United Gas Pipe Line Co. v. Willmut Gas & Oil Co.
United Gas Pipe Line Co. v. Willmut Gas & Oil Co.
Opinion of the Court
This suit was filed by Willmut Gas and Oil Company (Willmut), appellee, against United States Pipe Line Company (United), appellant, in the Chancery Court of Forrest County, Mississippi, for allegedly unjust, unlawful, excessive and discriminatory rates charged Willmut by United for natural gas sold and delivered for a six-year period ending June 20, 1963. The complainant prayed that the court “fix a just, reasonable, non-preferential and non-discriminatory rate for the intra-state gas delivered by United to complainant and award a decree to complainant for the difference between said sum so fixed and the amount actually paid by complainant. ’ ’
Included in the ansAver of United was a motion to dismiss the original bill because the Federal Power Com1 mission had full jurisdiction to regulate the rates involved and had assumed jurisdiction and adjudicated the questions. United also filed several pleas in bar. The motion to dismiss raised the question of whether the chancery court had any power or competence to hear and determine the question, and asserted that the fixing and regulation of the rates for the sale of natural gas involved was vested exclusively in the Federal Power Commission by the Natural Gas Act. Attached to the motion to dismiss and the pleas in bar were various proceedings had before the Federal Power Commission and the statement of facts next to be made is taken from these sources and from the bill of complaint.
Willmut moved to strike the motion to dismiss and demurred to the pleas in bar. A hearing was had on the
United is a natural-gas company within the meaning of the Natural Gas Act, and the Federal Power Commission issued to United a certificate of public convenience and necessity for the establishment of certain interstate pipelines for the transportation of natural gas. Its operation extended from Texas through Louisiana into Mississippi and other States to the east. Willmut is a franchised distributor of natural gas to consumers in Bast Jackson, Rankin County, Mississippi, and in Hattiesburg, Forrest County, Mississippi, and towns and communities lying between those places. Prior to August 19, 1943, Willmut owned an eight-inch pipeline from East Jackson to Hattiesburg, and on that date it was taking delivery of natural gas at East Jackson and transporting the gas in its own transmission line to its several distribution points. All of the gas purchased as of that date by Willmut from United was produced either in Texas or Louisiana. On August 19,1943, the Federal Power Commission issued to United a certificate of public convenience and necessity under the authority of which United purchased from Willmut the eight-inch transmission line running from East Jackson to Hattiesburg. Willmut retained all of its local distribution franchises and systems.
On August 20,1943, United and Willmut entered into a contract under which United agreed to sell, and Willmut agreed to purchase, a sufficient quantity of natural gas for the latter to supply its customers for a period of 20 years. The contract provided for a rate of 25^ per mcf for the first five years. Therafter the rate was either to be agreed upon by the parties or fixed by arbitration.
On October 10, 1941, United contracted to deliver natural gas at Plant Eaton, located within one mile of Hattiesburg, of the same kind and quality as that sold and delivered to Willmut, at a rate of 11.5^ per mcf. On August 5, 1947, United voluntarily put into effect a rate of 17.5‡ per mcf for natural gas of the same kind and quality as that sold and delivered to Willmut, for natural gas delivered to Mississippi Power & Light Company (now Mississippi Valley Gas Company) at Jackson, Mississippi, across Pearl River from East Jackson, Mississippi. These rates charged Plant Eaton and Mississippi Power & Light Company form the basis of the discrimination of which Willmut complains.
Until early in 1947, all of the natural gas sold and delivered to Willmut by United was transported from the States of Louisiana and Texas, and was therefore transported and sold in interstate commerce for resale. United’s system included a network of pipelines in at least five states. Included in that system was the eight-inch transmission line running from East Jackson to Hattiesburg, formerly owned by Willmut, and another line running parallel thereto between East Jackson and Hattiesburg which was used in transporting natural gas to Mobile, Alabama. These two parallel lines between
In the early part of the year 1947, United made certain system changes for the avowed purpose of restricting the passage and delivery to Willmut through the East Jackson-Hattiesburg line to intrastate gas. As a result of these changes, United effected a discontinuance of the flow of interstate gas into the East Jackson-Hattiesburg line, through which Willmut was served, except through the connecting link at or near the southern terminus. A relatively small amount of interstate gas flowed into the line serving Willmut after February 6, 1947. These system changes did not entirely discontinue the flow of interstate gas into the pipeline serving Willmut and a relatively small amount of interstate gas continued to commingle with locally produced gas into these pipelines. On seven occasions between February 6, 1947 and April 22, 1952, gas flowed from United’s interstate lines into the East Jackson-Hattiesburg line - five times because of repairs on the latter line and on two other occasions for other reasons. At any time the pressure on the pipes from the Gwinville Field fell below the pressure on United’s interstate line, interstate natural gas would flow into the pipelines supplying Willmut, and at all times there was some commingling of a relatively small amount of interstate gas with the locally produced gas supplied Willmut.
The system changes above referred to were made by United without approval of the Federal Power Commission as required under Section 7(b) of the Natural Gas Act (15 U.S.C.A., Sec. 717f(b)).
In that proceeding, Willmut contended that all of the natural gas sold to it by United was subject to the jurisdiction of the Federal Power Commission under the Natural Gas Act. After the hearing, the Federal Power Commission held that all the natural gas sold by United to Willmut was “in interstate commerce” so as to be subject to the provisions of the Natural Gas Act; that United had been charging Willmut a rate that was unjust, unreasonable, unduly discriminatory and preferential.
The Commission held that it did not have the power to award reparations for past discriminatory charges but that it did have power to make findings as to the lawfulness of past rates, but made no attempt to enforce its findings as to past rates. It is conceded that the Commission did not have the power to award reparations for excessive rates charged in the past. The Commission’s order, entered June 1, 1953, required United to file a schedule of rates equal to those charged Mississippi Valley Gas Company (17.50 per mcf). It also required United to undo the system changes made in 1947 when United attempted to cut off from Willmut all but local gas. Neither party appealed from the Commission’s order. The present suit was filed shortly after the Commision’s order was entered.
Willmut states in its complaint that the suit is for the benefit of its customers, to whom it will refund the amount recovered after deducting all of its costs.
The Natural Gas Act defines a natural gas company as “ (6) ‘Natural-gas company’ means a person engaged in the transportation of natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale.” There is no contention that United is not a natural gas company within the meaning of the Natural Gas Act.
Section 7(b) prohibits a natural gas company from abandoning any portion of its facilities subject to the jurisdiction of the Commission or any service rendered by means of such facilities without first obtaining the-permission and approval of the Commission.
The provisions of the Natural Gas Act “shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or other use and to natural-gas companies engaged in such transportation or sale, but shall not apply to any other transportation or sale of
Section 4 of the Natural Gas Act provides for the filing of schedules with the Federal Power Commission showing all rates and charges for any transportation or sale of natural gas subject to the jurisdiction of the Commission, and it is provided in Section 4(d) “unless the Commission otherwise orders, no change shall be made by any natural gas company in any such rate, charge, classification, or service.....except after 30 days notice to the Commission and to the public. ’ ’
Section 5 of the Natural Gas Act vests jurisdiction in the Federal Power Commission to determine just and reasonable rates “to be thereafter observed and enforced.”
Under the rule-making power vested in the Commission by the Act, the Commission adopted the following rule: “No natural-gas company shall directly or indirectly demand, collect, or receive, for the transportation or sale of natural gas subject to the jurisdiction of the commission, or for the lease or utilization of any facilities subject to the jurisdiction of the Commission, any rate or charge different from that prescribed in its rate schedule or schedules actually on file with the commission, unless the commission shall, for good cause shown, otherwise provide by order. ’ ’
The first question for our decision is whether the Federal Power Commission had power to regulate the rates charged by United for natural gas sold Willmut, both as to that locally produced as well as that transported into the State.
United operated a unified system enterprise which was interstate in character. The pipeline employed to serve Willmut with natural gas was an integral part of United’s interconnected interstate system, all of which was duly
The second question is whether Willmut can maintain a common law action for the recovery of the difference between the discriminatory rate charged by United and a just and reasonable and non-discriminatory rate for that part of the natural gas sold which was produced, transported and sold in the State of Mississippi. Willmut contends that since the Federal Power Commission had no power to award reparations for past charges, and could only require United to file a rate schedule
We have concluded that all of the natural gas sold Willmut was subject to the jurisdiction of the Federal Power Commission; thus it was all “in interstate commerce” as far as this second question is concerned. The problem is whether it is open for the courts to determine what the reasonable rates during the period prior to the Federal Power Commission’s order should have been. The Supreme Court of the United States said in Montana-Dakota Utilities Co. v. Northwestern Public service Co., 95 L. Ed. 912, 341 U. S. 246:
“Petitioner cannot separate what Congress has joined together. It cannot litigate in a judicial forum its general right to a reasonable rate, ignoring the qualification that it shall be made specific only by exercise of the Commission’s judgment, in which there is some considerable element of discretion. It can claim no rate as a legal right that is other than the filed rate, whether fixed or merely accepted by the Commission, and not even a court can authorize commerce in the commodity on other terms.
“We hold that the right to a reasonable rate is the right to the rate which the Commission files or fixes, and that, except for review of the Commission’s orders, the courts can assume no right to a different one on the ground that, in its opinion, it is the only or the more reasonable.”
The power of the Federal Power Commission to regulate the price paid for natural gas transported and sold for resale in interstate commerce is exclusive and such price is not subject to state regulation. Natural Gas Pipeline Co. of America v. Panoma Corp., et al., 99 L.
When a sale of natural gas is subject to the power of the Federal Power Commission, or when the Commission exercises its power in a case where it has discretion, (cf. Conn. Power & Light Co. v. Federal Power Commission, supra) its jurisdiction is full and exclusive. It is not for a court to say whether Congress gave the Federal Power Commission too much or too little power over the subject of rate regulation, or whether the remedy afforded a party in a given case is complete or inadequate, measured by judicial standards.
The jurisdiction of the Federal Power Commission having attached to all natural gas sold to Willmut, there is no residual jurisdiction for independent court action. The local component lost its intrastate character and there remained no power in the courts to apply the common law of the State.
The chancery court erred in not sustaining the motion to dismiss the bill for want of jurisdiction to determine the issues presented, and its order is therefore reversed. On interlocutory appeal we ordinarily remand the case to the trial court, but in this case no additional or amended pleading could enable Willmut to maintain its suit. It would serve no purpose to remand the cause, and final judgment will be rendered here dismissing the bill. Parker v. Board of Supervisors, 125 Miss. 617, 88 So. 172.
Reversed and bill dismissed.
ON SUGGESTION OF ERROR
Dissenting Opinion
dissenting.
The suggestion of error in this case is directed solely to the action of the Court in entering a final judgment, which point is covered only in the last paragraph of the opinion originally entered herein which has been reported in 97 So. 2d 530, 536, and I respectfully dissent from the action of the Court in overruling the suggestion of error.
It must be remembered that the lower court decided this case on a motion filed by United to dismiss the bill, which motion was overruled, and this Court reversed that action holding that the motion should have been sustained, but the Court went further and instead of remanding the cause, it rendered a final judgment without giving Willmut an opportunity to amend its bill in an effort to obviate the holding of this Court. The case was never tried on the merits and the result is that this Court has entered a final judgment against the original complainant without any hearing on the merits. This is contrary to every concept of fairness and justice and contrary to what this Court said in the case of Ascher & Baxter v. Moyse & Company, 101 Miss. 36, 56, 57 So. 299:
The holding of the majority is also contrary to what was said in Town of Utica v. State, ex rel. Rice, Attorney General, 166 Miss. 565, 579, 148 So. 635, on suggestion of error as follows: “On a former day of this term the judgment of the court below in this cause was reversed, and the cause was remanded to the circuit court for trial de novo. The appellant now suggests that upon reversal of the judgment of the circuit court a final judgment in its favor should have been entered in this court. This exact point was recently decided adversely to appellant’s contention in the case of McIntosh v. Munson Road Machinery Co. (Miss.), 145 So. 731; and consequently the
It is also contrary to what was said by Judge Griffith in the case of Brock, State Bank Commissioner v. Adler, 180 Miss. 126, 128, 178 So. 593, as follows: “Much as we sympathize with appellee as a result of the decision in Adler v. Interstate Trust & Banking Co., 166 Miss. 215, 146 So. 107, 87 A. L. R. 347, followed in the opinion delivered on December 13, 1937, 177 So. 523, we are bound to hold now that the controversy is at an end on its merits. We remanded the case that the trial court might adjudicate the damages on the injunction. Appellant now appears and expressly waives any claim for damages; and upon that basis a final decree will be entered here for appellant — but expressly disallowing damages for the wrongful issuance of the writ of injunction. Otherwise we could not enter any final decree as appellant has requested us to do.”
Willmut proposes certain allegations which it might make in the amendment which it desires to make and sets out these allegations in detail at pp. 17, 43 and 44, of its suggestion of error. There are many thousands of people indirectly interested in this case and over a million dollars is sued for, and I feel that in view of the number of people involved and the amount involved Willmut is entitled to its day in court and should not be kicked out on a final judgment based upon the pleadings.
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