Mobil Alaska Pipeline Co. v. United States

557 F.2d 775
Court of Appeals for the Fifth Circuit·Decided July 29, 1977·No. Nos. 77-2392, 77-2412, 77-2421 and 77-2437·Published·Cited by 8 cases

Opinions

PER CURIAM:

Four petitions seeking injunctive relief and review of a June 28, 1977 Order of the Interstate Commerce Commission are before us, together with the United States’ motion to dismiss.1 For reasons discussed below, we grant the government’s motion.

Background Of The Case

This controversy arose on the eve of the flow of crude oil through the Trans Alaska Pipeline System (TAPS)2 which stretches [778] from oil fields in Alaska’s North Slope at Prudhoe Bay to Valdez, Alaska, some 800 miles distant. The pipeline was constructed by the Alyeska Pipeline Service Corporation, an agent for its eight owners.3

Between May 27,1977 and June 15, 1977, seven TAPS owners filed the tariffs4 which are at issue here,5 having effective dates ranging from June 20 to July 1, 1977. Protests were filed by the Department of Justice, the State of Alaska,6 the Arctic Slope Regional Corporation,7 and the ICC’s Bureau of Investigations and Enforcement. The Commission heard oral argument on June 27, 19778 without making any formal evidentiary record.8a

[779] The ICC’s June 28 Order9 instituted an investigation into the lawfulness of the tariffs pursuant to 49 U.S.C.A. §§ 15(1)10 and 15(7).11 The rates filed were suspended for seven months without prejudice to the filing of interim rates during the suspension [780] period. The Commission additionally authorized the filing, upon not less than one day’s notice, of interim rates which were not to exceed certain levels, subject, however, to the condition that the carriers keep account and that (i) the interim tariffs contain a refund provision to the effect that if the new rates exceed those subsequently authorized or prescribed by the ICC, the carriers will refund the excess with interest; and (ii) the carriers file a similar refund provision applicable to the original proposed rates. The Order thus had the following effect on the carriers’ proposed rates per barrel:

As Filed by Authorized TAPS Owners Bv Order12 Reduction
Amerada Hess Pipeline Corp. $6.44 $4.85 $1.59
Arco Pipe line Company 6.04 4.91 1.13
BP Pipelines Inc. 6.35 4.68 1.67
Exxon Pipeline Company 6.27 5.10 1.17
Mobil Alaska Pipeline Company 6.31 4.84 1.47
Phillips Alaska Pipeline Corp. 6.22 Not Yet Acted Upon
Sohio Pipe Line Company 6.16 4.70 1.46
Union Alaska Pipeline Company 6.09 4.89 1.20

The carriers estimate that the Order will result in an irretrievable $340 million loss over the seven-month suspension period.

The suspension left the pipeline companies without tariffs on file, and they are forbidden by § 6(7) of the Act to engage or participate in the transportation of oil unless they file new tariffs. The carriers thus had two alternatives open to them. They could file new tariffs within the ICC guidelines or they could shut down the TAPS system for the seven-month suspension period. Unhappy with either choice, the pipeline companies filed their petitions and motions and the United States moved to dismiss.13 This Court heard oral argument on July 19, 1977.

The major issues raised by the parties are (i) whether we have jurisdiction to review the ICC order; (ii) whether the Commission has the authority under 49 U.S.C.A. § 15(7) to suspend the first and only (“initial”) rate of a carrier; (iii) whether as part of a purported suspension order the ICC may prescribe or suggest optional maximum interim rates; (iv) whether the ICC’s order authorizing the filing of maximum interim rates without a full hearing amounted to a prescription of rates within the meaning of 49 U.S.C.A. § 15(1); (v) whether the Commission acted outside its statutory authority in ordering the refund provisions in the tariffs; (vi) whether the Commission’s action was arbitrary, capricious or constituted [781] an abuse of discretion; (vii) whether the maximum interim rates authorized were confiscatory in violation of the Fifth Amendment.

1. Reviewability and the authority of the Commission

The government has moved to dismiss the petitions for review on the ground that this court has no jurisdiction to review suspension orders of the ICC issued pursuant to 49 U.S.C.A. § 15(7). True, courts do not have jurisdiction to review ICC suspension orders. Congress has committed the decision to suspend or not to suspend proposed rates exclusively to the discretion of the Commission. U. S. v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973); Arrow Transportation Co. v. Southern Railway Co., 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed.2d 52 (1963); K. Davis, ADMINISTRATIVE LAW TREATISE 966 (1970 Supp.). As a panel of this circuit noted:

The Interstate Commerce Commission . is vested with power to suspend, at its discretion, for a period of seven months, rates filed with it pending hearing and decision on their lawfulness. 49 U.S.C. § 15(7). The existence of this power in the ICC, it has been held, evinces the deliberate decision of Congress to extinguish judicial power to grant any injunction which interferes with the Commission’s discretionary decision to suspend rates filed with it at anytime before the Commission finally determines the lawfulness of the rates.

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