[00:00:01] Speaker 00: Case number 20-1013, Aircraft Service International Inc. [00:00:05] Speaker 00: doing business as Mansees Aviation et al. [00:00:08] Speaker 00: petitioners versus Federal Energy Regulatory Commission and United States of America. [00:00:13] Speaker 00: Mr. Field for the petitioners, Ms. [00:00:15] Speaker 00: Barry for the respondents, Ms. [00:00:17] Speaker 00: Hoff for the interveners. [00:00:20] Speaker 03: All right, good morning, Mr. Field. [00:00:22] Speaker 03: We'll hear from you. [00:00:24] Speaker 04: Thank you, Your Honor. [00:00:25] Speaker 04: May it please the court? [00:00:27] Speaker 04: In the proceedings below Burke found movements of Jectule that undeniably originate outside of Florida and terminate within Florida to nevertheless be interstate movements because the product enters the terminal at Tampa Florida before continuing on to its ultimate destination at Orlando. [00:00:45] Speaker 04: A century of precedent construing the Interstate Commerce Act dictates that the jurisdiction of a multi-part movement such as this is determined by whether the shipper of the product has a fixed and persisting intention to move product through the terminal storage to its ultimate destination. [00:01:02] Speaker 04: FERC explicitly found that the airlines, in this case, have an overarching intent to move jet fuel from out-of-state sources to the Orlando airport, and furthermore, that they execute this intent in the most efficient and economically practical way. [00:01:18] Speaker 04: But not only did FERC not conclude that the airlines then have the necessary fixed and persisting intention, but it found that these facts do not address the jurisdictional question of the transportation over Central Florida pipeline. [00:01:32] Speaker 04: It reached its inexplicable result only by ignoring the rich precedent left it by the Supreme Court, the Interstate Commerce Commission, and its own decisions, and then correctly and myopically applying a mechanistic three-factor test. [00:01:47] Speaker 04: Burt's critical error appears in paragraph 122 of its order. [00:01:52] Speaker 04: In rejecting the relevance of its own finding of overarching intent, Bert states that the airlines accomplished their overarching intent to supply their planes at Orlando through two distinct movements. [00:02:04] Speaker 04: First, a foreign interstate movement to the Tampa terminal, and an intrastate movement from the terminal to the airport by pipeline or truck. [00:02:14] Speaker 04: The question, however, is not whether this movement occurs in two separate movements. [00:02:20] Speaker 04: it's whether both movements serve the same purpose. [00:02:24] Speaker 04: And the findings by FERC on the record, undeniably demonstrate that there is no purpose behind either of these movements other than to move jet fuel to Orlando from out of state sources. [00:02:35] Speaker 02: But Mr. Field isn't part of the purpose, as you said, to create an efficient and economical way of moving this. [00:02:43] Speaker 02: So there is some other intent besides just moving it to Orlando. [00:02:47] Speaker 02: There is, you know, an intent to do this in a particular way by storing fuel at Tampa before it goes on to Orlando. [00:02:58] Speaker 04: There's two responses to that. [00:03:01] Speaker 04: The first is that the intent is to move the product to Orlando efficiently, and that intent is carried out. [00:03:07] Speaker 04: As far as storage at Tampa, there's no evidence that there's an intent to store product at Tampa in this case. [00:03:16] Speaker 04: The fuel is not needed at Tampa. [00:03:18] Speaker 04: And in fact, it's essentially impossible to store the fuel at Tampa because of the volume that moves through every month. [00:03:26] Speaker 06: Doesn't it stay? [00:03:28] Speaker 06: Tampa sometimes for a long period of time, up to 12 days? [00:03:36] Speaker 04: The fuel moves through Tampa continuously. [00:03:40] Speaker 04: It sometimes takes 10 to 12 days to move through the... Well, wait a minute, 10 to 12 days... No, council, 10 to 12 days in the tanks is not continuous movement. [00:03:54] Speaker 06: And here's my question about your overarching intent. [00:03:58] Speaker 06: If that were a proper interpretation of the statute, wouldn't all the cases, such as Atlantic, be decided differently? [00:04:12] Speaker 06: Isn't the real question whether there's continuous movement or not? [00:04:19] Speaker 06: And it's an objective test that determines so-called intent. [00:04:25] Speaker 06: It causes a little confusion here, but I use the word intent. [00:04:28] Speaker 06: But the key is whether there's continuous movement or not. [00:04:34] Speaker 04: To the question of continuous movement, there's no case that holds that the fact that a product stops during its movement defeats the continuity of movement. [00:04:45] Speaker 04: That's the subtle case from the Supreme Court. [00:04:51] Speaker 06: What about Atlantic? [00:04:52] Speaker 04: Atlantic coast. [00:04:54] Speaker 04: Atlantic Coast really highlights what the difference is between a continuous movement and one that's conducted in two legs. [00:05:00] Speaker 04: Atlantic Coast found that the entire purpose of bringing the product to the terminal storage was for Standard Oil to conduct a marketing and distribution business out of that terminal. [00:05:13] Speaker 04: It then delivered product to 127 different locations and it did that based on needs of customers that might arise and that were not planned before the product was brought into the terminal. [00:05:24] Speaker 06: But there still was an overarching intent to get the gasoline to the stations, right? [00:05:32] Speaker 04: The overarching intent was to run a marketing and distribution business out of the seaside storage. [00:05:40] Speaker 04: It was open. [00:05:40] Speaker 04: If you looked at the other cases that had held it. [00:05:43] Speaker 06: Am I wrong? [00:05:43] Speaker 06: Wasn't there an overarching intent to get the gasoline to the stations? [00:05:51] Speaker 04: There was not a primary intent to get the gasoline to the station. [00:05:56] Speaker 04: The intent was to bring it to storage so that there would be enough product in the seaboard storage that when need arose at those stations, it could move that product to those other stations. [00:06:09] Speaker 02: Isn't that how this works here as well, right? [00:06:13] Speaker 02: Fuel is sent to the Orlando airport as the different airlines need it. [00:06:18] Speaker 02: I mean, isn't that part of what FERC found? [00:06:22] Speaker 04: Yes, and it's also ordered based on what the airlines need. [00:06:26] Speaker 04: It's all driven by what the airlines need at Orlando. [00:06:30] Speaker 04: So they look at what they need, how much fuel they need at Orlando in a month. [00:06:35] Speaker 04: They ordered that amount of fuel to come to Orlando that month. [00:06:39] Speaker 04: It can only move through as fast as product is being consumed because there's already fuel at Orlando. [00:06:45] Speaker 04: It's a constant process. [00:06:46] Speaker 04: This has been going on for decades where you've got planes flying out of Orlando [00:06:52] Speaker 04: consuming fuel as they consume a day's worth of fuel, a day's worth of fuel can come in. [00:06:56] Speaker 04: It's just a cyclical process. [00:07:00] Speaker 04: And of course, it has to come to Tampa before it can move on to Orlando. [00:07:06] Speaker 04: There's no other way to get it onto the pipeline. [00:07:10] Speaker 06: Well, of course, if the fuel was shipped immediately to a connecting pipeline, [00:07:22] Speaker 06: and then on to a pipeline to Orlando, then you would have a different case. [00:07:30] Speaker 06: The problem is, did you have a sufficient stop in Tampa to break the continuity? [00:07:38] Speaker 06: And all the Norville factors run against you. [00:07:45] Speaker 06: You don't deny that. [00:07:48] Speaker 04: I do deny that the Northville factors run against us. [00:07:52] Speaker 04: The question that is present throughout all the precedent here is whether there's intent to move the product through the terminal to the ultimate destination. [00:08:03] Speaker 06: No matter how long it stops at the terminal. [00:08:07] Speaker 04: Certainly 10 days has not been shown to disrupt the transportation. [00:08:11] Speaker 04: There was one to 30 days in Sabine. [00:08:14] Speaker 04: In Department of Defense versus Interstate Storage, it could be stored up for two months. [00:08:19] Speaker 04: If you look in Northville, there is a system where the product was stored for months on end in off-peak periods, and the entire tent was in store product at the terminal so that it could be used months later during peak periods. [00:08:34] Speaker 04: Those facts just aren't present here. [00:08:37] Speaker 04: What our case has in common with all the other cases finding transportation jurisdictional is that the product was ordered specifically for use and an inland destination, the product moved through the terminal. [00:08:50] Speaker 04: There was never any question that the product would not move through the terminal. [00:08:54] Speaker 04: There's no other business occurring at the terminal. [00:08:56] Speaker 04: There's no sales there. [00:08:57] Speaker 04: There's no marketers that operate out of the terminal. [00:09:00] Speaker 04: There's no distribution business operating out of the terminal. [00:09:03] Speaker 06: Wait a minute. [00:09:05] Speaker 06: There was distribution out of the terminal. [00:09:08] Speaker 06: What about 10% of the fuel is sent to, not to Tampa, but to other locations in Florida. [00:09:15] Speaker 06: I mean, yeah, in Florida. [00:09:17] Speaker 04: Sure. [00:09:18] Speaker 04: So first of all, there's two airlines. [00:09:21] Speaker 04: that only moved the product to Orlando, that never moved to other airports. [00:09:26] Speaker 04: Second of all, any product that's delivered to another airport was ordered for use at that specific airport. [00:09:32] Speaker 04: In the record, the initial decision looked at the nominations that Delta submits. [00:09:38] Speaker 04: This is a paragraph 127 of the initial decision. [00:09:41] Speaker 04: It sets forth the particular volumes for each of the airports it supplies from Hookers Point. [00:09:46] Speaker 04: it sends a nomination that says, I want this much at Orlando, this much at this airport, this much at this airport, and that's where that fuel ends up. [00:09:54] Speaker 06: Council, what about my question? [00:09:56] Speaker 06: Isn't it true that a certain amount of fuel was sent from the Tampa terminals to other locations, not Orlando? [00:10:06] Speaker 04: Yes, it's sent to those airports that those airlines, for instance, Delta, ordered [00:10:12] Speaker 06: So Tampa constitutes a distribution location, as well as a trans-shipment location to Orlando. [00:10:23] Speaker 04: There's no precedent that any party has relied on this court that finds an analogous situation, a distribution point. [00:10:35] Speaker 06: May I ask the presiding judge, is there something wrong with our system here? [00:10:39] Speaker 06: Does counsel not hear my question? [00:10:42] Speaker 03: I believe everything is with the audio is working. [00:10:45] Speaker 03: Mr. Field, if, uh, if, if, if a judge asks you a question, you should, you should stop speaking and let the judge, um, have the floor. [00:10:56] Speaker 03: All right. [00:10:56] Speaker 03: So, so judge Silverman, why don't you ask your question? [00:11:01] Speaker 06: Well, now I can't remember the question. [00:11:03] Speaker 06: Uh, so it'll come back to me. [00:11:06] Speaker 04: I believe, I believe you asked that. [00:11:09] Speaker 06: Excuse me. [00:11:09] Speaker 06: Have you argued here before? [00:11:12] Speaker 04: No, Your Honor, I have not. [00:11:14] Speaker 06: Well, it is de rigueur that when a judge asks you a question, you stop. [00:11:19] Speaker 06: And I must say, because of our new technology, I was confused as to whether my voice was even coming across. [00:11:25] Speaker 06: Because typically, when a judge asks a question, experienced counsel will stop talking. [00:11:32] Speaker 04: I apologize, Your Honor. [00:11:33] Speaker 04: I did not hear that your question was coming while I was trying to answer your question. [00:11:38] Speaker 04: The question I thought I was answering was whether [00:11:41] Speaker 04: product goes to destinations other than Orlando. [00:11:45] Speaker 06: And what's the answer? [00:11:49] Speaker 04: The answer is that it does go to destinations other than Orlando because it's ordered by those airlines for their consumption at those destinations. [00:12:01] Speaker 04: The process is exactly the same as what goes to Orlando. [00:12:05] Speaker 04: And if you look at the Delta nominations that were detailed in the initial decision, [00:12:12] Speaker 04: The nomination specifies specific quantities to go to the different airports. [00:12:18] Speaker 04: And so from the time it's ordered, it's always known that that product, that quantity of product is going to that particular airport. [00:12:27] Speaker 04: That's just a separate mode of transportation from the product that's going to Orlando. [00:12:32] Speaker 04: What's ordered from Orlando goes over the pipeline to Orlando. [00:12:35] Speaker 04: What's ordered for the other locations [00:12:39] Speaker 04: goes from the ship into the terminal to those other locations. [00:12:42] Speaker 04: It's the same process. [00:12:43] Speaker 06: Council, what is the point you were making that the Norville factors don't apply? [00:12:50] Speaker 06: No, not the argument that Norville factors should not be used exclusively, but your previous argument that under the Norville factors, you should prevail. [00:13:05] Speaker 06: Why do you say that? [00:13:07] Speaker 06: Which one of the Norville factors points in your direction? [00:13:11] Speaker 04: The first Norville factor is whether there's a specific order for a specific quantity of product to move through the terminal destination. [00:13:21] Speaker 04: As I just explained, the airlines nominate specific amounts of jet fuel every month that they nominate based on what they plan to move through. [00:13:31] Speaker 06: But isn't that only an estimate? [00:13:34] Speaker 06: A rough estimate. [00:13:35] Speaker 06: It doesn't, it doesn't coincide exactly. [00:13:38] Speaker 06: It's not specific. [00:13:42] Speaker 04: It's an, it's an estimate based on the airlines anticipated needs and those estimates proved to be pretty accurate over time. [00:13:50] Speaker 04: And FERC has never before found that you need some sort of exact 100% match between the order and, and what actually comes through. [00:14:01] Speaker 04: In Carson Petroleum, there was a 10% discount. [00:14:04] Speaker 04: There's numerous cases coming out of the ICC where there's some difference between the amount that was ordered and that ultimately came through, but there was no question that those were still specific orders. [00:14:18] Speaker 06: Council, so you think the first factor in normal is satisfied because there's a specific order for specific amounts to be sent specifically to Orlando. [00:14:30] Speaker 06: Is that your view? [00:14:32] Speaker 04: Yes, Your Honor, that is. [00:14:34] Speaker 04: And on the second factor, the question is whether there's a marketing distribution business. [00:14:40] Speaker 04: Burke found that there's not a marketing and distribution business in the traditional commercial sense going on at Tampa. [00:14:48] Speaker 04: Now, I don't know what other type of marketing distribution business that they're looking at, but we know that there's not one in the commercial sense. [00:14:57] Speaker 04: And there's no marketers that operate out of Tampa. [00:15:00] Speaker 04: There's no, you know, there's no general distributors of product that operate there. [00:15:05] Speaker 04: Everything that comes to Tampa is brought to Tampa because it was ordered by an airline for use at an airport. [00:15:11] Speaker 04: And the product goes to the airport that the airline ordered it for. [00:15:15] Speaker 04: And it goes in a short period of time, much less time than it takes product to move through in other cases in which FERC has found the transportation jurisdictional. [00:15:27] Speaker 04: FERC states that the recurring pattern of shipments here are irrelevant. [00:15:33] Speaker 04: It says that in its brief. [00:15:35] Speaker 04: The recurring patterns of shipments show that you've got this constant flow of fuel coming through Tampa to define destinations that it was ordered for and where it's consumed. [00:15:49] Speaker 04: Each airline has a specific intent to bring jet fuel from other state sources to Orlando over the pipeline [00:15:56] Speaker 04: to fuel its planes at Orlando. [00:15:59] Speaker 04: What about the third factor? [00:16:03] Speaker 04: The third factor goes to whether arrangements have been made for the transportation beforehand. [00:16:09] Speaker 04: And there's a great deal of record evidence on this point, most of which FERC just decided did not go to that factor. [00:16:19] Speaker 04: The judge herself stated that she looked only at the arrangements from the tanks [00:16:24] Speaker 04: to the terminal and not at the general scheme, but the general scheme shows that these arrangements have been made in advance. [00:16:31] Speaker 04: The airlines formed LLC that engaged in a group and deficiency agreement with the terminal that requires them to put the product that comes into Tampa onto the CFPL pipeline. [00:16:46] Speaker 04: Every month, [00:16:47] Speaker 04: aircraft service submits a nomination to the pipeline detailing what's going to come in that month and what will go over the pipeline. [00:16:57] Speaker 04: There's simply no question that the arrangements have been made. [00:17:01] Speaker 04: The product is going to come into Tampa, it's going to go over the Orlando pipeline, it's going to go in the amounts that were ordered. [00:17:08] Speaker 04: And you can just see this by the fact that this is what happens every month. [00:17:12] Speaker 04: The product comes in and it moves through just as it's intended. [00:17:16] Speaker 04: There's no [00:17:17] Speaker 04: There's no sense in which something else happens. [00:17:20] Speaker 04: So to argue as Burke did that the arrangements haven't been made simply because there was no nomination to the pipeline that said, I'm having 100 barrels come in off vessel A, and I wanted to go on the pipeline on Thursday. [00:17:37] Speaker 04: That's something that's not practical to do commercially. [00:17:42] Speaker 04: It's not something that's been done. [00:17:44] Speaker 04: And it's not something that happened in cases like Sabine or Carson, where product came to the terminal and it was stored there until a vessel came back to take it away. [00:17:57] Speaker 04: That's a natural feature of [00:18:00] Speaker 04: the commercial transportation. [00:18:02] Speaker 04: And the Supreme Court precedent is clear that you're not supposed to let these practicalities obscure the fact that there's an overall intent to move product through the terminal rather than to keep it at the terminal for some distinct purpose other than moving it through to the final destination. [00:18:24] Speaker 03: Judge Soberman, Judge Rao, do you have further questions? [00:18:28] Speaker 06: No. [00:18:31] Speaker 03: All right. [00:18:31] Speaker 03: Thank you, Mr. Field. [00:18:32] Speaker 03: We'll give you some time on rebuttal. [00:18:35] Speaker 03: I believe next we are to hear from Ms. [00:18:38] Speaker 03: Perry on behalf of the commission. [00:18:45] Speaker 01: May it please the court, Lena Perry for the commission. [00:18:48] Speaker 01: I would like to address the Northville factors that were under discussion at the end of the petitioner's arguments. [00:18:56] Speaker 01: And I would like to point out the commission's findings based on substantial evidence that each of these factors were in fact met in this case. [00:19:07] Speaker 01: To begin with the first factor, the first factor is at the time of shipment, there is no specific order being filled for a specific quantity to be moved beyond terminal storage to the final destination. [00:19:20] Speaker 01: As was recognized previously, that means sent to Orlando in this case. [00:19:25] Speaker 01: And it is correct, first of all, that the Commission, the Administrative Law Judge, and the Commission found that these nominations that the petitioner was discussing were estimates. [00:19:35] Speaker 01: But in addition to that, there is a reason why the petitioner was referring you only to Delta's nominations. [00:19:42] Speaker 01: In the first place, the Administrative Law Judge found [00:19:48] Speaker 01: that three of the airlines who put nominations to their marine suppliers only identify Tampa as the delivery point. [00:19:57] Speaker 01: And that's in the initial decision at paragraph 191. [00:20:02] Speaker 01: So three of the airlines don't even specify any point of delivery past Tampa. [00:20:08] Speaker 01: So there can't be, by definition, any specific order for delivery past Tampa with those airlines. [00:20:16] Speaker 01: The other two airlines [00:20:18] Speaker 01: Delta, which he was just discussing, and Southwest do in their nominations specify points beyond the terminal storage. [00:20:31] Speaker 01: But the administrative law judge found with respect to that, both of those shippers are shippers on, both of those airlines purchased from Valero. [00:20:42] Speaker 01: And Valero loads its ships [00:20:45] Speaker 01: in foreign ports prior to receiving the nominations from the airlines. [00:20:52] Speaker 01: And you can find this at paragraph 178 of the initial decision. [00:20:56] Speaker 01: And because of that, there is no way that the marine supplier is loading its ships based on any specific order that is coming from either Delta or Southwest with regard to those amounts. [00:21:10] Speaker 02: But Miss Perry, when Delta or Southwest make that nomination, they know that the fuel will be traveling, you know, interstate or internationally in that case. [00:21:20] Speaker 02: I mean, so they're aware of that when they make that nomination. [00:21:24] Speaker 01: No, Your Honor, it needs to be at the time of shipment, there is a specific order to the shipper. [00:21:32] Speaker 01: The marine supplier is the shipper in this instance with regard to the first element. [00:21:39] Speaker 01: So it is not a question of whether the airlines know that ultimately this fuel is going to go to the regional airports or to Orlando. [00:21:47] Speaker 01: The question is, [00:21:48] Speaker 01: What does the marine shipper know? [00:21:50] Speaker 01: And the marine shipper does not know because the vessel is loaded before the nominations are received where any of this fuel is ultimately going to be delivered. [00:22:02] Speaker 01: And so that's why there is no satisfaction of the first Northville factor. [00:22:08] Speaker 01: The second Northville factor, the character of the storage, the commission found in the first instance that this [00:22:16] Speaker 01: storage in Tampa, like that in Northville itself, and like that in interstate energy was used for the purpose of inventory and storage. [00:22:29] Speaker 01: Specifically, if you look at paragraph 159 of the commission's order, the commission finds [00:22:37] Speaker 01: and affirms the administrative law judges finding that there was direct evidence of airlines intent to follow the recommended inventory by aircraft services, which was to maintain a 20 day fuel supply that was split between [00:22:56] Speaker 01: Tampa and Orlando, and that that was the purpose for the delay. [00:23:01] Speaker 01: The paragraph 146 of the order, the delay at Tampa was attributable to the desire of the airlines to maintain inventory at Tampa, not for continuous transportation. [00:23:14] Speaker 01: In addition to that, the commission also found and affirmed the administrative law judge's findings that in addition to the facts of Northfield Interstate in which the using it for inventory was sufficient for purposes of interrupting the continuity of travel, there are additional facts here which further support the finding that the continuity of travel was interrupted. [00:23:38] Speaker 01: That includes that it was a distribution point, which is [00:23:42] Speaker 01: there was distribution to between the regional airports and Orlando once the fuel is received in Tampa. [00:23:51] Speaker 01: Furthermore, there's distribution among the airlines because shipments from Chevron are not allocated among the airlines until they are delivered in Tampa and aircraft services makes that allocation. [00:24:05] Speaker 01: And in addition to that, the airlines treat the [00:24:09] Speaker 01: Fuel that is received in Tampa is being a fungible pool that can be shared among the airlines as necessary. [00:24:16] Speaker 01: Specifically, the administrative law judge and the commission pointed to negative inventory, where airlines are permitted to borrow from the accounts of other airlines if they are running short of fuel supply at the end of the month. [00:24:32] Speaker 01: And the commission found that this was actually a common occurrence. [00:24:37] Speaker 01: And if you look at the initial decision at paragraph 285, they list how often three of the airlines use this frequently and they list how many days during the relevant time period that happens. [00:24:51] Speaker 02: Miss Perry, can I ask you maybe a little bit different question that I was trying to get at the bottom of. [00:24:59] Speaker 02: If FERC finds that there has been an interstate shipment, is FERC required under the ICA to set just and reasonable rates? [00:25:11] Speaker 02: I mean, I guess another way of putting that is, is FERC's jurisdiction mandatory for interstate shipments or is there any discretion for FERC? [00:25:20] Speaker 02: to decline jurisdiction to set rates? [00:25:26] Speaker 01: I don't know that there's a ground on which the commission could decline jurisdiction if it were a jurisdictional pipeline. [00:25:35] Speaker 02: Because the ICA is written in different terms from FERC's other statutes involving the setting of rates. [00:25:44] Speaker 02: And so I don't know. [00:25:45] Speaker 02: I couldn't figure out the precise answer to that. [00:25:51] Speaker 02: So I was wondering what the agency's position was on whether they have discretion to decline jurisdiction under the ICA. [00:25:59] Speaker 01: I don't know of a commission answer to that, Your Honor, and certainly it didn't come up in this case because they found that the pipeline at issue was not jurisdictional. [00:26:11] Speaker 01: I can't tell you what the commission's position on that would be, whether it would feel compelled to exercise jurisdiction or not. [00:26:18] Speaker 01: But because it found that jurisdiction did not exist in this case, it didn't come up. [00:26:25] Speaker 02: But it would bolster the agency's argument, right, that even if there was sort of a close case, you know, that they have discretion not to exercise jurisdiction, right? [00:26:35] Speaker 02: So if they have discretion, then, you know, [00:26:39] Speaker 02: they get a little more leeway maybe in close cases. [00:26:45] Speaker 01: I understand your point, your honor. [00:26:47] Speaker 01: I don't believe that the commission made any findings regarding its jurisdictional discretion in this case. [00:26:54] Speaker 01: They found that the Northville factors clearly all pointed towards there being no jurisdiction over this pipeline transportation and therefore it was not an issue. [00:27:09] Speaker 01: did not regard it as being at the end of the day. [00:27:12] Speaker 01: No, I understand that. [00:27:13] Speaker 02: I just think it's a legal question that it seems the agency should have an answer to. [00:27:18] Speaker 02: But I guess if it doesn't, that's fine. [00:27:25] Speaker 06: What do you think about counsel's argument that he didn't have a chance to get to that Gutman recognized that the normal factors were not adequate? [00:27:38] Speaker 06: That's the way he put it. [00:27:39] Speaker 06: What's your response to that? [00:27:42] Speaker 06: And therefore, the main argument is that the FERC should understand the economic realities that the only way this fuel can be shipped to Tampa is the method they're using. [00:28:02] Speaker 06: I don't know, that can be shipped to Orlando is the method they're using. [00:28:09] Speaker 01: Your honor, Gutman did not, under any circumstances, disavow the Northfield factors. [00:28:16] Speaker 01: What Gutman found, and you can see that the commission talked about this in note 253 of its order, what the commission found in Gutman was that the Northfield factors, which they entirely recognized, were commission precedent. [00:28:32] Speaker 01: did not apply in that case because interstate transportation in that case was found to exist because there was no non-operational storage used at all. [00:28:44] Speaker 06: It was just pipeline to pipeline. [00:28:45] Speaker 01: It was just pipeline to pipeline, your honor, and they were trying to say that the junction between the two pipelines, the Chelsea junction, that that was a point of interruption that was sufficient to break the continuity. [00:28:57] Speaker 01: And the commission said that's not a break in continuity of transportation. [00:29:02] Speaker 01: And therefore, the Northfield Factors don't apply. [00:29:05] Speaker 01: The Northfield Factors only apply where there is an interruption in the shipment. [00:29:10] Speaker 01: And you apply the Northfield Factors to determine what the nature of that interruption is and whether it interrupts the continuity of transportation. [00:29:18] Speaker 06: The key argument that Petitioner raises in this case is the economic realities require the system that is used. [00:29:30] Speaker 06: And that should be taken into account. [00:29:34] Speaker 01: Your Honor, the fact that they organized, as the commission found, you would expect them to organize their business in the most efficient way for purposes of supplying themselves with jet fuel. [00:29:49] Speaker 01: But the point is, the way they have organized this transportation [00:29:55] Speaker 01: It leads to an interruption in the continuity of transportation that is not for purposes of onward transportation, which is the difference between Carson Petroleum and Sabine, where the Supreme Court specifically held that the delay in transportation there was only for purposes of onward transportation. [00:30:13] Speaker 01: In this case, on the other hand, the commission specifically affirms the administrative law judge's determination and the commission's finding is a paragraph 162 of its order that specifically affirmed the ALJ's determination that the petitioners failed to show that they were moving [00:30:38] Speaker 01: the oil from, I mean the jet fuel, pardon me, from Tampa to Orlando as expeditiously as possible. [00:30:47] Speaker 01: They put in a supply chain model that purported to show that, and the administrative law judge and the commission both rejected that model and found that they had failed to make a showing that it was going as expeditiously as possible. [00:31:00] Speaker 01: To the contrary, it was being held [00:31:03] Speaker 01: in Tampa for purposes other than its onward transportation to the Orlando airport. [00:31:14] Speaker 01: So in other words, the commission's finding was that the existence of the interruption, that everybody is planning their deliveries as efficiently as possible. [00:31:29] Speaker 01: In Atlantic Coast, the deliveries were planned there presumably as efficiently as possible by Standard Oil, but the factory made that the way their business was conducted, it was most efficient for them to hold the oil and storage until for later delivery. [00:31:48] Speaker 01: to their bulk stations as opposed to sending it out by immediate continuity of transportation. [00:31:54] Speaker 01: As the Atlantic Coast described it, it was being held there for convenient distribution instead of being sent through the storage onward to the bulk stations by immediate continuity of transportation. [00:32:08] Speaker 01: And that's the distinction, the fact that they organize it as efficiently as possible. [00:32:14] Speaker 01: Some efficient organizations result in there being a break in the continuity of transportation. [00:32:20] Speaker 01: And it's the continuous transportation, not the efficient organization, that is the jurisdictional issue. [00:32:33] Speaker 03: Seeing as you're over your time, Judge Silverman, I don't want to pre-term at this if you had further questions or Judge Rao. [00:32:44] Speaker 06: No, I don't have any questions. [00:32:46] Speaker 03: All right. [00:32:47] Speaker 03: Thank you, Ms. [00:32:48] Speaker 03: Perry. [00:32:50] Speaker 03: I believe next we have on behalf of the interveners, Ms. [00:32:53] Speaker 03: Hoff. [00:32:56] Speaker 05: Good morning. [00:32:56] Speaker 05: May it please the court [00:32:58] Speaker 05: My name is Amy Hoffa. [00:32:59] Speaker 05: I'm appearing this morning on behalf of the interveners in support of FERC. [00:33:05] Speaker 05: Your Honors, I believe that the fundamental problem with the petitioner's argument is relatively simple. [00:33:12] Speaker 05: What the petitioners advocate is a complete departure from Supreme Court and commission precedent. [00:33:18] Speaker 05: In order to adopt the jurisdictional test that the petitioners advocate, [00:33:24] Speaker 05: FERC would have had to reject the Supreme Court's decision in Atlantic and the FERC's own decision in Northville Dock as wrongly decided. [00:33:32] Speaker 05: Why? [00:33:34] Speaker 05: Because the test that the petitioners advocate would require FERC to focus, as Mr. Field indicated, solely on the undisputed facts that Jeff Field starts at locations outside of Florida and ends up at locations within the state of Florida at the Inland Airport [00:33:52] Speaker 05: And that the airlines want and need this to happen in order to operate their aircraft. [00:33:58] Speaker 05: In other words, according to the petitioners, these facts alone are sufficient to require finding that transportation on central Florida is an intrastate, I'm sorry, is an interstate commerce. [00:34:10] Speaker 05: But Your Honor, this is not the test. [00:34:14] Speaker 05: Mr. Field spoke earlier of whether or not there's a fixed and persisting intent to move through storage to the ultimate destination, but that's not entirely accurate. [00:34:25] Speaker 05: The test is whether there is a fixed and persisting intent to make a single continuous movement in interstate commerce. [00:34:33] Speaker 05: Not whether there's an intent to ultimately get to the destination, but again, whether you do that in a single continuous movement. [00:34:42] Speaker 06: It's rather confusing, isn't it, counsel, to use the word intent. [00:34:48] Speaker 06: The real question is whether there's a continuous movement or not. [00:34:53] Speaker 05: Yes, Your Honor, there is. [00:34:55] Speaker 05: These are objective factors. [00:34:59] Speaker 05: Yes, Your Honor. [00:35:00] Speaker 05: That is, right, if you look back at all of the Supreme Court precedent, Atlantic, right, all of the earlier cases as well, and then go on to the commission's decision in Northville Dock, right, and interstate energy, [00:35:12] Speaker 05: All of those cases look, right, they do evaluate whether or not the shipper has a fixed and persisting intent to make the single continuous movement in interstate commerce. [00:35:21] Speaker 05: But in making that determination, the court always looks at the objective factors, right, all of the details and all of the facts surrounding transportation, which the court and the commission have referred to as the indicia or the manifestations of intent. [00:35:38] Speaker 05: So again, the court and the commission, they don't just look at where the product starts and where it ends up and did the shipper intend for it to get there, but they look specifically at how it got there and what happened at any intermediate port or point of storage. [00:35:52] Speaker 05: And then they look at, again, whether that was a single continuous movement or whether, for example, there was a break. [00:35:59] Speaker 05: Your Honor, I see that I'm out of time. [00:36:00] Speaker 06: Did you notice that you filed the only brief [00:36:06] Speaker 06: with the use of acronyms created for this case that are not commonly used contrary to our wishes? [00:36:17] Speaker 05: No, Your Honor, I was not aware that that was contrary to your wishes, and we do apologize for that. [00:36:22] Speaker 06: In our rules. [00:36:25] Speaker 05: Thank you, Your Honor. [00:36:26] Speaker 05: I will say that this was a case in which there was a heavy use of acronyms from beginning to end, and so we apologize and simply intended to add clarity. [00:36:36] Speaker 06: It doesn't add clarity for people who are not specialists in the industry. [00:36:42] Speaker 06: And administrative law cases are important for all administrative lawyers. [00:36:46] Speaker 06: So in any event, we hate acronyms that are made up for cases other than acronyms like FERC. [00:36:55] Speaker 05: Thank you, Your Honor. [00:36:57] Speaker 05: I see that I'm out of time. [00:36:59] Speaker 05: Are there other additional questions? [00:37:01] Speaker 03: Judge Rao? [00:37:03] Speaker 03: Judge Silberman? [00:37:04] Speaker 05: No, sir. [00:37:05] Speaker 03: All right, thank you, Ms. [00:37:06] Speaker 03: Hoff. [00:37:07] Speaker 05: Thank you, Your Honor. [00:37:07] Speaker 03: Ms. [00:37:07] Speaker 03: Field, I know you were out of time, but we will give you two minutes for rebuttal. [00:37:14] Speaker 04: Thank you, Your Honor. [00:37:16] Speaker 04: I'd like to first start off with addressing the question of whether a temporary pause in transportation can dictate the jurisdiction. [00:37:23] Speaker 04: FERC did self-recognize in the Texaco case that storage by itself is not an issue of an intrastate movement. [00:37:31] Speaker 04: The Settle case from the Supreme Court says that the pause in transportation does not break the continuity of transportation where there's a persisting intention of the shipper which was carried out. [00:37:43] Speaker 04: That's at page 74 of that case. [00:37:46] Speaker 04: The ICC and the Railroad Commission of Texas, or the Oil and Field Haulers Association, says that if the halt in movement is a convenient intermediate step in the process of getting the goods to the final destination, they remain in commerce until the final destination is reached. [00:38:01] Speaker 04: Similarly, in the iron and steel articles case, which we brought up on our brief on the exceptions, but never addressed in its order, while there must be continuity of movement before the transportation as part of foreign commerce, such continuity is not interrupted by a temporary pause in the carriage of goods. [00:38:18] Speaker 04: The fact that this product stops in Tampa is not decisive in this case. [00:38:22] Speaker 04: The question is whether the product was ordered for the purpose of moving through Tampa to Orlando. [00:38:28] Speaker 04: And the undisputed evidence of this record clearly indicates that it was. [00:38:33] Speaker 06: Excuse me, counsel. [00:38:34] Speaker 06: May I ask a question? [00:38:35] Speaker 06: What is the amount of deference we owe to FERC's determination in this case? [00:38:44] Speaker 04: In this case, you do not owe deference to FERC, because FERC has made a legal error, not just an error of the facts. [00:38:53] Speaker 04: We are not contesting, for the most part, the fact that they found on the record. [00:38:57] Speaker 04: But the agency's decision is not based on its exercise of judgment, but on an erroneous view of the law. [00:39:06] Speaker 04: No deference is owed to the agency. [00:39:09] Speaker 06: And what's the erroneous view of the law? [00:39:11] Speaker 06: Oh, actually, we do give deference to [00:39:14] Speaker 06: agencies' determination of legal questions as well as factual questions. [00:39:19] Speaker 06: You're aware of that, aren't you? [00:39:22] Speaker 06: If it's a legal determination, we review it under whether it's arbitrary and capricious. [00:39:31] Speaker 06: And if it's a statutory interpretation, we give deference to that too. [00:39:37] Speaker 06: But it's really not a statutory interpretation question. [00:39:40] Speaker 06: It's an application of the jurisdictional issue. [00:39:44] Speaker 06: wouldn't we give deference to that? [00:39:47] Speaker 06: What legal error in your judgment we should not give deference to? [00:39:56] Speaker 04: Legal error that you should not give deference to is the decision to exclude evidence of affirmative shipper intent. [00:40:05] Speaker 04: that did not fit neatly within to the Northville criteria and that was based on the recurring pattern of shipments rather than a single shipment at one point in time. [00:40:18] Speaker 04: The recent Gutman case makes clear that where there's evidence of intention that a shipment will move forward, the application of the Northville criteria is not necessary. [00:40:31] Speaker 04: FERC has not specifically applied the Northville criteria in a number of cases. [00:40:35] Speaker 04: We discussed those at pages 48 through 51 of our brief. [00:40:41] Speaker 04: And the question is always, what is the intent behind the movement overall? [00:40:47] Speaker 04: Here we have the product being ordered specifically to go to an inland destination. [00:40:52] Speaker 04: And when that's the case, that's enough to justify a finding of jurisdiction. [00:41:00] Speaker 04: And it was inappropriate legally for FERC to reject evidence, such as the request for proposals that the airlines put out that specifically identify [00:41:11] Speaker 04: that they are soliciting product to move to the airports. [00:41:15] Speaker 04: It was inappropriate for FERC not to countenance evidence of the Brooklyn Deficiency Agreement that the airlines have set up that requires them to move product through Tampa to the terminal. [00:41:28] Speaker 04: And it was inappropriate to exclude the evidence of the [00:41:34] Speaker 04: the model that the airlines expert put on, which FERC specifically excluded because it did not go to the Northfield criteria, not because it thought that the model was wrong. [00:41:47] Speaker 04: So those are legal errors that were FERC applied too narrow of an interpretation of the task at hand. [00:41:57] Speaker 04: And for those reasons, this court should vacate FERC's work. [00:42:03] Speaker 03: Thank you, counsel. [00:42:03] Speaker 03: Further questions, Judge Rao, Judge Silverman? [00:42:07] Speaker 06: No. [00:42:09] Speaker 06: All right. [00:42:09] Speaker 03: Thank you. [00:42:12] Speaker 03: We will take the case under advisement.