Federal Power Commission v. Sunray DX Oil Company

PETITIONER: Federal Power Commission
RESPONDENT: Sunray DX Oil Company

DECIDED BY: Warren Court (1967-1969)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 391 US 9 (1968)
ARGUED: Jan 22, 1968 / Jan 23, 1968
DECIDED: May 06, 1968

Facts of the case


Media for Federal Power Commission v. Sunray DX Oil Company

Audio Transcription for Oral Argument - January 22, 1968 in Federal Power Commission v. Sunray DX Oil Company

Audio Transcription for Oral Argument - January 23, 1968 in Federal Power Commission v. Sunray DX Oil Company

Earl Warren:

Number 60, Sunray DX Oil Company et al. and companion cases.

Mr. Simon, you may proceed with your argument.

Morton L. Simon:

Mr. Chief Justice, may it please the Court.

I appear in these cases on behalf of four clients, the Public Service Commission of the State of New York which is a regulatory agency of that state, and three public utilities serving in the Philadelphia, New York area; Philadelphia Electric Company, Brooklyn Union Gas Company, Long Island Lighting Company.

We appear in these cases are representatives of the consumer interest.

In these proceedings before the Commission, the contest was between the producers who are regulated by the Commission and who were the applicants for certificates of public convenience and necessity on the one hand and ourselves with some general support from the staff of the Federal Power Commission on the other.

There are three principal issues in this case; their short form is need, in-line and refund.

On the need issue, the question is whether the Federal Power Commission can grant certificates of public convenience and necessity to the producer applicants authorizing them to make their sales in interstate commerce without first making a finding that there is a public need for the gas proposed to be sold.

On that issue it was our position that the Commission was required to make a finding of need.

The Commission held that it was not.

The District of Columbia Court of Appeals, District of Columbia Circuit in the decision by a Chief Judge Bazelon agreed with us and this Court has granted certiorari on that issue.

On the second question, the so called in-line issue, the question is at what initial price should the Commission certificate these sales to be sold.

In each of the three dockets, the Commission elevated the in-line price that it had previously found for each of the three areas by one cent per Mcf to correspond with a guideline level that it had previously announced.

We challenged that once in escalation.

The Court of Appeals for the Tenth Circuit has affirmed the Commission's escalation in the District 4 case Amerada.

The District of Columbia Circuit has reversed the Commission's escalation in the Districts 2 and 3 case, Hawkins and Sinclair.

The Commission, I should add, decide at that one against us also as it had decided the need issue.

The final issue in the case is if the sales are certificated, should the producers make refunds of the amounts that they have collected under temporary certificates during the pendency of the litigation to the extent that those collections exceed the in-line price as finally determined by the Commission after hearing.

As indicated by other counsel earlier, the Commission originally held in a prior opinion, the Skelly Oil opinion in August of 1962, that it would not require refunds.

We, along with Mr. Coleman's client, United Gas Improvement Company appealed that decision to the D.C. Circuit.

The D.C. Circuit in January '64 held that the Commission could not excuse refunds merely because there had been no expressed refund condition in the temporary, that this Court denied certiorari after the D.C. Circuit's decision.

And up to that time, the Commission had decided against us.

After that decision, the Commission substantially decided in our favor.

Accordingly, on these three issues we are opposed to the Commission on need and in-line and we in the Commission are now in agreement on the third question, refund, although there is a slight difference which I will get to when I discuss that issue.

Now, it appears to us that one of the reasons that the Commission went wrong here is because it overlooked the very basic elements that are involved in this case.

And I want just for a moment to go back to the basics that are involved in the Natural Gas Act.

These are very elementary matters.

I apologize to the Court for being so basic.

But I think that even as expert a body is the Commission may have jumped in a little too late.

May not have gone back into what the Gas Act is all about.