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FPC V. TEXACO, INC., 377 U. S. 33 (1964)

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U.S. Supreme Court

FPC v. Texaco, Inc., 377 U.S. 33 (1964)

Federal Power Commission v. Texaco, Inc.

No. 386

Argued March 25, 1964

Decided April 20, 1964

377 U.S. 33


1. A Court of Appeals granted review of a Federal Power Commission (FPC) order concerning a contract performed in its circuit involving natural gas produced there by two respondent natural gas companies incorporated outside the circuit, the principal place of business of one (A) being within the circuit; that of the other (B) being without. Respondents proceeded under §19(b) of the Natural Gas Act, which provides for review in the court of appeals wherein the aggrieved natural gas company "is located or has its principal place of business."

Held: The Court of Appeals erred in failing to dismiss the petition of respondent B for lack of venue, since the term "is located" in §19(b) means more than having physical presence in a place, and refers in the case of a corporation to the State of its incorporation. Pp. 377 U. S. 37-39.

2. Pursuant to §16 of the Natural Gas Act and § 4 of the Administrative Procedure Act, the FPC, after a hearing given to interested parties, including respondents, at which they were allowed to submit their views in writing, issued regulations providing for the summary rejection of contracts with pricing provisions other than those specified in the regulations as being "permissible." Under § 7 of the Natural Gas Act, which includes a provision for an FPC hearing, respondents each submitted an application for a certificate of public convenience and necessity to supply natural gas to a pipeline. Since the applications disclosed price clauses impermissible under its regulations, the FPC rejected the applications without a hearing. Its order on review was set aside by the Court of Appeals.


(a) The "hearing" satisfied the requirements of § 4 of the Administrative Procedure Act. P. 377 U. S. 39.

(b) The requirement for a hearing under § 7 does not preclude the FPC from specifying statutory standards through the rulemaking process and barring at the outset those like respondent A whose applications neither meet those standards nor show why, in the public interest, the rule should be waived. United States v. Storer Broadcasting Co., 351 U. S. 192, followed. Pp. 377 U. S. 39-41. chanroblesvirtualawlibrary

Page 377 U. S. 34

(c) The present regulations pass on the merits neither of any rate structure nor of a certificate of public convenience and necessity; they merely prescribe qualifications for applicants. P. 377 U. S. 42.

(d) The FPC need not proceed on a case-by-case basis where its policy outlaws all indefinite price-changing provisions. P. 377 U. S. 44.

(e) A plenary adversary-type hearing under § 7 of the Natural Gas Act and § 5 of the Administrative Procedure Act would have been necessary had there been an adjudication on the merits as to whether respondent A could qualify for a certificate of public convenience and necessity. But the only determination made -- after the adequate rulemaking hearing under § 4(b) of the Administrative Procedure Act -- was not one on the merits, but only that respondent A's application was not in proper form because of the impermissible price-changing provisions in the contract upon which the application depended. Pp. 377 U. S. 44-45.

317 F.2d 796 reversed.

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