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07/24/75 Association of v. United States Securities

July 24, 1975

ASSOCIATION OF MASSACHUSETTS CONSUMERS, INCORPORATED, PETITIONER

v.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION, RESPONDENT, NEW ENGLAND ELECTRIC SYSTEM BAY STATE GAS COMPANY, INTERVENORS 1975.CDC.152



Richard T. Rives,* Senior Circuit Judge for the Fifth Circuit, and McGowan and Wilkey, Circuit Judges.

UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

Date Decided: July 24, 1975; As Amended August 14, 1975.

Petition for Review of Order of Securities and Exchange Commission.

APPELLATE PANEL:

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE RIVES

Without a hearing, the Securities and Exchange Commission (Hereafter referred to as "Commission") approved the final step in compliance with its order requiring the New England Electric System -- a statutory holding company under the Public Utility Holding Company Act of 1935 (15 U.S.C. § 79) (hereinafter the Act) -- to divest itself of all ownership in gas utility companies. The Association of Massachusetts Consumers, Inc. , an intervenor in the proceedings before the Commission, challenges the actions of the Commission. We find that the Commission did not abuse its discretion and affirm its disposition of this case.

The controversy culminating in the present proceeding began over 18 years ago. In 1957, NEES held stock in a number of electric and gas utility companies serving New England. In that year, the Commission began proceedings, under section 11 of the Act (15 U.S.C. § 79k), against NEES. The following year the Commission declared NEES' electric utility holdings to be an integrated system. (See § 2 of the Act, 15 U.S.C. § 79b). Six years later, the Commission ordered NEES to divest itself of the gas utility stock. *fn1 In 1968, after protracted litigation, the Supreme Court and the First Circuit affirmed the order. *fn2 In December, 1971, with approval of the Commission, NEES sold its stock in four of the gas utilities. *fn3 The following year NEES sought Commission approval of a plan to sell to the Boston Gas Company, an operating subsidiary of the Eastern Gas System, the assets of three utilities (plus another company related to those utilities), whose corporate shells would thereafter be dissolved. In a separate application, NEES also proposed to sell to Springfield Gas Light Company its Lawrence Gas Company stock. *fn4 The plan required minority shareholders, whose holdings totaled 10% of the stock, to sell their stock to Springfield at the same price received by NEES. Springfield would then merge into its subsidiary, the Northampton Gas Light Company. The surviving company would change its name to Bay State Gas Company, and would hold all of the Lawrence stock.

Two petitions to intervene in the proceedings were filed by AMC -- (1) in the Eastern proceedings to ratify the sale of the assets of the three utilities to Boston Gas, and (2) in the Bay State proceedings to ratify the sale of the Lawrence stock to Bay State. AMC moved that the Commission consolidate the proceedings and conduct a hearing. The Commission did not act upon AMC's motion, but it did allow AMC limited participation in the Eastern proceedings. Following the hearings in those proceedings, a settlement among the parties was reached, and the Commission approved the sale to Boston Gas. At about the same time, the Massachusetts Public Utility Commission held a public hearing on the proposed sale of the Lawrence stock to Springfield and the merger of Springfield into Northampton to form Bay State. The record of those hearings reveals no participation by AMC. The Massachusetts Commission approved the plan. On October 31, 1973, the Commission issued a memorandum opinion approving the sale of the Lawrence stock to Springfield and denying AMC's motion. The Commission denied AMC's request for reconsideration. AMC appeals to this Court, pursuant to 24(a) of the Act (15 U.S.C. § 79x(a)).

The question before this Court is whether the Commission abused its discretion in refusing to consolidate these proceedings with the Eastern proceedings and in denying a hearing on the original motion or on the motion for reconsideration.

The law is clear concerning judicial review of an administrative body's refusal to consolidate two proceedings.

"No principle of administrative law is more firmly established than that of agency control of its own calendar. Practical problems of calendar administration confront an agency whenever related applications are pending at the same time. Consolidation . . . and similar questions are housekeeping details addressed to the discretion of the agency and, due process or statutory considerations aside, are no concern of the courts."

City of San Antonio v. C.A.B., 126 U.S.App.D.C. 112, 374 F.2d 326, 329 (1967) (footnotes omitted). Consolidation would have needlessly delayed resolution of the Eastern proceedings. The failure to consolidate prejudiced none of AMC's rights in either proceeding. The Commission's refusal to consolidate the proceedings was a sound exercise of necessary discretion.

On appeal, AMC submits that, contrary to the Commission's determination, three ...


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