Western Refining Southwest, Inc. v. Federal Energy Regulatory Commission, 636 F.3d 719

Background

Western leases pipeline capacity from Enterprise to transport crude oil Midland, TX to Hobbs, NM; Western must use leased capacity as an individual common carrier and maintain its own tariffs.
Lease provides Western a base capacity of 15,000 barrels per day, with a separate minimum purchase commitment from Western to Enterprise for the first two years, then declining.
Enterprise is to construct a Hobbs–Lynch pipeline; Western initially obtained a waiver from FERC of tariff filing requirements based on an affiliate shipper.
In May 2008, Western failed to notify planned June activity; Enterprise reversed the pipeline flow and diverted Western’s line fill, storing it in Midland.
Western continued to pay monthly rent; Western filed a complaint with FERC in February 2009 alleging unjust and unreasonable conduct and seeking damages under § 8 of the Act.
FERC dismissed the claim as a private contract dispute not involving oil transportation under the Act; Western sought review in the Fifth Circuit.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FERC has jurisdiction under the ICA over Western's contract dispute with Enterprise.	Western: Act covers common carriers engaged in pipeline transportation; leasing capacity creates common-carrier duties.	Enterprise: leases and contracts are private disputes outside the transportation jurisdiction of the Act.	No jurisdiction; Enterprise not a common carrier vis-a-vis Western.
Whether the appeal is ripe for judicial review.	Western contends ripeness exists despite ongoing state proceedings; issue is jurisdictional and ready for review.	FERC argued ripeness question is atypical due to state proceedings.	Appeal is ripe; jurisdictional issue properly before court.
Whether Chevron deference applies to the agency's interpretation of its statutory powers.	Western argues agency interpretation should be constrained; statute is unambiguous as to common carriers.	FERC's construction should be reviewed for reasonableness under Chevron.	Court applies Chevron and, given text, finds no jurisdiction; no need for Step Two analysis.
Whether the Act's scope extends to a lessee acting as a common carrier in the Western–Enterprise arrangement.	Western asserts clause including 'irrespective of ownership or contract' makes lessees common carriers.	Clause does not create common-carrier duties; Enterprise remains non-common-carrier.	Statute unambiguously applies only to true common carriers; Enterprise not a common carrier; no jurisdiction.
Whether the clause allowing Western to file tariffs and act as common carrier affects jurisdiction or liability.	Western seeks to enforce common-carrier-like liability and tolls on lease.	Lease arrangement remains private contract; Act does not regulate capacity leases for oil pipelines.	No jurisdiction under the Act; contract concerns do not implicate pipeline transportation.

Key Cases Cited

Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (Supreme Court 1984) (establishes two-step Chevron review for agency interpretations)
Abbott Labs. v. Gardner, 387 U.S. 136 (Supreme Court 1967) (ripeness and justiciability considerations in agency review)
Pub. Serv. Co. of N.H. v. Patch, 167 F.3d 15 (1st Cir. 1998) (concurrent state proceedings do not render federal review unripe)
Kerr-McGee Oil & Gas Corp. v. U.S. Dep't of Interior, 554 F.3d 1082 (5th Cir. 2009) (Chevron deference framework applied to agency powers)
Phillips Pipe Line Co. v. Diamond Shamrock Ref. & Mktg. Co., 50 F.3d 864 (10th Cir. 1995) (distinguishes lease-based arrangements from transportation under the ICA)
Dillon v. Rogers, 596 F.3d 260 (5th Cir. 2010) (jurisdictional disputes can be resolved on motion to dismiss if facts contested)
Fl. E. Coast Ry. Co. v. City of West Palm Beach, 266 F.3d 1324 (11th Cir. 2001) (historical context of ICA and discrimination concerns)