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U.S. Supreme Court

FPC v. Panhandle Eastern Pipe Line Co., 337 U.S. 498 (1949)

FPC v. Panhandle Eastern Pipe Line Co.

No. 558

Argued April 22, 1949

Decided June 20, 1949

337 U.S. 498


A natural gas company which is subject to the Natural Gas Act may sell the leases covering an estimated 12% of its total gas reserves without the approval and contrary to an order of the Federal Power Commission. Pp. 337 U. S. 499-507.

1. Section 1(b) of the Natural Gas Act, excluding "the production or gathering of natural gas" from the Commission's jurisdiction, left the transfer of gas leases to state regulation and outside the scope of the Commission's regulatory powers. Pp. 337 U. S. 502-505.

2. Sections 5(b), 6(a) and (b), 8(a), 9(a), 10(a) and 14(b), empowering the Commission to make investigations, to prescribe rules for the keeping of accounts and records by natural gas companies, and to require them to file such reports as are deemed necessary by the Commission in the proper administration of the Act, do not require a different result. Pp. 337 U. S. 505-507.

3. Nor is a different result required by §§ 7(c), 4, 5, and 16, authorizing the Commission to issue certificates of convenience and necessity for the interstate transportation and sale of natural gas, to determine reasonable rates for such transportation and sale, and to do the things appropriate to carry out the provisions of the Act -- even when the leases involved were used to justify the issuance of certificates of convenience and necessity. Pp. 337 U. S. 507-508.

4. Nor is a different result required by § 7(b), which forbids any natural gas company to abandon any of its facilities subject to the jurisdiction of the Commission without the prior approval of the Commission. Pp. 337 U. S. 508-513.

5. The conclusion here reached is supported by the undisputed finding by the District Court that it has been the practice for natural gas companies to trade freely in gas leases and that the Commission has never before asserted the right to regulate the transfer of such leases. Pp. 337 U. S. 513-514.

6. Since the Commission could not stop the transfer of a gas lease, it was not entitled to an injunction delaying such a transfer until it could complete an investigation and determine its own power and the necessity for using it. Pp. 337 U. S. 514-516.

172 F.2d 57 affirmed.

Page 337 U. S. 499

A Federal District Court denied an injunction sought by the Federal Power Commission to bar the sale of certain gas leases by a natural gas company subject to the Natural Gas Act. The Court of Appeals affirmed. 172 F.2d 57. This Court granted certiorari. 336 U.S. 935. Affirmed, p. 516.

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