Utah Pub. Svc. Comm'n v. El Paso Nat. Gas Co.
Annotate this Case
395 U.S. 464 (1969)
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U.S. Supreme Court
Utah Pub. Svc. Comm'n v. El Paso Nat. Gas Co., 395 U.S. 464 (1969)
Utah Public Service Commission v. El Paso Natural Gas Co.
Argued April 29, 1969
Decided June 16, 1969
395 U.S. 464
In United States v. El Paso Natural Gas Co., 376 U. S. 651 (1964), this Court ordered that appellee El Paso Natural Gas Co. divest itself of Pacific Northwest Pipeline Co., which El Paso was held to have acquired in violation of § 7 of the Clayton Act. On remand, the Government and El Paso entered into a consent decree that would have transferred the illegally acquired assets to a New Company. In Cascade Natural Gas Corp. v. El Paso Natural Gas Co., 386 U. S. 129 (1967), the Court set the consent decree aside as being contrary to the divestiture mandate, which was designed to restore competition in the California market, and suggested guidelines for an appropriate decree. The District Court, on the second remand, then chose Colorado Interstate Gas Co. as the applicant "best qualified to make New Company a serious competitor" in the California market. El Paso was to receive 5,000,000 shares of New Company nonvoting preferred stock convertible into common stock after five years. New Company was to assume Northwest Division's pro-rata share (about $170,000,000) of El Paso's system-wide bond and debenture indebtedness. The District Court awarded the New Company 21.8% of the San Juan Basin gas reserves, which it said was "no less in relation to present existing reserves" than Northwest had when it was independent, and also gave the New Company more than 50% of the net additions to the reserves developed since the merger, though concededly the New Company's total reserves will not meet the old Northwest's existing requirements and those of a California project. Appellant filed a jurisdictional statement in this Court presenting the question whether the District Court's decree comported with this Court's mandate, but later moved to dismiss its appeal under Rule 60. The motion to dismiss was supported by a number of appellees and opposed by an amicus curiae and a "consumer spokesman," and the Court ordered oral
argument as to whether there had been compliance with its mandate.
1. The filing of a motion under Rule 60 to dismiss the appeal does not deprive this Court of jurisdiction to determine whether the mandate it issued in this case has been complied with. P. 395 U. S. 466.
2. The District Court's decree does not comply with this Court's mandate. Pp. 395 U. S. 469-472.
(a) The allocation of gas reserves (particularly those in the San Juan Basin) must place the New Company in the same relative competitive position in the California market vis-a-vis El Paso as Pacific Northwest occupied before the illegal merger. The District Court's decree fails to meet that objective, and that court must therefore reconsider the question of which applicant, in light of the reallocation, should acquire the New Company. Pp. 395 U. S. 470-471.
(b) In order to accomplish the complete divestiture which this Court mandated all managerial and financial connections between El Paso and the New Company must be severed, and there must be a cash sale of Northwest Division. Pp. 395 U. S. 471-472.
291 F.Supp. 3, vacated and remanded.