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

United Gas Pipe Line Co. (United) (defendant) was a fuel supplier to New Orleans Public Service, Inc. (NOPSI) (plaintiff), a public utility for the City of New Orleans. After a long-term contract between United and NOPSI expired, the parties entered into an interim agreement that gave United a unilateral right to change the price of fuel on an annual basis. NOPSI could reject a price change only by rejecting the fuel. In 1981, United notified NOPSI that it intended to increase the price of fuel by a considerable amount. NOPSI executed a letter agreement acceding to the new rate with a proviso that it was reserving its rights in the matter. NOPSI then sued United in a federal district court, alleging that it had been compelled to sign the agreement under duress and that United’s redetermination of fuel prices was invalid under Louisiana law. The Mayor of New Orleans, the City of New Orleans, and certain other individuals and entities, on behalf of themselves and as representatives of all of NOPSI’s customers, sought to intervene in the lawsuit. In their petition to intervene, they adopted the allegations of NOPSI and did not otherwise state any independent, substantive bases for relief. The district court denied intervention, both as a matter of right and as permitted in the court’s discretion. On appeal, a panel of the Fifth Circuit affirmed the district court’s decision as to intervention of right but held that the court abused its discretion by not allowing permissive intervention by city officials. The Fifth Circuit agreed to rehear the appeal en banc.