text:
FPC v. LOUISIANA POWER & LIGHT CO.
[ Footnote * ] Together with No. 71-1040, United Gas Pipe Line Co. et al. v. Louisiana Power & Light Co. et al., on certiorari to the same court.
1. The FPC has power to regulate curtailment of direct interstate sales of natural gas under the head of its "transportation" jurisdiction in 1 (b), and the prohibition in the proviso clause of that provision withheld from FPC only rate-setting authority with respect to such sales. Pp. 631-647.
2. The FPC had primary jurisdiction to determine whether the Green System was subject to its authority, and the Court of Appeals [406 U.S. 621, 622] erred in deciding that question. See Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41 . Pp. 647-648.
BRENNAN, J., delivered the opinion of the Court, in which all members joined except STEWART, J., who took no part in the decision of the cases, and POWELL, J., who took no part in the consideration or decision of the cases.
Gordon Gooch argued the cause for petitioner in No. 71-1016. With him on the briefs were Solicitor General Griswold, Samuel Huntington, Leo E. Forquer, J. Richard Tiano, and George W. McHenry. William C. Harvin argued the cause for petitioners in No. 71-1040. With him on the briefs were William R. Choate, Perry O. Barber, Jr., Jeron Stevens, W. DeVier Pierson, and William B. Cassin.
Andrew P. Carter argued the cause for respondent Louisiana Power & Light Co. With him on the brief was Thomas W. Leigh.
Briefs of amici curiae urging reversal were filed by J. Lee Rankin, Stanley Buchsbaum, and Francis I. Howley for the City of New York; by Peter H. Schiff for the Public Service Commission for the State of New York; by J. Evans Attwell, Christopher T. Boland, Robert O. Koch, John J. Mullally, and William W. Brackett for the Pipeline Intervenors; by Howard E. Wahrenbrock and John M. Kuykendall, Jr., for Mobile Gas Service Corp. et al.; by Barbara M. Gunther for Brooklyn Union Gas Co.; and by Richard A. Rosan and Daniel L. Bell, Jr., for Columbia Gas Transmission Corp.
Briefs of amici curiae urging affirmance were filed by John J. McKeithen, Governor, Jack P. F. Gremillion, Attorney General, Fred G. Benton, Sr., and Arnold D. Berkeley for the State of Louisiana; by Pat Moran for the Arkansas Public Service Commission; by Martin N. [406 U.S. 621, 623] Erck, John R. Rebman, Kirby Ellis, Sherman S. Poland, and Daniel F. Collins for Humble Oil & Refining Co.; by Thomas G. Johnson for Shell Oil Co.; and by J. Donald Annett, Kirk W. Weinert, and John M. Young for Texaco Inc.
Briefs of amici curiae were filed by Albert G. Norman, Jr., John W. Hinchey, Assistant Attorney General of Georgia, John E. Holtzinger, Jr., and Allen E. Lockerman for Atlanta Gas Light Co. et al., and by John T. Miller, Jr., for Monsanto Co. et al.
In April 1971 the Federal Power Commission (FPC) promulgated its Order No. 431 requiring every jurisdictional pipeline to report to the FPC whether curtailment of its deliveries to customers would be necessary because of inadequate supply of natural gas. A pipeline anticipating the necessity for curtailment was required to file a revised tariff to control deliveries to all customers - industrial "direct sales" customers, purchasing gas for their own consumption, and "resale" customers, purchasing gas for distribution to ultimate consumers.
A subsidiary question presented is whether the doctrine of primary jurisdiction obliged the federal courts in this case to defer to the FPC for an initial determination of FPC jurisdiction to certificate a particular pipeline delivery when a certification proceeding to determine that question was pending before the Commission.
The Court of Appeals for the Fifth Circuit held that the proviso of 1 (b) prohibited application of FPC curtailment regulations to direct sales deliveries, and held, further, that neither that court nor the District Court was obliged to defer to the FPC's pending certification proceeding. 456 F.2d 326 (CA5 1972). We granted certiorari, 405 U.S. 973 (1972). We reverse.
Respondent Louisiana Power & Light Co. (LP&L) generates electricity at Sterlington-Electric Generating Station in Ouachita Parish, Louisiana, and at Nine-Mile Point Generating Station in Jefferson Parish, Louisiana. The natural gas burned under LP&L's boilers at both stations is purchased from United Gas Pipe Line Co. (United), a petitioner in No. 71-1040, under direct-sales contracts of long standing. The sales to Sterlington Station are sales of interstate gas, initially certificated by the FPC. Sales to Nine-Mile Point Station had been wholly intrastate gas delivered from United's intrastate "Green System" when, in 1970, United diverted 2.6% of the gas from its interstate "Black System" into the intrastate "Green System" after which United sought FPC certification of the "Green System." In 1970 also, United, from concern that its gas supply [406 U.S. 621, 625] during the 1970-1971 heating season would fall short of demand, sought a declaratory order from the FPC to approve a proposed program of curtailment of natural gas deliveries to both its direct and resale customers. This proceeding culminated in agreement among affected customers under which FPC allowed United to carry out its program for the 1970-1971 winter.
When, however, United made a supplemental filing in February 1971, for a proposed curtailment program for the 1971 summer season, LP&L, in March 1971, filed this diversity action in the District Court for the Western District of Louisiana, alleging that the program was a breach of its contracts with United and asking injunctive relief against its implementation. LP&L also asked for a judgment declaring that the "Green System" was an intrastate system, deliveries from which did not require FPC certification. The FPC and United sought dismissal of the action on the ground that a prior decision by the District Court would be destructive of the FPC's primary jurisdiction since the FPC was, in fact, asserting its jurisdiction over both issues at that time and was promulgating its Order No. 431, and United, in response to Order No. 431, was filing its third curtailment plan.
United is a "jurisdictional" pipeline 1 purchasing gas from producers in Texas and Louisiana and supplying wholesalers, direct-sales customers, and other pipelines. United supplies ultimate consumers throughout the eastern half of the United States from Texas to Massachusetts with a peak-day commitment in the winter heating months totaling about 6,000,000 thousand cubic feet (Mcf).
This plan was opposed by LP&L and others, primarily on the ground that the FPC had no jurisdiction to curtail deliveries under direct-sales contracts. While preserving their objections, all but one of United's customers 7 agreed to a modified plan to go into effect for the 1970-1971 winter season while the proceedings continued.
During this same season, many other pipelines reported serious shortages and applied to the FPC for assistance in effecting curtailment plans. In response, the FPC promulgated several emergency provisions for temporary measures to avoid major disruptions of power supplies. Orders Nos. 402, 35 Fed. Reg. 7511, and 402A. 35 Fed. Reg. 8927, authorized short-term purchases by pipelines facing shortages from other jurisdictional pipelines to ensure that storage fields were filled. Order No. 418, 35 Fed. Reg. 19173, authorized similar emergency purchases from producers without following usual procedures.
Also, in October 1970, based on the introduction of the interstate gas from its Black System, United sought certification under 7 (c) 9 for the continued operation of the portion of its pipeline facilities in Louisiana (the Green System) used to supply LP&L's Nine-Mile Point generating station. LP&L opposed the application, alleging that the pipeline was constructed and operated to be wholly intrastate, and that United's "illegal" introduction of a very small quantity of interstate gas did not cause the whole system to come under Commission jurisdiction.
On February 9, 1972, the Commission found in Op. No. 610 that the Green System was within its jurisdiction and thus required certification; it remanded the [406 U.S. 621, 630] proceedings to a trial examiner to determine if the certificate should be granted under the "public convenience and necessity" standard of 7.
The Court of Appeals' reversal of the District Court 10 on the curtailment, issue rested on its view that under the Natural Gas Act ". . . FPC has no form of continuing certificate jurisdiction over direct sales to customers of interstate pipeline companies. It has the initial right to issue or veto a certificate of public convenience and necessity and it must give its approval to the abandonment of the use of the certificated facilities, but between the two functions the express exemption [in the proviso of 1 (b)] of regulatory power over such consumptive sales bars agency intervention." 456 F.2d, at 338.
"when a dispute arises over whether a given transaction is within the scope of federal or state regulatory authority, we are not inclined to approach the problem negatively, thus raising the possibility that a `no man's land' will be created. Compare Guss v. Utah Labor Board, 353 U.S. 1 . That is to say, in a borderline case where congressional authority is not explicit we must ask whether state authority can practicably regulate a given area and, if we find that it cannot, then we are impelled to decide that federal authority governs." FPC v. Transcontinental Gas Pipe Line Corp., supra, at 19-20.
This litigation poses the question whether FPC has authority to effect orderly curtailment plans involving both direct sales and sales for resale. LP&L insists that [406 U.S. 621, 632] the FPC has no power to include direct sales in these plans. Transcontinental counsels inquiry into the necessary consequences of that contention in terms of the scope of federal and state regulatory authority in the premises.
Thirty-seven percent of United's total sales in 1970 were direct industrial sales. Under LP&L's argument, this volume would be wholly exempt from any curtailment plan approved by the FPC and thus United's resale customers would be forced to accept the entire burden of sharply reduced volumes while direct-sales customers received full contract service. The ultimate consumers thus affected include schools, hospitals, and homes completely dependent on a continued natural gas supply for heating and other domestic uses. These resale consumers could be curtailed by as much as 560,000 Mcf on cold days without dire consequences, but burdening them with the full curtailment volume would deprive them of up to 1,500,000 Mcf.
From a practical point of view, LP&L's position may thus produce a seriously inequitable system of gas distribution. Many direct industrial users of gas require only "interruptible services," which by the terms of their contracts are recognized to be of such minimal importance to the user that, upon the happening of certain events, the supply can be shut off on little or no notice. Nevertheless, the need for curtailment may not be sufficient to trigger these provisions of the contract and interruptible service customers may be able to demand full contract gas while resale consumers are being drastically curtailed. Many other direct industrial sales customers have alternative means available at little or no additional cost, yet under LP&L's contention will be able to demand their contract volumes while homes, hospitals, and schools suffer from lack of adequate service.
Can state authority practicably regulate in this area to prevent this inequity and hardship? Insofar as state [406 U.S. 621, 633] plans purport to curtail deliveries of interstate gas, Pennsylvania v. West Virginia, 262 U.S. 553 (1923), is authority that such plans, when they operate to withdraw a large volume of gas from an established interstate current whereby it is supplied to customers in other States, would constitute a prohibited interference with interstate commerce. But even to the extent the States may constitutionally promulgate curtailment plans, the inevitable result would be varied regulatory programs of state courts and agencies, interpreting a countless number of different contracts and applying a variety of state agency rules. The conflicting results would necessarily produce allocations determined simply by the ability of each customer to pump its desired volume from a pipeline. Moreover, in some States, Louisiana for example, the state regulatory agency is forbidden to regulate direct-sales contracts. 11 Besides, a state agency empowered to regulate these contracts would be obliged to regulate in the State, not the national interest. 12 Cf. Pennsylvania v. West Virginia, supra. The unavoidable conflict between producing [406 U.S. 621, 634] States and consuming States will create contradictory regulations that cannot possibly be equitably resolved by the courts. With these problems in mind, the desirability [406 U.S. 621, 635] of uniform federal regulation is abundantly clear. Nevertheless, as the Court of Appeals emphasized, 456 F.2d, at 335, a need for federal regulation [406 U.S. 621, 636] does not establish FPC jurisdiction that Congress has not granted. We turn then to analysis of the statute to determine whether Congress withheld, as LP&L argues, authority from the FPC to apply its curtailment regulations to direct sales.
LP&L argues that the proviso in 1 (b) creates a complete exemption of direct sales from curtailment regulations. 14 The answer is that the prohibition of [406 U.S. 621, 638] the proviso of 1 (b) withheld from FPC only rate-setting authority with respect to direct sales. Curtailment regulations are not rate-setting regulations but regulations of the "transportation" of natural gas and thus within FPC jurisdiction under the opening sentence of 1 (b) that "[t]he provisions of this Act shall apply to the transportation of natural gas in interstate commerce . . . ." The Court of Appeals rejected that construction on the ground that under it the "transportation" jurisdiction would swallow up the proviso's exemption for direct sales. We disagree.
The major impetus for the congressional grant of sales jurisdiction to the FPC was furnished by a Federal Trade Commission study of the pipeline industry in 1935-1936. 15 The study showed that increasing concentration in the industry was producing vast economic power for the pipelines and a serious threat of unreasonably high prices for consumers. This threat was most acute in the case of sales for resale because wholesale distributors and their customers had little economic clout with which to obtain equitable prices from the pipelines. State power to regulate rates charged for interstate service to a customer in another State for resale was also thought, within this Court's decisions, constitutionally to be outside the regulatory power of the [406 U.S. 621, 639] States. Public Utilities Comm'n v. Attleboro Steam & Elec. Co., 273 U.S. 83 (1927); Missouri v. Kansas Gas Co., 265 U.S. 298 (1924).
"Provided, That nothing in this Act shall be construed to authorize the Commission to fix rates or charges for the sale of natural gas distributed locally in low-pressure mains or for the sale of natural gas for industrial use only." Hearing on H. R. 11662 before a Subcommittee of the House Committee on Interstate and Foreign Commerce, 74th Cong., 2d Sess., 1 (1936) (emphasis supplied).
The author of the changed version, the General Solicitor of the National Association of Railroad and Utilities Commissioners, confirmed this interpretation. Hearing on H. R. 4008, before the House Committee on Interstate and Foreign Commerce, 75th Cong., 1st Sess., 143.
Thus, Congress' grant of sales jurisdiction as to sales for resale and the prohibition as to direct sales were meant to apply exclusively to rate setting, and in no wise limited the broad base of "transportation" jurisdiction granted the FPC. That head of jurisdiction plainly embraces regulation of the quantities of gas that pipelines may transport, for in that respect Congress created "a comprehensive and effective regulatory scheme," Panhandle Eastern Pipe Line Co. v. Public Service Comm'n, 332 U.S., at 520 , to "afford consumers a complete, permanent and effective bond of protection . . . ." Atlantic [406 U.S. 621, 641] Refining Co. v. Public Service Comm'n, 360 U.S. 378, 388 (1959).
"Therefore, when we are presented with an attempt by the federal authority to control a problem that is not, by its very nature, one with which state regulatory commissions can be expected to deal, the conclusion is irresistible that Congress desired regulation by federal authority rather than nonregulation." FPC v. Transcontinental Gas Pipe Line Corp., 365 U.S., at 28 .
Comprehensive and equitable curtailment plans for gas transported in interstate commerce, as already mentioned, are practically beyond the competence of state regulatory agencies. Congress was also aware that Pennsylvania v. West Virginia, 262 U.S. 553 (1923), casts serious doubt upon the constitutionality of state regulation of such plans. That decision was considered in the deliberations on the Natural Gas Act and was cited to the House Committee as a reason for federal regulation. Hearing on H. R. 11662 before a Subcommittee of the House Committee on Interstate and Foreign Commerce, 74th Cong., 2d Sess., 14 (1936).
"The Commission shall have power to perform any and all acts, and to prescribe, issue, make, amend, and rescind such orders, rules, and regulations as it may find necessary or appropriate to carry out the provisions of this Act. . . ." 15 U.S.C. 717o.
In applying this section, we have held that "the width of administrative authority must be measured in part by the purposes for which it was conferred . . . . Surely the Commission's broad responsibilities therefore demand a generous construction of its statutory authority." Permian Basin Area Rate Cases, 390 U.S. 747, 776 (1968); see United Gas Pipe Line Co. v. FPC, 385 U.S. 83, 89 -90 (1966).
"No natural-gas company shall, with respect to any transportation or sale of natural gas subject to the jurisdiction of the Commission, (1) make or [406 U.S. 621, 643] grant any undue preference or advantage to any person or subject any person to any undue prejudice or disadvantage, or (2) maintain any unreasonable difference in rates, charges, service, facilities, or in any other respect, either as between localities or as between classes of service." 15 U.S.C. 717c (b).
Two procedural mechanisms are available to enforce this antidiscriminatory provision of 4 (b). As to a tariff already on file and in effect, the FPC may proceed under 5 (a). 17 The 5 (a) procedure has substantial disadvantages, however, rendering it unsuitable for the evaluation of curtailment plans. The FPC must afford interested parties a full hearing on the reasonableness of the tariff before taking any remedial action, and, as we have observed, "the delay incident to determination in 5 proceedings through which initial certificated rates [as well as "practices" and "contracts"] are reviewable appears nigh interminable." Atlantic Refining Co. v. [406 U.S. 621, 644] Public Service Comm'n, 360 U.S., at 389 . 18 In addition a prescribed remedial order can have only prospective application. FPC has therefore chosen to process curtailment plans under 4 (c), (d), and (e). 19 [406 U.S. 621, 645] Under these provisions, a pipeline's tariff amendments filed with the FPC go into effect in 30 days unless suspended by the Commission. If a filing is challenged or the FPC of its own motion deems it appropriate, it may suspend the amended tariff for up to five months, at the end of which time the amended tariff becomes effective pending the completion of hearings. In these hearings, the pipeline has the burden of proving that its plan is reasonable and fair.
Order No. 431 makes full use of the 4 procedures. All pipelines facing shortages necessitating curtailment are required to file reasonable allocation schemes as amendments to their existing tariffs, or to state that the existing tariffs are adequate. When emergency or other conditions arise and it appears desirable in the public interest to place a plan into effect, the FPC may accept the filing, implement it immediately or suspend it, and employ the plan as a working guideline while hearings continue. In addition to the flexibility of this arrangement, the requirement that pipelines submit plans enables the FPC to utilize each pipeline's unique knowledge of its customers' needs, ability to substitute other fuel sources, and other relevant considerations.
The Court of Appeals held that, under our decision in FPC v. Transcontinental Gas Pipe Line Corp., 365 U.S., at 17 , FPC authority over direct-sales contracts is limited to a "veto power" to be exercised only in certification proceedings under 7 (c) and abandonment [406 U.S. 621, 646] proceedings under 7 (b). We reject this argument on two grounds. First, Transcontinental dealt with FPC's authority to consider direct-sales rates in certification proceedings. We there noted that under 1 (b) FPC jurisdiction over rates was limited. The litigation here, unlike Transcontinental, does not involve rates and therefore the provision of 1 (b) is wholly inapplicable. Secondly, Transcontinental dealt only with FPC "veto power" under 7, and in no way limited FPC authority under 4 (b) to prevent discrimination among a pipeline's customers. Since 4 (b) deals with "service," the FPC may invoke it to deal with curtailment programs, whether or not it could also invoke 7 for that purpose.
We conclude therefore that the FPC has the jurisdiction asserted here and that the Natural Gas Act fully authorizes the method chosen by the FPC for its exercise.
In addition to holding that the proviso to 1 (b) prohibited curtailment of gas delivered to the Nine-Mile Point Station, the Court of Appeals held that those deliveries were not regulable by the FPC because "the flow of gas from the Black system into the Green system . . . is occasional and irregular, as well as minimal," and that "[t]he Green system, as an entire and separate unit, is physically located and functions entirely in Louisiana"; the court concluded that, for these reasons, "[t]he regulation of the Green system is substantially and essentially a localized matter committed to Louisiana's jurisdiction." 456 F.2d, at 339-340. The Court of Appeals erred in deciding this question. The FPC had exercised its primary jurisdiction and was conducting proceedings to determine whether the Green System was subject to its jurisdiction. In that circumstance, the District Court and the Court of Appeals were obliged to defer to the FPC for the initial determination of its jurisdiction. See Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41 (1938). The need to protect the primary authority of an agency to determine its own jurisdiction "is obviously greatest when the precise issue brought before a court is in the process of litigation through procedures originating in the [agency]. While the [agency's] decision is not the last word, it must assuredly be the first." Marine Engineers Beneficial Assn. v. Interlake S. S. Co., 370 U.S. 173, 185 (1962). Review of the FPC decision may proceed in due course pursuant to 19 (b) of the Act, 15 U.S.C. 717r (b). We see no need to make the same disposition as to the [406 U.S. 621, 648] curtailment question since the Court of Appeals had Op. No. 606 before it and acted upon the opinion in reaching its decision.
MR. JUSTICE STEWART took no part in the decision of these cases.
[ Footnote 1 ] A "jurisdictional" pipeline transports natural gas in interstate commerce and for that reason is subject to FPC certification jurisdiction. The "jurisdictional" label is also sometimes used to apply to sales, in which case it refers to interstate sales for resale, which are subject to Commission rate regulation.
[ Footnote 2 ] FPC Staff Report No. 2, National Gas Supply and Demand 1971-1990 (1972): "The emergence of a natural gas shortage during the past two years marks a historic turning point - the end of natural gas industry growth uninhibited by supply considerations. Not only has the Nation's proven gas reserve inventory for the lower 48 states been shrinking for the past three years, but major pipeline companies and distributors in most parts of the country have been forced to refuse requests for additional gas service from large industrial customers and from many new customers. For practical short-term purposes we are confronted with the fact that current proven reserves in the lower 48 states, as reported by the American Gas Association, have dropped from 289.3 trillion cubic feet in 1967 to 259.6 in 1970, a 10.3 percent drop within a three-year period. Furthermore, approximately 95 percent of this proven reserve inventory is already committed to gas sales contracts and is therefore unavailable for sales to new customers or for increased volumes to old customers." Id., at xi.
[ Footnote 3 ] Demand for natural gas fluctuates sharply from season to season and from day to day. Nationally, peak days occur in winter heating [406 U.S. 621, 627] months. For LP&L, however, the need for gas is greatest in the summer months, when air conditioning increases electricity consumption.
[ Footnote 4 ] Many of the facts are taken from the recitals in the petitions for certiorari, which draw upon evidence presented before the FPC in the curtailment proceedings. LP&L has not challenged their accuracy except to argue that no significant gas shortage actually exists. Our decision in this case in no way limits LP&L's freedom to argue its position as to the facts on the appeal pending in the Court of Appeals.
[ Footnote 5 ] The Commission has authority to issue declaratory orders under the Administrative Procedure Act, 5 U.S.C. 554 (e).
[ Footnote 6 ] The record in these cases does not contain all the contract terms dealing with curtailment of deliveries. United's two contracts with LP&L under consideration in this litigation, however, indicate that the terms vary from year to year and customer to customer since these two contracts themselves establish slightly different priority systems. Moreover, LP&L informs us that its contracts had terms slightly different from those in most other direct-sales contracts.
[ Footnote 7 ] The objecting party appealed the decision of the FPC and that case is now pending in the District of Columbia.
[ Footnote 8 ] The petitions of the Solicitor General and United for review here of the FPC decision prior to judgment of the Court of Appeals were denied. 405 U.S. 973 (1972).
[ Footnote 9 ] Section 7 (c) provides: "No natural-gas company or person which will be a natural-gas company upon completion of any proposed construction or extension shall engage in the transportation or sale of natural gas, subject to the jurisdiction of the Commission, or undertake the construction or extension of any facilities therefor, or acquire or operate any such facilities or extensions thereof, unless there is in force with respect to such natural-gas company a certificate of public convenience and necessity issued by the Commission authorizing such acts or operations . . . ." 15 U.S.C. 717f (c).
[ Footnote 10 ] Argument was heard in the Fifth Circuit in November 1971, one month after the FPC decision in No. 606. The Court of Appeals decision was announced in January 1972, one month before the FPC decision in No. 610.
[ Footnote 11 ] La. Const., Art. 6, 4.
[ Footnote 12 ] The conflict between producing and consuming States over state or federal regulatory authority is highlighted in the contrast between Louisiana's amicus brief in this litigation and the statement of the Chairman of the New York Public Service Commission in another case. Louisiana, a producing State, submits: "Historically, gas producing states have certain advantages over states which do not have their own gas supply. Their very proximity to the source of production attracts industries which use gas as the raw material without which their plants could not operate. The lower transportation costs of delivering gas to other industrial and commercial users within the state makes its use particularly attractive for such applications. It is not surprising, therefore, that producing states have a higher proportion of industrial-commercial consumption of total gas consumed and of firm gas than consuming states. Louisiana utilizes 84% of the total quantity of firm gas sold [406 U.S. 621, 634] in the state for industrial and power plant generation purposes, in comparison to a national average of only 37%. "Louisiana's economy is heavily dependent upon the availability of a firm, reliable and uninterrupted supply of natural gas. State-wide investment by industrial category clearly reflects the predominance of petroleum, refineries and chemicals which represented $465,297,370 or 76% of a total industrial investment of $609,578,850 in 1970. Apart from these industries which use natural gas as process gas without which their plants cannot function, the state's electric utilities are completely dependent upon natural gas as fuel for electric generators. "Thus, the economic welfare of the state hinges upon the continued delivery of the volumes of gas it received and used prior to United's curtailment and upon the ability to draw upon greater volumes. Otherwise, its economy will be frozen at or below its present level. This is not true of other states in which natural gas plays a subsidiary rather than a dominant role in the overall economy of the state and in which the electrical utilities have alternate power sources such as coal, imported liquefied natural gas and inexpensive hydro-electric power." Brief of State of Louisiana Amicus Curiae 2-3. As observed in FPC v. Transcontinental Gas Pipe Line Corp., 365 U.S. 1 (1961), consuming States prefer federal regulation. The Chairman of the New York Public Service Commission summed up this position in In re Cabot Gas Corp., 16 P. U. R. (N. S.) 443 (1936): "There can be but one opinion among those who believe in the conservation of natural resources. They should be developed not to benefit a few individuals but in the interests of public welfare present and future. Our natural gas resources ought to be conserved and there is probably no field where the Federal government acting in the interests of the entire country and to protect the welfare of the future could accomplish more than in the natural gas industry. From a conservation viewpoint, I thoroughly agree with Commissioner Burritt, and if I could see how a denial of the present petition would work to this end, I would vote to refuse the application; but will such denial produce the desired results? "The field from which gas is to be taken by the petitioner is in [406 U.S. 621, 635] northern Pennsylvania and southern New York. Apparently, far more of the gas will come from Pennsylvania than from New York and over the extraction of gas in the state of Pennsylvania, this Commission has practically no control. It is possible for Pennsylvania companies to take all of the gas from this field unless the New York companies remove the gas before the field is exhausted. "Further, the Public Service Commission has been given no adequate authority to determine how the natural gas resources of this state, to say nothing of the resources of Pennsylvania, shall be developed. We have no powers directly to control the amount of gas that is taken from any field and our indirect powers are so limited that it is doubtful if much could be accomplished. The state of New York receives far more gas from sources located beyond its boundaries than it exports to any adjoining state and the conservation of natural gas resources in the various states cannot be properly brought about except through voluntary action of the states or by the Federal government. Neither one is yet operative and while attention has been given to electric interstate commerce, no effective steps have been taken to conserve or regulate the distribution of natural gas, where it is so urgently needed. "In view of the lack of authority conferred upon this Commission to conserve natural resources, the question becomes primarily what will be gained to consumers in the state of New York if the petition is denied. It is stated that about 80 or 90 per cent of the gas furnished by the petitioner will be used for industrial purposes and that only from 10 to 20 per cent will go to the general public, the inference being that the saving to the companies purchasing the gas will go to enrich a few stockholders. Let us assume such are the facts. Who will gain if those benefited by the petition are deprived of their profits or advantages by a denial of the petition? This Commission does not control the use that will be made of the gas from the field tapped by the petitioner. There are many other companies tapping the supply and we have no means of determining where, when, or to whom the gas will be sold. If restriction is imposed on the use of it in New York, it may go to Pennsylvania; and if the petitioner is not allowed to supply the areas which it is proposed to serve, the gas will go to other areas and there is no assurance that it [406 U.S. 621, 636] will be used any more beneficially from a public viewpoint than it will be if the petition is granted. "As stated, I am heartily in favor of the conservation of natural gas as well as other natural resources; but in this specific case, will the granting or the denial of the petition work to the benefit of the people of New York? The benefit to the area to be supplied by the petitioner is definite, it is known, it is sure. But if the petition is denied, who will be benefited? There is no assurance upon this point. The answer is speculative and uncertain. There is nothing to assure us that the denial of the petition would conserve the gas supply. Is it not likely that the benefits would merely be diverted from one group or one locality to another?"
[ Footnote 13 ] East Ohio dealt with the grant of FPC jurisdiction over natural gas companies engaged in interstate transportation or sale. What we said there has relevance to the issue in this case: "Respondents contend, however, that the word `transportation' [406 U.S. 621, 637] in 1 (b) must be construed as applying only to companies engaged in the business of transporting gas in interstate commerce for hire or for sales to be followed by resales, whereas East Ohio does neither. The short answer is that the Act's language did not express any such limitation. Despite the unqualified language of 1 (b) making the Act apply to `transportation of natural gas in interstate commerce,' respondents ask us to qualify that language by applying it only to businesses which both transport and sell natural gas for resale. They rely on a sentence in the declaration of policy, 1 (a), referring to `the business of transporting and selling natural gas.' But their contention that the word `and' in the policy provision creates an unseverable bond is completely refuted by the clearly disjunctive phrasing of 1 (b) itself. As we pointed out in Panhandle Eastern Pipe Line Co. v. Public Service Comm'n, 332 U.S. 507, 516 , 1 (b) made the Natural Gas Act applicable to three separate things: `(1) the transportation of natural gas in interstate commerce; (2) its sale in interstate commerce for resale; and (3) natural gas companies engaged in such transportation or sale.' And throughout the Act `transportation' and `sale' are viewed as separate subjects of regulation. They have independent and equally important places in the Act. Thus, to adopt respondents' construction would unduly restrict the Commission's power to carry out one of the major policies of the Act. Moreover, the initial interest of Congress in regulation of transportation facilities was reemphasized in 1942 by passage of an amendment to 7 (c) of the Act broadening the Commission's powers over the construction or extension of pipe lines. 56 Stat. 83. This amendment followed a report of the Commission to Congress pointing out that without amendment the Act vested the Commission with inadequate power to make `any serious effort to control the unplanned construction of natural-gas pipe lines with a view to conserving one of the country's valuable but exhaustible energy resources.' We hold that the word `transportation' like the phrase `interstate commerce' aptly describes the movements of gas in East Ohio's high-pressure pipe lines." 338 U.S. 464, 468 -469 (1950). (footnotes omitted).
[ Footnote 14 ] It is well established that the proviso was added to the Act merely for clarification and was not intended to deprive FPC of any jurisdiction otherwise granted by 1 (b). FPC v. Transcontinental [406 U.S. 621, 638] Gas Pipe Line Co., 365 U.S. 1 (1961); FPC v. East Ohio Gas Co., 338 U.S. 464 (1950). The House report on the bill described this second sentence of 1 (b) as follows: "The quoted words are not actually necessary, as the matters specified therein could not be said fairly to be covered by the language affirmatively stating the jurisdiction of the Commission, but similar language was in previous bills, and, rather than invite the contention, however unfounded, that the elimination of the negative language would broaden the scope of the act, the committee has included it in this bill." H. R. Rep. No. 709, 75th Cong., 1st Sess., 3 (1937).
[ Footnote 15 ] S. Doc. No. 92, pt. 84-A, 70th Cong., 1st Sess., submitted Dec. 31, 1935.
[ Footnote 16 ] In Panhandle, the Court was asked to hold that direct industrial sales customers receiving gas in interstate commerce could not be subjected to state regulatory control consistently with FPC jurisdiction in the area. In support of this position, the customers [406 U.S. 621, 642] argued that state control of certain matters affecting the sales could not practically be managed by state regulation. Not surprisingly, the problem of curtailment was used as a prime example of a matter presenting these difficulties.
[ Footnote 17 ] Section 5 (a) provides: "Whenever the Commission, after a hearing had upon its own motion or upon complaint of any State, municipality, State commission, or gas distributing company, shall find that any rate, charge, or classification demanded, observed, charged, or collected by any natural-gas company in connection with any transportation or sale of natural gas, subject to the jurisdiction of the Commission, or that any rule, regulation, practice, or contract affecting such rate, charge, or classification is unjust, unreasonable, unduly discriminatory, or preferential, the Commission shall determine the just and reasonable rate, charge, classification, rule, regulation, practice, or contract to be thereafter observed and in force, and shall fix the same by order: Provided, however, That the Commission shall have no power to order any increase in any rate contained in the currently effective schedule of such natural gas company on file with the Commission, unless such increase is in accordance with a new schedule filed by such natural gas company; but the Commission may order a decrease where existing rates are unjust, unduly discriminatory, preferential, otherwise unlawful, or are not the lowest reasonable rates." 15 U.S.C. 717d (a).
[ Footnote 18 ] Of course, even when conducting a 5 hearing, the Commission would have emergency authority to issue interim orders effecting a curtailment plan. FPC v. Natural Gas Pipeline Co., 315 U.S. 575 (1942).

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On August 1, the District of Columbia Court of Appeals issued its decision in Attias v. CareFirst, Inc., et al., No. 16-7108 (D.C. Cir. Aug. 1, 2017), weighing in on the circuit split developing across the country regarding whether, following a data breach, a plaintiff’s risk of future injury is enough to establish standing under Article III.
In 2014, health insurer CareFirst was the victim of a cyberattack, during which its customers’ personal information was allegedly stolen. Id., slip op. at 2. Certain of CareFirst’s customers brought a putative class action, blaming the breach on CareFirst’s negligence. Id. Plaintiffs sought to certify a class comprised of all District of Columbia, Maryland, and Virginia customers whose personal information had been hacked. Id., slip. op. at 3. On CareFirst’s motion, the district court dismissed plaintiffs’ complaint for lack of standing, finding the risk of future injury to the plaintiffs was too speculative to establish an “injury in fact,” which is a prerequisite of Article III standing. Id., slip op. at 3-4. Specifically, the district court held that plaintiffs’ alleged increase risk of identity theft was too speculative, finding that plaintiffs had not alleged the hackers actually stole their social security or credit card numbers and concluding “[p]laintiffs have not suggested let alone demonstrated, how the CareFirst hackers could steal their identities without access to their social security or credit card numbers.” Attias v. CareFirst, Inc., 199 F. Supp. 3d 193, 201 (D.D.C. 2016).
On appeal, the D.C. Circuit reversed. Considering the question of “whether the plaintiffs have plausibly alleged a risk of future injury that is substantial enough to create Article III standing,” the Court concluded the plaintiffs had done so. Attias v. CareFirst, Inc., et al., No. 16-7108, slip op. at 9 (D.C. Cir. Aug. 1, 2017). Looking to D.C. Circuit precedent, the Court found that “the proper way to analyze an increased-risk-of-harm claim is to consider the ultimate alleged harm”—here, identity theft—“as the concrete and particularized injury and then to determine whether the increased risk of such harm makes injury to an individual citizen sufficiently ‘imminent’ for standing purposes.” Id., slip op. at 11 (internal citations omitted). The Court opined that should it occur, identity theft “would constitute a concrete and particularized injury” to any of the plaintiffs. Id. The issue in this case was “whether the complaint plausibly alleges that the plaintiffs now face a substantial risk of identity theft as a result of CareFirst’s alleged negligence in the data breach.” Id. (emphasis original). The Court disagreed with the district court’s conclusion that the complaint did not allege the breach resulted in the theft of social security or credit card numbers, finding that the complaint actually contained those allegations. Id., slip op. at 12. Finding that the risk of identity theft in this case was “substantial,” the Court found that plaintiffs had satisfied the requirement of an injury in fact. Id., slip op. at 14.
In doing so, the D.C. Circuit has aligned with the growing majority of circuit courts that have opined actual harm is not required to establish Article III standing. See, e.g., Galaria v. Nationwide Mut. Ins. Co., 663 F. App’x 384, 386 (6th Cir. 2016); Lewert v. P.F. Chang’s China Bistro, Inc., 819 F.3d 963 (7th Cir. 2016); Remijas v. Nieman Marcus Group, LLC 794 F.3d 688 (7th Cir. 2015); Krottner v. Starbucks Corp., 628 F.3d 1139 (9th Cir. 2010). But see Beck v. McDonald, 848 F.3d 262 (4th Cir. 2017); Reilly v. Ceridian Corp., 664 F.3d 38, 41-42 (3d Cir. 2011), which conclude that the enhanced risk of future identity theft was too speculative to establish standing under Article III. It is likely that at some point in the near future, the Supreme Court will provide needed guidance to resolve this split regarding what constitutes sufficient future harm to confer data breach plaintiffs with standing under Article III.
This decision illustrates how quickly the legal landscape is changing in the area of data breach litigation. For guidance on responding to data breaches to minimize the risk of litigation and handling such litigation if it occurs, please contact Stephen Reynolds or Jenny Buchheit. Jenny Buchheit is a partner in Ice Miller’s Litigation and Intellectual Property Group who represents clients at both the trial and appellate levels and focuses much of her work on defending companies in both state and national putative class actions. Stephen Reynolds, a former computer programmer and IT analyst, is a partner in Ice Miller’s Litigation and Intellectual Property Group and co-chair of Ice Miller’s Data Security and Privacy Practice.

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James Edgar, Lincoln, Neb., argued (Patrick T. O'Brien, on the brief), for appellant.
Counsel who presented argument on behalf of the appellee was Steven Arthur Russell, Lincoln, Neb., argued (Ronald D. Lahners and Steven A. Russel, argued on the brief), for appellee.
Before RICHARD S. ARNOLD, Chief Judge, HEANEY, Senior Circuit Judge, and MAGILL, Circuit Judge.
James M. Edgar appeals the sentence imposed by the district court after a jury found him guilty of bankruptcy fraud and conspiracy to commit bankruptcy fraud. We reverse and remand.
Edgar's conviction for bankruptcy fraud stemmed from his legal representation of Peter Salter. Salter was the owner of Duplitech Corporation, a copying and printing business. Although Duplitech had filed for Chapter 11 bankruptcy protection in 1983, the bankruptcy was still pending in early 1987 when Dan Fuss approached Salter about the possibility of purchasing his business. Edgar, acting as Salter's attorney, handled the successful negotiations for this sale and drew up many of the documents. The final purchase agreement provided that Salter would receive a total of $35,000 up front and a specified percentage of gross receipts over a period of twenty years. This agreement also contained a clause stating that Fuss would pay off or compromise the bankruptcy claims against Duplitech "as the BUYER shall determine in the buyer's sole discretion." Pl.'s Ex. 19. In addition to the purchase agreement, Salter and Fuss entered an employment agreement in which Fuss agreed to employ Salter for a period of seven years with a specified monthly salary that included use of a car. Despite the fact that the assets of Duplitech formally belonged to the bankruptcy estate, neither Edgar nor Salter informed the bankruptcy court of their sale to Fuss. In fact, Edgar structured the sale so that the assets of Duplitech and the proceeds from their sale would be difficult to trace. Salter did not use any of the proceeds he received up front to pay Duplitech creditors.
Approximately seven months after completion of the sale, the bankruptcy court was informed that Salter had sold all of Duplitech's assets to Fuss. In response, the court appointed a trustee to investigate the sale and attempt to recover for the estate either the assets transferred or the value of those assets. The trustee's investigation led to his filing of a civil suit against, inter alia, Edgar and Fuss. Edgar settled his suit for $5000. Fuss, from whom the trustee was attempting to recover either the assets of Duplitech or the value of those assets, settled for $300,000. This settlement amount was based on the present value of the payments Salter was to receive under the purchase agreement and the employment agreement.
The bankruptcy court also informed the FBI of the sale. The FBI's investigation led to the indictment of Edgar for bankruptcy fraud and conspiracy to commit bankruptcy fraud, in violation of 18 U.S.C. § 152 and 371 (1988). Although Edgar admitted the acts he had taken in connection with the sale of Duplitech's assets, he denied any intent to defraud creditors or to conceal assets of the bankruptcy estate. After a three-week trial, a jury found him guilty on all counts — rejecting Edgar's defense of lack of the requisite criminal intent. Following a sentencing hearing, the district court concluded that Edgar's offense level was seventeen, based on a base offense level of six, a seven-level increase for a loss of more than $120,000 but less than $200,000, a two-level increase for violation of the bankruptcy process, and a two-level increase for more than minimal planning. The court denied Edgar's request for a two-level reduction for acceptance of responsibility. With a criminal history category of I, this resulted in a sentencing range of twenty-four to thirty months. The court denied Edgar's request for a downward departure from this range, and sentenced Edgar to twenty-four months incarceration, three years supervised release, and $25,000 restitution.
Salter also was indicted and found guilty of bankruptcy fraud and conspiracy to commit bankruptcy fraud.
At this hearing, the district court heard testimony on both acceptance of responsibility and the amount of loss.
Edgar now appeals his sentence. He claims that the district court erred in denying a two-level reduction for acceptance of responsibility, in denying a downward departure from the sentencing range, and in calculating the loss caused by his fraud. We discuss each of his claims in turn.
The Sentencing Guidelines provide that the court may reduce the defendant's offense level by two "[i]f the defendant clearly demonstrates a recognition and affirmative acceptance of personal responsibility for his criminal conduct." U.S.S.G. § 3E1.1(a). We give great deference to the district court "when reviewing its evaluation of a defendant's acceptance of responsibility, and will disturb the district court's decision only if it is without foundation." United States v. Russell, 913 F.2d 1288, 1295 (8th Cir. 1990), cert. denied, ___ U.S. ___, 111 S.Ct. 1687, 114 L.Ed.2d 81 (1991).
Prior to being found guilty by a jury, Edgar denied any intent to defraud the creditors. Only after the jury returned its verdict of guilty did Edgar voluntarily relinquish his license to practice law and state that he accepted the jury's verdict of guilty and thought that it was correct. The district court did not clearly err in denying the reduction based on Edgar's refusal to admit an essential element of bankruptcy fraud before his conviction. U.S.S.G. § 3E1.1, comment. (n. 2); see also, e.g., United States v. Stuart, 923 F.2d 607, 613 (8th Cir.), cert. denied, ___ U.S. ___, 111 S.Ct. 1599, 113 L.Ed.2d 662 (1991) (no acceptance of responsibility reduction when defendant put the government to its burden of proof at trial by denying any intent to distribute a controlled substance); United States v. Sloman, 909 F.2d 176, 182 (6th Cir. 1990) (no acceptance of responsibility reduction when defendant gave statements to officers and expressed regret over what happened, but never admitted any fraudulent intent).
The Sentencing Guidelines allow a court to depart downward from the applicable sentencing range if the court finds "`that there exists [a] . . . mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines. . . .'" U.S.S.G. § 5K2.0, p.s. The district court's ruling that it could depart from the sentencing range only if it found that such a mitigating circumstance existed was a correct interpretation of the guidelines. See United States v. Johnson, 908 F.2d 396, 399 (8th Cir. 1990). The district court's conclusion that no such mitigating circumstance existed in this case, and thus it did not have a basis for departure, was an exercise of discretion that is not reviewable. See, e.g., United States v. Evidente, 894 F.2d 1000, 1004 (8th Cir.), cert. denied, 495 U.S. 922, 110 S.Ct. 1956, 109 L.Ed.2d 318 (1990).
The court also correctly noted that a departure for substantial assistance was not available because the government had not made a motion for departure. U.S.S.G. § 5K1.1, p.s.; see also United States v. Kelley, 956 F.2d 748, 757 (8th Cir. 1992).
Under the Sentencing Guidelines, the offense level for fraudulent conduct is increased according to the amount of loss. The amount of loss used to increase the offense level may be either the amount of loss the defendant intended to inflict or the actual loss resulting from the fraudulent conduct, whichever is greater. U.S.S.G. § 2F1.1, comment. (n. 7); see also, e.g., United States v. Smith, 951 F.2d 1164, 1166 (10th Cir. 1991). In this case, the district court found that the intended loss was the value of Duplitech as a going concern. The court further concluded that the only reliable evidence of Duplitech's value was the $300,000 settlement between Fuss and the bankruptcy trustee, and the present value of the payments Salter was to receive under the purchase agreement and the employment agreement. An accountant calculated that the present value of these payments was about $270,000. Based on this evidence, the court estimated that Duplitech's value was in the range of $270,000 to $300,000. The court then subtracted $100,000 from this amount because the court found that Edgar intended Fuss to pay the bankruptcy creditors approximately $100,000. Sentencing Tr. at 17-18 (held June 17, 1991). These calculations resulted in an intended loss of approximately $170,000 to $200,000. Because this amount exceeded the actual loss of approximately $75,000, the court concluded that the appropriate loss range was $120,000 to $200,000, resulting in a seven-level increase. U.S.S.G. § 2F1.1(b)(1)(H).
At the time Edgar was sentenced in 1991, the Sentencing Guidelines specifically provided that "if a probable or intended loss that the defendant was attempting to inflict can be determined, that figure would be used if it was larger than the actual loss." U.S.S.G. § 2F1.1, comment. (n. 7) (1990). This note was changed on November 1, 1991, to provide that "if an intended loss that the defendant was attempting to inflict can be determined, this figure will be used if it is greater than the actual loss." U.S.S.G. § 2F1.1, comment. (n. 7) (1991). The only difference between these two notes is the inclusion of "probable loss" in the version applicable to Edgar at the time of his original sentencing. "Probable loss" is an ambiguous term. See United States v. Kopp, 951 F.2d 521, 531 n. 16 (3d Cir. 1991) (discussing alternative interpretations of "probable loss"). Fortunately, the district court clearly based Edgar's sentence on intended loss, and not on probable loss. App. at 60. Because we conclude that the district court incorrectly calculated intended loss, and thus are remanding this case for resentencing, it is not necessary for us to define "probable loss" here. Additionally, because the district court will apply the guidelines in effect at the time of resentencing (including the current version of note seven), the district court also will not have to define "probable loss." 18 U.S.C. § 3553(a)(4), (5) (1988); Kopp, 951 F.2d at 526. Only when the retroactivity of a guidelines' change results in a harsher penalty, and thus an ex post facto problem arises, is the district court required to apply the earlier version. Id. Given that the earlier note required the district court to increase the offense level based on either probable loss, intended loss, or actual loss, whichever is larger, deletion of the phrase "probable loss" could not result in a harsher penalty. Thus, no ex post facto problems can arise by applying the most current version of note seven.
A present value calculation discounts a stream of future payments to that amount which, if presently received, could be invested at a given interest rate to yield the future payments. See, e.g., DuBois v. DuBois, 335 N.W.2d 503, 506 (Minn. 1983). In this case, the accountant discounted the amount of the future payments to arrive at the present value on the date the purchase agreement and employment agreement were executed.
As the above facts make clear, the calculation of loss in a bankruptcy fraud case can be rather complicated. It is thus not surprising that the district court made both some correct and some incorrect assumptions in calculating the loss. The district court correctly used the greater of the intended loss and the actual loss to calculate the offense level increase. The court also did not err in using the going-concern value of Duplitech rather than its liquidation value in calculating the value of the concealed assets. There was no proof that the creditors would have recovered only the liquidation value of Duplitech if it had not been sold to Fuss without the bankruptcy court's approval. Additionally, the court properly concluded that the present value of the amount Fuss was willing to pay for Duplitech is a valid measure of Duplitech's value. It is well established that the fair market value of a business as a going concern is "that price a willing seller could secure from a willing buyer." Albrecht v. Herald Co., 452 F.2d 124, 131 (8th Cir. 1971); see also Malley-Duff Assocs. v. Crown Life Ins. Co., 734 F.2d 133, 148 (3d Cir.), cert. denied, 469 U.S. 1072, 105 S.Ct. 564, 83 L.Ed.2d 505 (1984); Banco Nacional De Cuba v. Chase Manhattan Bank, 505 F. Supp. 412, 459-60 (S.D.N.Y. 1980), rev'd on other grounds, 658 F.2d 913 (2d Cir. 1981), rev'd, 462 U.S. 611, 103 S.Ct. 2591, 77 L.Ed.2d 46 (1983). In this case, Fuss was a purchaser willing to buy Duplitech, and Salter was an owner willing to sell it. In fact, the amount Fuss agreed to pay for Duplitech was the most reliable evidence of Duplitech's value available to the district court. The $300,000 settlement between Fuss and the bankruptcy trustee had little, if no, independent significance in the valuation of Duplitech because it was derived from the present value of the amount Fuss agreed to pay under the purchase agreement and employment agreement.
Although the court correctly treated the amount Fuss paid for Duplitech as reliable evidence of Duplitech's value, the court erred when it treated the amount Salter was to receive under the employment agreement as part of the purchase price for Duplitech. The monthly salary Fuss agreed to pay Salter and the car Fuss gave Salter to drive were not compensation for the assets of Duplitech. Rather, the employment agreement between Fuss and Salter clearly provides that the monthly salary and the car were compensation for Salter's post-sale services, and that Fuss was not liable for this compensation if he terminated Salter's employment for cause. Because the valuation of Duplitech should not have included the payments Salter was to receive under the employment agreement, the only amounts relevant to Duplitech's value were the $35,000 up-front payment and the percentage of gross receipts Fuss agreed to pay Salter. Based on the accountant's calculations, the present value of all these payments totalled approximately $150,000. Supp.App. at 4-5.
No expert testified that the payments Salter was to receive under the employment agreement were properly included in a valuation of Duplitech. Gregory Nielsen, the accountant hired by the bankruptcy trustee, testified on the present value of the payments Salter was to receive under the purchase agreement and the employment agreement. He did not testify that the payments due under the employment agreement reflected on the value of Duplitech. In fact, another accountant testified that compensation for future services is not properly included in a valuation of a company. Sentencing Tr. at 130-31 (held June 11, 1991).
Although Salter also was to receive a 20% ownership interest in the surviving entity, there was no evidence introduced as to the value of this interest.
In addition to not being properly included in the valuation of Duplitech, the present value of the employment agreement cannot, in its own right, constitute a portion of the intended loss. Salter's future earnings from personal service were never part of the bankruptcy estate. Cf. 11 U.S.C. § 541(a)(6) (1988) (the bankruptcy estate does not include "earnings from services performed by an individual debtor after the commencement of the case"). Edgar could not have intended to deprive Duplitech creditors of an amount they were not entitled to in the first place.
Another error the district court made in calculating the intended loss was to deduct the $100,000 it found that Fuss was going to pay the Duplitech creditors from the amount Fuss was going to pay Salter. Fuss had agreed to pay Salter approximately $150,000 in 1987 dollars, and to pay the creditors approximately $100,000. This indicates that Fuss valued Duplitech at approximately $250,000, not at the difference between these two amounts. Thus, based on the amount Fuss was willing to pay for Duplitech, Salter, with the help of Edgar, fraudulently transferred assets worth approximately $250,000. Obviously, however, Edgar did not intend to deprive the creditors of the entire $250,000 because Fuss was to pay $100,000 of Duplitech's value to the creditors rather than to Salter. Accordingly, Edgar could not have intended to conceal from the creditors more than the $150,000 that Salter was to receive.
If calculation of the intended loss stopped here, we could simply affirm Edgar's sentence, which was based on a loss range of $120,000 to $200,000. It is possible, however, for the intended loss to be less than the value of the concealed property. This situation arises when an individual debtor or the sole owner of a corporate debtor is the party who benefits from the concealment, and the value of the concealed property exceeds the amount of debt owed to the creditors.
A hypothetical can best illustrate this situation. Assume that an individual debtor has one asset, a painting worth $5000, and debt of $1000. Assume further that because her creditors are threatening to execute judgment — forcing her to sell the painting — the debtor, with the help of a third party, fraudulently conceals the painting and files for bankruptcy, depriving her creditors of $1000. After the third party who helped the debtor is found guilty of fraud, the sentencing court must determine the amount of intended loss. Because the debtor is the party who benefited from the concealment, the third party clearly intended no loss to the debtor. The only remaining entities that could be injured by the concealment are the creditors and the bankruptcy estate. The third party clearly intended to deprive the creditors of the $1000 they were owed. Additionally, because all the debtor's property goes into the bankruptcy estate, 11 U.S.C. § 541 (1988), the estate was deprived of $5000, the full value of the concealed painting. The estate, however, would not have kept this $5000 indefinitely. Rather, the estate trustee would have used it to pay the creditors, and then would have returned the remaining portion, approximately $4000, to the debtor. Because this $4000 would have been returned to the same person who obtained it as a result of the fraudulent concealment, we do not believe it is appropriate to include it in the amount of intended loss. In this situation, the third party's culpability is more comparable to that of a con artist who swindles a person of $1000 than to that of a con artist who swindles a person of $5000. Cf. Smith, 951 F.2d at 1167 (noting that the relative culpability of a defendant is a relevant factor in calculating the amount of loss); United States v. Schneider, 930 F.2d 555, 559 (7th Cir. 1991) (same). We thus conclude that the amount of debt places a cap on the intended loss when an individual debtor or the sole owner of a corporate debtor is the party who benefits from the concealment.
Of course, the amount of debt is not fixed in Chapter 11 bankruptcies. Accordingly, the sentencing court must make a reasonable estimate of the amount of debt anticipated at the time of the fraudulent transfer. When estimating this debt, the court should include the liabilities likely to be incurred by the on-going operations of the debtor and the foreseeable costs of administering the estate. Additionally, the court should deduct from these estimated liabilities any payments that the defendant intended the creditors to receive. Although it is always possible that an intended payment will not be made, intended loss is not the same as possible or potential loss. See Kopp, 951 F.2d at 529; United States v. Hughes, 775 F. Supp. 348, 350 (E.D.Cal. 1991).
In this case, Salter, the owner of Duplitech, was the party who benefited from the concealment — Fuss was to pay him the $150,000. Thus, it is necessary to determine whether the amount of debt was less than $150,000, the value of the concealed property. If it is, the amount of debt is the intended loss. If it is not, the value of the concealed property, $150,000, is the intended loss. The amount of debt reasonably anticipated in September 1987, when Edgar arranged for Fuss to purchase Duplitech, is not readily apparent. At the time Duplitech filed for bankruptcy in 1983, it listed outstanding liabilities of $118,016.14. At the time Duplitech had a plan confirmed in 1990, it had outstanding liabilities of approximately $643,851.89. The amount of liabilities anticipated in 1987 must be somewhere between these two figures. Additionally, because Edgar intended Fuss to pay off $100,000 of these liabilities, $100,000 must be subtracted from the anticipated liabilities to arrive at the amount of debt reasonably anticipated by Edgar. Although Fuss did not actually pay the creditors the $100,000, the district court concluded that Edgar thought and intended that Fuss would make this payment. We find no clear error in this factual finding.
Although the record contains some ambiguous references to other shareholders of Duplitech, it appears that, at the time Duplitech's assets were transferred to Fuss, Salter was the sole owner. The disclosure statement prepared in conjunction with the bankruptcy goes so far as to call Duplitech Salter's alter ego.
There are clearly some liabilities included in the 1990 figure that were not reasonably foreseeable in 1987. For example, the large amount of insider claims included in the 1990 figure were probably not anticipated by Edgar.
Because the district court did not calculate the intended loss within the structure here provided, we must reverse and remand for resentencing. In recalculating the intended loss, the court need not reach an exact number. All the guidelines require is a reasonable estimate of the loss. U.S.S.G. § 2F1.1, comment. (n. 8). Once the court has recalculated the intended loss, it should again compare it to the actual loss, and use the greater amount to determine the appropriate increase in offense level.
In conclusion, we affirm the district court's denial of a two-level reduction for acceptance of responsibility and its refusal to depart downward from the applicable sentencing range. Because we conclude that the district court incorrectly calculated the intended loss, however, we reverse and remand for further findings consistent with this opinion.
 HEANEY, Senior Circuit Judge, concurring in part and dissenting in part.
Judge Warren Urbom is one of our most thoughtful and distinguished judges. He clearly believed that a sentence other than the one he imposed would be most appropriate under the circumstances of this case. Judge Urbom did not impose what he thought to be the proper sentence here, however, because he did not believe he had the authority to do so under the sentencing guidelines. In my view, the Sentencing Reform Act grants district judges this authority, and I would remand to permit Judge Urbom to impose the sentence he feels appropriate. Accordingly, I cannot concur in part II.B. of the court's opinion.
18 U.S.C. § 3553(a) (1988).
the court finds that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described.
18 U.S.C. § 3553(b) (1988). If the Commission has not "adequately" taken into consideration mitigating or aggravating circumstances present in a case, then the sentencing court must impose an appropriate sentence "having due regard for the purposes set forth" in 18 U.S.C. § 3553(a)(2) (1988). Id.
The bill requires the judge before imposing sentence, to consider the history and characteristics of the offender, the nature of circumstances of the offense, and the purposes of sentencing. He is then to determine which sentencing guidelines apply to the case. Either he may decide that the guideline recommendation appropriately reflects the offense and offender characteristics and impose sentence according to the guideline recommendation or he may conclude that the guidelines fail to reflect adequately a pertinent aggravating or mitigating circumstance and impose sentence outside the guidelines.
S.Rep. No. 98-225, 98th Cong., 2d Sess., reprinted in 1984 U.S. Code Cong. Admin. News 3182, 3235 (emphasis added). Thus, the district court in each case must look to the "adequacy" of the Commission's consideration of aggravating or mitigating factors present in each case.
The Sentencing Commission, however, has formulated a set of guidelines instructions different than the process outlined in section 3553(a), and has "seemingly reversed the sentencing sequence intended by Congress." Marc Miller Daniel J. Freed, Honoring Judicial Discretion Under the Sentencing Reform Act, 3 Fed. Sentencing Rep. 235-37 (1991). The guidelines set forth a nine-step process for calculating a sentence, but none of these steps require the court to consider the purposes of sentencing or the nature and circumstances of the offense, as set forth in the statute. Compare U.S.S.G. § 1B1.1 (setting forth "application instructions") to 18 U.S.C. § 3553(a)(2). Like Judge Bright of our court and Chief Judge Merritt of the Sixth Circuit, I believe that the Sentencing Commission has misinterpreted the text of the Sentencing Reform Act in its "application instructions" by telling judges they may consider a downward or upward departure only after they have calculated the guidelines range. See United States v. Quarles, 955 F.2d 498, 503-05 (8th Cir.), cert. denied, ___ U.S. ___, 112 S.Ct. 2285, 119 L.Ed.2d 209 (1992) (Bright, J., concurring and dissenting) (expressing view that the sequence of sentencing steps set forth by Sentencing Commission was incorrect); United States v. Davern, 937 F.2d 1041, 1043-47 (6th Cir. 1991), on rehearing, 970 F.2d 1490 (6th Cir. 1992). This is no trivial matter, because the Sentencing Commission's process is unduly mechanical and "produces a presumptive sentencing range but . . . does not provide a sufficient context in which to consider the facts of the case." Miller Freed, supra, at 237.
The present case is a perfect example of how the Commission's failure to follow the statute has resulted in a sentence that the district court would have found inappropriate had the Commission properly interpreted the statute. Edgar presented an alternative sentencing proposal which, if adopted, would have put Edgar's expertise in computers and statistics to work for the Legal Services of Southeast Nebraska and the Nebraska State Bar Association Pro Bono Program. Under his proposal, Edgar would have developed a case management system for these organizations either while on probation or while serving a ten-month split sentence. Judge Urbom stated that he thought the proposal was "excellent," and that Edgar was not one of the people who should be in prison for the safety of society, for punishment, or for deterrence. Although he did not refer to section 3553(a)(2), Judge Urbom plainly considered the factors set forth there and concluded that an alternative to prison would be the best sentence in Edgar's case. If Judge Urbom had been able to follow the sequence anticipated by Congress, he probably would have concluded that the guidelines sentence did not best serve the purposes of sentencing because the guidelines did not adequately reflect mitigating circumstances in Edgar's case, such as Edgar's ability and willingness to help improve the legal services available to poor people in his area, and the fact that Edgar was not a danger to society.
Judge Urbom, however, imposed a guidelines prison sentence because he felt that under the guidelines, he was bound to follow the sentencing grid and impose the sentence contained therein. It is not difficult to see why Judge Urbom reached this conclusion. First, judges and practitioners have assumed that the Commission's application instructions conform with the Sentencing Reform Act, an assumption that is unwarranted. See Miller Freed, supra. Second, although the statute treats departures as an integral part of the guidelines scheme, the appellate courts have been swift to strike down district courts that depart from the guidelines range. Appellate courts seem to presume that the Commission has "adequately" taken into consideration mitigating or aggravating circumstances present in a case even when the Commission has never said a word on the mitigating circumstance in question. See, e.g., United States v. Prestemon, 929 F.2d 1275, 1277-78 (8th Cir.), cert. denied, ___ U.S. ___, 112 S.Ct. 220, 116 L.Ed.2d 178 (1991) (departure based on defendant's status as an adopted child reversed; court finds that Commission adequately took such circumstances into consideration even though guidelines are entirely silent on the subject); United States v. Pozzy, 902 F.2d 133, 139 (1st Cir. 1990) (although guidelines never mention pregnancy as a mitigating factor, appellate court finds as a matter of law that Commission must have adequately considered it when formulating the guidelines). We do not exhibit such blind deference when reviewing the rulemaking of other administrative agencies, and practitioners and judges need to take a harder look at the Commission's work product. If this were done, district courts might be less hesitant to depart from the guidelines range and to exhibit more of the "discretion, flexibility and independent judgment" that Congress intended. United States v. Lara, 905 F.2d 599, 604 (2d Cir. 1990).
I find this particularly ironic, given that the authors and principal supporters of the guidelines claim that the sentencing guidelines give the district judges much greater discretion than they are using. See, e.g., Gerald B. Tjoflat, The Untapped Potential for Judicial Discretion Under the Federal Sentencing Guidelines: Advice for Counsel, 55 Federal Probation 4 (1991); William W. Wilkins, Jr., Plea Negotiations, Acceptance of Responsibility, Role of the Offender, and Departures: Policy Decisions in the Promulgation of Federal Sentencing Guidelines, 23 Wake Forest L.Rev. 181, 196 (1988) (departure power gives district judges flexibility to impose individualized sentences). The introduction to the guidelines plainly states that they were intended to set forth the appropriate sentence in the heartland of cases, not every case, see U.S.S.G. Ch. 1, Pt. A4(b) (introduction) (policy statement), but the appellate courts seem to have ignored this policy statement as well as the underlying statute.
In determining whether a circumstance was adequately taken into consideration, the court shall consider only the sentencing guidelines, policy statements, and official commentary of the Sentencing Commission.
18 U.S.C. § 3553(b) (1988).
28 U.S.C. § 994(j) (1988) (emphasis added).
The guidelines have not even come close to complying with this mandate. We repeatedly see first offenders convicted of non-violent offenses who face prison sentences because the guidelines grid requires prison sentences for first offenders with offense levels of 13 or greater. See U.S.S.G. Ch. 5, Pt. A (sentencing table); U.S.S.G. § 5C1.1(f). Where a guideline is not in "sufficiently reasonable compliance with the statutory mandate" we may invalidate it. United States v. Lee, 887 F.2d 888, 891 (8th Cir. 1989) (invalidating section 2J1.6 of the guidelines for failing to comply with Congressional mandate). Although Congress did not require the Commission to make probation available for all crimes or all offenders, see United States v. Barrett, 937 F.2d 1346, 1350 (8th Cir.), cert. denied, ___ U.S. ___, 112 S.Ct. 322, 116 L.Ed.2d 263 (1991) (sexual abuse), it did express a strong preference for alternatives to imprisonment where the crime was not violent and the defendant was a first offender, as is the case here.
I recognize that Edgar's counsel did not specifically argue the foregoing points before Judge Urbom or before this court. It could be claimed, therefore, that the statutory question is not properly before us, and ordinarily I would have declined to address the issue. Recently, however, our court saw fit to reverse a district court on an issue that was never raised on appeal and never raised in the district court. See Lufkins v. Leapley, 965 F.2d 1477 (8th Cir. 1992) (court reverses granting of writ on grounds that constitutional violation was harmless error even though harmless error issue was never raised by the prosecution in state court proceedings, in the United States District Court, or in this court). If an issue so waived by the prosecution may be considered by this court, then I see no reason why we cannot reverse a district court on a point not specifically raised by a defendant below or on appeal.
For the foregoing reasons, I cannot concur in part II.B. of the court's opinion. I concur in all other respects.


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Justice: how open in family proceedings?
When the Government proposals come on stream – as surely they will, eventually – for instruction of a court advocate to cross-examine a domestic violence complainant (‘advocacy assistance’) where her alleged abuser acts in person, the question of whether the hearings in question are secret (also called ‘confidential’), private or in open court will revive. The media surely will want to see how the new scheme – which had such publicity earlier in the year (see eg Observer/Guardian of 12 February 2017) – is working.
The Family Procedure Rules Committee has defined all proceedings covered by the rules for which they are responsible – Family Procedure Rules 2010 (FPR 2010) – as to be heard in ‘private’ (FPR 2010 r 27.10), save where otherwise indicated. The term ‘private’ is not defined. Plainly it is something different from ‘open court’; but does it mean entirely secret, or confidential (see Allan v Clibbery  EWCA Civ 45,  Fam 261 sub nom Clibbery v Allan  1 FLR 565), or does it mean only that public may be admitted if the court agrees. And if so, are the parties to remain anonymous; is the judgment public; and can anyone see any of the documents generated by the proceedings?
The Art 8 rights of children balanced against those (Art 10 and Human Rights Act 1998 s 12(4)) of the press (Re S (Identification: Restrictions on Publication)  UKHL 47,  1 AC 593,  1 FLR 591; PJS (above)).
Space does not permit that all of these subjects be covered here; but the same principles recur. For example in PJS Lady Hale made comments on the importance of consideration of the Art 8 rights of children affected, where publicity is concerned; and Guardian v Westminster (above) dealt with whether the Guardian – after the hearing of an extradition case – could see papers read by the court (yes they could). Neither case was directly concerned with whether anyone could attend a hearing in open court.
 With limited exceptions, the English courts administer judgment in public, at hearings which anyone may attend within the limits of the court’s capacity and which the press may report. In the leading case, Scott v Scott  AC 417, public hearings were described by Lord Loreburn (p 445) as the ‘inveterate rule’ and the historical record bears this out. In the common law courts the practice can be dated back to the origins of the court system.
It is the ‘limited’ exceptions with which this article is concerned; for the ‘open justice principle’ (as Toulson LJ defined it in R (Guardian News and Media Ltd) v City of Westminster Magistrates’ Court (Article 19 intervening)  EWCA Civ 420,  QB 618,  3 WLR 1343) probably runs parallel with the origins and history of the court system itself.
… The exceptions are themselves the outcome of a yet more fundamental principle that the chief object of Courts of justice must be to secure that justice is done. In the two cases of wards of Court and of lunatics the Court is really sitting primarily to guard the interests of the ward or the lunatic. Its jurisdiction is in this respect parental and administrative, and the disposal of controverted questions is an incident only in the jurisdiction. It may often be necessary, in order to attain its primary object, that the Court should exclude the public. The broad principle which ordinarily governs it therefore yields to the paramount duty, which is the care of the ward or the lunatic.
… As the paramount object must always be to do justice, the general rule as to publicity, after all only the means to an end, must accordingly yield. But the burden lies on those seeking to displace its application in the particular case to make out that the ordinary rule must as of necessity be superseded by this paramount consideration. The question is by no means one which, consistently with the spirit of our jurisprudence, can be dealt with by the judge as resting in his mere discretion as to what is expedient. The latter must treat it as one of principle, and as turning, not on convenience, but on necessity.
Starting from the open justice principle, as stated in Scott and reaffirmed countless times since then, what may be said to be the modern exceptions.
In criminal proceedings the principle in relation to freedom of expression (European Convention 1950 Art 10) has been held to override the interests of a child’s right to protection of family life (Re S (Identification: Restrictions on Publication)  UKHL 47,  1 AC 593,  1 FLR 591; R (Trinity Mirror) v Croydon Crown Court  EWCA Crim 50,  QB 770).
(e)where the court (having power to do so) expressly prohibits the publication of all information relating to the proceedings or of information of the description which is published.
(b)subject to any enactment, where the court directs otherwise.
Neither this rule, nor either of s 12(1) or r 39.2(3) (nor CPR 1998 as a whole) defines what is meant by ‘private’, save to say that the public have no right to be present (as distinct from, presumably, the right to ask to be present?). The rule must also be read subject to the right of ‘accredited representatives’ of the press and other media and others, with permission, to be in court for private hearings (r 27.11(2)(f) and (g)).
The question remains: is there any law on what is meant by ‘private’; and if so can the rules committee override that law? The seeker for an answer to that question goes back, again, to the common law.
As the then new CPR 1998 (in accordance with Civil Procedure Act 1997) were approaching a final draft, the committee chairman, Lord Woolf MR (with Aldous and Chadwick LJJ: it was a judgement of the court) considered the meaning of open court and ‘chambers’ hearings in Hodgson v Imperial Tobacco Ltd  1 WLR 1056 (judgment: 12 February 1998). The court’s conclusion was that it was open to a party to publish what was said in chambers (ie ‘in private’: see 1070) unless the case comes within those listed in s 12(1).
As [AJA 1960 s 12(1)] makes clear, the publication of information relating to proceedings held in private (i.e. chambers) is not in itself contempt except in the specific cases identified in s 12(1) (which do not apply here) unless the court makes an order prohibiting publication when it has “power to do so” (s 12(1)(e)). Nor is the publication of the whole or part of the order made by a court sitting in private a contempt (s 12(2)). The general position is that any judgment including a judgment in chambers is normally a public document….
A distinction has to be clearly drawn between the normal situation where a court sits in chambers and when a court sits in camera in the exceptional situations recognised in Scott v. Scott  AC 417 or the court sits in chambers and the case falls in the categories specified in section 12(1) of the Act of 1960 (which include issues involving children, national security, secret processes and the like). Section 12(1) also refers to the court having prohibited publication. Such proceedings are appropriately described as secret; proceedings in chambers otherwise are not appropriately so described.
As can be seen the Court of Appeal distinguishes between hearings ‘in private’ (or in chambers) where information can be published and the public may be admitted; and hearings ‘in secret’ (formerly in camera) which are those to which the exceptions in Scott and s 12(1) apply.
In relation to hearings in chambers … The public has no right to attend hearings in chambers because of the nature of the work transacted in chambers and because of the physical restrictions on the room available but, if requested, permission should be granted to attend when and to the extent that this is practical.
And this is what r 27.10(2) appears, almost exactly, to say: ‘no right to be present’; and, as will be seen, this is the formula preferred by Dame Elizabeth Butler-Sloss P in a later constitution of the Court of Appeal (Allan v Clibbery  EWCA Civ 45,  Fam 261 sub nom Clibbery v Allan  1 FLR 565).
Allan v Clibbery (above) remains the main source for family lawyers considering open justice and the principles on which it is based. It is also of relevance to the question of press attendance at hearings of, or publicity arising from, cases under Family Law Act 1996 Pt 4 (which include Allan v Clibbery itself and the cases of alleged abusers cross-examining complainants in person). It was a case under Pt 4, where Ms Clibbery published information and documents arising from the case to, amongst others, the Daily Mail. On appeal from Munby J, the Court of Appeal agreed with him in the result and held that she could publicise information and certain documents from the proceedings; though the proceedings should have been held, on Dame Elizabeth’s definition, ‘in private’.
There is no reason which that definition should not be the same in FPR 2010; so that the exception occurs for ‘secret’ hearings cases, that is those listed in AJA 1960 s 12(1).
Fundamental rights cannot be overridden by general or ambiguous words. This is because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process. In the absence of express language or necessary implication to the contrary, the courts therefore presume that even the most general words were intended to be subject to the basic rights of the individual.
 … The mere fact that proceedings are heard in private does not of itself prohibit publication of what happens in those proceedings: Clibbery v Allan  EWCA Civ 45,  Fam 261 at  and . However, the fact that parties are required to make full and frank disclosure of financial information may justify reporting restrictions relating to that information: Clibbery v Allan at  and . But there is no blanket ban: Clibbery v Allan at .
The Court of Appeal definition is the common law which applies to family as to all other types of proceedings. As ever, a rule cannot make, still less override, the law (Jaffray v The Society of Lloyds  EWCA Civ 586),  1 WLR 75); and nothing was said of all this in the statute which empowers the rule-makers (Courts Act 2003 ss 75 and 76). Either on this basis or under exp Simms principles, the rule-makers – who are not Parliament – cannot override a common law principle. It may be worth adding that FPR 2010 are made by the negative resolution procedure (Courts Act 2003 s 79(6)) so they do not need formal approval by Parliament. Mostyn J’s comment in Appleton & Anor v News Group Newspapers Ltd & Anor  EWHC 2689 (Fam),  2 FLR 1 – that ‘ …. Parliament when passing the rules specifically maintained [ancillary relief] proceedings as private, and denied members of the public admission to them’ must be read with s 79(6) in mind.
Even if the rule-makers do have a power to override the common law by r 27.10, the drafting of the rule is ambiguous. Rue 27.10 says the same as the Court of Appeal said in Hodgson as to what is the meaning of ‘chambers’; and that means something different from ‘secret’ proceedings. ‘Secret’ proceedings are those covered by the exceptions which run in a line from Scott, through AJA 1960 s 12(1) to the modern CPR 1998 r 39.2(3). Other proceedings under FPR 2010 which are not expressly open court (such as divorce and committal) are ‘private’. As Hodgson and Allan v Clibbery both say, they are ‘in chambers’ but, space permitting, the public may be admitted; save for those listed in s 12(1) which are ‘secret’.
And as to allegations ‘of a criminal nature’: it must be recalled that under Prison and Courts Bill cl 47 (which is the proposed statutory amendment with which this article begins) it is allegations which have been the subject of existing findings by a court – criminal or in injunction proceedings – which forms the basis of an application for advocacy assistance.
Surely there is no reason why cases where such allegations are being made should not be open to public scrutiny (if anyone is interested to attend)? After all, the origin of the Scott case was that Mrs Scott wanted her former husband’s family to understand the true nature of what she had alleged about him, and which the court had found, against him. The modern equivalent of Mrs Scott might be the physically abused woman.
Scott makes clear that the presumption is that all cases will be heard in open court. As Viscount Haldane states (see passage above): the burden is on anyone ‘seeking to displace [the presumption] in the particular case to make out that the ordinary rule must as of necessity be superseded’. And then, he goes on, it is not a matter of judicial discretion was to whether an application for privacy is allowed but one of legal principle (see eg R v Legal Aid Board (exp Kiam Todner (a firm))  QB 966,  3 WLR 925, CA; Spencer v Spencer  EWHC 1529 (Fam),  2 FLR 1416, Munby J). Just because the parties agree to exclude the press does not mean the court should go along with them.

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