FERC v. Martin Exploration Management Co.

486 U. S. 204

May 31, 1988

A 1978 law provided a timetable by which different types of natural gas would transition from having a price ceiling to having no price ceiling (i.e. being deregulated). If there was any ambiguity about where certain gas fell on the timetable, it would be treated in the way “which could result in the highest price.” As it turned out, deregulated gas ended up selling for considerably less than regulated gas in the market. Thus, many gas providers contended that the regulated price ceiling classification was the one “which could result in the highest price.”

The Supreme Court unanimously disagreed (White did not participate). Brennan said it was a simple textual case. The gas that theoretically could have the highest price of all was the deregulated gas, and not the gas with price ceilings. That market conditions currently deemed deregulated gas less expensive did not matter. Congress did not intend, Brennan showed, for market conditions to be inquired into in the course of classifying gas. Gas producers also argued that a regulatory agency had abused its authority in putting forth certain rules defining how gas would be classified. To the contrary, said Brennan, the agency had perfect statutory authority to do so, even if they had no affirmatively imposed obligation to do so. All in all, a good textualist ruling.

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