Source: http://www.chanrobles.com/usa/us_supremecourt/314/498/case.php
Timestamp: 2019-10-17 20:04:03
Document Index: 708756399

Matched Legal Cases: ['§ 2', '§ 717', '§ 717', '§ 7', '§ 717', '§ 7', '§ 2']

On complaint of appellee, Central Illinois Public Service Company, which is engaged in the distribution of natural gas to consumers in various cities and towns in Illinois, appellee, Illinois Commerce Commission, made its order requiring appellant, Illinois Natural Gas Company, to supply the Central Company with natural gas and to establish the pipeline connection necessary for chanroblesvirtualawlibrary
Appellant, an Illinois corporation, is a wholly owned subsidiary of Panhandle Eastern Pipe Line Company, which owns and operates a natural gas pipeline system extending from gas fields in Texas, Kansas, and Oklahoma across Illinois and into Indiana. Appellant owns a pipeline system wholly in Illinois, whose transmission pipelines connect at various points in Illinois with the main line of Panhandle Eastern. Appellant, by long-term contract, purchases its supply of gas from Panhandle Eastern and transports it through its own lines to local gas distributing utilities in Illinois to which it sells the gas for distribution to consumers in Illinois cities and towns. It also sells and delivers gas to several industrial consumers in the state. The gas moves continuously, under pressure applied by Panhandle, from the gas fields until it enters appellant's transmission lines, where appellant reduces chanroblesvirtualawlibrary
That appellant and Panhandle Eastern are engaged in interstate commerce in the purchase and sale of the natural gas which moves in a continuous stream from points without the state into appellant's pipes within the state seems not to be open to question. Missouri v. Kansas Gas Co., 265 U. S. 298; Ozark Pipe Line Corp. v. Monier, 266 U. S. 555; People's Gas Co. v. Public Service Commission, 270 U. S. 550; State Tax Commission v. Interstate Gas Co., 284 U. S. 41. Pursuant to the mutual agreement of the two companies, the gas is transported in continuous movement through the pipeline into the state and through appellant's pipes to the service lines of the distributors, where appellant delivers it to them. In such a transaction, the particular point at which the title and custody of the gas passes to chanroblesvirtualawlibrary
This Court has held that the retail sale of gas at the burner tips by one who pipes the gas into the state, or by one who is a local distributor acquiring the gas from another who has similarly brought it into the state, is a sale in intrastate commerce, since the interstate commerce was said to end upon the introduction of the gas into the service pipes of the distributor. Public Utilities Commission v. Landon, 249 U. S. 236; East Ohio Gas Co. v. Tax Commission, 283 U. S. 465. In applying this mechanical test for determining when interstate commerce ends and intrastate commerce begins, this Court has held that the interstate transportation and the sale of gas at wholesale to local distributing companies is not subject to state control of rates, Missouri v. Kansas Gas Co., supra; see Public Utilities Commission v. Landon, supra, 249 U. S. 245; cf. Public Utilities Commission v. Attleboro Co., 273 U. S. 83, 273 U. S. 89, or to a state privilege tax, State Tax Commission v. Interstate Gas Company, supra. Yet state regulation of local retail rates to ultimate consumers has been sustained where the gas so distributed chanroblesvirtualawlibrary
In other cases, the Court, in determining the validity of state regulations, has been less concerned to find a point in time and space where the interstate commerce in gas ends and intrastate commerce begins, and has looked to the nature of the state regulation involved, the objective of the state, and the effect of the regulation upon the national interest in the commerce. Cf. South Carolina Highway Dept. v. Barnwell Bros., 303 U. S. 177, 303 U. S. 185-187 et seq.; California v. Thompson, 313 U. S. 109, 313 U. S. 113-114; Duckworth v. Arkansas, ante, p. 314 U. S. 390. Thus, in Pennsylvania Gas Co. v. Public Service Commission, 252 U. S. 23, where natural gas was transported by pipeline from one state into another and there sold directly to ultimate local consumers, it was held that, although the sale was a part of interstate commerce, a state public service commission could regulate the rates for service to such consumers. While the Court recognized that this local regulation would to some extent affect interstate commerce in gas, it was thought that the control of rates was a matter so peculiarly of local concern that the regulation should be deemed within state power. Cf. Arkansas Louisiana Gas Co. v. Dept. of Public Utilities, 304 U. S. 61. And, similarly, this Court has sustained a nondiscriminatory tax on the sale to a buyer within the taxing state of a commodity shipped interstate in performance of the sales contract upon upon the ground that the delivery was not a part of interstate commerce, see East Ohio Gas Co. v. Tax Commission, supra, but because the tax was not a prohibited regulation of or burden on that commerce. 294 U. S. 50. In Southern Gas Corp. v. Alabama,@ 301 U. S. 148, 301 U. S. 156-157, on which the Illinois Supreme Court relied, we held only that the sale of gas to a local industrial consumer by one who was piping the gas into the state was a local business sufficient to sustain a franchise tax on the privilege of doing business within the state, measured by all the taxpayer's property located there, including that used for wholesale distribution of gas to local public service companies.
An avowed purpose of the Natural Gas Act of June 21, 1938, was to afford, through the exercise of the national power over interstate commerce, an agency for regulating the wholesale distribution to public service companies of natural gas moving interstate, which this Court had declared to be interstate commerce not subject to certain types of state regulation. H.R. No. 709, Committee on Interstate and Foreign Commerce, 75th Cong., 1st Sess., April 28, 1937. [Footnote 1] By its enactment, Congress undertook chanroblesvirtualawlibrary
And, by § 2(6), 15 U.S.C. § 717a(6), "natural gas company" means a person (including corporation) engaged in the transportation of natural gas in interstate commerce or the sale in interstate commerce of such gas for resale. Sections 4, 5, 6, 15 U.S.C. §§ 717c, d, e, give the Federal Power Commission extensive control over the rates at which the gas is sold for resale. Under § 7(a), 15 U.S.C. § 717f(a), the Commission has authority to order natural gas companies to extend their systems to establish physical connections of their transportation facilities with those of chanroblesvirtualawlibrary
We think it plain that these provisions, read in the light of the legislative history, were intended to bring under federal regulation wholesale distribution, like that of appellant, of gas moving interstate. Appellant engages in interstate commerce in gas and in its interstate transportation as those terms had been defined by this Court before the adoption of the Act. After the gas is brought into the state, appellant makes the first sale to distributors for resale, to which the Act in terms applies, and which the cases last mentioned defined as a part of the commerce subject, in some respects, to the exclusive regulation of Congress. Cf. Parker v. Motor Boat Sales, Inc., ante, p. 314 U. S. 244. Section 7 of the Act commits to the Federal Commission the control of extensions and abandonment of the transportation facilities of natural gas companies, their physical connection with those of distributors and sales to distributors, and prohibits extensions, such as the state commission has now ordered, into an area already served by another natural gas company unless the Commission has first granted a certificate of public convenience and necessity. Since the communities here are supplied by the Universal and Central companies, which transport the gas interstate, they constitute a market already served by a natural gas company within § 7(c) and § 2(6) of the Act. chanroblesvirtualawlibrary
In determining the scope of the federal power over the proposed extension of facilities and sale of gas, it is unnecessary to scrutinize with meticulous care the physical characteristics of appellant's business, in order to ascertain whether, as the court below held, the interstate commerce involved in bringing the gas into the state ends before delivery to distributors. In any case, the proposed extension of appellant's facilities is so intimately associated with the commerce, and would so affect its volume moving into the state and distribution among the states, as to be within the Congressional power to regulate those matters which materially affect interstate commerce, as well as the commerce itself. @ 222 U. S. 119-120.