Legal Document

347 U.S. 157 74 Supreme Court Reporter 396 98 L.Ed. 583 MICHIGAN-WISCONSIN PIPE LINE CO.v.CALVERT et al. (two cases). PANHANDLE EASTERN CO. versus CALVERT Nos. 198, 199, 200 and 201. Argued Jan. 5, 6, 1954. Decided Feb. 8, Rehearing Denied March 15, See 931, 528. [Syllabus from pages 157-158 intentionally omitted] Messrs. D. or Haw. Hawai‘i Reports KFH45 A2 Culton, Amarillo, Tex., Samuel Atlantic L. Morgan, Houston, for appellants. W. V. Geppert, John Ben Shepperd, Austin, appellees. Mr. Justice CLARK delivered the opinion of Court. 1 The appellants, two natural gas pipeline companies, brought separate suits against Texas State officials, appellees here, in a state district court, seeking determination that tax statute as applied to appellants violates Commerce Clause Constitution United States, recovery money paid under protest compliance with statute. District sustained appellants' contentions entered judgment their favor. Civil Appeals reversed, holding is constitutional. 255 South Western Reporter, 2nd Series 535. 'refused' applications writs error. 2 By procedural rule, docket notation denying application writ error signifies deems correct one principles law declared correctly determined. Appellants were uncertain whether appeal this was properly Texas, 'the highest court which decision could be had' within meaning 28 States Code KF62 § 1257, Annotated KF65 U5 1257. Hence each appellant appealed courts.1 We postponed hearing cases on merits jurisdictional question. 346 805, 44. 3 think appeals these Appeals. In American Ry. Exp. company Levee, 1923, 263 19, 44 11, 12, 68 140, Louisiana had refused certiorari Appeal "for reason correct." Holmes, speaking unanimous Court, said: 4 '* * (U)nder jurisdiction discretionary although it necessary petitioner invoke order make certain case go no farther, when declined shown had. Another section article cited required give its reasons refusing writ, therefore fact happened an upon rather than some more technical consideration, did not take refusal ostensible character declining jurisdiction. Union Telegraph Crovo, 220 364, 366, 31 399 (400), 55 498; Norfolk & Suburban Turnpike Commonwealth Virginia, 225 264, 269, 32 828 (830), 56 1082. Of course limit time applying date refused.' at 20—21, page 12. 5 Lone Star Gas 1938, 304 224, 551, 58 883, 82 1304, present provisions effect, Court's mandate issued where also Public Service 1937, 301 667, 57 921, 81 1332. 6 Accordingly 199 201, are dismissed. proceed consider 198 200. 7 question presented infringed by occupation 'gathering gas,' measured entire volume 'taken,' interstate company, taxable incidence taking outlet independent gasoline plant purpose immediate transmission. relevant part statute2 provides 'In addition all other licenses taxes levied assessed there hereby every person engaged gathering produced State, privilege engaging such business, rate 9/20 cent per thousand (1,000) cubic feet gathered.' Using beggared definition term Act further containing liquid hydrocarbons removed extracted scrubbing, absorption, compression any process, gas' means first retaining possession processing transmission through pipeline, either common carrier private, otherwise after has passed plant.' It prohibits 'gatherer' therein defined shifting burden producer gas, shall gathered local consumption if unconstitutional 8 Michigan-Wisconsin Pipe Line Company Panhandle Eastern Company, Delaware corporations companies certificates convenience necessity Natural 15 717 seq., transportation sale commerce gas. nature activities been stipulated. 9 constructed extending Michigan Wisconsin. At points Missouri Iowa sells distribution serve markets those areas.3 Texas. produces gas; purchases supply Phillips Petroleum long-term contract. collects wells pipes plant, liquefiable hydrocarbons, oxygen, sulphur, hydrogen sulphide, dust foreign substances preparatory residue. As residue leaves absorbers flows owned distance 300 yards boundary between property Michigan-Wisconsin. installed meters point. emerging directly into 26-inch pipelines 'taking' made After taken approximately 1,215 compressor station operated pressure raised about pounds 975 facilitate movement distant markets. flow compressed, cooled, scrubbed dehydrated then passes 24-inch carries 1.74 miles Oklahoma border thence outside Additional motive power furnished stations states transported. 10 producing consumers steady continuous flow. All Michigan-Wisconsin's purchased so 11 Exclusive question, pays ad valorem value facilities leases State. levies producers 5.72% well special cover expenses enforcing conservation proration laws. 12 place much emphasis measures afforded great benefits protection companies. beyond enforcement laws only public interest but commercial advantage industry. But, though appealing truth, here show essential requirements due process have met sufficiently justify imposition activity. No challenge validity Due Process Clause, basing objections we examine latter 'depends considerations constitutional policy having reference substantial effects, actual potential, particular suppressing burdening unduly commerce.' Nippert City Richmond, 1946, 327 416, 424, 66 586, 590, 90 760. proceed, therefore, discuss factors involved testing Clause. 13 assailed applies equally moving intrastate commerce. denominated gas.' Obviously ordinary usage; gives transcendent scope; operations outlet' plant. Appellate realistically found event described statute' *.' thought since activity subject repetition elsewhere, sole closely related integral business (appellants) who transport scope Constitution.' concluded 'is just production itself local,' held valid principally authority Utah Power Light Pfost, 1932, 286 165, 52 548, 76 1038, Hope Hall, 1927, 274 284, 47 639, 71 1049.4 14 accept court's operating tax, stated presented. But unable agree answer thereto conclusion constitutionality. Appellants' Under instrumentalities totally immune taxation, absent action Congress. Frequently said must pay way, Postal Telegraph-Cable 1919, 249 252, 259, 39 265, 266, 63 590; Live Stock Bureau Revenue, 303 250, 254, 546, 823; done lip service idea. Numerous upheld does operate discriminate possibility multiple taxation resulting same sort being imposed states. recurring problem resolve conflict Constitution's trade permitted freely without unnecessary obstruction source, state's rightful desire require bear proper share costs government return received. Some wisest would uphold patently discriminatory, wait Congress adjust conflicts wished. view prevailed, forced decide many varied factual situations given aspect now settled if, commerce, cannot separated it. Memphis Stone, 1948, 335 80, 87, 1475, 1478, 92 1832; supra, 258, 550. And genuine separation taxed impossible, likely can equal right impose similar levy goods, net effect prejudicing 16 transmitted not, cf. delayed step ceased begun. Cf. supra. issue, appellate Phillips' This event, stipulated, occurs produced, processed others solely actually committed What seeks is, merely loading condemned Joseph Carter Weekes Stevedoring Co., 1947, 330 422, 427, 67 815, 818, 91 993, simultaneously enters moves continuously market. 'There break, period deliberation, ending contemplated beginning line.' Fuel Hallanan, 1921, 257 277, 281, 42 105, 106, 234. early Gloucester Ferry Pennsylvania, 1885, 114 196, 213, 826, 833, 29 158, said, 'Receiving landing passengers freight incident transportation.' receipt 'taking'; practical standpoint 'taking off' commerce; reality exit economic inherently unsusceptible division distinct capable forming basis imposed, hand, other. difficult conceive situation itself. less integrated 'so practically it'.5 essentially 17 Appeals, stated, relied largely supra (286 551). license generation electricity hydraulic Idaho Utah. called solve electrical energy, like manufacture generally, (is) complete itself; linked inseparable transaction commerce'. inaccurate say system purely transferring device. 'On contrary,' generator lines perform different functions, result comparable, far consideration concerned, physical articles subsequent shipment commerce.'6 Cited support principle Oliver Iron Mining Lord, 262 172, 43 526, 929, 'engaged mining iron ore ores' 'ore enter until done, respect mining', 179, 528; (274 640), 'producers reckoned according commodity well.' capture production, processing. 18 recognized nothing point form changed way; continued journey. However, unfair base fluid two-step transmission, interference title passing processing, took prior 'taking.' passing, readily admit designed avoid taxing sale; that, finding activity, factor owner connecting another. Such 'carve(d) out what process', 423, 589, legislative whimsy segregated tax. realistic.7 19 Here perhaps sufficient taxed, namely additional objection upheld. 'permit commerce', 429, 819, may 'first taking' total taken, recipient least 'unloading' arrives distribution. might seek crossed substantially resurrect customs barriers eliminate. 'The very create area free among several States. That clause vested unbroken Congress, States.' McLeod Judge E. Dilworth 1944, 322 327, 330—331, 64 1023, 1026, 88 1304. 20 Reversed. Tel. Priester, 1928, 276 48 234, 72 555. Tex.Laws 1951, chapter 402, XXIII. Vernon's Ann.Civ.St. art. 7057f. consumer population 12,000,000 people. noted below, '(E)xcept minor variations conducts manner loads outlets three plants, plant; portion takes plants; makes sales small customers, sending State.' purposes Panhandle's significantly Only aspects enterprise Michigan-Wisconsin, transmits most clearly decided will our discussion. approach utilized court; do suggest here. Appellees outset argument appeals, ground federal otherwise, determination. substance grounds courts set forth number alleged incidences none coincided Appeals; conclusive binding Court; urging discriminatory advancing new considered hence waived statute; short, issue raised. contention. complaints thereafter specifically challenged trial invalid violating expressly 'violates If void, valid.' Since treated single preserved, suggested contrary brief taken. Baltimore O.S.W.R. Burtch, 1924, 540, 544, 166, 433 ('loading unloading shipment'); see 1881, 105 460, 466, 26 1067 (tax 'sending' messages regulation commerce); Puget Sound Tax Commission Wash., 302 90, 92, 72, 73, discharge cargoes' operation); Richfield Oil Corporation Board, 329 69, 83, 156, 164, 80 (commerce begins 'no later delivery oil vessel'). 180—181, 552. operation convert mechanical energy before transformation completed began. analogous prepared fed lines. rely supra; Edelman Boeing Air Transport, 1933, 289 249, 53 591, 77 1155; Chassaniol Greenwood, 1934, 291 584, 54 541, 78 1004; Coverdale Arkansas-Louisiana 604, 736, 1043. distinguishable them involved. Also McGoldrick Berwind-White Coal 1940, 309 33, 60 388, 84 565, involving goods consumption, city come rest. ended likened property.

Classification Label: 7