Opinion ID: 2407622
Heading Depth: 1
Heading Rank: 5

Heading: the common purchaser act

Text: The Cox Act was enacted in a context of shortage of natural gas and the alleged monopolistic practices by those owning the available supply which was distributed in North Texas through pipelines. In 1930, some 10 years later, the reverse situation as to supply was presented. With the development of the East Texas and other fields, Texas was producing vastly more oil than the market could absorb. The price of oil dropped to ten cents a barrel. Legislation was therefore submitted to a special session of the Legislature in 1930, [12] and the Common Purchaser Act was forthcoming. Among other things, the Legislature prohibited discrimination in the purchase and transportation of oil by pipe line utilities. In the early 1930's the Panhandle gas field and others were developed so as to bring in a then overwhelming supply of gas. There were many gas wells with tremendous capacities and reserves, but no market or pipe line connection for the gas. Accordingly in 1931, the Common Purchaser Act was amended to make it applicable to common purchasers of natural gas. [13] The Act, now Article 6049a, is relevant here because, among other things, it deals with discrimination by purchasers of gas, and with the powers given to the Commission in dealing with the purchase of gas, as compared with the powers given the Commission in dealing with the sale and distribution of gas under the Cox Act. Some of the same terminology is used as that used in the Cox Act. A comparison of the powers is noteworthy; and as will be observed, the powers given the Commission are much stronger, particularly in carrying out the Act regulating discrimination in the purchase of oil and gas. Section 2 provides that no such public utility . . . shall discriminate between or against its patrons in regard to facilities furnished or services rendered, or rates charged . . .. Section 4 says that the Commission shall establish and enforce rules and regulations governing the character of facilities to be furnished by such utilities . . .. Section 6a says that The Commission shall establish and promulgate rates and charges . . .; and that [I]mmediately after this Act shall become effective it shall be the duty of the Commission to hold hearings as to rates now charged [for transportation and delivery by such common carriers] and shall reset them on all existing and operating lines . . .. Section 6a then says, (and the Cox Act significantly contains no similar provision) No common carriers by pipe line . . . shall hereafter abandon any of its connections or lines except under authority of a permit granted by the Railroad Commission, or with written consent of the owner. . .. In Section 7, the Commission is empowered to require pipe line operators to extend their lines to the extent found [by the Commission] to be reasonable and in the public interest. Then the Act particularly deals with discrimination: every pipe line is required to purchase without discrimination [Sec. 8]. Next it specifically says that, the question of justice or reasonableness to be determined by the Railroad Commission . . .. The Act made it unlawful to discriminate as therein defined. Section 8b provides that it shall be the duty of the Railroad Commission of Texas to see that the provisions of this Act are fully complied with . . .. [14] Section 10 says that Any person. . . or the Attorney General . . . may institute proceedings before the Railroad Commission . . . upon any question relating to the enforcement of this Act, and jurisdiction is hereby conferred upon said Commission to hear and determine the same . . .. For violation of the provisions of the Act, or rules of the Commission, the Act provides in Section 11 for fines to be recovered in a district court of Travis County. One half of the fine is to go to the person against whom there shall have been an unlawful discrimination . . .. In addition, Section 11c says that if anyone is discriminated against, a cause of action for damages . . . shall lie . . ., and such person may bring suit for the same in any court of competent jurisdiction. Section 11g provides for a similar cause of action in any court of competent jurisdiction by royalty owners discriminated against. This Act was construed in Foree v. Crown Central Petroleum Company, 431 S.W.2d 312 (Tex.1968), in a suit brought directly in the district court for damages for discrimination,the failure and refusal of a pipe line company to extend its lines to a producer and to purchase gas. It was held that in a suit for damages under the Common Purchaser Act, there need not have been first a finding by the Commission that there had been a past discrimination; that within their respective spheres and powers, both the Commission and the courts had concurrent jurisdiction to find discrimination, and that the Commission had power to act in those areas in which it had power to grant relief. On pages 316 and 317 of 431 S.W.2d, this Court recognized that under the Common Purchaser Act, the Commission has broad powers to hold hearings, make findings, promulgate rules and regulations and enter orders to prevent or to terminate discriminatory practices by common carriers . . .. The Court continued, In none of these statutes, however, do we find authority for the Commission to hold hearings and make findings of discrimination except as incidental to the power to take official action, i. e., to promulgate rules and regulations or to enter and issue orders. Specifically, the Court held, as relevant here, that when the administrative agency is powerless to grant the relief sought [it] has no authority to make incidental findings which are essential to the granting of the relief. [15]