FPC v. Transcontinental Gas Pipe Line Corp.
423 U.S. 326 (1976)

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U.S. Supreme Court

FPC v. Transcontinental Gas Pipe Line Corp., 423 U.S. 326 (1976)

Federal Power Commission v. Transcontinental Gas Pipe Line Corp.

No. 75-584

Decided January 19, 1976

423 U.S. 326

Syllabus

Because of a claimed natural gas shortage, respondent pipeline company submitted to the Federal Power Commission (FPC) for approval an interim curtailment plan which resulted from a settlement agreement between respondent company and its customers providing for allocation of natural gas supplies among the customers during shortage periods and a monetary compensation scheme whereby customers receiving more gas than the systemwide average would compensate customers receiving less. The FPC rejected the plan on the ground that the compensation scheme would violate various provisions of the Natural Gas Act. Thereafter, respondent company and several of its customers sought review of the FPC's order. The Court of Appeals entered an interlocutory order directing the FPC to investigate the company's claims of reduced gas reserves and to report the result of the investigation directly to the court.

Held:

1. The Court of Appeals' order, although interlocutory, is properly reviewable by this Court on certiorari pursuant to 28 U.S.C. § 1254(1), since its effect is immediate and irreparable and any review by the Court of its propriety must be immediate to be meaningful.

2. An actual gas shortage is a necessary predicate to the FPC's assertion of authority under its transportation jurisdiction to approve curtailment of gas already contracted for, and the Court of Appeals could properly conclude that the FPC would have abused its discretion had it approved curtailment plans absent evidence whereby it "could have reasonably believed" the shortage to exist, and that "substantial evidence" in the record is necessary to support any such finding.

3. The Court of Appeals, however, exceeded its reviewing authority in ordering the gas shortage investigation, since § 19(b) of the Natural Gas Act providing for judicial review of FPC

Page 423 U. S. 327

decisions contemplates a mode of review that considers only the agency's decision and the evidence on which it is based, and not some new record initially made by the reviewing court. If new evidence is needed, the case must be remanded so that the agency can decide in its discretion how best to develop the needed data and how its prior decision should be modified in the light thereof.

4. Since it cannot be determined from the record whether evidence regarding respondent company's actual gas shortage is absolutely essential for the Court of Appeals' review, that court is free on remand either to consider the merits of the issues presented by the compensation scheme, and only thereafter to deal with the adequacy of the record evidence as to the shortage, or immediately to remand the case to the FPC for the required inquiry.

5. In light of the immediacy of the gas shortage problem, the protracted nature of the review proceedings, and the potential importance of a resolution on the merits of the compensation scheme issues, the Court of Appeals should give priority consideration to the case on remand.

Certiorari granted; 171 U.S.App.D.C. 66, 518 F.2d 459, vacated and remanded.

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