UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


PANHANDLE EA PIPE

v.

FERC


98-1409a

D.C. Cir. 1999


*	*	*


Edwards, Chief Judge: Petitioner, Panhandle Eastern Pipe  Line Co.
("Panhandle"), implores this court to vacate two  opinions of the
Federal Energy Regulatory Commission  ("FERC" or the "Commission")
that have been rendered  moot by a settlement entered into between
Panhandle and a  group of its customers. Panhandle argues that,
because  FERC concedes that the two opinions do not reflect final 
orders and because the settlement ensures that the chal- lenged
opinions will never become final, this court should  remand the
opinions to FERC with instructions to vacate  them.


FERC responds that, because Panhandle is not an "ag- grieved" party, as
required by Section 19(b) of the Natural  Gas Act ("NGA"), see 15
U.S.C. s 717r(b) (1994), the court  has no jurisiction over the
instant case. In other words,  FERC claims that the now moot opinions
are nothing more  than general statements of policy that give rise to
no justicia- ble claims. Alternatively, FERC contends that, under U.S.
 Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S.  18 (1994),
absent extraordinary circumstances, a federal court  will not vacate a
judgment that has been rendered moot by  voluntary settlement. FERC is
right on the first count;  accordingly, we deny Panhandle's petition
for review.


We reject FERC's alternative argument resting on U.S.  Bancorp. This
case differs from U.S. Bancorp, because the  disputed issues here were
rendered moot while the case was  still before the agency and before
any jurisdiction was found 


in federal court. U.S. Bancorp and other such cases apply  only to
determine the jurisdiction of Article III courts, not  administrative
agencies, and to instruct when an opinion must  be vacated after a
federal court loses its jurisdiction. For  example, in American Family
Life Assurance Co. v. FCC,  129 F.3d 625 (D.C. Cir. 1997), we held
that "federal courts  should vacate agency orders they decline to
review on  grounds of mootness." Id. at 630. Here, however, no federal
 court has had jurisdiction over the instant case, because the  agency
never issued a final, appealable order. In short, there  are no
"unreviewed administrative orders" extant. Id.  Therefore, U.S.
Bancorp and American Family Life have no  sway in the resolution of


I. Background


In September 1991, Panhandle initiated a rate proceeding  under Section
4 of the NGA. FERC accepted and suspended  the filing, and set the
proposed rates for hearing. In August  1994, an Administrative Law
Judge issued an initial decision  relating to numerous issues
concerning Panhandle's proposed  rates. Unhappy with many of the
judge's conclusions, "[v]ari- ous parties filed exceptions to most of
the [Administrative  Law Judge's] rulings." Panhandle Eastern Pipe
Line Co., 83  F.E.R.C. p 61,353, at 62,419 (1998). On May 25, 1995,
the  Commission addressed these exceptions in Panhandle East- ern Pipe
Line, 71 F.E.R.C. p 61,228, at 61,819 (1995) ("Opin- ion No. 395"),
the first of the two challenged opinions. Pan- handle and several of
its customers were dissatisfied, and  they requested rehearing.


In May 1992, while the fate of its first filing was still  pending,
Panhandle initiated a second Section 4 rate filing.  Just as it had
with the first filing, the Commission accepted  and suspended the
filing, and set the proposed rates for  hearing. In December 1994, the
Administrative Law Judge  in this second case issued an initial
decision, which, like its  predecessor, met with exceptions. On
February 5, 1996,  FERC issued Panhandle Eastern Pipe Line Co., 74
F.E.R.C.  p 61,109, at 61,351 (1996) ("Opinion No. 404"), the second
of  the challenged opinions. A petition for rehearing followed.


The Commission never had the opportunity, however, to  address either
of the pending requests for rehearing. In 


September 1996, while both requests were still pending, and  before any
final orders were issued by the agency, Panhandle  and a group of its
customers filed a settlement aimed at  resolving both of the previous
rate cases and related proceed- ings. On December 20, 1996, the
Commission approved the  settlement "as a fair and equitable
resolution." Panhandle  Eastern Pipe Line Co., 83 F.E.R.C. p 61,353,
at 62,419. On  December 2, 1997, Panhandle filed a motion to vacate
the  challenged opinions. On April 1, 1998, the Commission de- nied
Panhandle's motion to vacate, holding that, because  vacatur is an
equitable remedy, it is unjustified when the  party seeking vacatur
has settled the underlying case and  thus rendered it moot. See
Panhandle Eastern Pipe Line  Co., 83 F.E.R.C. p 61,008, at 61,029-31
(1998) (citing U.S.  Bancorp, 513 U.S. at 18). The Commission also
noted that it  had invested significant resources in conducting
hearings and  that the challenged opinions offered useful discussions
of  recurring issues. See id. at 61,030. On May 1, 1998, Panhan- dle
sought rehearing on FERC's refusal to vacate the opin- ions. On June
30, 1998, FERC denied Panhandle's request.  See Panhandle, 83 F.E.R.C.
p 61,353, at 62,418. This petition  for review followed.


II. Analysis


Section 19(b) of the NGA requires a party seeking judicial  review to
be "aggrieved." See 15 U.S.C. s 717r(b); see also  El Paso Natural Gas
Co. v. FERC, 50 F.3d 23, 26 (D.C. Cir.  1995) ("[O]nly a party that is
'aggrieved' by an order issued  under the Act may obtain judicial
review thereof."). Because  such a party must also satisfy the
requirements of constitu- tional standing, a petitioner must establish
"at a minimum,  'injury in fact' to a protected interest." El Paso, 50
F.3d at  26 (quoting Shell Oil Co. v. FERC, 47 F.3d 1186, 1200 (D.C. 
Cir. 1995)). A party establishes an injury-in-fact under Arti- cle III
by alleging "an invasion of legally protected interests  that is both
(a) concrete and particularized and (b) actual or  imminent, not
conjectural or hypothetical." Id. In addition,  "[j]udicial review is
limited to 'orders of definitive impact,  where judicial abstention
would result in irreparable injury to  a party.' " CNG Transmission
Corp. v. FERC, 40 F.3d 1289, 


1292 (D.C. Cir. 1994) (quoting Papago Tribal Util. Auth. v.  FERC, 628
F.2d 235, 238 (D.C. Cir. 1980)).


Panhandle's problem in this case is twofold: It is not an  aggrieved
party under the NGA, and it lacks standing to  appear in federal
court. There is no aggrievement in this  case, because FERC never
issued final judgments disposing  of Panhandle's rate filings. Both
filings were pending re- hearing when Panhandle voluntarily entered
into a settlement  that rendered moot the claims before FERC. Thus,
there  was no "order issued by the Commission" from which Pan- handle
could obtain judicial review under 15 U.S.C. s 717r(b).


Panhandle resists this conclusion by arguing that it was  "injured"
enough to satisfy both section 19(b) and Article III  standing
requirements when FERC refused to vacate the  contested opinions that
were pending rehearing. FERC, in  turn, contends that the disputed
opinions are nothing more  than "policy statements," binding on no
party and having no  precedential effect. On this view, FERC asserts
that the  mere existence of the disputed opinions causes Panhandle no 
harm. FERC surely has the better argument.


In Pacific Gas & Electric Co. v. Federal Power Commis- sion, 506 F.2d
33 (D.C. Cir. 1974), this court delineated the  distinction between a
substantive rule and a policy statement.  The court noted that 5
U.S.C. s 553(b)(A) allows an agency to  issue a general statement of
policy, which differs from a  substantive rule in that a policy
statement is "neither a rule  nor a precedent but is merely an
announcement to the public  of the policy which the agency hopes to
implement in future  rulemakings or adjudications." Id. at 38. In this
sense, a  policy statement is "like a press release" in that it
"presages  an upcoming rulemaking or announces the course which the 
agency intends to follow in future adjudications." Id.; see  also
American Hosp. Ass'n v. Bowen, 834 F.2d 1037, 1046-47  (D.C. Cir.
1987) (analyzing the nature of policy statements).


This advance-notice function of policy statements yields  significant
informational benefits, because policy statements  give the public a
chance to contemplate an agency's views  before those views are
applied to particular factual circum-


stances. This opportunity to anticipate the agency's actions 
"facilitates long range planning within the regulated industry  and
promotes uniformity in areas of national concern." Pa- cific Gas, 506
F.2d at 38. This period of foreshadowing is  made even more useful by
the fact that, unlike substantive  rules,


[a] general statement of policy ... does not establish a  'binding
norm.' It is not finally determinative of the  issues or rights to
which it is addressed. The agency  cannot apply or rely upon a general
statement of policy  as law because a general statement of policy only
an- nounces what the agency seeks to establish as policy. A  policy
statement announces the agency's tentative inten- tions for the
future. When the agency applies the policy  in a particular situation,
it must be prepared to support  the policy just as if the policy
statement had never been  issued. An agency cannot escape its
responsibility to  present evidence and reasoning supporting its
substan- tive rules by announcing binding precedent in the form of  a


Id. at 38-39 (footnotes omitted). In other words, a policy  statement
has neither the force of a substantive rule adopted  pursuant to
rulemaking nor the binding effect of an order  following an


The Commission has confused matters somewhat in this  case by noting
the "ongoing precedential value" of the chal- lenged opinions, Br. for
Respondent FERC at 16, as if to  suggest that the opinions serve as
binding precedent. See  also Panhandle Eastern Pipe Line Co., 83
F.E.R.C. p 61,353,  at 62,420 (noting that the parts of the challenged
opinions  that "contain discussions of issues that appear before the 
Commission time and time again ... can and do serve as  precedent").
More telling, however, is FERC's failure to  issue final judgments on
the merits of Panhandle's claims and  the agency's acceptance of the
settlement to moot the pend- ing claims. In its brief to this court,
FERC conceded that  the challenged opinions serve only as policy
statements that  have no binding effect. See Br. for Respondent at 17
("[T]he  only colorable effect, if any, of Opinion Nos. 395 and 404 is


that they leave in public view statements of Commission  policy which
would not be judicially reviewable until the  Commission has applied
it in a concrete situation."). And,  during oral argument, Government
counsel acknowledged  unhesitatingly that the disputed opinions have
no precedential  value. In short, for the most part, the Commission
has been  unwavering in explaining that the challenged opinions are 
"the functional equivalent of a Commission policy statement."  Id. at
27; see also Panhandle Eastern Pipe Line Co., 83  F.E.R.C. p 61,008,
at 61,031 ("In future cases, Panhandle or  any other person may seek
an outcome contrary to Opinion  Nos. 395 and 404, either based on
arguments similar to those  contained in the requests for rehearing of
Opinion Nos. 395  and 404 or for other reasons, and the Commission
will  consider those contentions.").


In light of the record at hand, it is clear that Panhandle can  cite no
injury-in-fact in support of standing. Panhandle's  rates for the
relevant time periods were set by the settlement  agreement, so they
were unaffected by the challenged opin- ions. And there is no
recognizable residual harm that can  result from FERC's continued
publication of the opinions as  policy statements. FERC concedes that
the challenged opin- ions now serve only as policy statements that
have no binding  effect on Panhandle. Thus, because Panhandle can
point to  no harm that can be redressed by this court, it fails to
satisfy  the requirements of section 19(b) of the NGA and Article III 


III. Conclusion


The challenged opinions are non-binding policy statements.  As a
result, Panhandle is not aggrieved and has not suffered  an
injury-in-fact. We therefore deny Panhandle's petition for  review.