively of such decision.

United also cites City: of Tacoma v. Taxpayers of Tacoma, |

_. ~ 357 U.S. 320 (1958) for the proposition that an agency ©

order. cannot be collaterally attacked after judicial review

has begun. This gase has no application’ to the problem at

harid in that LP&L's | suit and..the opinions of the courts

below a]l occurred prior to the issuance of O Opinion No. 610.

N6 impediment to orderly judicial review Of that opinion.

” .exists..

« - ARGUMENT

| I

EXHAUSTION OF > ADMINISTRATIVE REME-

DIES IS NOT REQUIRED IN EVERY CASE IN-

VOLVING AGENCY. SUBJ ECT MATTER JUR-

ISDICTION.— -

in asserting that LP&L. should have awaited’ the out-

‘come of United’s certificate case both the’ Commission and

United have principally relied upon Myers v. Bethlehem -

_ Shipbuilding Corp., 303 U.S. 41 (1938); Federal Power °

Commission v. Arkansas Power & Light Co., 330 U.S. 802, .

rev’g per. curiam 156 F.2d 821 (D.C. Cir. 1946) and other -

cases, for the proposition that there exists a long-settled

rule of judicial administration that questions relating to

an agency’s subject matter jurisdiction should be deter-

mined by the agency in the first. instance. The decisions of

_ o

; o 8 - . ~ .

this Court:simply do not ‘bear out the contention of the

Commission and United that there is such a rule which

‘must be applied in all cireurhstances, In at least seven cases

- jthe Court has passed upon questions of administrative |

jurisdiction without requiring éxhaustion of administrative .

| remedies.® As recently observed by the Court in McKart v.

U.S., 395 U.S. 185 (1969)? a case principally relied upon

by United : _s |

“We do not view the cases of Falbo v United States,

32 US 549, 88 L Ed 305, 64 S Ct 346-(1944), and Estep v

United States, 327 US 114, 90 L Ed 567, 66 S Ct 423

(1946), insofar as they concern the exhaustion doctrine,

4 . asa bar to today’s holding: Neither those two cases,

' ~ nor any of the other cases decided by this Court, stand

for the proposition that the exhaustion doctrine must

_be applied blindly in every case... .” (395 U.S. 185,

* 200-01, n. omitted) ——

Rather than being-an immutable rule, the exhaustion of

_ administrative remedies doctrine: is therefore exercised

_ by the Court only where éircumstances of-a particular

ease dictate, | *« ' |

§ Allen v. Grand Central Aircraft Co., 347 U.S. 585 (1954) ;

*. Bethlehem Steel Co. v. New York State Labor Relations Board,

330 U.S. 767 (1947); Order of Railway Céndi ors of America

v.“Swan, 329 U.S. 520 (1947); Public Utilities Commission of.

Ohio v. United Fuel Gas Co., 317 U.S. 456 (1943) ; Illinois

- Commerce Commission v. Thompson, 318 U.S. 675 (1943); .

Skinner and Eddy Corp. v. United States,"249 U.S. 557 (1919)

and Gonzales v. Williams, 192 U.S. 1 (1904). ~

7 The Court. in this case held that ina criminal proceeding con-

cerning the failure of the defendant to report for induction into

the Armed Forces, the defendant was not barred from raising

‘the defense that he was a “sole surviving son” of a family whose **

father has been killed in action while ‘serving in the Armed

Forces by the fact that he hadwot exhausted his administrative

remedies. United’s reliance on this case is therefore misplaced in

2 no exhaustion was required. Additionally, the relevance of

the discussion on exhaustion in the context of ‘a criminal pro-

oe °

- ceeding is questionable. 2

In this proceeding the district court’s decision, which —

the Commission and United ‘support, recognized as much

- (United Pet. 41a).* In considering the exhaustion argu- |

ment, the district court utilized a test proposed by Professor ° \

Kenneth Culp Davis in his Administrative Law Treatise,

Volume 3, orem 20.03, page 69, involving three factors

which slfould be considered in determining whether prior

resort to administr ive action is required in a particular,

proceeding.® The court ‘quoted these three criteria as ex-

‘plained by Professor Davis: *. & 2

“The key factors are three: extent of injury from

pursuit of. administrative remedy, degree of apparent.

- Clarity or’ doubt about. administrative jurisdiction, and

involvement: of specialized administrative understand-

_ ing in the question of jurisdiction. Unfortunately, each

_ of these three key factors is a variable, and each often

calls for a considerable*amount of judgment for its’

proper appraisal. oo. ~

x, - ™ Ow,

A workable standard probably should not go. beyond

a Statement that each of these three factors should be

weighed in etermining whether or not a court should

decide an @ssue-of administrative jurisdiction without

requiring exhaustion of administrative remedies. A

neat word formula probably is not feasible.” (United.

Pet.4la) . , i.e =>.

Following the statement of this three part test ip mgion

court concluded that in the circumstances of this ¢ase |

exhaustion of- administrative remedies -was required. The |

Fifth Circuit, however, arrived at a different conclusion |

(Qnited Pet.:25a-26a), stating: .

" 8“United Pet.” references are to the petitions filed: herein in |

, No. 71-1040, which contain as appendices the relevant opinions

_ of the Commission and courts below. ;

® The test recommended by Professor Davis has ‘been employed in

lower court decisions. See Lone Star Cement Corp. v. PIC.

~~ 339 F.2d 505 (9th Cir. 1964) ; United States v. Rockland Steam-

ship Corp., 218 F. Supp. 509 (S.D.N.Y. 1963) ; and Ow Shale.

Corp. v. Udall, 235 F. Supp. 606 (D. Colo. 1964). . .

10— : =

~ “Both United and the FPC ecntena that. ie curtail.,

ment proceedings in Docket No. RP 71-29 and the

certificate proceedings in Docket No. CP 71-89 are

within the jurisdiction of the FPC and that the court.

was correct in dismissing the present action. All parties

cite numerous precedents, most_from the Supreme

Court. An attempt at. rationalizatt®n would needlessly,

lengthen ,this opinion. The entire area has been

thoroughly analyzed by a leading text in the field. It

collects and discusses most: of -the authorities relied

‘on.by both sides. It was relied upon by the court below

‘and we rely upon it here. See 3 K. Davis, Administra-

o', tive Law Treatise $§ 20.01 through 20.03.

_ Because we hold the lower court erred in its holding

| regarding potential injury and in its views as to.

primacy of agency jurisdiction, we arrive at a different

result in applying Professor: Davis’ three-part. test

(§ 20.03).

See Bailey v. United States, — . F.2d ...... (5th Cir.

197J) [No. 71-1731, December 8, 1971], and cf. Untted

‘States v. Hernandez, ...... F.2d ...... (5th Cir. 1971) [No.

T1- 1656, December 27, 1971].” .°

‘Texaco submits that the circumstances of this pipooeding-

‘are such that LP&L was not required to await the outcome

of the Commission’ s certificate case under the criteria used

by. the courts. below. > i

A. .LP&L Would Sustain Substantial Injury. From Pursuit

‘Of Its Administrative Remedies.

_ m&

The first consideration employed by the court low in.

considering the exhaustion of remedies problem was the

- extent of injury.which LP&L would suffer from pursuit of

its administrative remedy. 10 The question of irréparable

10 Assuming that LP&L had chosen to await the outcome of the.

certificate proceeding with respect to-the jurisdictional nature

- of the Coen System and if it is ultimately determined in that

—— was at the heart of tlie proceedings below. In seeking

_ injunctive relief‘to prohibit United from breaching its con-

-Eract by failing to deliver the contract. quantity of gas to —

its Nine-Mile Point station, LP&L alleged in its sworn

complaint that it supplied electricity to various parishes

in Louisiana and had: interconnections with all other -elec-

trical utility companies in the state and most of-the rural ~ |

electrical cooperatives in the state (United Pet. 7a-8a). ©

Through this network LP&L asserted. that’it served the

electrical needs of numerous domestic and industrial cus-

tomers as well. as governmental subdivisions. Through .

other interconnections it. participated i in’ an area wide elec-

trical network serving 2,500,000 consumers which is stift

further connected to various power sources ‘throughout

most of the eastern part.of the natign, LP&L alleged. that a

' failure to utilize the full electrical generating capacity of

its Nine-Mile Point. station at peak demand periods could

cause an area “blackout” or “brownout” with damages

beyond any means of calculations It also asserted} that it

_ would lose electrical sales which. could never be recovered

because of the satay

after the immediate demand has passed. A loss of such sales

would involve further irreparable injury since the fixed |

of its stock in trade, 1.¢..,. electricity.

cannot be stared nog can it be delivered at any moment ~’

cost of its basic electrical generating facilities continues to

be depreciated whether they are used or not.

United and the Corunission filed no responsive pleadings

_ with the district court challenging these allegations on the

mente (United Pet. 9a). :

Sruseadiiie that the Commission has no jurisdiction over such

facilities serving LP&L’s Nine-Mile Point station, then United’s

curtailment plan, as approved by the Commission, would not

apply to the LP&L Nine-Mile Point station and assumedly no

injunction to prevent United from . employing ‘such = would

be required. _ .

Rents,

' The ‘Fifth Circuit reversed. the district’ court’s finding

that n¢ irreparable injury had been shown, by.LP&L and

remanded the case for further hearings in this regatd. The

court. suggests that evjdence be considered as to the fuel ~

needs at the électrical generating stations, the alternative

sources of energy supply, ‘the anrount of power that can be

exchanged through interconnectéd sources and-an-analysis, -

NONE pd ne

of LP&L’s usual and peak day demands (United Pet. 12a).

In‘summary “the Fifth Circuit held that the record “does

‘not demonstrate that. ‘such injury 1s not ey to ieee |

. (emphasis added).

~~ “The: extent. of: injury to LP&L has thareior not: been

finally determined.: Nevertheless, several observations can

- be made with respect to this inquiry. .First, the allegatiops

’ of injury raised by LP&L have not been aalsugea Ge es

merits by. United or the Commission. The allegation of lost

sales because of inadequate fuel supply will become more

compelling as the summer air conditioning season increases

the demand for electricity. Any injury being suffered by

-LP&L as the result of curtailed deliveries to the Nine-Mile

Point station has continued since LP&L’s suit in this pro--

ceeding was instituted in March of 1971, over a year ago,

and such injury would continue for some unspecified period

_into the future while the Commission’s deliberations. con-

tinue in the remanded United certificate case, or conceivably

while the Commission’s Opinion No. 610 is under review. in

~~the Courts. ‘In view of the fact that United is delivering less .

gas ‘to. LP&L’s Ni ine-Mile Point station than called for in its

contract, it may be.assumed that to some degree LP&L

_ has not been able to generate and sell electricity to its full ©

capability and aa suzeperale injury has resulted there-

from. |

bee 4 a 13

iB. ‘Bice Is Little Doubt That: The Commission Juris.

diction Does ‘Not Extend Over_United’s Green System.

- The second part of the test utilized by the, courts below

in resolving the question of exhaustion of administrative

remedies was the evaluation of the degree of clarity or

doubt about the Commission’s jurisdiction over the Green

System. An analysis of the jurisdictional question .prin-

ae ce — m SS

— _ eipally involves applying the existing legal precedent to

an undisputed and relatively simple fact situation.

g - The basic factual predicate was created by the introduc-

tion into evidence as an exhibit in this. proceeding United’s

prepared direct case which it had previously submitted to

-» the Commission in connection with itd certificate proceeding -

(R. 138-43). Within this material was an explanation of.

the flows of gas which have taken place from United’s ©

interstate system into the Green System gver the past

several years. Based upon this ; evidence and the cross- .

| examination thereof, the Fifth’ Circuit found that JUnited’s 7

intrastate -GreesSystem is located entirely ‘within the

. State of Louisiana (United Pet. 22a). During. 1970 United

“ chose to inject limited volumes of interstate gas into the -

' Green System which. accounted for some 2.6 percent of

- court s deliveries to LP&L’s Nine-Mile Point station. The

court further found that no gas escapes from the Green ©

System back into United’s interstate system because of

“pressure differentials between the lines and the presence

of valves separating the two at their aes ail of

interconnection.

In holding that essentially tliese same facts give rise 7

jurisdiction over the Green System, the-Commission in

Opinion No. 610 relied upon this Court’s decisions. i in Calt-

_ fornia v. Lo-Vaca Gathering Co., 379 U.S. 366 (1965),

_ (“Lo-Vaca”), thé companion case of Federal Power Com-

mission v. Amerada Petroleum Corp., 379 U. S. 687 (1965),

(“Amerada”) and the Fifth Circuit’s decision with respect

_to Commission jurisdiction over certain other facilities of

United in the “Florida Parishes” case, Louisiana Public |

Service Commission v. F.P.C., 359 F.2d 525, (5th Cir. 1966) ,

cert. ‘demed, 385 U.S. 833. ae

“The Court’s Lo-Vaca and Amerada.decisions are clearly

distinguishable in several respects. The-Green System

unlike the situation in Lo-Vaca and Amerada does not

inyolve ‘an attempt to clothe interstate gas with an intra-

state or nonjurisdictional sales character by contract lan-

guage. Secondly, Lo-Vaca and Amerada involved situations

where a commingled stream of jurisdictional and non-

jurisdictional gas left the state of its origin. The Green

System, however, is the exact opposite in that small quant-—

N\Nities of gas from jurisdictional sources are introduced into

a completely contained intrastate pipeline network and no

gas from the Green System leaves the State of Louisiana.

- . Thirdly, Lo-Vaca. and Amerada cannot be. read to. ho

. that every commingling of jurisdictional and nonjurisdic-

_ tional gas brings the nonjurisdictional gas within the Com-

mission’s jurisdiction.1! Finally, the Court’s Lo-Vaca deci-

sion rested on the fact that substantial rather than de

"minimis volumes. of commiygled ga’ were at issue.’? The

Court held: | ? | : a

“The fact that a substantial part of the gas will be

resold, in our view, invokes federal jurisdiction at the

outset over the entire transaction... .” (379 U:S. 366,

369, emphasis added) ~ _ a

11 Cf. Public Service Electric & Gas Company v. Federal Power

Commission, 371 F.2d 1 (3rd Cir. 1967) ; Secretary of the Army |

v. Federal Power Commission, 425 F.2d:496 (D.C. Cir. 1969)..

*? In its Opinion No. 610 the Commission found that the volumes

‘_ , of interstate gas-introduced into the Green System were not de

“+ minimis, principally relying on “peak day” deliveries of such .

volumes (United Pet. 101a). It is erroneous to take ‘a single

“worst case” example in the year to judge the dezree to which |

interstate gas has been injected into the Green System.

oo : |

15.

The Flerida Parishes case is likewise distinguishable in __

that the facilities involved ir that decision were determined”.

to be-an integrated part of United’s interstate operations.

~ In this case, hefvever, United’s Green System is entirely

\ separate, with its own nonjurisdictional gas supply. The’

Fifth Circuit found no difficulty in distinguishing its earlier: _

- opinion in Florida Parishes from ‘the case at bar (United . °

Pet.24a). | - <

The Commissién and United also suggest that the Com-

‘Inission’s\ jurisdiction ‘exists dover the Green System by

virtue ‘of this Court’s holding in Connecticut Light and —

Power Co. v. Federal Power Commission, 324 U.S, 515

(1945) ‘and Federal -Power Commission v. Florida Power —

.\ and Light Co., No. 70-38, decided January 12, 1972. Both

\ of these cases arose under the Federal Power Act?* rather

than the Natural Gas Act; and involve the transmission

of nonjurisdictional electricity across a state boundary. As |

jreviously mentioned no gas once having entered the Green |

System leaves the State: of Louisiana. Therefore, these. .

cases like Lo-Vaca and’ Amerada are distinguishable from

- _ the situation. here under consideration.

~ The Commission’s jurisdictional determination over the

Green System in Opinion No. 610 was likewise in error in

its failure to recognize that Congress in amending the

Natural Gas Act in 1954 to add Section 1(c)#* known as

the “Hinshaw Exemption” expressed its clear intention to

exempt operations such’ as United’s Gréen System from

Commission jurisdiction.1¢ The legislative ‘history of the |

19 16 U.S.C. §§ 800, et seq.

1415 U.S.C. §§ 717, et seg:

_ 515 U.S.C. §717(e), reproduced in footnote 7, Opinion\No. 610 |

United Pet. 108a): in :

| | | | ‘ 4

16 Cf. Virginia Petroleum Jobbers Ass’n. v. F.P.C., 265 plese en

> 368 (D.C. Cir. 1959), discussing .Congress’ intent. to overcome

. Federal Power Commission vy. East Ohio Gas Co., 338 U.S. 464 ;

(1950). Nie oo ee ) é , a.

| 16.

“enactment of the Hirishaw Améndinenit clearly indicates

. Congress’ intention. As stated im Senate: Report Ro.’ "817, |

J aly 30, 1953, accompanying H.R. 5967 :

“The purpose of this legislation is to clarify’ i

Natural. Gas ‘Act. by. further defining the limits of: the

Federal Power.Commission’s jurisdiction with respect

to operations of companies engaged -in the local dis-

-tribufjon/ within a State of out-of-State natural gas

which has been received by such a company at or’

* within ‘the state borders.” (1954 U.S. Code Congres-

sional and Administrative News, p. 2102) ,

The ty requisites for operation of Seétion 1(c) of the or

Act are that the jurisdictional. gas received in the state be

ultimately consumed in such state and that the rates

chargefl, services performed, and the facilities used be | .

subject to the regulation of the state regulatory commission.

‘The record in this case clearly indicates that the jurisdjc- —

tional gas received in the Green System js ultimately con-

sumed in the State of Louisiana. The State of Louisiana i in

its motion filed herein for leave to orally argue.as amicus

curiae dated April 3, 1972 ‘clearly indicated that it is ready,

willing and able to perform its duty to the extent. permissi-

ble under its State Constitution as a state regulatory agericy — | .

over United’s Green System. The instant factual situation

, concerning the Green System i is precisely the type" which

was considered by Congress to be “primarily of local nature-

~ and subject to the regulation of the several states.”27

It is clear; therefore, that the Commission’s jurisdiction

jou not exist over United’s Green System ynder the appli-

cable precedent. The need for resort to administrative

remedies u LP&L was not required i in these circumstances.

4715 U8.C. §717(e).

’

5 ; F . ; : | f 17 6 | ’

Geetion 0 Or J —* Over The Green System Is: °

Involved. ? . |

The- final element i in Professor he three: part test is |

an’ inquiry into the degree. to -which an administrative ;

agency may be required. to sort through | the various con-

, _tentiogs of parties and to apply its special expertise tothe : )

matters concerning its jurisdiction. As noted above, in ¢his

pr ing the Commission fully participated in the devel-

of the record upon which the Fifth Circuit’s decision

jurisdiction over the Green System was made.

The record shows no dispute as to the material facts

- involved.4* The question of application of existing legal

a precedent i is one within the capability of the court which

properly exercised its prerogatives to decide legal issues.

The Commission and United’in their briefs have sug-

gested that the Fifth Circuit’s decision on the jurisdictional -

issue was inappropriate because the court did ndt have

before it evidence which was presented in the certificate -

' proceeding before the’ Commission, It is cited that the-

- Commission’s record in the certificate proceeding consisted |

- of 1,276 pages of transcript, 63 exhibits and ten items by -

_ reference. This recitation is misleading in that the bulk of

the testimony, exhibits and items by reference in the certi-

ficate case related to issues other than- the Commission’s |

jurisdiction over. the facilities involved. United tendered a

single witness, Mr. Echterhoff, on the’critical issue of gas

flows into the Green System from United’s interstate facil-

ities. Mr. Echterhoff’s same testimony was also introduced

in the injanctive hearing below. Therefore; the possible:

| 18 The same was true with respect to the record ‘tebe the Commis-

Sion in United’s certificate case. There the Commission granted

waiver of the presiding examiner’s initial decision, apparently

feeling that there was no need for his assistance in considering

‘the uncomplicated and undisputed fact situation.

distinctions on the jurisdictional point between the retord

_available to the Commission in the certificate case and the |

_ record available to. the court below lie in the extent of the

direct and cross-examination by various parties to-either

proceeding. It must be reiterated, however, that the testi-

mony on the gas flows, a subject uniquely within United’s

~~ knowledge, was not rebutted by testimony of any .party.in

either the Commission’s certificate case or in the prokeod:

ings below.

For the foregoing 3 reasons it is submitted that no ‘par-

ticular degree of administrative expertise is required in

these circurhstances. to sort through a complicated and

contradicted factual record. The flows of gas involved are

undisputed and reasonably simple in concept. The principal

difficulty is in the application of existing law to these ‘undis-

- puted facts, a subject which the Court is as capable of

performing as the Commission. ,

a, For the foregoing reasons Texaco submits that the Fifth °

. of United’s certificate case, a process which may _

finite length of time in view. of the potential —

court review

as to the remanded, certificate proceeding still before the

~ Commission. It is Tikéty.that LP&L has suffered and will.

continue to suffer irreparal injury from imposition of

United’s curtailment program to LP&L’s Nine-Mile Point. .

. tion: does not extend over the Green System. Finally the

determination of such jurisdiction is not a Anatter which

falls uniquely — the Commissions field of —

in this case.

it was justified in not-requiring that LP&L await the . -

Opinion No. 610 as well as the uncertainty .

T@ INSTANT PROCEEDINGS HAVE.IN NO

WAY INTERRUPTED THE COMMISSION’S

CERTIFICATE PROCEEDING CONCERNING.

UNITED’S GREEN SYSTEM OR THE PRO.

CEDURES FOR ORDERLY REVIEW OF THE

COMMISSION’S OPINION NO. 610 ISSUED

THEREIN —— a

United has gag as an . additional reason a LP&L

should exhaust its administrative remedies, the claim that

Commission’s consideration: of United’s certificate case as

well as the orderly judicial review of Opinion No. 610

issued int the proceeding, pursuant to Section 19(b) of the

- Natural Gas Act.!® United has recognized, however, that

unlike the situation in Myers v. Bethlehem Shipbuilding

Corp., 303 U.S. 41 (1938), LP&L has not sought an injunc-

tion against the Commission’s certificate proceeding which

~ has continued unabated through the hearing stage in June

1971 and in which Opinion No. 610 was issued on February |

9,-1972 (United Pet..91a). Front a reading of the Commis-

~ sion’s Opinion No. 610 it is dpparent that the: Commission,

- while aware of LP&L’s actions below, was not deterred -

‘ from continuing its consideration of the certificate case.

The Commission* stated:

“75, In Louisiana Power: & Light Co. v. United Gas

_ Pipe Line Co., Fifth Cirenit No. 71- 2550, decided Jan.

"14, 1972, ...... F.2d ......, the court held that « ‘... The

regulation of the Green system is sibatantially and

essentially a localized matter committed to Louisiana’ 8 :

jurisdiction’ (Slip-Op._p, 29). Since. we respectfully dis-—

agree with the legal conclusion drawn by the court, we

are constrained to consider -the question of whether this.

19 15.U.S.C. § 717r(b).

Commission is precluded from making an independent —

decision ‘based upon the record in the case before us.

(United Pet. 121a-122a) - 2 8 3

ee © © oe _ |

“83. We conclude that we are not precluded from —

reaching a decision by the action of the court’s opinion.

The LP&L case is a collateral attack-on the Commis-

. sion’s jurisdiction to hear and to decide the case pre- -~

‘sented in Docket No. CP71-89. Counsel for the Com-. -

‘mission, authorized and directed to appear for the —

Commission as intervener in the collateral suit, asserted

the primary jurisdiction of this Commission to decide

the case; — the-Commission did not — and could not —

take a position on. the merits until this decision was

reached, Therefore, the instant decision is- the first

opportunity we have Rad to decide the issues entrusted

to us by the Congress through the Natural Gas Act,

subject to court review. We thus feel constrained to |

state for the review of any Court of Appeals and the

Supreme Court, if certiorari be granted, the findings

and: conclusions of law in the order herein entered.”

(United Pet. 124a) - 2 :

United has also cited the’ case of City of Tacoma v. Taa-

‘payers of Tacoma, 357 U.S. 320 (1958) and two lower court

decisions for the proposition that “when” Congress has

provided statutory procedures designed to permit agencies

expertise to be brought to bear on particular problems

these procedures are to be exclusive” (United’s Brief p. |

23). Texaco submits that the Tacoma case stands for the

proposition that review of a.Commission order must follow

the procedures ‘set, forth in the applicable judicial review

section of the agency’s enabling statute and may not be

attacked after issuance of the order in a collateral proceed-

ing. This. problem is simply not. preseated. in. this case.

LP&L’s suit below was brought long before the Commission

"issued its Opinion No. 610 in the certificate case and. in

fact the decision of the Fifth Circuit below likewise -pre-

ceded the issuance of the Commission’s decision. Therefore,

the instant proceeding cannot be characterized as in any

_way interfering with the orderly review of Opinion No. 610.

Applications for rehearing have been filed to the Com-

mission’s order. Nothing in this proceeding will prevent |

any party from following the regular procedure of taking

an appeal to an appropriate tircuit court upon issuance of

the Commission’s order onrehearing.”°

United’s concern over. the interruption of the orderly

process of appeal has + saarered hollow ring when con- . 7

sidering the fact that United petitioned this Court for direct

review of the Commission’s Opinion.No. 606 in its curtail-

ment proceeding without the benefit of the Fifth Circuit’s

consideration of that.amatter-While the Court denied Uni-

ted’s petition with respect to this request, United and ‘the

' Commission fervently argue herein for a decision on the

merits on the .Commission’s curtailment powers which.

would unquestionably affect the decision of the Fifth Cir-

cuit on this matter. Thus, while United is perfectly willing

to have the power of the Commission over curtailments

decided in this proceeding it argues that an appropriate

court of appeals must be given full rein to conSider the

question of the jurisdiction over the Green System, unen- _

20 On April 7, 1972. the Commission issued its Order on rehearing,

Opinion No. 610-A, reaffirming its prior finding of jurisdiction -

over United’s Green System in Opinion No. 610. Texaco believes

that Opinion No. 610-A will be set forth as an appendix to the

Amicus Curiae brief filed hereby by Humble Oil and Refining:

Company. Texaco respectfully’commends to: the Court’s atten- -

tion the dissenting statement of Commissioner Carver wherein

he points out the fact -that the Commission’s jurisdictional de-

‘termination was made on the basis of extra-record, ex parte

advice from the Commission’s Staff. This disclosure creates an

additional reason why the Fifth Circuit’s decision with respect

to the Green System should be left undisturbed.

. ™ . 4

April 12, 1972

99"

CONCLUSION

For the reasons stated, the judgment of the pourt ‘of

- appeals should be affirmed as to ‘the nonjurisdictional status

of United’s Green System serving LP&L’s Nine-Mile Point

station on the basis that the court had all necessary author-

ity to decide this 3 issue.

Respectfully submitted,

_ Texaco Inc.

. J. Donatp ANNETT .

1001 Connecticut Aecame: N .W.

_ Washington, D. oe 20036 -

Kix W. nn B

Joun M. Youne.

P. O. Box, 52332 .

: Houston, Texas 77052 |

ssilaecil For Texaco Inc.

“LIBRART -. —

- URT a Supreme Ceort, B.S.

so aa cm = ne p P24. Fb

[ape 12 72

7’ . ©

Me SL ROBEK, JR. ‘CLERK

"Supreme Court off The United States

- OCTOBER TERM, 1971

| " No. 71-1016

'. FeperaL Power Commission, Petitioner

Ok a

_ Loutstana Power & Licut Company, ET AL.

| No. 71-1040 | |

Untrep Gas Prre Line Company AND PENNZOIL

UntrTep, Inc., Petitioners i

1" Vv. are

Louisiana Power & Licut Company

_ON WRITS OF CERTIORARI TO THE UNITED STATES __

COURT. OF APPEALS FOR THE FIFTH aRCUrE..

"ARKANSAS PUBLIC SERVICE COMMISSION

Pat Moran, _ . Po

‘Chairman eee. See

papeapsin Cc: McMinn,

i, General Counsel

_ State Capitol Crowds. |

iseees Rock, Arkansas 72201

‘TREVATHAN PRINTING COMPANY. NEWPORT, ARKANSAS

- AMICUS CURIAE-BRIEF FOR THE Pere

Cte, eS . oo,

INDEX

I. INTEREST OF THE AMICUS CURIAE |

a (ARKANSAS PUBLIC SERVICE ices ]

COMMISSION) ........... AA re me, Ce

II. ‘SUMMARY OF ARGUMENT ..........-: Kina ae

4HI., ARGUMENT ':.........00006. Ratsiatees. be tey 4

aes :

| &° The FPC Has’ No Jurisdiction Over

_ Direct Industrial Sales of Natural

Gas Pipelines ...... yee pe eeaednenes Bie

IV.. CONCLUSIONS... 0.0.00. 006. ge Oe

_.. ‘TABLE OF AUTHORITIES

' City of Hastings v. FRC, 991 F.2d 31 (D.C. Cir. 1954) on

Coastal TOMEENESION Corporation, et al, 26 | Py

ted ‘SR (UR i BRE ees s a

Colorado lati Gas Co. v. FPC, 185 “F.2d 357-

- (3d Cir, 1950) ...... Sl a ug nabs 6,8

"Federal Power Commission. v. Louisiana: Power ee

Light Company, et al (Opinion Below) ......: 4, 15

_ Federal Power Commission v. Transcontinental Gee

Corporation, 365 U.S. 1 (1960) ........2.5..+. 8, 10

‘Fe Trade Commission ¥v. Raladam Co., 283 US. ae

ios cats uacansens bck be tencesd (15

: ee 643 ( ) : £1

Granite City Steel. Company v. FPE, 320 F.2d 711 oe |

WE (RAGIN Ce

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