Source: https://supreme.justia.com/cases/federal/us/252/23/
Timestamp: 2019-04-25 14:05:21+00:00

Document:
The transmission and sale of natural gas, produced in one state and transported and furnished directly to consumers in a city of another state by means of pipelines from the source of supply in part laid in the city streets, is interstate commerce (p. 252 U. S. 28), but, in the absence of any contrary regulation by Congress, is subject to local regulation of rates. P. 252 U. S. 29. Public Utilities Commission v. Landon, 249 U. S. 236, distinguished.
Appeals of New York (225 N.Y. 397) held that the Commission had such authority.
"Every gas corporation, every electrical corporation, and every municipality shall furnish and provide such service, instrumentalities, and facilities as shall be safe and adequate and in all respects just and reasonable. All charges made or demanded by any such gas corporation, electrical corporation, or municipality for gas, electricity, or any service rendered or to be rendered shall be just and reasonable, and not more than allowed by law or by order of the commission having jurisdiction. Every unjust or unreasonable charge made or demanded for gas, electricity, or any such service, or in connection therewith, or in excess of that allowed by law or by the order of the commission, is prohibited."
Consumers of gas furnished by the plaintiff in error in the City of Jamestown, New York, filed a complaint demanding a reduction of gas rates in that city. The Public Service Commission asserted its jurisdiction which, as we have said, was sustained by the Court of Appeals of New York.
of supply in the State of Pennsylvania into the State of New York. It sells and delivers gas to consumers in the City of Jamestown, in the Town of Ellicott, and in the Village of Falconer, all in Chatauqua County, New York. It also sells and delivers natural gas to consumers in the Cities of Warren, Corry, and Erie in Pennsylvania.
We think that the transmission and sale of natural gas produced in one state, transported by means of pipelines and directly furnished to consumers in another state, is interstate commerce within the principles of the cases already determined by this Court. West v. Kansas Natural Gas Co., 221 U. S. 229; Haskell v. Kansas Natural Gas Co., 224 U. S. 217; Western Union Telegraph Co. v. Foster, 247 U. S. 105.
This case differs from Public Utilities Commission v. Landon, 249 U. S. 236, wherein we dealt with the piping of natural gas from one state to another, and its sale to independent local gas companies in the receiving state, and held that the retailing of gas by the local companies to their consumers was intrastate commerce, and not a continuation of interstate commerce, although the mains of the local companies receiving and distributing the gas to local consumers were connected permanently with those of the transmitting company. Under the circumstances set forth in that case, we held that the interstate movement ended when the gas passed into the local mains; that the rates to be charged by the local companies had but an indirect effect upon interstate commerce, and therefore the matter was subject to local regulation.
subject to applicable constitutional limitations which govern the states in dealing with matters of the character of the one now before us.
The general principle is well established and often asserted in the decisions of this Court that the state may not directly regulate or burden interstate commerce. That subject, so far as legislative regulation is concerned, has been committed by the Constitution to the control of the federal Congress. But, while admitting this general principle, it, like others of a general nature, is subject to qualifications not inconsistent with the general rule, which now are as well established as the principle itself.
pending federal intervention. Thus, there are certain subjects having the most obvious and direct relation to interstate commerce which nevertheless, with the acquiescence of Congress, have been controlled by state legislature from the foundation of the government because of the necessity that they should not remain unregulated and that their regulation should be adapted to varying local exigencies; hence, the absence of regulation by Congress in such matters has not imported that there should be no restriction, but rather that the states should continue to supply the needed rules until Congress should decide to supersede them. . . . Our system of government is a practical adjustment by which the national authority as conferred by the Constitution is maintained in its full scope without unnecessary loss of local efficiency. Where the subject is peculiarly one of local concern, and from its nature belongs to the class with which the state appropriately deals in making reasonable provision for local needs, it cannot be regarded as left to the unrestrained will of individuals because Congress has not acted, although it may have such a relation to interstate commerce as to be within the reach of the federal power. In such case, Congress must be the judge of the necessity of federal action. Its paramount authority always enables it to intervene at its discretion for the complete and effective government of that which has been committed to its care, and, for this purpose and to this extent, in response to a conviction of national need, to displace local laws by substituting laws of its own. The successful working of our constitutional system has thus been made possible."
The rates of gas companies transmitting gas in interstate commerce are not only not regulated by Congress, but the Interstate Commerce Act expressly withholds the subject from federal control. C. 309, § 7, 36 Stat. 539, 544.
is local in its nature, and pertains to the furnishing of natural gas to local consumers within the City of Jamestown in the State of New York. The pipes which reach the customers served are supplied with gas directly from the main of the company which brings it into the state; nevertheless the service rendered is essentially local, and the sale of gas is by the company to local consumers who are reached by the use of the streets of the city in which the pipes are laid, and through which the gas is conducted to factories and residences as it is required for use. The service is similar to that of a local plant furnishing gas to consumers in a city.
This local service is not of that character which requires general and uniform regulation of rates by congressional action, and which has always been held beyond the power of the states although Congress has not legislated upon the subject. While the manner in which the business is conducted is part of interstate commerce, its regulation in the distribution of gas to the local consumers is required in the public interest, and has not been attempted under the superior authority of Congress.
The principles announced, often reiterated in the decisions of this Court, were applied in the judgment affirmed by the Court of Appeals of New York, and we agree with that court that, until the subject matter is regulated by congressional action, the exercise of authority conferred by the state upon the Public Service Commission is not violative of the commerce clause of the federal Constitution.

References: v. 
 v. 
 v. 
 v. 
 v. 
 § 7