United Cities Gas Co. v. Brock Exploration Co.

984 F. Supp. 1379, 1997 U.S. Dist. LEXIS 19083, 1997 WL 716142
CourtDistrict Court, D. Kansas
DecidedNovember 13, 1997
DocketCivil Action 97-2113-GTV
StatusPublished
Cited by9 cases

This text of 984 F. Supp. 1379 (United Cities Gas Co. v. Brock Exploration Co.) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Cities Gas Co. v. Brock Exploration Co., 984 F. Supp. 1379, 1997 U.S. Dist. LEXIS 19083, 1997 WL 716142 (D. Kan. 1997).

Opinion

MEMORANDUM AND ORDER

VAN BEBBER, Chief Judge.

Plaintiff brings this action seeking damages arising out of defendants’ unlawful sales of natural gas within plaintiffs certified territory. The case is before the court on the parties’ cross motions for partial summary judgment (Docs. 14 & 16) relating to the applicable statute of limitations. 1 For the reasons set forth below, the court holds that plaintiff’s claims are subject to a three-year statute of limitations and are not extendable by a discovery rule or continuing violation doctrine.

I. Background

In 1988, defendant Brock Exploration Company purchased oil and gas leases, natural gas wells, and a gathering system from local producers in Johnson County, Kansas. Brock sold natural gas from these wells to three industrial customers with plants located at or near the Johnson County Industrial Airport. Brock also obtained a tap on the Williams Natural Gas Company’s interstate pipeline and transported gas from its own wells to the tap for later resale to its industrial customers.

Each of Brock’s industrial customers— Dazey Corporation, Grindsted Products, Inc., and Superior Asphalt—are located within the “certificated area” of plaintiff United Cities Gas Company. A “certificated area” is a region in which the Kansas Corporation Commission (“KCC”) has granted a common carrier or public utility the authority to transact business falling within the commission’s regulatory jurisdiction. See K.S.A. 66-104 (discussing entities and activities subject to KCC’s supervision). The KCC confers this authority by issuing a certificate of convenience and necessity. See K.S.A. 66-131.

In May 1987, approximately one year before Brock purchased the oil and natural gas infrastructure described above, Union Gas System, Inc., plaintiff’s predeeessor-in-inter-est, entered into a gas purchase contract with Williams Production Company. Under that agreement, Williams promised to sell unspecified quantities of natural gas to Union Gas. The contract also contained a provision in which Williams specifically reserved its right to sell natural gas to certain other customers. At least one of those customers—Dazey Corporation—purchased natural gas from Brock as well after Brock entered the market in the industrial airport area.

On September 26, 1995, United Cities filed a complaint with the KCC alleging that Brock had contravened the Kansas Public Utilities Act, specifically K.S.A. 66-131, by transacting the business of a public utility without obtaining the requisite certificate of convenience and necessity. On May 29,1996, following full briefing and an evidentiary hearing, the KCC issued an Order concluding that Brock’s sales of natural gas in the industrial airport area constituted the business of a public utility. The KCC further determined that Brock’s operations amounted to an unlawful bypass of United Cities’ local distribution facilities. Based on those findings, the KCC ordered Brock to obtain a certificate of convenience and necessity to transact the business of a natural gas public utility.

Brock subsequently petitioned for a reconsideration of the KCC’s Order, On July 8, 1996, although denying Brock’s petition for reconsideration, the KCC clarified its prior Order. Specifically, the KCC noted that if Brock did not change its operations in any way, the company would have to secure a certificate of convenience and necessity to operate as a public utility; if, however, Brock *1383 chose to deliver natural gas directly to United Cities’ local distribution facilities for subsequent redelivery to Brock’s customers, Brock would be functioning as a gas marketer rather than a public utility and would need no certifícate from the KCC.

On August 6, 1996, Brock appealed the KCC’s Orders to the Shawnee County, Kansas District Court. On November 7, 1996, while Brock’s appeal was still pending, United Cities filed the instant action in the District Court of Shawnee County, Kansas. Brock removed the case to federal court on March 3, 1997 after obtaining a particularized statement of United Cities’ requested damages. 2 On June 24,1997, Judge Terry L. Bullock of the Shawnee County District Court issued an opinion upholding the KCC’s findings.

II. Standards

In deciding a motion for summary judgment, the court must examine any evidence tending to show triable issues in the light most favorable to the nonmoving party. Bee v. Greaves, 744 F.2d 1387, 1396 (10th Cir. 1984). A moving party is entitled to summary judgment only if the evidence indicates “there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). A genuine factual issue is one that “can reasonably be resolved only by a finder of fact because [it] may reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. This burden may be discharged by “showing” that there is an absence of evidence to support the nonmov-ing party’s case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553-54, 91 L.Ed.2d 265 (1986). Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party, who “may not rest on mere allegations or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256, 106 S.Ct. at 2514. Thus, the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Id.

III. Discussion

The dispute raised in the parties’ partial summary judgment motions centers exclusively around the applicable statute of limitations governing plaintiffs claim for damages. Plaintiff predicates its claim on K.S.A. 66-176. This statute provides:

Damages for violation; attorney fees.

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Bluebook (online)
984 F. Supp. 1379, 1997 U.S. Dist. LEXIS 19083, 1997 WL 716142, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-cities-gas-co-v-brock-exploration-co-ksd-1997.