New Orleans Public Service, Inc., v. United Gas Pipe Line Company

732 F.2d 452 (1984)

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Nature of the Case

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Facts

P provides natural gas and electricity to residential, business, industrial and other end-use consumers. D, a Delaware corporation headquartered in Texas, owns and operates an interstate natural gas transmission system. P purchases gas from D. P and D had a long-term contract, but it expired. They entered into an interim agreement that gave D a unilateral right to change the price of fuel on an annual basis. D could, at any time or times after June 1, 1976, unilaterally 'institute a redetermined rate,' to remain in effect not less than one year, by giving P sixty days' notice of the specified new rate. If P did not within thirty days notify D that it agreed to that rate, then P would 'cease taking gas on the date such rejected redetermined rate was to be instituted.' On March 3, 1981 D sent notice of a considerable price increase. P executed an agreement acceding to the new rate but reserving its rights in the matter. P sued D in federal court. P claims it agreed to the redetermined rate 'under the duress' of d's 'threat' by its April 27, 1981 letter to charge 'fair market value' for the Power Plant Gas and D's subsequent oral statement 'that it would contend that a fair market value for Power Plant Gas on and after May 3, 1981, would be $6.00 to $8.00 per Mcf,' which would be more than double what P paid for gas in 1980. P also alleged the agreement was invalid under Louisiana law. P1 (The Mayor of New Orleans, the City of New Orleans, and certain other individuals and entities) under Rule 24(a), sought to intervene in the lawsuit. The petitions and amended petitions recites that P1 and P electricity customers, and are thus paying the most significant portion of the increased cost of power plant gas. The amended petition expressly adopts the allegations of P's complaint and does not allege any substantive claim or ground for relief. It seeks precisely the same relief as sought in P's complaint, with the sole exception of requesting that the refunds be paid 'to P and the [rate payer] Class jointly' [instead of just to P]. P1 claimed the right to intervene because the contract between P and D was a stipulation pour autrui, or third-party beneficiary contract, in their favor. Eventually, the court refused intervention as a right and on the court's discretion. P1 appealed. Eventually, the case was reheard in banc.