985 F.3d 1013
D.C. Cir.2021Background
- Airlines (American, Delta, Southwest, United-affiliates, UPS, and related fuel companies) petitioned to review a FERC order about jet fuel movements into Orlando.
- Jet fuel is shipped from out-of-state to the Port of Tampa, stored/commingled in the Tampa Terminal, then moved via the Central Florida Pipeline to Orlando International Airport.
- Supply contracts name Tampa as the delivery point; fuel is commingled, allocated in Tampa, and airlines manage inventory targets in Orlando rather than specifying shipment quantities at origin.
- Fuel typically rests in Tampa for an average of 9.5–12 days (minimum 1–4 days uncontroverted); airlines engage in local reallocation (including frequent ‘‘negative inventory’’ accounting entries).
- The ALJ and FERC applied the three Northville factors (no specific order through terminal; terminal as distribution/local marketing; onward transport arranged after allocation) and concluded the Tampa stop broke interstate continuity, making the Central Florida Pipeline intrastate and outside FERC rate jurisdiction.
- The D.C. Circuit denied the petition and affirmed FERC’s factual findings and legal application, rejecting arguments that overarching intent or prior Supreme Court cases compelled federal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FERC misapplied Northville by finding the Tampa terminal is a distribution/local marketing facility | Airlines: Tampa had virtually no spot sales; not a local marketing facility | FERC: Fungible pooling, allocations, frequent negative inventory, and reallocation among airlines are local business activity | Held: FERC reasonably found Tampa a local marketing/distribution point |
| Whether Northville is an inadequate or too-narrow test for continuity | Airlines: Commission’s framework is outdated and incomplete | FERC: Northville applies; Guttman used extra factors when Northville didn’t fit, and those extra factors here largely support FERC | Held: Northville and additional factors support FERC’s conclusion |
| Whether precedent (Sabine, Carson, Erie) requires treating the Tampa stop as incidental to interstate movement | Airlines: Supreme Court cases show pauses incidental to transport do not break continuity | FERC: Those cases involved stops solely to facilitate continued transport; Tampa involved allocation/distribution purposes | Held: Distinctions are dispositive; precedent does not compel reversal |
| Whether the airlines’ ‘‘overarching intent’’ to move fuel to Orlando makes the movement continuous interstate commerce | Airlines: Original and persisting intent to ship to Orlando proves continuity | FERC: ‘‘Intent’’ must be shown by objective indicia; here objective facts show intrastate movement after Tampa | Held: Court accepts FERC’s objective approach; overarching intent insufficient alone |
Key Cases Cited
- Texas & New Orleans R.R. Co. v. Sabine Tram Co., 227 U.S. 111 (1913) (delays incidental to transfer for continued interstate transport do not break continuity)
- Atlantic Coast Line R.R. Co. v. Standard Oil Co. of Ky., 275 U.S. 257 (1927) (terminal distribution activities can convert movement into intrastate transport)
- Carson Petrol. Co. v. Vial, 279 U.S. 95 (1929) (temporary storage incidental to export did not break continuity)
- United States v. Erie R.R. Co., 280 U.S. 98 (1929) (specific identification and orders for through shipment preserve interstate character)
- Frontier Pipeline Co. v. FERC, 452 F.3d 774 (D.C. Cir. 2006) (FERC jurisdiction principles for interstate pipeline movements)
- SFPP, L.P. v. FERC, 967 F.3d 788 (D.C. Cir. 2020) (courts give no deference to agency interpretations of judicial precedent)