Pan American Petroleum Corporation v. Superior Court of Delaware for New Castle County

PETITIONER: Pan American Petroleum Corporation
RESPONDENT: Superior Court of Delaware for New Castle County
LOCATION: Trailways Bus Terminal

DOCKET NO.: 80
DECIDED BY: Warren Court (1958-1962)
LOWER COURT:

CITATION: 366 US 656 (1961)
ARGUED: Apr 18, 1961 / Apr 19, 1961
DECIDED: May 29, 1961

Facts of the case

Question

Media for Pan American Petroleum Corporation v. Superior Court of Delaware for New Castle County

Audio Transcription for Oral Argument - April 19, 1961 in Pan American Petroleum Corporation v. Superior Court of Delaware for New Castle County

Audio Transcription for Oral Argument - April 18, 1961 in Pan American Petroleum Corporation v. Superior Court of Delaware for New Castle County

Earl Warren:

Number 80, Pan American Petroleum Corporation, Petitioner, versus Superior Court of the State of Delaware in and for New Castle County et al., and Number 81, Texaco, Incorporated, Petitioner, versus Superior Court of the State of Delaware in and for New Castle County.

Mr. Gray.

Byron M. Gray:

Mr. Chief Justice, may it please the Court.

There are two petitions consolidated here.

I will make the direct argument for Pan American, and Mr. Paul Schlicher will make the direct argument for Texaco, and I will make the rebuttal for both petitioners.

These appeals involve the rate paid on sales of natural gas made subject to the jurisdiction of the Federal Power Commission under the Natural Gas Act.

The actions originated in a state court.

Now, the Natural Gas Act, as Your Honors know is a complete regulatory act and particularly, is applied to these actions.

Section 4 of the Act provides for a complete rate filing with the Federal Power Commission.

It provides that all rates and charges must beyond the file of that Commission.

Section 19 provides a very complete review, procedure and everything, and the review jurisdiction is placed in the various United States Courts of Appeals.

Section 22 provides for the enforcement of the rights and duties and obligations created by that Act.

So, the question here is whether or not a state court has jurisdictions of an action involving natural gas rates required by the Act to be on file with the Commission.

The facts of the -- these actions have to go back beyond January 1, 1954 because the contracts that are involved were entered before that date and for -- for less than eleven-cents per thousand cubic feet.

But on January 1, 1954, the so-called Kansas eleven-cent minimum rate order was entered by the Kansas Corporation Commission.

It became effective on that date and required that eleven-cents, in order to meet the conservation requirements of the Kansas statute to prevent waste of gas, that eleven-cents would be the minimum rate that could be charged.

Now, the Cities Service, the respondent here, advised these petitioners that it would comply with the Kansas order and pay the eleven-cents, but it was doing so under the compulsion of the order and would expect its -- its money refunded back to the contract rates in the event the Kansas order were ultimately declared to be invalid.

And for five or six months that was the status.

And then on the sixth day and the seventh day of June 1954, this Court decided Phillips versus Wisconsin, wherein for the first time, the industry and these parties came aware of the fact that producers of gas that the wellhead independent producers were natural gas companies within the meaning of the Act.

And therefore, of course, it required to file their rates and take all of the other actions that the Act requires of natural gas companies.

The Federal Power Commission responded to the Wisconsin case by implementing Section 4 of the Act setting forth the requirements for filing and required that the parties file the rate, in effect, on June 7, 1954 as their initial rate filing under Section 4 (c).

Now, Section 4 (c) of the Act requires that schedules showing all rates and charges be filed and will file with the Federal Power Commission that I stated.

Responding the order of 74 -- 174 and in conformities to that order and the requirement of that order that the rate, in effect, on June 7, 1954 be filed as initial rate of filing under Section 4 (c).

These petitioners filed what the Commission's order required them to file, the contract, any documents supplementary of the contract and one of this is the Kansas eleven-cent order.

And the Order 174 also required that they file a billing statement showing the billing as it was being made on June 7, 1954.

These parties filed the billing showing the eleven-cent rate.

Thereafter, now, I should say that no objection was made to this rate tender, although the cities, people were served at that time with copies of the tender as made and were perfectly aware of the fact that it was eleven-cent tender and in fact will paying the eleven-cent.

Since then, and as I will point out, subsequently, continued to pay it after the Commission had accepted it.

After these filing, the Federal Power Commission admits and its record show that it considered the rate tender of these petitioners.

I should say that Pan American did not file this refund letter, but they considered the rate filing.