[00:00:00] Speaker 04:
Case number 16-1245, United Airlines, Inc.

[00:00:04] Speaker 04:
at L Petitioners versus Federal Energy Regulatory Commission at L. Mr. Aduchi for the petitioners, Ms.

[00:00:10] Speaker 04:
Chu for the respondents.

[00:00:57] Speaker 02:
Good morning.

[00:00:59] Speaker 00:
May it please the Court, Steve DiDucci on behalf of petitioners in this matter.

[00:01:03] Speaker 00:
The Commission's determination in this case that it categorically lacks any authority to direct the carrier here to cease and desist from selectively refusing to transport particular petroleum products is plainly in error.

[00:01:15] Speaker 00:
The challenged orders misconstrue the Commission's fundamental authority under ICA Section 14, 16, and 15.1 of the ICA and are in direct conflict with established case law

[00:01:26] Speaker 00:
and agency precedent.

[00:01:28] Speaker 00:
Contrary to the challenged orders, artificially labeling an action as an abandonment does not curtail or otherwise limit the Commission's statutory authority.

[00:01:38] Speaker 00:
The Commission's definition of abandonment in this matter flies in the face of the Act's own unambiguous definition of abandonment.

[00:01:46] Speaker 00:
Agency and judicial precedent directly contrary to the challenged orders, including a Supreme Court case,

[00:01:52] Speaker 00:
and a pipeline common carrier's duty and obligation to provide transportation upon reasonable request.

[00:01:59] Speaker 00:
Indeed, FERC's abandonment and related holding out interpretation effectively negates the transportation upon reasonable request provision of section 14 of the interstate conversation.

[00:02:09] Speaker 03:
Could you start out by addressing standing, please, and the argument that there's no standing here because the chain of inferences for injury is too much.

[00:02:19] Speaker 00:
The focus in standing is injury causation and regressibility.

[00:02:26] Speaker 00:
As this court said in the carpenter decision, where the government's action has taken away an integral part of the business, including a supply chain or source of supply, and removing that source of supply causes an increased cost.

[00:02:46] Speaker 00:
Do you all use enterprise?

[00:02:47] Speaker 02:
Pardon me?

[00:02:48] Speaker 02:
Do you all use the enterprise pipeline?

[00:02:50] Speaker 00:
Yes, in the proceedings below, we submitted affidavits and verified statements that indicated that United Airlines, all the complainants- There was prior use and perhaps future use, but was there current use at the time?

[00:03:03] Speaker 02:
Were you using the pipeline at the time they withdrew?

[00:03:07] Speaker 00:
United was not using the pipeline, it was relying on that pipeline as a source.

[00:03:17] Speaker 00:
UPS fuels was using that as a distillate, and then problems with the pipeline caused it to stop using it.

[00:03:24] Speaker 00:
But as indicated, that source of supply, they've indicated they would use it during the settlement, without the settlement.

[00:03:33] Speaker 00:
And in addition, the absence of the distillate and jet fuel service on that pipeline, United evaluated that as being approximately increasing their cost by about $3 million.

[00:03:45] Speaker 00:
That was not disputed anywhere on the record.

[00:03:47] Speaker 00:
Enterprise, in its answer to the complaint, challenged petitioners' ability to enforce the settlement, but nobody challenged the economic harm that was indicated by petitioners.

[00:04:00] Speaker 00:
and here, not in addition to the fact that there is a monetary harm as presented by United, there's also a economic harm in the fact that what the Commission's decisions have done have fundamentally changed the dynamics between shippers and carriers.

[00:04:18] Speaker 00:
As carriers already conceded, the challenged orders have now required it to change its contractual obligations.

[00:04:25] Speaker 03:
I'm missing the distinction between

[00:04:29] Speaker 03:
the harm that you're talking about right now and the harm that you just got done talking about.

[00:04:34] Speaker 03:
So the harm that you're talking about right now, I take it.

[00:04:36] Speaker 00:
Two separate harms.

[00:04:37] Speaker 03:
Yeah, and what's the distinction between the two?

[00:04:39] Speaker 03:
What's the first one again?

[00:04:40] Speaker 00:
The first one was an actual monetary harm.

[00:04:43] Speaker 00:
They've identified it and estimated that the actual monetary harm could cost them additional monetary cost.

[00:04:50] Speaker 03:
But from what?

[00:04:50] Speaker 03:
From the risk that there might be discontinuation in the future?

[00:04:55] Speaker 03:
From the discontinuation.

[00:04:56] Speaker 03:
That already occurred?

[00:04:57] Speaker 00:
That occurred.

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that it would result in excess or an increasing cost in actually obtaining supply in the Illinois area.

[00:05:05] Speaker 03:
So that's done?

[00:05:08] Speaker 00:
That's done.

[00:05:09] Speaker 00:
Now the second, now in addition to that monetary harm, the commission's orders have fundamentally changed the dynamic between shippers and carriers.

[00:05:21] Speaker 00:
First of all, carriers already admitted

[00:05:25] Speaker 00:
that as a result of these orders, they are now going to have to change the way they contract going forward with respect to settlements and right agreements.

[00:05:33] Speaker 00:
Now in addition to that, these orders have now given the pipeline a very substantial tool.

[00:05:40] Speaker 00:
And that tool is that they can

[00:05:44] Speaker 00:
at any point discontinue the transportation of a particular product in face of a challenge by a shipper to its rates, to its practices.

[00:05:57] Speaker 00:
And in doing so, that shipper will be foreclosed from pursuing any type, any type of retribution from the standpoint of it couldn't go to the commission because the commission has already said, we consider that an abandonment.

[00:06:12] Speaker 00:
We will not have jurisdiction.

[00:06:14] Speaker 01:
It's about discrimination and there are arguments that you could be that you could make beyond that aren't precluded by the abandonment, right?

[00:06:26] Speaker 00:
No, because if if they can, if they can discontinue the transportation of product and the commission has no authority to review that.

[00:06:39] Speaker 00:
Discrimination doesn't become a factor.

[00:06:43] Speaker 00:
We've raised discrimination in the complaint below.

[00:06:47] Speaker 00:
We haven't highlighted that in the appeal today, strictly because that is a factual analysis that would need to be done pursuant to Section 14.

[00:06:57] Speaker 03:
So you might be right that in that circumstance, the abandonment principles that FERC has, that the commission has adopted would be binding in the subsequent

[00:07:05] Speaker 03:
hypothetical scenario that you lay out.

[00:07:08] Speaker 03:
But the issue that we're facing here is do we have a justiciable controversy before us?

[00:07:14] Speaker 03:
And part of what factors into our analysis is that if that set of circumstances came to pass, and that there was the hypothetical sequence of events that you lay out, and then somebody brought a challenge to the commission, the commission said, can't you read, look at our prior decision, we said this was an abandonment, you're out of luck, well then there'd be judicial review at that point.

[00:07:35] Speaker 00:
No.

[00:07:36] Speaker 03:
Why not?

[00:07:37] Speaker 00:
Because in that context, again, the question would be, in fact, what would happen in that context is the pipeline would start to play a shell game.

[00:07:48] Speaker 00:
For instance, if you filed a complaint saying, I've made a request for transportation, the pipeline rejects that and then terminates or abandons that product transportation, you go to the commission and file a complaint.

[00:08:04] Speaker 00:
The pipeline can turn around and temporarily put that service right back into play, mooting your complaint where it'd have to be dismissed.

[00:08:12] Speaker 00:
Then when the pipeline turns about... Well, if that were true, then the commission would review it.

[00:08:17] Speaker 03:
It wouldn't be an abandonment.

[00:08:19] Speaker 00:
No, because the fact of the matter is, is that under their rules, you can put it into service, take it out of service, without review, because what would happen if once they put it back into service on a temporary basis, that would be a terra filing.

[00:08:35] Speaker 00:
Now, when they take it out, it would also be a terra filing.

[00:08:38] Speaker 00:
Under 15-7, it's unreviewable.

[00:08:40] Speaker 03:
I mean, we can ask the Commission this.

[00:08:42] Speaker 03:
I guess it is not immediately apparent to me that if an entity engaged in games of that sort that's just purely designed to circumvent review, that that would be a successful strategy.

[00:08:53] Speaker 03:
I mean, maybe in the physical world it's possible.

[00:08:55] Speaker 03:
It's just that that doesn't seem to be the necessary import of what the Commission has done so far.

[00:09:01] Speaker 00:
But what I think, and maybe I'm not making it clear enough, but in this context, one of the major injuries is this change in dynamic between carriers and shippers.

[00:09:11] Speaker 00:
And with the ability of a pipeline to fundamentally stop transporting a product, if I'm going to, as a shipper, if I'm going to request transportation on that pipeline, I may have to invest significant sums.

[00:09:25] Speaker 00:
Now, a factor that I need to now take into account, which I didn't have before, is whether that pipeline at the drop of a hat can pull the product.

[00:09:33] Speaker 00:
I could lose a lot of money in that.

[00:09:34] Speaker 02:
Do you have instances where there have been negotiations that have been affected by this rule?

[00:09:39] Speaker 00:
Well, the pipeline itself said that going forward from now, they will physically change the way that they contract.

[00:09:45] Speaker 02:
And in here, what the commission has done is... And you've entered into those negotiations and have found that it costs more than it did before?

[00:09:54] Speaker 00:
What has cost more?

[00:09:55] Speaker 02:
You're saying that the fundamental, the negotiation strategy between

[00:10:01] Speaker 02:
the two has been changed because of this preference for the pipeline.

[00:10:06] Speaker 02:
And I'm wondering if you have some concrete examples that that has actually happened.

[00:10:10] Speaker 00:
I have no concrete examples in the record, but I can say that it has been a function in the United and UPS fuels are active participants in cases.

[00:10:20] Speaker 00:
And this is not the first time where a pipeline has said, you know, we can always just pull the product.

[00:10:27] Speaker 00:
And that is a lingering major factor in all of the disputes and negotiations between carriers and shippers coming today.

[00:10:35] Speaker 00:
Because of that main fact, the pipeline can pull transportation of a product at any time.

[00:10:42] Speaker 00:
And shippers will not have the benefit of Section 1-4 of the Interstate Commerce Act to ask for a review to whether that was a reasonable request for transportation and whether the pipeline was actually living up to its duty providing transportation upon reasonable request.

[00:10:59] Speaker 01:
I don't want to stop the questions about standing if there's still more.

[00:11:04] Speaker 01:
But even if we assume you get beyond injury traceability and redressability, why isn't this moot?

[00:11:11] Speaker 01:
I want you to get to that at some point.

[00:11:14] Speaker 00:
Okay.

[00:11:16] Speaker 00:
As this Court has indicated in Better Government and the City of Houston, if you challenge a government action, as well as the legality of that action that engendered the government action, if the government action terminates or expires,

[00:11:33] Speaker 00:
That does not move the legality challenge, the facial challenge to the policy that engendered the original action.

[00:11:41] Speaker 00:
And here, the action was allowing the termination, not enforcing the settlement agreement to require the transportation.

[00:11:48] Speaker 02:
And why didn't you challenge the 2013 tariff in which the abandonment, so-called abandonment, took place?

[00:11:54] Speaker 02:
You didn't challenge that.

[00:11:55] Speaker 00:
The protest order?

[00:11:56] Speaker 00:
Right.

[00:11:56] Speaker 00:
And the protest order was done via a tariff.

[00:11:59] Speaker 00:
It was done with a tariff filing.

[00:12:00] Speaker 00:
The commission acted under 15-7.

[00:12:03] Speaker 00:
of the Interstate Commerce Act.

[00:12:05] Speaker 00:
Now, the Supreme Court decision in Southern as well as this court's decision in Arctic and Resolute in the 2X on mobile decision have made it clear that the commission's determination not to investigate under 15-7 is unreviewable.

[00:12:23] Speaker 00:
We could not take that to this court.

[00:12:25] Speaker 03:
Yeah, I guess it depends on whether it was a 15-7 determination, what the commission says.

[00:12:29] Speaker 03:
I think the commission takes some issue with that, but you think it necessarily was.

[00:12:31] Speaker 00:
I believe it's the only way that it could be.

[00:12:34] Speaker 00:
A 15-7 is the only authority that it has.

[00:12:36] Speaker 00:
And even a 15-7 somehow doesn't apply, which I don't think is the case.

[00:12:41] Speaker 00:
The commission plainly reopened this matter.

[00:12:44] Speaker 00:
Just a simple comparison between the hearing order and the protest order.

[00:12:50] Speaker 00:
indicates that the commission retook on this, re-examined the entire issue of its abandonment policy and whether it could inhibit some way a pipeline's ability to terminate product carriage even in the face of a jurisdictional agreement.

[00:13:14] Speaker 00:
And in addition to that, the commission actually changed its position between the protest order and the complaint order, where in the protest order, it indicated that it did not have jurisdiction over what it considered the abandonment in that case that Enterprise took, but indicated and identified that

[00:13:38] Speaker 00:
If the abandonment was associated with the jurisdictional agreement, the commission did have authority under Section 13 and Section 8 in order to address or remediate that violation of the act.

[00:14:00] Speaker 00:
Now, when it came to the complaint order, the commission changed its tune.

[00:14:04] Speaker 00:
It said,

[00:14:05] Speaker 00:
Not only can we not address abandonment, but even when that abandonment is associated with a jurisdictional agreement, we will not enforce that jurisdictional agreement.

[00:14:16] Speaker 00:
Nowhere in the protest order did it ever limit that factor.

[00:14:23] Speaker 00:
It simply said that it had the ability to redress that violation.

[00:14:28] Speaker 00:
If you filed a section 13 complaint, we filed the section 13 complaint.

[00:14:33] Speaker 00:
However, the commission then turned around and said, no, we only have authority to do monetary damages, which in and of itself make no sense given the fact that if the commission has jurisdictional authority for an Interstate Commerce Act violation under Section 13 and exercises its right under Section 8,

[00:14:53] Speaker 00:
The Commission's orders are completely devoid of any discussion of how they could have partial jurisdiction.

[00:15:01] Speaker 00:
If the Commission has jurisdiction under Section 8 for a violation of the Act, it would similarly have jurisdiction under 15.1 for the same exact Act.

[00:15:15] Speaker 02:
We'll give you back a couple minutes.

[00:15:16] Speaker 00:
Okay.

[00:15:20] Speaker 00:
In this proceeding, one of the main issues is whether

[00:15:24] Speaker 02:
I think it's time for the intervener.

[00:15:26] Speaker 02:
I mean, wait a second, I'm confused here.

[00:15:29] Speaker 02:
Where are we?

[00:15:29] Speaker 00:
No intervener in this case.

[00:15:30] Speaker 02:
No intervener here.

[00:15:31] Speaker 02:
We're now here from council for further.

[00:15:34] Speaker 02:
Okay, thank you.

[00:15:35] Speaker 02:
We'll give you a couple minutes back after that.

[00:15:37] Speaker 02:
Sorry.

[00:15:42] Speaker 02:
That's just to put the intervener on notice in the next case that you will be heard from.

[00:15:47] Speaker 04:
What we have here is a broad policy challenge that's disembodied from the Commission's orders on review.

[00:15:59] Speaker 04:
The petitioners can't show a real stake in the outcome of this litigation.

[00:16:04] Speaker 04:
As it became clear,

[00:16:06] Speaker 04:
here today and in the affidavits that the petitioner pointed to, both United and UPS had ceased being shippers on the enterprise pipeline at the time of the cancellation of service.

[00:16:19] Speaker 04:
But the main point really is

[00:16:21] Speaker 04:
If it were really important for the petitioners to obtain service over this particular pipeline, they could have filed a complaint as early as March 2013 asking the commission to prevent the pipeline from discontinuing service.

[00:16:40] Speaker 04:
They didn't do that.

[00:16:41] Speaker 04:
Instead, they joined with other parties in a complaint that asked the commission to award either specific performance on the

[00:16:50] Speaker 04:
a settlement agreement or money damages.

[00:16:55] Speaker 04:
Now, leaving aside the fact that these particular petitioners weren't parties to the settlement agreement, these petitioners joined in that complaint and they participated in the proceedings before the commission.

[00:17:07] Speaker 04:
They participated in two years worth of settlement discussions with the pipeline over the extent of damages from the pipeline's breach of the settlement agreement.

[00:17:17] Speaker 04:
So to the extent that petitioners are trying to mount this broad policy challenge, they've done too little too late to preserve their ability to do it.

[00:17:27] Speaker 02:
What do you do with your friend's argument that they want, they had at least UPS had access to the pipeline and now no longer has access to the pipeline?

[00:17:37] Speaker 02:
Isn't that a harm?

[00:17:39] Speaker 04:
As I understand it, UPS actually

[00:17:43] Speaker 04:
In its affidavit, the affidavit that's attached to petitioner's reply brief, which is the second to last page of attachment one, UPS said that it had suspended shipments over enterprise prior to May 2013 due to operational issues.

[00:17:58] Speaker 04:
So they had suspended shipments, as I understand it, for reasons separate and apart from this cancellation of service.

[00:18:05] Speaker 04:
And saying for United, in paragraph three of a United affidavit at JA 212,

[00:18:12] Speaker 04:
United stated that it had not shipped over Enterprise TEPCO for the past two years.

[00:18:19] Speaker 04:
This was as of June 2013.

[00:18:20] Speaker 04:
They did include some speculation that they might have some fuel suppliers that may have used the Enterprise pipeline, but they didn't testify that they actually had used the pipeline.

[00:18:33] Speaker 02:
What about the notion that contract negotiations right now are being affected by this policy announced by FERB?

[00:18:43] Speaker 04:
I don't think that the petitioners are barred in any way from bringing a complaint to the commission and ultimately to the court to the extent that they suffer any real harm in the course of any negotiations with some other pipeline.

[00:18:57] Speaker 04:
Now, I don't want to speak for the pipeline in this case, but as I understand it, when petitioner was saying that pipeline has indicated that this case has changed its negotiating stance and that it can abandon service at will,

[00:19:13] Speaker 04:
Two things.

[00:19:14] Speaker 04:
I believe Pipeline only acknowledged that the Commission will hold them through their settlement agreements.

[00:19:22] Speaker 04:
So if they agree to provide services at particular rates, if they breach that agreement, the Commission will order them to make the other party whole through money damages or other actions within their jurisdiction.

[00:19:41] Speaker 04:
there's no new policy here that is affecting contract negotiations going forward.

[00:19:49] Speaker 04:
The particular order is in this case finding that a pipeline

[00:19:54] Speaker 04:
has authority to abandon distinct services is consistent with prior commission orders.

[00:20:00] Speaker 03:
So that's the merits because they challenge that.

[00:20:03] Speaker 03:
They say it's not consistent with past decisions.

[00:20:06] Speaker 03:
And typically for purposes of justiciability, we assume the correctness of their arguments on the merits.

[00:20:10] Speaker 03:
So if we assume that they're right in saying that

[00:20:14] Speaker 03:
the decision in this case, the commission's decision in this case that this is just a mere abandonment of a distinct category, and that's something that we can't review, assuming that that's a new doctrine, because as I understand it, I think we do assume that.

[00:20:28] Speaker 03:
Then their argument would be, well, we didn't know that before, and now that we know that, it's having a present effect on us, because now we have to factor in the risk of discontinuation, which wasn't in play before.

[00:20:40] Speaker 03:
And that's a present harm that we're suffering, the risk of discontinuation that's factoring into our business decisions.

[00:20:46] Speaker 04:
Right.

[00:20:46] Speaker 04:
And that's all that they have, which I think even that, even assuming that they're right on the merits, assuming that, that harm isn't sufficient for Article III standing purposes, I think the best case they have on that might be the Great Lakes case.

[00:21:03] Speaker 03:
Right.

[00:21:03] Speaker 03:
So Great Lakes seemed to have a theory that was pretty parallel to that theory.

[00:21:07] Speaker 04:
Right.

[00:21:07] Speaker 04:
But the difference there is that in Great Lakes, the commission actually attached a particular condition to a certificate of public convenience and necessity that it had issued to the gas pipeline.

[00:21:19] Speaker 04:
And that particular condition that was imposed on the certificate granted to the petitioner

[00:21:25] Speaker 04:
had immediate business consequences because it required the pipeline to lock in contracts for 33 years.

[00:21:32] Speaker 04:
The court even noted that it might affect the pipeline's credit rating.

[00:21:37] Speaker 04:
That's really an opposite to the situation here, where petitioners participated as complainants before proceeding, but

[00:21:47] Speaker 04:
They weren't even parties to the settlement agreement that gave rise to the litigation.

[00:21:52] Speaker 03:
But isn't it parallel to Gray-Lakes and then you could reconceive of this, the commission's ruling in this case, as basically telling everybody in the industry, effectively every contract now has a provision in it that says that the pipeline can always just decide to discontinue a particular service.

[00:22:08] Speaker 03:
That's just something that is going to be read into every agreement.

[00:22:11] Speaker 03:
Is that not right?

[00:22:14] Speaker 04:
Um, well, it's not right that it's a new policy going forward.

[00:22:17] Speaker 04:
I mean, that's, you know, that reading is fully consistent with both the Commission's precedents and also with the Interstate Commerce Act, which has no provision.

[00:22:27] Speaker 03:
So, so let's get, just to go back on it, so let's assume that they write on the merits on that, too, that this is a new thing.

[00:22:33] Speaker 03:
So, for standing purposes, which, let's just assume that we have to assume that, double layer of assumptions.

[00:22:38] Speaker 03:
Okay.

[00:22:38] Speaker 03:
Um, then on that, if we assume that this is new,

[00:22:43] Speaker 03:
and therefore they didn't know before that the risk of abandonment existed and was not remediable, at least by specific performance.

[00:22:50] Speaker 03:
Is your answer to that, well, there's still a remedy with monetary damages, or is there something else that you would say?

[00:22:58] Speaker 04:
That's right.

[00:22:59] Speaker 04:
There still is a remedy with monetary damages, but also to the extent that it comes up in a negotiation with another pipeline or with enterprise again in the future, they could file a complaint with the Commission asking the Commission to prevent the proposed abandonment.

[00:23:18] Speaker 04:
There's nothing stopping them from filing a complaint whenever an actual live controversy emerges.

[00:23:24] Speaker 03:
And then the commission presumably would be bound by its decision in this case and would say, because it's an abandonment, we can't do anything about it.

[00:23:31] Speaker 04:
Presumably, yes, but the binding effect of a particular commission order isn't sufficient to sustain standing, which we know from this court's prior case law.

[00:23:44] Speaker 04:
So just one point I just want to clarify.

[00:23:51] Speaker 04:
The petitioners say that the commission changed its position from the 2013 protest order to the complaint order.

[00:23:57] Speaker 04:
I just want to clarify that there was no such change in position.

[00:24:01] Speaker 04:
Paragraphs 26 and 27 of the protest order make very clear that the commission

[00:24:13] Speaker 04:
does not possess the authority to, as a potential equitable remedy, prevent or delay the abandonment of service of an oil pipeline.

[00:24:21] Speaker 04:
So the commission did make that clear in the protest order.

[00:24:24] Speaker 04:
In addition, I would say that paragraph 26, there's a sentence that talks generally about the commission's jurisdiction to appropriately remedy the situation.

[00:24:34] Speaker 04:
Footnote 13 to paragraph 26 cites to a natural gas pipeline case in which FERC lacked jurisdiction

[00:24:43] Speaker 04:
to require a pipeline to engage in specific performance, but it ordered damages to remedy the breach.

[00:24:52] Speaker 04:
So the protest order and the complaint order, there was no change in position between those two orders.

[00:24:59] Speaker 03:
Do you think that the 2013 tariff order was judicially reviewable?

[00:25:04] Speaker 04:
I think for purposes of resolving this case, it's not necessary to decide whether that particular order was reviewable, but

[00:25:14] Speaker 04:
I think it is an open question whether Southern Railway governs this particular case or that particular order.

[00:25:21] Speaker 04:
Because the commission didn't say that it was accepting the tariff abandonment under Section 15.7.

[00:25:29] Speaker 04:
Section 15.7, which is

[00:25:32] Speaker 04:
printed in the addendum to our brief at A14 gives the Commission the power to suspend or investigate rate filings by oil pipelines.

[00:25:44] Speaker 04:
It's not clear to me whether that section would encompass an oil pipeline's filing of a tariff that cancels service entirely.

[00:25:56] Speaker 04:
So I think that

[00:25:58] Speaker 03:
But there's no reason that, what else, United side of 15-7 when it filed the protest.

[00:26:04] Speaker 03:
And the commission, I think, and then the commission didn't say anything to the contrary in its resolution, right?

[00:26:10] Speaker 04:
I don't believe so.

[00:26:10] Speaker 04:
I don't think the commission addressed the issue.

[00:26:13] Speaker 04:
And so that's one reason why this issue may not be properly

[00:26:19] Speaker 04:
Excuse me, I just mean that perhaps this case is not the best vehicle for considering that particular issue, but I will say that it is a question whether or not Southern Railway would preclude review of that particular order.

[00:26:35] Speaker 04:
The bottom line from our perspective is that the petitioners just did too little too late to preserve

[00:26:40] Speaker 04:
this broad challenge to the policy of the commission by first joining in a complaint that asks for either specific performance or damages and then continuing in the administrative proceeding, continuing to participate through two years of damages negotiations with the pipeline and then

[00:27:01] Speaker 04:
waiting, actually waiting an additional five months.

[00:27:04] Speaker 02:
Let me go back and ask you, this is a hypothetical.

[00:27:07] Speaker 02:
Let's imagine that the commission had arrived at this policy on abandonment through formal rulemaking.

[00:27:19] Speaker 02:
put out for notice and comment that they're going to interpret their rules such that to make clear that the commission doesn't have authority to stop a pipeline who wants to cease transportation of a certain product.

[00:27:34] Speaker 02:
If they had done that, would these petitioners have standing as an aggrieved party under the APA?

[00:27:47] Speaker 04:
Possibly, Your Honor.

[00:27:48] Speaker 04:
Honestly, I'm not sure.

[00:27:50] Speaker 04:
If the commission had proposed a rulemaking, possibly.

[00:27:56] Speaker 04:
I mean, certainly petitioners are shippers.

[00:27:59] Speaker 04:
I don't see that they were actually shippers on this particular pipeline in this proceeding at the time the pipeline canceled service.

[00:28:08] Speaker 02:
But they are shippers.

[00:28:08] Speaker 02:
We're not talking about a broad policy.

[00:28:10] Speaker 02:
You're saying they're making a tap on a broad policy.

[00:28:12] Speaker 02:
Yeah.

[00:28:13] Speaker 02:
Right.

[00:28:13] Speaker 02:
Right.

[00:28:14] Speaker 02:
Will they be permitted to make that sort of?

[00:28:16] Speaker 04:
I think they probably would to the extent that they are shippers across other pipelines in the country.

[00:28:23] Speaker 04:
I think they would.

[00:28:26] Speaker 04:
And certainly they have the ability to challenge any other pipelines, cancellation of service, to the extent they're actually harmed by it.

[00:28:39] Speaker 04:
If there are no further questions, then thank you, Your Honors.

[00:28:41] Speaker 02:
Great, thank you very much.

[00:28:46] Speaker 02:
We'll give you two minutes.

[00:28:49] Speaker 02:
If you only want one, that's fine.

[00:28:51] Speaker 00:
Thank you.

[00:28:53] Speaker 00:
Just to point out, I believe Council for Respondent has understated what the carrier has actually conceded.

[00:29:03] Speaker 00:
At page 11 of its brief, it said, and I quote, it is highly unlikely that any oil pipeline would ever again enter into a settlement agreement like the one at issue here,

[00:29:15] Speaker 00:
without explicitly addressing the possibility of abandonment now that FERC has put the industry on notice.

[00:29:23] Speaker 00:
Not that this is an existing policy.

[00:29:25] Speaker 00:
It's putting them on notice about the obligations implied in a rate settlement agreement.

[00:29:32] Speaker 00:
That is clear.

[00:29:33] Speaker 00:
That is now something that, as Super Tire would indicate, is a factor lurking in every negotiation between the carrier and the shipper going forward in addition to the risk

[00:29:45] Speaker 00:
Council has indicated that we waited or somehow didn't exercise our rights quick enough.

[00:29:52] Speaker 00:
30 days after that complaint order was issued, we filed a request for rehearing.

[00:29:58] Speaker 00:
It took FERC nearly three years to address that request for rehearing.

[00:30:02] Speaker 00:
We had to wait for FERC

[00:30:05] Speaker 00:
to actually address the rehearing so that we could appeal.

[00:30:09] Speaker 00:
And in addition to that, indicating that somehow we did not adequately keep FERC informed, you can look to JA site 0446, which is a status report dealing with the settlement discussions.

[00:30:23] Speaker 00:
And in footnote one, we've identified, and we continue to identify, that petitioners

[00:30:28] Speaker 00:
were intending to preserve their rights so that they could challenge the legal policy underneath FERC's action.

[00:30:38] Speaker 00:
We did everything we could.

[00:30:40] Speaker 00:
We could have maybe started another proceeding, but the fact of the matter is, is that this was the proceeding.

[00:30:46] Speaker 00:
This was the proceeding where FERC issued its new policy.

[00:30:50] Speaker 00:
Now FERC can say all day long that this was not somehow a new policy, but the fact of the matter is as follows.

[00:30:58] Speaker 00:
The Interstate Commerce Act defines abandonment, and it defines abandonment as a complete termination of service on a facility or a route.

[00:31:08] Speaker 00:
That definition is unambiguous.

[00:31:11] Speaker 00:
That definition is sitting in the ICA.

[00:31:13] Speaker 00:
And abandonment, as contemplated by the ICA, is what Congress defined abandonment in the ICA.

[00:31:22] Speaker 00:
So to the extent that an action does not meet the definition of abandonment under the ICA, it's not an abandonment.

[00:31:33] Speaker 02:
We have your argument.

[00:31:34] Speaker 02:
Thank you very much.

[00:31:35] Speaker 02:
The case is submitted.