Document: 338 U.S. 464 70 S.Ct. 266 94 L.Ed. 268 FEDERAL POWER COMMISSIONv.EAST OHIO GAS CO. et al. No. 71. Argued Nov. 10, 1949. Decided Jan. 9, 1950. Rehearing Denied Feb. 20, See 339 905, 515. Mr. Bradford Ross, Washington, D.C., for petitioner. 1 William B. Cockley, Cleveland, Ohio, respondent, East Ohio Gas Co. 2 Harry M. Miller, Columbus, respondents, State of and Public Utilities Commission Ohio. 3 Walter R. McDonald, Indiana Service al., as amici curiae, by Special leave Court. 4 [Argument Counsel from page 465 intentionally omitted] 5 Justice BLACK delivered the opinion 6 Section 1(b) Natural Act1 provides that Act 'shall apply to transportation natural gas in interstate commerce, sale commerce resale ultimate public consumption * natural-gas companies engaged such or sale, but shall not any other local distribution facilities used *.' 2(6) defines 'natural-gas company' 'a person The Federal Power Commission, after hearings, found facts respondent Company was a company subject Commission's jurisdiction.2 On these subsidiary findings ordered keep accounts submit reports required Act.3 rejected Company's contentions4 its operations were covered expense supplying information so great transgress statutory constitutional limits.5 Court Appeals District Columbia, without reaching contentions, reversed orders on ground 'engaged within meaning Act'.6 Importance questions administration prompted us grant certiorari. 337 937, 69 1516, 93 1742. I. 7 owns operates business solely selling more than half million consumers through systems. Most this is transported into Kansas, Texas, Oklahoma, West Virginia pipe lines Panhandle Eastern Pipe Line Hope Company, an affiliate Inside boundary connect with Ohio's large high-pressure which imported gas, propelled mainly own pressure, flows continuously 100 miles combined length trunk at least 650 miles. 8 That continuous flow states constitutes has been established numerous previous decisions does cease journey instant it crosses enters pipes, even though completely state where finally consumed. Respondents do cannot claim their commerce.7 As we held Interstate v. Comm., 331 682, 688, 67 1482, 1486, 91 1742, 'interstate commerce' no restricted theretofore had given opinions 9 contend, however, word 'transportation' § must be construed applying only transporting hire sales followed resales, whereas neither. short answer Act's language did express limitation. Despite unqualified making 'transportation commerce,' respondents ask qualify businesses both transport sell resale. They rely sentence declaration policy, 1(a), referring 'the gas'. But contention 'and' policy provision creates unseverable bond refuted clearly disjunctive phrasing itself. pointed out 332 507, 516, 68 190, 195, 92 128, made applicable three separate things: '(1) commerce; (2) resale; (3) sale.' And throughout 'sale' are viewed subjects regulation. have independent equally important places Act. Thus, adopt respondents' construction would unduly restrict power carry one major policies Moreover, initial interest Congress regulation reemphasized 1942 passage amendment 7(c) broadening powers over extension lines. 56 Stat. 83. This report pointing vested inadequate make 'any serious effort control unplanned view conserving country's valuable exhaustible energy resources.'8 We hold like phrase aptly describes movements High-pressure lines.9 10 also contend exempt because all come proviso inapplicable 'to distribution'. what meant facilities' 'local distribution' equipment distributing among particular community, mains. For prior enactment statute sharply distinguished between two: clear national alone point pressure reduced entered mains, while could regulate those mains.10 legislative history shows attention directly focused cases drawing distinction. It barred federal community supply systems Committee Report correctly describe surplusage 'not actually necessary.'11 wholly unpersuaded intended treat they mere integrated service. Indeed, admitted upon oral argument here, logical consequence principle line stretching Texas Cleveland jurisdiction if owned To draw strained inference congressional exemption ignore importance nationally controlling order preserve 'equality opportunity treatment various communities concerned.' Missouri Kansas Co., 265 298, 310, 44 544, 546, 1027. 11 What said indicates comes squarely coverage set §§ 2(6). Nevertheless broad purpose provide regulate. Urging fully state, statements cut down regulatory power, rather supplement closing gap created decisions.' 517—519, 195—196, 128; see Comm. United Fuel 317 456, 467, 63 369, 375, 87 396. adhere statements. decisions, since decided decide today, form measure close Illinois Central 314 498, 508, 62 384, 388, 86 371; Parker Motor Boat Sales, 244, 250, 221, 225, 184. 12 In series repeatedly called House Committee,12 declared system. Landon, 249 236, 243, 39 268, 577; 1027; Poublic Attleboro Steam & Electric 273 83, 89, 47 294, 496, 71 549; Tax 283 465, 470 472, 51 499, 500—501, 75 1171.13 Under reach 'gap' close. therefore acted under indicated not. already doing subjected resale, state. 371.14 respect differs sells direct difference immaterial. out, granting just came covering light decision how can encompassing mean thing "transportation' another 'sale resale' involved. 13 Here elsewhere, once properly 'natural company,' interfere commission might some preclude exercise function. Connecticut Light 324 515, 533, 65 749, 757, 89 1150; 89—90, 296, 549. Nor purport abolish overlapping. 5(b), example, may 'investigate determine cost production authority establish rate governing gas.' 52 824. Yet agency establishing equivalent authority. 14 find indicating create exception every Regardless whether wiser farseeing statesmanship exception, should interpretative process. There nothing authorizes interpret away plain mandate. II. 15 A passed urged here compliance accounting impose burden 'as limits.' Our specifically referred anything record showing method reasonably related granted respect.15 fail proper support order. All requirements affirmatively appear call precise kind system, information, deemed relevant necessary performing duties. principles law adequately Cardozo speaking American Telephone Telegraph States, 299 232, 57 170, 81 142. Northwestern 321 119, 64 451, 88 596. Measured criteria judicial review orders, reason reject issued applied compliance, sufficient say case, supra, 247, 177, 142: 'The evidence show will lay heavy overpass bounds reason.'16 16 violates reserved rights Tenth Amendment foreclosed Court's holding 125, 454, 8(a) National itself 'nothing act relieve keeping accounts, memoranda, records laws State.' 17 valid enforced. 18 Reversed. 19 DOUGLAS BURTON took part consideration case. 20 JACKSON, whom FRANKFURTER joins, dissenting. 21 If case explicit recalcitrant company, there course dissent. such, likely her Utility Association Railroad Commissioners, authorities several states, including notable protecting interest, helping utility. alliance against suggests meets eye. 22 key understanding supplant Before Act, each able price distributed consumers. Pennsylvania 252 23, 40 279, 434. never denied power. obliged allow operating costs paid when brought system purchase regulate, often investigate, purchases frequently affiliates, fact cool company's normal zeal drive good bargain Hence, appealed up machinery fix import out-of-state gas. asked Government do, everything revealed legislation pending. Its Solicitor summarized purposes before subcommittee Foreign Commerce, follows: whole bill bring commissions rates, moves not.' Hearings Sub-committee Commerce H.R. 11662, 74th Cong., 2d Sess. 24. active promoting seem believed accomplished. 23 all-Ohio deriving income assets located transacted Since 1911, exercised included rate-making, authorizing acquisition property, approval capitalization security issues, complete practices requiring detailed periodic reports. Except inability line, supervise utility continuously. 24 authorized fixed state-line pay supplies. now seeks go beyond superimpose features conflict identical matter How much farther supplanting duplicating argument, far rendered unclear expressly approves overlapping leaves carefully stated doubt. anxiety program stirs explained magnitude. petition notes forty-three pending takes same position vis-a-vis 25 appears present issue arises theories different seen fit accept. change entire properties very cost. requires either conduct contrary perhaps two sets books. real experience wither rule possession field. 26 sustain overriding state's repudiating recent After reviewing 'Congress comprehensive scheme complementary operation confusion functions.' later quoting H.R.Rep.No. 709, 75th 1st Sess., '(T)he designed take 'no commissions' 'so drawn complement manner usurp authority." 320 591, 610, 281, 291, 333. Quoting Report, thereafter 'basic purpose' passing occupy field Supreme States act." 690, 1487, last year observed that, produce harmonious industry. Neither nor body encroach other.' 513, 1251, 1260. 27 provisions apply? inherent limitation affirmative render clause denying application Or exclusionary At rate, finds dividing physical characteristics transmission seizes high transmitted sub-stantial distance low served customers' burners outer limit 'local' area states. 28 Recognizing June 21, 1938, unregulated unregulatable assumes passage, today,' states' measuring Commission. heretofore intend freeze impact current absence makes intention unmistakable. South-Eastern Underwriters Ass'n, 322 1162, 1440. today look searched it. Cf. Helvering Griffiths, 318 371, 636, 843; 29 Today's anomalous result whereby intrastate whose admittedly based premise paramount Congress' mind dealing was, holdings relating regulation, peculiarly mechanistic formula employed principally 1931 1171,1 means levy excise tax gross receipts company. 30 I convincing indication, history, forever bound, construing legislation, then limitations Clause cf. separated nonlocal facilities. crucial question factual situation exerted exerted. So long lip service satisfactorily beg question. 31 shift doctrine casts Acts mold Court, pressure-reduction station relied lost standing accepted cases. interested known disdainful disregard changes favor emphasis wholesale retail less decision. 284 41, 62, 76 156.2 32 yet, although Reports debates scanned vain mention point, believe end begin. approach, today's confines area, bounded low-pressure practically city gates. By However, factor immaterial 689, where, rare unanimity, put our commerce. termed immaterial, present. 33 rests inferences inconsistent examining subject. Heretofore careful consistently observe attempt limits until insisted extending 'was meticulous territory reach.' 519, 196, 128. years ago '(B)y 1938 delineated broadly permissible intrude. former consumers, exemplified 434; latter, 1027, reinforced 549.' went effective 'by adding weight reinforce Id., pages 514, 517, 195. 1486. 1742; also, 609, 333, 506, 387, 371. hardly realm industry 34 professes first widens gap, outside reduction pressure. Actually, Congress, none cited electric similar premise. considered, however. Quite contrary, months pen Chief Hughes, sphere ratemaking powers. Lone Star 304 224, 551, 58 883, 82 1304.3 consulting define fill function, latest, unanimous one, declare perceives existent. 35 Although scope limited recognized concern prices.4 likewise whatever old doctrines frozen include entrance municipal authority, 36 Thus apparent selecting mark corollary imposed excluding distribution, resorted neither supportable claimed consistent most doctrines. 37 resurrected bound employ? simple, unsophisticated available. seems me obvious devoted exclusively serving accordingly excepted forgotten justification resort sections defining jurisdictional. forth areas apply. 'but' assurance bodies sponsoring extend 527, 755, 1150. 38 simple solution squares modern standards, adopted, froze decisions. keeps faith decidedly almost words formula, statewide hundred 'facilities distribution.' supra. Of course, meaningless instance logically enough give above clause,' exclusive main ran New York; lateral branching and, long, delivering burner tips communities. Similarly, hypothesis constructed opinion, wherein pictured having way border well retail. Again, would, quite obviously nature common carriers hire. which, apply.5 asks none, room 41 understand expand sprawls many physically depths wells consumer's tips. uniform controls middle segment, committed willing supersede left peculiar problems affecting producing protection consuming rates moving two. subdivides operate unitary enterprise, Whatever think wise field, chafe free override. foreshadowed suppose passed, certainly evoked resistance agencies instead support. 42 diversity experimentation values centralization uniformity destroy. Brandeis said, 'It happy incidents single courageous may, citizens choose, serve laboratory; try novel social economic experiments risk rest country.' Ice Liebmann, 285 262, 311, 386, 747. Long stirred utilities, initiative practice resulted experiences. 43 forget measures temporary expedients, eternal verities—if indeed verities all. Certainly matters indulged—the right own—is methods property being accounted Out emerge pragmatic tests. require revert original cost, basis Jennings Bryan earlier generation progressives eloquently railroad rate-making. Smyth Ames, 169 466, 418, 819. Bryan's 489. month, connection, 'Original 'false standard past' market value reflects cost.' Toronto, Hamilton Buffalo Navigation 396, 403, 217, 221. remembered closer customers authorities, mechanisms cumbersome quickly adjusted changing times. utilize centralizing judiciary destroy diversities scrupulous protect. utilities according standard, small preserving gave advance initiative. 45 observance represented time enactment, terms read, have, it, viz. amounts entrapment supported representation deprive them probably easier get needed future. 821, amended U.S.C. 717 seq., U.S.C.A. seq. instituted proceedings motion complaint City Later cities filed complaints. F.P.C. 586; 15; 497. note 15, infra. intervenor, substantially contentions. 74 P.U.R.,N.S., 256. Related discussions 497, 638, 129; Cir., 115 F.2d 385. 84 U.S.App.D.C. 312, 316, 173 429, 433. See, e.g., Colorado-Wyoming 626, 850, 1235; 503—504, 385—386, 470, 500, 1171; Daniel Ball, Wall. 557, 999. Twentieth Annual (1940), p. 78. Wheat, Administration Certificate Provisions Geo.Wash.L.Rev. 194, 197. (United Oil Co.) 234 548, 562, 956, 959, 1459, Uncle Sam oil, 'simply oil across refinery, use, 49 slight force, any, determination word's Furthermore, merely processing plants. buys transports sale; further kind, except eventual puts nearly category Valvoline 308 141, 145, 60 160, 162, 151; Champlin Refining 329 29, 1, 22. latter sold difference, persuasive why special expanded here. 245, 269, 577, 28, 280, 434, Landon reasoned movement ended mains.' (249 270.) decision, reasoning. continued reached tips, nevertheless permitted presented problem concern. resolved conflicting readopting rule. interpreting resting charges 549, reaffirmed choice doctrine, product (electricity) 470—472, 1171, yield sharp cleavage necessary, specified therein fairly stating Commission.' H.R.Rep. pp. 3—4. Committee, exclude hearings considering proposed crowded repeated references discussed supra; received emphasis. General 'established imported, stepped permit distribution. It, still announced *' Subcommittee 88. his brief committee extracted thus transported, phases transportation.' 16. Amendments exempted rejected. concerned taxes. involved irrelevant Undeniably relevant, considered enunciated case: 'is essentially national—not local—in character state.' 1171. implications prevailing now, 504, 512, 192, compare H. P. Hood Sons DuMond, 336 525, 545, 657, 668. primarily regulations pursuant following sections. 6(b) file 'an inventory statement thereof, informed regarding additions, betterments, extensions, new construction.' 824, 717e(b), 717e(b). duty 'such cost-accounting procedures,' etc., rules prescribe. 10(a) similarly 'annual reports'. 5(b) vests prescribe general 'necessary appropriate act.' estimate placing $1,500,000 $2,000,000 convincing, greater investment considerably exaggerated.' expansion volume mains compared breaking package shipment contents treated, prepared Mississippi pipe-line Curtly dismissing State's arguments held, succinctly headnote: local, distributors become affair privilege vendor, deliver quantities sold, uses thermometer meter reduces pressure.' 42, analogy shipped 156. examined validity fixing charged gates piped fields Panhandle, segment Oklahoma. amount produced purchased added supply. commingled recognition, types conducted companies. Because interrelated corporate structure companies, treated unit, approved rate-making valuation H.R.Rep.No.709, 1—2, adopted S.Rep.No.1162, became Act: '* regulated transactions. prohibition (1920), (40 434). enacting disturb jurisdiction. so-called sales, (for companies) legal different. Such transactions Congressional action, (See (State of) (Natural) (1924), 298 (44 1027), (1927) 83 (47 549)). basic aspects existed. These led, House, Chairman Lea Senate, Wheeler Commerce. explanatory declared, primary lack interstate-commerce law. commissions; retain time.' Cong.Rec. 6721. he later, object regulate.' Ibid. member Halleck assured '(T)his consumer.' 6723. declared: 'There time. applies 9313. emphasized adverted debates. suggested comports conclusions Senate reports, 3, 3: 'That negative gas' connection character.'

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