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This section contains the nature of the case and procedural background.

P and D entered a contract in August 1981 where D agreed to purchase natural gas produced by P. The contract was a minimum purchase obligation, commonly known as a 'take-or-pay' contract, under which D is obligated to take 75 % of the gas produced at P's wells or to pay P as if this amount of gas was taken. D failed to take the minimum and did not pay. P filed suit seeking damages for breach of the contract. D removed the case to federal court and then filed a complaint with FERC asking to issue an order that the take-or-pay prepayments would constitute unlawful payments in excess of the maximum natural gas prices established in the Natural Gas Policy Act of 1978. D filed a motion to dismiss P's suit because FERC has exclusive or primary jurisdiction to consider whether take-or-pay prepayments violated NGPA price ceilings. The district court dismissed and P appealed.

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