204 F.2d 46 | D.C. Cir. | 1953
Lead Opinion
This is an appeal from a judgment of the United States District Court for the District of Columbia.
Appellee is a corporation engaged in the transportation and sale of natural gas in interstate commerce. For convenience, we shall refer to it as “El Paso”, and the Secretary of the Interior will be referred to as “the Secretary”. El Paso undertook to construct a gas pipe line from New Mexico to California, and to that end obtained appropriate authorization from the Federal
From time to time, as construction of the San Juan Basin pipe' line progressed, El Paso applied for and promptly received certain rights-of-way. In the continuing relations between El Paso and the Secretary, concerning rights-of-way for other lines as well as for San Juan, there developed a disagreement as to the specific nature of El Paso’s obligation as a common carrier in the operation of its gas lines. When all but a very small portion of the San Juan Basin line had been built,
El Paso filed suit for a mandatory m-junction to require the Secretary to issue the remaining rights-of-way, and to enjoin the Secretary from attaching conditions to such rights-of-way beyond the authority of the Secretary to exact. Negotiations continued between the parties, with the result that a still further form of proposed stipulation was submitted to El Paso under date of May 29, 1951.
As for Section 28, in the absence of more specific language by Congress, we regard the condition that pipe lines be constructed, operated, and maintained as “common carriers” to embrace the common law meaning of the term. Compare McNally v. Hill, 1934, 293 U.S. 131, 136, 55 S.Ct. 24, 26, 79 L.Ed. 238, and see 3 Sutherland, Statutory Construction, §§ 5303, 5304 (3rd ed. 1943). Ample protection of the public interest exists, and adequate enforcement of the condition is possible, under the provision for forfeiture of the grant ¡by the United States District Court, in an appropriate proceeding, for failure to comply with the provisions of the section or with appropriate regulations and conditions established by the Secretary. The language of Section 28 clearly gives the Secretary authority to provide regulations and conditions as to survey, location, application, and use, but we read that to pertain to the physical aspects of the rights-of-way and not to the operation of the pipe line. Without more than the requirement that a condition be imposed that pipe lines be “constructed, operated, and maintained as common carriers”, we do not regard the statute as conferring upon the Secretary authority to exercise so vast and so detailed a power as the promulgation of specific regulations and conditions for operation of the pipe line as a common carrier, as attempted in the proposed stipulations of March 22 and May 29, 1951.
As further support to that view, the statute does not purport to express adequate standards for guidance of the Secretary in the complex problems attendant upon such intimate regulation of corporate affairs as the financing, construction, and employment of facilities as is attempted in the contested stipulation. Had Congress desired the Secretary to enter upon such comprehensive supervision of those to whom rights-of-way were granted, we believe it would have expressed its desire more clearly and in more detail. Instead, Congress required that a condition be incorporated in any rights-of-way granted, and provided for court decision of any question which might arise as to the adequacy of compliance. It is significant, also, that for thirty-one years the Secretary of the Interior has made no such extensive effort at regulation, thus leaving at least a question that he did not consider the authority to exist. See F.P.C. v. Panhandle Eastern Pipe Line Co., 1949, 337 U.S. 498, 513, 69 S.Ct. 1251, 1260, 93 L.Ed. 1499; F.T.C. v. Bunte Brothers, 1941, 312 U.S. 349, 352, 61 S.Ct. 580, 582, 85 L.Ed. 881; Norwegian Nitrogen v. U. S., 1933, 288 U.S. 294, 315, 53 S.Ct. 350, 358, 77 L.Ed. 796.
Indeed, when Congress later, by passage of the Natural Gas Act, 15 U.S.C.A. § 717 et seq., recognized the need for regulation of gas pipe lines operating in interstate commerce, not only were careful and detailed standards set forth, but specific provision was also made that the regulatory body — the Federal Power Commission— should have no authority to compel enlargement of facilities, or extension or improvement of services, if to do so would impose an undue burden upon the pipe line company or impair its ability to render adequate service to its customers. Before the Commission may enter an order for extension or enlargement of facilities or service, it must first grant opportunity for hearing, and it must thereafter find that no undue burden would be imposed by the contemplated order. No such reasonable limitations appear in the contested stipulations.
Even more, without regard to the provisions of the March 22 and May 29, 1951, stipulations, the requirements which they seek to impose, and the provisions they set forth concerning the obligations failing up
We do not • agree with El Paso’s proposition that the Natural 'Gas Act impliedly repealed the requirement of Section 28 of the Mineral Leasing Act that rights-of-way be subject to the express condition that pipe lines be “constructed, operated, and maintained as common carriers”. When Congress enacted the Natural Gas Act it did so in recognition of the fact that “the business of transporting and selling natural gas for ultimate distribution to the public is affected with a public interest, and that Federal regulation in 'matters relating to the transportation of natural gas and the sale thereof in interstate and foreign commerce is necessary in the public interest”. 52 Stat. 821 (1938), 15 U.S.C.A. § 717. It studied the problem with great care, and incorporated in the Natural Gas Act the objectives to be accomplished and the methods and standards by which they were to be pursued. The provisions of the two statutes are fully compatible. By the language of Section 28 of the Mineral Leasing Act, it is mandatory that the Secretary of the Interior attach express condition to , any right-of-way granted requiring that the pipe line be maintained as a common carrier. Thereafter, activities of the company are subject to the plenary jurisdiction of Federal Power Commission under- the provisions of the Natural Gas Act. By that Act, Congress expressed itself fully concerning the extent to which pipe line companies are to be regulated within the scope of Federal authority, and jurisdiction for such regulation was placed in the Federal Power Commission: But in the absence of unequivocal language placing jurisdiction for regulation in both the Commission and the Secretary of the Interior, we are not persuaded that the Secretary of the Interior is authorized to impose the conditions' which he has sought to attach to the issuance of rights-of-way concerned in this litigation. We therefore hold that the so-called stipulations of March 22, 1951, and May 29, 1951, are beyond the authority of the 'Secretary of the Interior.
That ruling, however, does not dispose of the entire problem. The Government contends that the Decision of July 21 and the letter of 'August 18 were not considered by the parties, dnd could not be regarded in law, as a definitive conclusion of the controversy between El Paso and the Secretary; that the latter had the power to reopen the proceedings at any time, revoke any ruling he may have made earlier, and take whatever new and inconsistent action he desired, including the imposition of con-' 'ditions and stipulations ad infinitum;
In our opinion, the District Court was entirely correct when it held as a fundamental conclusion of law that the Secretary had fully exercised and exhausted his discretion when he decided and concluded that the common carrier obligation of the Mineral Leasing Act would be fulfilled by execution of the stipulation contained in the letter of August 18. That letter, when read in conjunction with the decision of July 21, amounted to more than a vague statement of opinion or a pious expression of the views of the Secretary or his subordinates as of that particular moment, subject at any time to change or modification. These documents had the effect of laying down the policy of the Department of the Interior with respect to El Paso’s application and of establishing the principle that El Paso was entitled to the rights-of-way, provided only that the required stipulation was filed, and El Paso was therefore fully justified in regarding the decision of the Secretary as a legally binding determination that the actual certificates would ¡be issued in due course, and in acting in reliance thereon. Title 43 of the Code of Federal Regulations, Part 221, Subpart B, describes in great detail the procedure to be followed in connection with decisions of the Director of Land Management and Secretary of the Interior. Obviously, there would be no need to set forth and describe the various motions, hearings, and appeals which may he had oil a decision of this type were it intended to have no legal effect.
The decision of July 21, after there had been compliance with the terms and stipulations specified therein, was equipollent to a grant or license vesting authority in El Paso to construct a pipe line over certain designated Government lands. While the statute reposes discretion as to the issuance of rights-of-way in the Secretary of the Interior, that discretion by its very nature is not a continuing one. By the granting of a license to El Paso the Secretary necessarily made not an ephemeral, reversible determination, but he so exhausted and terminated whatever discretion he possessed with relation to this particular controversy that it thereafter became proper for the courts not only to strike down illegal conditions attached then or later but also to compel the Secretary affirmatively, by mandatory injunction, to perform whatever ministerial duties remained to be executed by him in the discharge of the initial policy decision.
It may well be appropriate for a licensing authority to reopen proceedings of this kind after final determination has been made in order to correct clerical errors or to modify rulings on the basis of newly discovered or supervening facts, but a decision may not be repudiated for the
Affirmed.
. The stipulation reads in full: “The applicant agrees to operate the pipe line as a common carrier in accordance with the provisions of the Mineral Leasing Act, and, within 30 days after the request of the Secretary of the Interior, to file rate schedule and tariff for the transpor-' tation of gas as such common carrier with any regulatory agency having jurisdiction over such transportation, as the Secretary may prescribe.” ’
. At an expénditure of some $40,000,000.
. (a) The applicant agrees that it will operate the pipe line as a common carrier
(b) The applicant further agrees, within 30 days from the date of a request by the Secretary of the Interior, to submit
(c) None of the specific provisions of this stipulation shall be construed to limit in any way the obligation of the applicant to operate its pipe line as a common carrier in accordance with the provisions of tiie Mineral Leasing Act and pertinent regulations heretofore or hereafter adopted under that act or any other obligation imposed on the applicant by such act or regulations, and any violation of such obligation, including the specific obligations contained in this stipulation, shall be ground for the cancellation of the grant of the right-of-way, as provided in the Mineral Leasing Act.
. (a) The applicant agrees that it will operate the pipe line as a common carrier in accordance with the provisions of the Mineral Leasing Act as now or hereafter amended and pertinent regulations heretofore or hereafter adopted thereunder and that it will transport natural gas for others, whether such gas is produced from government lands or not, at reasonable rates and subject to conditions to be allowed or determined by the regulatory agency having jurisdiction over such transportation, provided that no condition shall be imposed by the applicant which is inconsistent with the applicant’s obligation to operate its pipe line as a common carrier. The applicant agrees to provide common carrier transportation service requested, including firm service, as follows:
(1) When any request for the transportation of natural gas is made and there is unused capacity in the applicant’s pipe line, the applicant agrees promptly, or within such time as may be fixed by the Secretary, (i) to file with the regulatory agency having jurisdiction over such matter an application for issuance of authority to the applicant to transport such gas, to the extent of the unused capacity of the pipe lino, if an application for such authority is required by the law applicable to such agency or by the rules or regulations of such agency, and, upon the issuance of such authority, to commence to render service to the extent of the unused capacity of the pipe line pursuant to the terms and conditions of such authority, or (ii) where no such authority need be obtained in advance of transportation, to file a rate schedule or tariff with such regulatory agency and to commence to render transportation service at the rates and subject to the conditions allowed or determined by such agency. Nothing in this paragraph (1) shall be construed to prevent any right of appeal which the applicant may have under applicable law from the issuance of authority under clause (i) or from any determination of rates or conditions under clause (ii) of the preceding sentence, but no appeal taken by the applicant shall delay the commencement of transportation service by the applicant as provided in that sentence.
(2) If there is no unused capacity or insufficient unused capacity in the applicant’s pipe line at the time when the request for transportation is made, the applicant. agrees promptly, or within such time as may be fixed by the Secretary, to file with any regulatory agency having
Upon completion of construction under such authorization, applicant will take all steps necessary, including the filing of rate schedules or tariffs where required, to commence service pursuant to the terms and conditions of the authorization and at the rates and subject to the conditions allowed or determined by the agency. Nothing in the preceding sentence shall be construed to prevent any right of appeal which the applicant may have under applicable law from any determination of rates- or conditions by the regulatory agency, but no such appeal taken by the applicant after the completion of construction, shall delay the commencement of transportation service by the applicant as provided in that sentence.
(b) Any rate schedule or tariff filed under paragraph (a) shall include the provisions set forth in paragraph (a) of this stipulation and no change shall be made in paragraph (a) without first obtaining the approval of the Secretary of the Interior. A copy of such rate schedule or tariff and of any amendment to, or revision of, a rate schedule or tariff shall be furnished to the Secretary of the Interior when the original is filed with the regulatory agency.
(c) None of the specific provisions of this stipulation shall be construed to limit in any way the obligation of the applicant to operate its pipe line as a common carrier in accordance with the provisions of the Mineral Leasing Act as now or hereafter amended and pertinent regulations heretofore or hereafter adopted under that Act or any other obligations imposed on the applicant by such Act or regulations, and any violation of such obligation shall be ground for the cancellation of the right-of-way as provided in the Mineral Leasing Act.
. Subject only to the qualification that the action so taken not be contrary to the provisions of any statute.
. Chapman v. Sheridan-Wyoming Coal Co., 1950, 338 U.S. 621, 70 S.Ct. 392, 94 L.Ed. 393, was limited by the Supreme Court to a factual situation where the right granted was negative only, the correlative burden being on the land of others. The Court clearly implied that a different result would be reached on different facts. Wilbur v. United States, 1930, 281 U.S. 206, 50 S.Ct. 320, 74 L. Ed. 809, was predicated on a finding that the original ruling was wrong and that it was the subsequent modification which stated the law correctly — obviously, quite the opposite of the situation here. Walker-Hill v. United States, 7 Cir., 1947, 162 F.2d 259, dealt with a tax ruling reversing an earlier legal opinion; no grants or licenses were even remotely in
. Since El Paso complied with the original conditions, the effect is the same as if the grant had been unconditional.
Concurrence Opinion
(concurring in part).
I agree that the Secretary had no power to impose the disputed so-called stipulations of March and May, 1951, upon the remaining permits necessary to complete the line. And I agree that the court has the power and the duty to enjoin that proposed illegal action. I further agree that for the Secretary to refuse to issue these permits if the court enjoins the illegal stipulation would be an outrageous act in view of his formal official announcements of July 21 and August 18, 1950, his issuance of some permits, and the expenditure of millions of dollars by the permittees in reliance upon those announced terms. In my judgment the law ought to be that the official word of a Government officer acting within the scope of his authority should be the maximum in reliability — binding and not changeable at his wish. And I understand from the briefs before us that the Secretary will issue the permits upon the terms the courts approve.
But the Supreme Court in Larson v. Domestic & Foreign Corp.
In the Larson case there was a written-contract. As I read the opinion, the Court held that, even if the act of the officer in violation of the contract was tortious, and' even if an action on the contract for damages would lie against the United States,, nevertheless, if the disposition of the property was within the scope of the authority conferred upon the official by Congress,, the courts can neither enjoin nor direct the-act. The courts cannot compel the United States to comply with its contractual obligations. They can compel an officer to-comply with a statutory mandate; they can restrict him to his statutory authority; and they can award damages for breach of a contract or for a tort. But otherwise they have no jurisdiction over his acts in respect to property of the United States. In the-Larson opinion the Court specifically saidt
“We hold that if the actions of an officer do not conflict with the terms of his valid statutory authority, then they -are the actions of the sovereign, whether or not they are tortious under general law, if they would ¡be regarded as-the actions of a private principal under the normal rules of agency. A Government officer is not thereby necessarily immunized from liability, if his ac*55 tion is such that a liability would be imposed by the general law of torts. But the action itself cannot be enjoined or directed, since it is also the action of the sovereign.”9
And the Court also said:
“Of course, a suit may fail, as one against the sovereign, even if it is claimed that the officer being sued has acted unconstitutionally or beyond his statutory powers, if the relief requested can not be granted by merely ordering the cessation of the conduct complained of but will require affirmative action by the sovereign or the disposition of unquestionably sovereign property.”10
The issuance of a permit which contains no illegal condition is an act of the Secretary which does not conflict with the terms of his valid statutory authority. ' As such it is an act of the sovereign and cannot be directed by a court.
The court holds that the Secretary exhausted his discretion when he prescribed terms in August, 1950. But it seems to me that that rule would apply to his prescription of terms and not to the act of transfer itself. The latter act remained the act of the sovereign and so immune from judicial direction. I find nothing in the statute which makes the executory announcements of 1950 the equivalent of a license executed except for signature. Even if they amounted to a binding contract, or were such as would create an estoppel in ordinary matters, the actual issuance of the permits remained an act of the sovereign. No act of Congress, active representative of the sovereign, limited the Secretary to terms once announced, or reduced the discretion conferred upon him. Whatever exhaustion of discretion occurred was by his act, not an act of the Congress. The Secretary could not, as I understand it, translate the nature of his act. He might make a contract or commit a tort. But he could not by some act of his own strip the permits of their nature as a sovereign act. Congress could so act on behalf of the sovereign as to leave the Secretary nothing hut ,a ministerial duty, but the Secretary himself could not do that.
I would hope that the Supreme Court will agree with my brethren that I am wrong in my reading of the Larson opinion. But unless it does so1 I am bound by what I understand it to have said. Upon that basis I would enjoin the proposed stipulation as beyond the authority of the Secretary to impose, but I would not by specific mandate direct the issuance of the permits.
. 1949, 337 U.S. 682. 69 S.Ct. 1457. 93 L.Ed. 1628.
. Supra, 337 U.S. at page 695, 69 S.Ct. 1457.
. Id., 337 U.S. at page 691 n. 11, 69 S.Ct. 1457.