JOHN R. BROWN, Circuit Judge:
On November 9, 1978, Congress enacted the Natural Gas Policy Act (NGPA), 15 U.S.C.A. §§ 3301
et seq.,
a comprehensive regulatory statute governing the natural gas industry.
Two months later, the Federal Energy Regulatory Commission (FERC) promulgated order No. 21, entitled “Final Regulation Providing for Rehearing of Orders and Rules Issued Under the NGPA (No. RM79-12).” That Order sets forth a rehearing requirement as a jurisdictional prerequisite to obtaining judicial review of rules issued by FERC under the NGPA.
In this case we are asked to determine the legality of Order No. 21.
Petitioners
contend that the NGPA does not establish a rehearing requirement and that FERC cannot impose such a requirement without statutory authority. FERC contends that Order No. 21 merely implements a specific provision of the NGPA requiring a rehearing and is therefore valid.
In challenging the legality of Order No. 21, a procedural rule setting forth requirements for challenging substantive rules, petitioners do not simultaneously challenge any substantive rules. While FERC has not contested petitioners’ right to challenge Order No. 21 in this case, we believe that the threshold question before us is whether there exists a case or controversy under Article III of the United States Constitution.
After first determining that this case presents a case or controversy under Article III, we hold that we do not have jurisdiction to review the legality of Order No. 21 for a reason unrelated to the case or controversy question. Specifically, after a lengthy discourse, we conclude that the NGPA imposes a rehearing requirement as a jurisdictional prerequisite to judicial review of rules issued by FERC under the NGPA. The petitioners, who seek a ruling on the legality of Order No. 21, which is itself a rule promulgated under the NGPA, did not comply with the rehearing requirement of the NGPA. Instead, without filing petitions for rehearing, they sought review of that rule by this Court. Consequently, we are without jurisdiction to review the legality of Order No. 21 and must therefore dismiss the petitions for review. Of course, since the basis of petitioners’ case is that Order No. 21 is illegal because the NGPA does not impose a rehearing requirement, our determination that the NGPA
does
impose such a requirement is as a practical matter a ruling on the merits of petitioners’ case.
Ecee Come .
Article III, Section 2 of the Constitution limits federal court jurisdiction to “cases” and “controversies.” The case or controversy requirement stems both from constitutional requirements and from prudential considerations of judicial self-restraint.
Warth v. Seldin,
1974, 422 U.S. 490, 498, 95 S.Ct. 2197, 2204, 45 L.Ed.2d 343, 354.
The case or controversy problem presented here is whether this case is ripe for review. Underlying the ripeness doctrine is the principle that cases should not be heard by a court before the issues have become concrete and focused in the context of a live and genuine dispute.
Abbott Laboratories
v.
Gardner,
1967, 387 U.S. 136, 148-49, 87 S.Ct. 1507, 1515, 18 L.Ed.2d 681, 691.
In 1967, the Supreme Court decided three related cases concerning the ripeness of challenges to administrative action.
Abbott Laboratories
v.
Gardner, supra; Toilet Goods Association v. Gardner,
1967, 387 U.S. 158, 87 S.Ct. 1520, 18 L.Ed.2d 697;
Gardner v. Toilet Goods Association,
387 U.S. 167, 87 S.Ct. 1526,18 L.Ed.2d 704. The Supreme Court found two of the three cases,
Abbott Laboratories, supra,
and
Gardner
v.
Toilet Goods, supra,
ripe for review.
Abbott Laboratories
involved regulations by the Commissioner of Food and
Drugs requiring that the generic name of a drug be printed each time the trade name was used.
Gardner v. Toilet Goods
involved a challenge to regulations promulgated by the Commissioner of Food and Drugs prescribing conditions for the use of color additives in foods, drugs, and cosmetics. The Court found these two cases ripe for review even though' the regulations had not yet been enforced. On the other hand, in
Toilet Goods Association v. Gardner, supra,
the Court held not ripe a challenge to regulations authorizing the Commissioner of Food and Drugs to order under certain circumstances inspection of manufacturing facilities and to refuse to certify color additives unless and until such an inspection was allowed.
In each of the three cases, the Court reached its decision by applying precise factors set forth in the first case,
Abbott Laboratories.
The most important of these factors are: (1) whether the issues presented are purely legal; (2) whether the challenged agency action constitutes “final agency action;” (3) whether the challenged agency action has or will have a direct and immediate impact upon the petitioners; and (4) whether resolution of the issues will foster, rather than impede, effective enforcement and administration by the agen
cy.
Abbott Laboratories, supra,
387 U.S. at 149-54
, 87 S.Ct. at 1515-18, 18 L.Ed.2d at 691-95. See also
Dresser Industries, Inc. v. United States,
5 Cir., 1979, 596 F.2d 1231, 1235. The application of these factors here reveals that this case is ripe for review.
First, the issue presented is a purely legal one: whether the NGPA imposes a rehearing requirement with respect to rules issued by FERC. No set of facts can aid this Court in determining whether the Act authorizes a rehearing requirement. Thus, “ ‘we will be in no better position later than we are now’ to decide this question.”
Duke Power Co.
v.
Carolina Env. Study Group,
1978, 438 U.S. 59, 82, 98 S.Ct. 2620, 2635, 57 L.Ed.2d 595, 617,
quoting Regional Rail Reorganization Act Cases,
1974, 419 U.S. 102, 145, 95 S.Ct. 335, 359, 42 L.Ed.2d 320, 354.
Second, order No. 21 is clearly “final agency action” under 5 U.S.C.A. § 704. The order will not be the subject of any further proceedings at the Commission. Its finality is reflected in its very title: “Final Regulation Providing for Rehearing of Orders and Rules Issued Under the NGPA.”
Third, Order No. 21 has a direct, immediate, and continuing impact upon petitioners. Petitioners are natural gas producers whose wellhead sales are subject to FERC regulation under the NGPA. Acting under the NGPA, FERC has issued and continues to issue substantive rules directly affecting petitioners. Whenever a rule is issued, petitioners are faced with a classic “Hobson’s choice.” If petitioners seek direct judicial review of the substantive rule and the Court determines that a rehearing was necessary, then petitioners have lost their right to challenge the substantive rule because they have failed to file for rehearing within the thirty day limitation imposed by Order No. 21 and the NGPA. Thus, petitioners must obey a rule which may in fact be unlawful. On the other hand, if petitioners seek rehearing of the substantive rule, they cannot simultaneously obtain judicial review of that rule. See
Outland v. Civil Aeronautics Board,
D.C.Cir., 1960, 109 U.S. App.D.C. 90, 284 F.2d 224, 227-28. During the rehearing process, petitioners must comply with rules they believe to be unlawful. And the very act of seeking rehearing of the substantive rule would only serve to leave the rehearing requirement intact and applicable to future substantive rules. The only “safe” but effective option is to attack Order No. 21 without simultaneously attacking a substantive rule.
Fourth, resolution of the case before us will clearly expedite, rather than delay, FERC enforcement of its rules. The legality of several FERC rules remains in a state of uncertainty, and this uncertainty stems in large part from the confusion surrounding the rehearing question.
FERC’s implementation of rules is necessarily impeded when the review process for determining the legality of rules is so muddied and unclear. Moreover, the confusion surrounding the rehearing question leaves FERC in a state of uncertainty as to whether and when it must file the record. In short, prompt resolution of the rehearing question will foster more rapid and efficient enforcement by FERC of its rules.
Since the issue presented is purely legal, since Order No. 21 is final agency action, since the challenged agency action has a direct impact upon petitioners, and since resolution of the controversy will foster bet
ter enforcement by FERC of its rules, we hold that this case is ripe for review.
Ecee Go.
Having found this case ripe for review, we now proceed to the issue of the legality of Order No. 21. FERC concedes that this case is solely one of statutory construction. That is, if the NGPA itself does not establish a rehearing requirement, then FERC cannot impose such a requirement as a jurisdictional prerequisite to judicial review. See
Levers v. Anderson,
1945, 326 U.S. 219, 222 n.4, 66 S.Ct. 72, 74 n.4, 90 L.Ed. 26, 29 n.4.
This case involves the construction of the NGPA for another — and more fundamental —reason. Order No. 21 is a rule issued by FERC. In challenging the rule, petitioners did not first seek a rehearing. Consequently, if the NGPA imposes a rehearing requirement as a jurisdictional prerequisite to judicial review, then we have no jurisdiction to review the legality of Order No. 21 and must dismiss the appeal.
The NGPA was enacted in 1978. Prior to its enactment, most natural gas questions arose under the Natural Gas Act, 15 U.S. C.A. §§ 717
et seq.
(NGA). The NGA has one simple provision pertaining to judicial review: 15 U.S.C.A. § 717r(a).
That provision expressly requires a rehearing as a jurisdictional prerequisite to judicial review. And that provision applies to rules as well as non-rulemaking orders.
The NGPA, on the other hand, has a much more elaborate — and confusing— scheme regarding judicial review. The judicial review section of the NGPA is 15 U.S.C.A. § 3416 (hereafter referred to as § 3416).
Section 3416 is divided into four parts. Subsection (a) pertains to most non
rulemaking orders, including orders as defined in 5 U.S.C.A. § 551(6)
(these various non-rulemaking orders are hereafter referred to collectively as “non-rulemaking orders”). Subsection (b), which is at issue in this case, pertains to rules as defined in 5 U.S.C.A. § 551(4).
Subsection (c) pertains to certain emergency orders. Subsection (d) pertains to pricing determinations made pursuant to § 3347(c) of the NGPA.
Subsections (a), (c), and (d) are relatively straightforward. Under subsection 3416(a), a rehearing of non-rulemaking orders is clearly a prerequisite to judicial review. Regarding emergency orders, subsection 3416(c) provides for direct appeal to the Temporary Emergency Court of Appeals. Subsection 3416(d), by incorporating § 717r of the NGA, makes the NGA rehearing requirement applicable to the incremental pricing determinations made under subsection 3347(c) of the NGPA.
More difficult than subsections (a), (c) and (d) is subsection (b). Subsection 3416(b) provides in its entirety:
(b) Review of rules and orders. — Except as provided in subsections (a) and (c) of this section, judicial review of any rule or order, within the meaning of section 551(4) of Title 5, issued under this chapter may be obtained in the United States Court of Appeals for any appropriate circuit pursuant to the provisions of chapter 7 of Title 5, except that the second sentence of section 705 thereof shall not apply-
To put it mildly, subsection 3416(b) is not a model of statutory clarity. The various references to other statutory provisions provide a glimmer of hope that a cross-reference will wash away any apparent ambiguity. But alas — the cross-references only increase the number of dead ends within the statutory labyrinth.
Nonetheless, our initial task is clear. We must grapple with the precise wording of the statute, since “[t]he starting point in every case involving construction of a statute is the language itself.”
Ernst & Ernst v. Hochfelder,
1976, 425 U.S. 185, 197, 96 S.Ct. 1375, 1383, 47 L.Ed.2d 668, 679,
quoting Blue Chip Stamps v. Manor Drug Stores,
1975, 421 U.S. 723, 756, 95 S.Ct. 1917, 1935, 44 L.Ed.2d 539, 561.
In this case, both sides have presented elaborate arguments to demonstrate why their view, and their view alone, is the correct one. Because the statute is so poorly drafted, the arguments of both sides are not merely supportable, but impressive. We think it useful — if not essential — to
present in some detail the construction of subsection 3416(b) given by each side.
Petitioners correctly point out that subsection 3416(b) does not even mention the word “rehearing” and that reviewability is made subject to the applicable provisions of the Administrative Procedure Act (APA), 5 U.S.C.A. §§ 701-06. Petitioners reason from these observations that direct judicial review is allowed under 5 U.S.C.A. § 704, which provides:
Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action. Except as otherwise expressly required by statute, agency action otherwise final is final for the purposes of this section whether or not there has been presented or determined an application for a declaratory order, for any form of reconsideration, or, unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative, for an appeal to superior agency authority.
Petitioners read 5 U.S.C.A. § 704 as providing for direct judicial review because subsection 3416(b) does not expressly require a rehearing.
Petitioners buttress their interpretation by relying on the structure of § 3416 itself. They point out that the provision is divided into four subsections, each concerning a different type of “order,” and each providing its own scheme regarding judicial review. In particular, they cite § 3416(a)(1), claiming that under § 3416(a)(1), the rehearing provisions of subsection (a) apply
only
to orders specifically defined in (a)(1), and that subsection (b)’s rules are not included among the kinds of orders specified in (a)(1).
FERC agrees that 5 U.S.C.A. § 704 is relevant as a starting point, but contends that here, that provision is displaced by the rehearing requirement of subsection 3416(b). In reading subsection 3416(b) as mandating a rehearing prior to judicial review, FERC engages in a creative journey through the statutory maze created by Congress.
First, FERC points out that § 3416(a)(2), which requires a rehearing prior to obtaining judicial review, specifically applies to all orders issued by FERC
in any proceeding.
FERC points out that the word “proceeding” includes rulemaking as well as adjudication. 5 U.S.C.A. § 551(12) (defining “agency proceeding” as including rulemaking, adjudication, and licensing).
Second, . FERC points out that the word “section” is used in § 3416(a)(2), while the words “subsection” and “paragraph” are used elsewhere in § 3416. Specifically, § 3416(a)(2) states that “[n]o person may bring an action
under this section
to obtain judicial review of any order
of the Commission ”
without first applying for a rehearing. (Emphasis added.) FERC reasons from these observations that the rehearing provision of (a)(2) is applicable to each and every subsection dealing with FERC proceedings. Subsections (a) and (b) deal with FERC proceedings, while subsections (c) and (d) do not. Thus, concludes FERC, § 3416(a)(2)’s rehearing requirement explicitly applies to the rules specified in subsection 3416(b).
FERC buttresses its argument that § 3416(a)(2) applies to the rules specified in
subsection 3416(b) by pointing out that subsection 3416(b) explicitly incorporates subsection (a) with the introductory clause “[éjxcept as provided in subsections (a) and (c) .” FERC contends that such language conclusively demonstrates that each subsection is not to be read in a vacuum.
Petitioners’ reading of subsection 3416(b) has more superficial appeal than FERC’s reading. The immediate tendency of one trained in the law is to reason that if subsection 3416(a) mentions rehearing while subsection (b) does not, then the rehearing provision of subsection (a) does not apply to the rules mentioned in subsection (b). The problem with this approach is that it assumes that each subsection of 3416 is a self-contained entity. Upon successive readings of subsection (b), it becomes increasingly clear — although never crystal clear — that subsection (b) explicitly incorporates the rehearing provision contained in § 3416(a)(2). In particular, and without again rehashing FERC’s arguments, subsection (b) begins with the phrase “[ejxcept as provided in subsections (a) and (c) . . .” This language of incorporation refutes the argument that the provisions of (a) have no relationship to (b). Furthermore, the rehearing provision in (a)(2) applies to all parts of the “section” dealing with FERC proceedings. The term “section” encompasses the four subsections. This is clear because throughout § 3416, Congress uses the term “subsection” to refer solely to subsection (a), (b), (c) or (d). In addition, we recognize the well-established principle that “the construction of a statute by those charged with its execution should be followed unless there are compelling indications that it is wrong.”
Red Lion Broadcasting Co. v. Federal Communications Commission,
1969, 395 U.S. 367, 381, 89 S.Ct. 1794, 1802, 23 L.Ed.2d 371, 384. Accordingly, we conclude that the language of § 3416 demonstrates that a rehearing requirement
is a jurisdictional prerequisite
to judicial review of rules issued by FERC.
Although the language of the statute is by itself enough to resolve the case before us, we do not base our holding solely on the wording of the statute. Even assuming that petitioners’ construction is more consistent with the literal wording of the statute than FERC’s construction, we would nonetheless be constrained to adopt FERC’s view. The Supreme Court, in setting forth principles to govern statutory construction, has stated:
There is, of course, no more persuasive evidence of the purpose of a statute than the words by which the legislature undertook to give expression to its wishes. Often these words are sufficient in and of themselves to determine the purpose of the legislation. In such cases we have followed their plain meaning.
When that meaning has led to absurd or futile re-
suits, however, this Court has looked beyond the words to the purpose of the act. Frequently, however, even when the plain meaning did not produce absurd results but merely an unreasonable one “plainly at variance with the policy of the legislation
as a
whole” this Court has followed that purpose, rather than the literal words.
Perry v. Commerce Loan Co.,
1966, 383 U.S, 392, 400, 86 S.Ct. 852, 857, 15 L.Ed.2d 827, 833-34,
quoting United States v. American Trucking Assns.,
1940, 310 U.S. 534, 543, 60 S.Ct: 1059, 1063, 84 L.Ed. 1345, 1350 (emphasis added). See also
Quinn v. Butz,
D.C. Cir., 1975, 166 U.S.App.D.C. 363, 373, 510 F.2d 743, 753 (“[A] construction of a statute leading to unjust or absurd consequences should be avoided.”);
Worthy v. United States,
5 Cir., 1964, 328 F.2d 386, 391 (“A meaning will not be attributed to statutory language which would lead to an abuse or unjust result.”). As we demonstrate below, adoption of petitioners’ interpretation would lead to absurd results, results that Congress clearly could not have intended.
The NGA and the NGPA are to a large extent interrelated. In fact, it is often not possible to draw a precise line separating the boundaries of the two Acts. Implementation of many NGPA provisions requires conduct by FERC authorized under both Acts.
As a result, the promulgation of
rules may entail the exercise of authority under both the NGA and the NGPA.
Were we to hold that judicial review of NGPA rules need not be preceded by a rehearing, utter chaos would result. A court attempting to review a case decided without a rehearing would be faced with the impossible task of separating out the separable elements of the rule which are based on the NGA and dismissing those for failure to comply with § 717r(a) of the NGA, while reviewing the NGPA-based matters. Where the authority for a particular rule arises
simultaneously
under both Acts, a court would be left without guidance in determining whether to hear the case or dismiss for failure to comply with the rehearing requirement. Congress simply could not have intended this confusion.
Moreover, subsection 3416(b) states nothing about venue and nothing about the filing of the record. We cannot believe that Congress, having addressed these matters so clearly and carefully in § 3416(a)(4), which in petitioners’ view applies only to orders specified in § 3416(a)(1), could have intended to provide no direct guidance as to these matters when rules are involved. Petitioners’ view requires that whenever a challenge is made to a rule, petitioners and FERC must hunt through the Administrative Procedure Act for answers regarding such matters as venue and record filing. Under the view we adopt today, the detailed provisions of § 3416(a)(4) relating to such questions as venue and the filing of the record control when rules are involved.
Additionally, our construction of subsection 3416(b) is supported by sound policy considerations. In a case such as this, where the wording of the statute is so confusing and where direct statements of congressional intent are lacking,
it is appropriate to look to considerations of policy. As the Supreme Court has stated:
It is . . . proper [to consider] what may be described as policy considerations when we come to flesh out the portions of the law with respect to which . congressional enactment [does not] offer conclusive guidance.
Blue Chip Stamps v. Manor Drug Stores, supra,
421 U.S. at 737, 95 S.Ct. at 1926, 44 L.Ed.2d at 550.
The purpose of a rehearing requirement is to give the administrative agency an initial opportunity to correct its errors. Additionally, a rehearing gives a court the benefit of prior agency consideration and analysis of issues which involve technical questions about which the agency has particular expertise, expertise not typically possessed by courts. As the Supreme Court has stated in a closely related context:
The necessity for prior administrative consideration of an issue is apparent where, as here, its decision calls for the application of technical knowledge and
experience not usually possessed by judges. The Federal Power Commission is an administrative agency the decisions of which involve those difficult problems of policy, accounting, economics and special knowledge that go into public utility rate making.
Federal Power Commission v. Colorado Gas Co.,
1954, 348 U.S. 492, 500-01, 75 S.Ct. 467, 472, 99 L.Ed. 583, 593. See also
North Carolina
v.
Federal Power Commission,
D.C. Cir., 1976, 174 U.S.App.D.C. 475, 478, 533 F.2d 702, 705.
Most rules issued by FERC are extremely technical and require significant expertise. Courts would be aided greatly by FERC being given an opportunity to examine its alleged errors through a rehearing process.
To summarize, we conclude that a rehearing is required as a jurisdictional prerequisite to judicial review. Our conclusion is supported by the wording of the statute. Moreover, our holding recognizes that because of the interrelationship between the NGPA and the NGA, to permit direct judicial review of NGPA rules while requiring a rehearing as to NGA rules would lead to absurd results. Finally, the rehearing requirement is sound as a matter of policy.
Ironically, the conclusion we reach on the rehearing question means that we have no jurisdiction to consider the legality of Order No. 21, which is itself a rule issued by FERC under the NGPA. As previously stated, in challenging Order No. 21, petitioners did not seek a rehearing before the Commission. Instead, they sought direct judicial review of that rule. Since a rehearing is a jurisdictional prerequisite to judicial review, we must dismiss the appeal.
It is clear, however, that since Order No. 21 itself deals with the rehearing question, and since petitioners’ attack on Order No. 21 is based on the argument that the NGPA does not impose a rehearing requirement, our interpretation of the NGPA and our dismissal of the appeal for lack of jurisdiction is in reality a ruling on the merits.
APPEAL DISMISSED.