392

Opinion of the Court.

clauses of § 1 (b) gives content to the national objectives of the Natural Gas Act as expounded in Phillips, and to the Commission's jurisdiction to accomplish them, while in no way interfering with state regulatory power over the physical processes of production or gathering in furtherance of conservation or other legitimate state concerns.

Respondents argue that the Court's decision in FPC v. Panhandle Eastern Pipe Line Co., supra, precludes th:3 result. In Panhandle an interstate pipeline company transferred undeveloped leases to a production company. The Government asserted that Commission jurisdiction should attach because the gas reserves covered by the leases had been included in the interstate company's rate base computation and because the lessening of its natural gas reserves might affect the pipeline company's ability to perform adequately the obligations for which it had been certificated. This Court disagreed, holding that the disposition of undeveloped leases was encompassed by the production or gathering exemption.

Two distinctions between Panhandle ard the present case are apparent. First, the Panhandle leases were undeveloped. The Rayne Field leaseholds were substantially developed. Natural gas would and did begin to flow into the Texas Eastern system immediately upon completion of its connection with the field. The substantiality of development is a relevant consideration, for the more that must be done before the gas begins its interstate journey, the less the transaction resembles the conventional wellhead sale of natural gas in interstate commerce which, as Phillips held, the Act has affirmatively placed within Commission jurisdiction. Second, Panhandle did not involve a sale of natural gas for resale in interstate commerce, but a transfer by an interstate transmission company to a production company for sale of the gas in

8 See n. 3, supra.

Opinion of the Court.

381 U.S. intrastate commerce. Hence, the Panhandle court did not have before it the present problem-whether the transfer to an interstate pipeline company for transmission and resale in interstate commerce of proven and substantially developed gas reserves is subject to Commission jurisdiction. This was largely the problem which the Court later faced in Phillips and resolved in favor of jurisdiction.

The language of Panhandle is unquestionably broad. But flat statements such as "[o]f course leases are an essential part of production," 337 U. S., at 505, should not be taken to cover more than the particular kind of leases that were before the Court; it should not be considered as embracing each and every transfer that can be put in lease form. Concepts of stare decisis in statutory interpretation apply to the holdings with which the case-by-case method of decision surrounds a statute. To recognize no differences between the Panhandle transfers and those in issue here, and in the name of stare decisis to hold that Commission jurisdiction depends on the form rather than the substance of the transaction, would turn the case-bycase process against itself.

III.

Because we differ with the court below on the jurisdictional issue, it is necessary for us to reach the question which the Fifth Circuit did not decide-whether the mandate of the Court of Appeals for the District of Columbia Circuit or the prior ruling of the Commission established the law of the case.

The original Commission order granting Texas Eastern a certificate to construct its connecting facilities proceeded on the basis that the Commission lacked authority to certificate the leasehold transfers. That question was not put in issue before the Court of Appeals for the District of Columbia Circuit. The opinion assumed its correct

392

Opinion of the Court.

ness with the single statement, citing Panhandle, that "the Commission has been held to lack jurisdiction over gas leases," 109 U. S. App. D. C., at 291, 287 F. 2d, at 145, and concluded that "[t]he relevance of Texas Eastern's acquisition costs to these matters is unaffected by the form of the transaction; the Commission's warrant to inquire arises by virtue of its responsibility to regulate the purchaser, regardless of the status of the seller." Id., at 292, 287 F. 2d, at 146. On remand, the Commission stated that in its previous decision it had "merely noted without discussion that we had no authority to issue a certificate for the acquisition of the leases. . . It is apparent the issue was hardly considered in the earlier phase of this proceeding." 29 F. P. C. 249, 253. In exercising the warrant to inquire, the Commission became aware of the difficulties of inquiring into the reasonableness of the acquisition prices without having jurisdiction over the transfers, and as a result, reconsidered the jurisdictional question.

We do not think that either the prior Commission decision or the initial opinion on review foreclosed that possibility. It is extremely doubtful that certiorari would have been appropriate from the decision which the Court of Appeals for the District of Columbia Circuit allegedly made on the jurisdictional question, with the result that review by this Court would be precluded on this basic question of Commission jurisdiction. Furthermore, in light of the fact that this case followed two different routes of appeal, thus eliminating the possibility that the initial reviewing court would clarify the extent of its mandate, compare Colgate-Palmolive Co. v. FTC, 326 F. 2d 517, it is appropriate to resolve doubts about the construction of the initial mandate in the Commission's favor.

See n. 6, supra.

DOUGLAS, J., dissenting.

381 U.S.

We believe that the Commission's decision to reconsider the jurisdictional issue was consistent with a decision to inquire into the acquisition costs. "On review the court may thus correct errors of law and on remand the Commission is bound to act upon the correction. But an administrative determination in which is imbedded a legal question open to judicial review does not impliedly foreclose the administrative agency, after its error has been corrected, from enforcing the legislative policy committed to its charge." Federal Communications Comm'n v. Pottsville Broadcasting Co., 309 U. S. 134, 145. Reversed.

MR. JUSTICE DOUGLAS, dissenting.

While I dissented in Federal Power Comm'n v. Panhandle Eastern Pipe Line Co., 337 U. S. 498, it is not conceivable to me that the majority that made up the Court in that case would adhere to what is done today. That would be irrelevant if we dealt with a constitutional matter, as issues of that magnitude are always open for reexamination. But since we deal with the vagaries of a statute with no constitutional overtones, I think the matter should be left where Panhandle Eastern Pipe Line left it, saving for the Congress, of course, the power to expand the regime of the federal bureaucracy if it desires. It is sometimes customary for a court to distinguish precedents to the vanishing point, creating an illusion of certainty in the law while leaving only a shadow of an ancient landmark. That is within the judicial competence and has been done before. But where the issue has been so hotly contested as it was in Panhandle Eastern Pipe Line and when the Court has been so explicit in bringing traffic in gas leases under the "production or gathering of natural gas" which Congress left to the States, I would adhere to that result until Congress changes it.

Syllabus.

SCOTT, TREASURER OF ILLINOIS, ET al. v. GERMANO ET AL.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS.

No. 1152. Decided June 1, 1965.

After invalidating senatorial apportionment provisions in the Illinois Constitution and statutes, a Federal District Court ordered that any corrective provisions be submitted to it before any election thereunder, failing which it would issue a show-cause order as to why State Senators should not be elected at large in 1966 and thereafter. Previously a case had been filed in state court attacking the composition of the legislature which, after the federal court order, the State Supreme Court decided on appeal, holding the State Senate composition invalid. The court expressed confidence that the legislature at its current session would take corrective action and retained jurisdiction to insure that the 1966 election was pursuant to a valid plan. Thereafter appellant here unsuccessfully moved the District Court to vacate its order and stay proceedings in light of the State Supreme Court opinion. Held: Appropriate state action to correct malapportionment is to be encouraged. The District Court order is vacated and the case remanded for the fixing of a reasonable time for valid senatorial redistricting by an agency of the State, including its Supreme Court, before the 1966 election, with retention of jurisdiction by the District Court for appropriate action, including an order for a valid reapportionment plan, failing timely state action.

241 F. Supp. 715, vacated and remanded.

Don H. Reuben, Howard J. Trienens and D. Lawrence Gunnels for appellants.

Bernard Kleiman and Lester Asher for Germano et al., and William G. Clark, Attorney General of Illinois, and Richard A. Michael, Assistant Attorney General, for Kerner et al., appellees.