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Mississippi River Fuel Corp. v. Federal Power Commission.

decided: February 9, 1953.


Author: Hastie

Before GOODRICH, STALEY and HASTIE, Circuit Judges.

HASTIE, Circuit Judge.

Mississippi River Fuel Corporation brings this petition for review to challenge an order of the Federal Power Commission which undertook to reject and return without hearing rate schedules and supporting material constituting tariff changes proposed by the corporation and filed with the Commission.

Petitioner is a natural gas company within the meaning of the Natural Gas Act, 52 Stat. 821, 15 U.S.C.A. ยง 717 et seq. Pursuant to Section 4(d) of the Act, petitioner, hereinafter called "Mississippi", filed on April 30, 1952 revised tariff sheets which it proposed should become effective June 1, 1952. As proposed, the new rate schedules would have increased the price of natural gas in sales within the jurisdiction of the Commission and would have changed the manner of determining customers' maximum rights to call upon petitioner for service. On May 29, 1952, the Commission issued an opinion and order in which it reasoned that the stated basis and justification of about one-third of the proposed increase in Mississippi's rates was an expected increase in the cost of gas to be purchased by Mississippi from its principal supplier, United Gas Pipe Line Co.; that sales of natural gas by United to Mississippi are within the jurisdiction of the Commission, and that, since no application for an increase in rates had been filed by United, it was clear that no increase in cost of supply would be experienced by Mississippi on June 1, 1952. The Commission added that it was uncertain when, if ever, such an increase in costs would occur.*fn1 The Commission was "not unmindful" that about two-thirds of Mississippi's proposed increased rates and other proposed changes in the method of computing charges bore no relation to the claimed anticipated increase in cost of gas purchased from United, but said that "the application for tariff changes * * * has not * * * been so constructed by Mississippi as to enable the Commission to deal with its components separately." In these circumstances, the Commission ordered the proposed rate schedule rejected without prejudice to Mississippi's "filing proposed tariff changes which do not include indefinite, speculative and unknown increases in the cost of service."

On June 24, 1952, Mississippi applied to the Commission for rehearing of the May 29 order alleging as a principal ground of complaint that the Commission was required to grant a hearing on its proposed tariff changes and had no authority to reject its filing summarily. No action was taken by the Commission on this application and therefore, as provided by Section 19(a) of the Natural Gas Act, it is deemed to have been denied thirty days after it was filed. Mississippi now petitions for review of the Commission's order of May 29.

Section 4 of the Natural Gas Act provides:

"(d) Unless the Commission otherwise orders, no change shall be made by any natural-gas company in any such rate, charge, classification, or service, or in any rule, regulation, or contract relating thereto, except after thirty days' notice to the Commission and to the public. Such notice shall be given by filing with the Commission and keeping open for public inspection new schedules stating plainly the change or changes to be made in the schedule or schedules then in force and the time when the change or changes will go into effect. * * *

"(e) Whenever any such new schedule is filed the Commission shall have authority, either upon complaint of any State, municipality, or State commission, or upon its own initiative without complaint, at once, and if it so orders, without answer or formal pleading by the natural-gas company, but upon reasonable notice, to enter upon a hearing concerning the lawfulness of such rate, charge, classification, or service; and, pending such hearing and the decision thereon, the Commission, upon filing with such schedules and delivering to the natural-gas company affected thereby a statement in writing of its reasons for such suspension, may suspend the operation of such schedule and defer the use of such rate, charge, classification, or service, but not for a longer period than five months beyond the time when it would otherwise go into effect: * * *. If the proceeding has not been concluded and an order made at the expiration of the suspension period, on motion of the natural-gas company making the filing, the proposed change of rate, charge, classification, or service shall go into effect. Where increased rates or charges are thus made effective, the Commission may, by order, require the natural-gas company to furnish a bond, to be approved by the Commission, to refund any amounts ordered by the Commission * * *"

Section 16 of the Act empowers the Commission to make such rules and regulations as are "necessary or appropriate" to the performance of its duty to execute the provisions of the Act. Among the rules and regulations promulgated pursuant to this authority is the following:

"Notice requirements. All tariffs, and contracts or any parts thereof shall be filed with the Commission and posted not less than thirty days nor more than sixty days prior to the proposed effective date thereof, * * *"*fn2

It is conceded by counsel for the Commission that all formal requirements other than the quoted rule were complied with by Mississippi in submitting its proposed tariff schedule. And it may be assumed for purposes of this case that the Commission has the power, implied from its authority to make rules and regulations, to reject a proposed filing which does not conform to such rules and regulations.*fn3 But the Commission contends that the quoted rule was not complied with. It argues that "proposed effective date" means something more than merely the date on which the company proposes to make its new rates effective. We do not agree. The language of the rule and of the section of the statute it implements seems clear and unambiguous. Reading the words with their "ordinary and usual" meaning leaves no doubt that they simply refer to the date which the applicant states is the one on which he would like to change his rates. But for the strenuousness with which the Commission contests this point we would be content thus to dispose of it.

The Commission speaks in its order of the proposed effective date "requested" as if there may be some other proposed effective date "permitted" which becomes "the proposed effective date" within the meaning of the regulation. If the Commission's position is that the proposed effective date must be one on which the rate increase asked is justified, then the Commission must decide, whenever a proposed change is submitted for filing, that the rate change is justified before it accepts the proposed tariff for filing and orders a hearing to determine whether or not it is justified. Perhaps the Commission's position escapes this absurdity, though without achieving soundness, if all that is required by the Commission to elevate the date proposed by the company into a "proposed effective date as contemplated by the rule" is merely that it not be obvious beyond conceivable need for proof that the justification stated for the proposed increase has no reasonable relationship to the date proposed by the company.

Motions to dismiss for failure to state a cause of action and motions for summary judgment are familiar judicial devices for avoiding the delay of a full scale hearing of cases in which it is clear as a matter of law or of indisputable or easily ascertained fact that the plaintiff cannot recover. It may well be that a quasi-judicial body such as the Federal Power Commission has need for some analogous procedures to expedite the handling of those matters which come before it which can be resolved solely as matters of law or on the basis of some easily ascertained fact. But the statute which defines the powers of the Commission in natural gas matters makes no provision for any such procedures. Whether the Commission could, in the legitimate exercise of its rule-making powers, establish such procedures,*fn4 or whether specific statutory reform is needed, is not now before us. What we have here is an attempt by the Commission to adopt some such procedure by distorting otherwise clear words of a regulation it has itself adopted Whatever might be said of action under a regulation framed so as to attempt to authorize the type of procedure the Commission is indulging here, this attempt to achieve the result by reading it into a section of the regulations, which does not even purport to deal with anything but the formal notice which shall attend the filing of proposed tariff schedules, is clearly beyond the scope of permissible administrative interpretation of administrative regulations.

Moreover, even if there were some procedure by which the Commission could act summarily in some rather clear cases, the Commission concedes that much of petitioner's proposed tariff schedule was based on claims which could not be rejected summarily as without merit. For factors other than anticipated future rate increases of Mississippi's suppliers are the stated basis of most of what Mississippi proposes. Admitting this, the Commission argues in effect that it is asking too much to expect the Commission, after full hearing at which all relevant facts may be adduced and the parties have had opportunity to analyze the evidence and present ...

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