Federal Power Commission v. Texaco, Inc.
Supreme Court
377 U.S. 33 (1964)
The Federal Power Commission (defendant) adopted, through notice-and-comment rulemaking in which Texaco, Inc. (plaintiff) itself submitted comments, a regulation prohibiting certain price clauses in natural-gas producer-pipeline contracts. Texaco later applied for a certificate of public convenience and necessity containing price clauses the new regulation prohibited, and the FPC rejected the application without holding a hearing, even though the Natural Gas Act stated the FPC "shall set" each such application "for hearing." Texaco argued it was entitled to a hearing on its specific application, and the court of appeals agreed and remanded.
Whether an administrative agency may reject a certificate application without an individualized hearing when the application fails standards the agency already established through a notice-and-comment rulemaking.