Court Opinion

ID: 9418259
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:17:43.576246+00
Date Added: 2024-06-11T17:21:59.428025
License: Public Domain

Mr. Justice McKenna,
dissenting.
I am unable to concur in the judgment of the court or in the reasoning upon which it is based. I pass by the construction of the amendment of June 29, 1906 (c. 3591, 34 Stat. 584), set out in the opinion, although its application to the business of appellee companies is in controversy. I shall assume its application, therefore, and pass to the. other and more serious questions. Extended discussion *564of them is not now possible. Indeed, any discussion may not be worth while, as I express only my individual views. In order to be brief, I have to refer to the principles of the decision of the court, and indeed I am impelled more to dissent from them than from the judgment. It is of little consequence, aside from the rights of the appellee companies, whether they are subject to be regulated as common carriers, but it is of great consequence whether the sanctions of property be impaired.
The outside principle of the decision is the power of Congress to regulate interstate commerce, but to assert that power solves none of the difficulties of the questions. in the case. I need not pause to demonstrate that the exercise of that power is subject to other provisions of the Constitution, and one of those provisions is invoked by the appellees. It is contended that the act offends the Fifth Amendment in that it takes their property without due process of law. But what is due process of law, and wherein does its requirement limit the power of Congress? Neither question can be answered in a word, and the usual consideration^ are encountered when the courts are called upon to investigate tlie limits of legislative power, Autocracy is free from such perplexities. When authority can say, “The State — it is I!” it meets ho impediments to its- exercise. But that extreme illustration is not necessary. Even a government under a constitution, if it be unwritten, may have a power that leaves nothing for the courts to do other than to enforce the fiats of legislative authority. Under a written constitution, however, there is a sovereignty superior to the legislature, that of the people expressed in the Constitution. How to reconcile legislation with the limitations of the Constitution and leave government practical in its exercise is a problem which comes to this court often. It is the problem in the case at bar. It is to be regretted that there is no indisputable standard for its solution — no indisputable test of *565due process of law. We know that ah act of legislation does not necessarily satisfy it. It may, however, be sufficient, or, to be more careful and accurate, there may be a regulation of the uses of property whose legality cannot be denied. ■ Regulation is not a taking, and we are brought to the inquiry, what uses of property will subject it to regulation? I mean regulation in a special sense, not in the sense in which-all property, whether its uses be public or private, is subject to regulation. "“Property,” it is said, “becomes of public interest when used in a manner to make it of public consequence, and affect the community at large.” “When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created.” Munn v. Illinois, 94 U. S. 113; Budd v. New York, 143 U. S. 517; Brass v. Stoeser, 153 U. S. 391; German Alliance Insurance Co. v. Kansas, 233 U. S. 389. Manifestly the principle needs the definition of the facts of the cases. In three of them the fees for storage of grain were regulated; in the other the price of fire insurance; but dominant in all, as giving character to the property, was the fact that its use was voluntarily offered to the public. There was no compulsion of use or service. This must be kept in mind as the determining circumstance. Conduct may be regulated which cannot be initially commanded. The rates of interest may be regulated, but loans can not be compelled; There is further illustration in a case subsequent to those cited. In W. W. Cargill Co. v. Minnesota, 180 U. S. 452, an injunction was sought against the operation of an elevator and warehouse situated on -the right of way of a railroad until its operator should have obtained a license from the Railroad and Warehouse Commission of the State under a law1 of the State. The defendant company bought and soíd grain, although its *566elevator was used for storing its own grain only. The state court decided that the business was of a “public character” and was “sufficiently affected with a public interest to warrant a very considerable amount of regulation of it by the State.” This conclusion was put upon the ground that the elevator was a kind of public market place and it was important to see that correct weights were had, uniform grades given, proper amount of dock-age taken and no dishonest practice allowed. The provision for a license was sustained. The act, however, provided for. many other regulations, among others, for the receipt and storage of the grain of others and the rates of charges therefor. The state court, passing on these and other regulations, said that there were many provisions in thé act which applied only to warehouses and elevators in which grain was stored for others or for the public and which could not apply to such warehouses as the one in question, and there were perhaps provisions in the act which it would be unconstitutional to apply to such warehouses. The court, however, said, “Such matters need not be considered at' this time. The provision recognizing license is not one of these.” One of the judges of the court -was of opinion that on account of the interdependence of the provisions of the act. many of them, when applied to warehouses not used for the storage of grain by others, were beyond the police power of the State and, therefore, invalid, and made the whole act so. This court, by Mr. Justice Harlan, sustained the judgment of the state court and said “that the mere requirement of a license was not forbidden by the Fourteenth Amendment.” Answering the suggestion that other provisions were repugnant to the Constitution of the United States, it was said that the license would give authority to carry on the business under the valid laws of the State and the valid regulations of the Commission. The case, therefore, manifestly decides that the use of the warehouse by others could not *567have been legally compelled, and in the other cases, as we have seen, it was the act of the parties, not the power of the law, which devoted the property to the public interest. In the Munn Case it was.said of the owners of the elevators that there was no attempt to compel them “to grant the public an interest in their property, but to declare their obligations if they used it in this particular manner.” And further, “He may withdraw his grant by discontinuing the use; but so long as he maintains the use, he must submit to the control.” -
In the cases cited, therefore, there was a regulation of uses which were extended voluntarily to others. I recall no case where the use was compelled and by the use so compelled regulation was justified. The case at bar has no fellow in our jurisprudence.
These considerations are not touched upon in the opinion of the court, and how far they affect the decision can only be conjectured. It may be not at all. At any rate, other considerations are given explicit prominence. The impulse of the amendment is said to be the control which the Standard Oil Company had acquired over the pipe-line transportation of oil. It is further said that it availed “itself of its monopoly of the means of transportation” by refusing to carry “through its subordinates any oil unless the same was sold to them and through them to it on terms more or less dictated by itself, and thereby became master of the fields without owning them.” It is not very clear whether this is intended as a statement merely of the motive of the amendment or of its legal justification. If stated as the motive of the amendment I have no concern with it; as a justification of the amendment its foundation must be considered
The facts of the cases the opinion of the court does not give. They are, however, quite necessary to a discussion of the questions which they present. I quote the summary of the Commerce Court (p. 802):
*568“The Prairie Oil and Gas Company is a corporation organized in 1900 under the laws'of the State of Kansas. It owns and operates a system of pipe lines consisting of gathering lines in the mid-continent field, in the States of Kansas and Oklahoma, a trunk line from that field to Griffith in the State of Indiana, where it connects with the Indiana pipe line, and a trunk line in the State of Arkansas, connecting the Oklahoma pipe line with the pipe line of the Standard Oil Company of Louisiana. This company has no refinery, and its business is confined to producing, purchasing, and selling crude oil, which it delivers to its customers by means of the pipe lines described. Its own wells yield only about 12,000 barrels per day and it purchases approximately 70,000 barrels per day on the average. Its trunk lines are about 860 miles in length, of which some 300 miles are located on the right of way of the Atchison, Topeka & Santa Fe Railway Company under contract arrangement with that company:
“The Uncle Sam Oil Company is a corporation organized in 1905 under the laws of the State (then Territory) of Arizona. It owns and operates a pipe line from its wells in the State of Oklahoma to its refinery at Cherry-vale, Kans. The extent to which this company purchases oil from other producers, if it engages in that business at all, does not appear from the record.
“Robert D. Benson et al. are the members of a partnership, organized in 1878 for the term of 20 years and reorganized in 1898 for a further term of 20 years, in compliance with the laws of the State of Pennsylvania, and doing business under the name of the Tide-Water Pipe Co. (Ltd.). This company transports oil from the Appalachian field in the western part of Pennsylvania, and also oil received through connecting lines from other fields, to the Tide-Water Oil Co. refinery at Bayonne, in the State of New Jersey. It also owns and operates branch lines in New York and Pennsylvania, and a line extending *569from Stoy, 111., through the States of Illinois, Indiana,. Ohio, and Pennsylvania. The greater part of the crude oil transported by this company is purchased from other producers. The lines which it owns and the Bayonne refinery which it serves are under common or unified control.
“The Ohio Oil Co. is a corporation organized in 1887 under the laws of the State of Ohio. It owns and operates pipe lines in the States of Ohio, Indiana, and Illinois and also leases and operates a line from Negley, Ohio, to Centerbridge, in the State of Pennsylvania. It is an extensive purchaser of crude oil from other producers.
“Standard Oil Company, designated, for convenience, ‘Standard Oil Company of New Jersey/ is a corporation organized in 1882 under the laws of the State of New Jersey, and its principal pipe lines are the following: (a) A line extending from Unionville, in the State of New York, near the boundary line of New Jersey, through the latter State to its refineries at Bayonne; (6) a line from Centerbridge, in the State of Pennsylvania, near the boundary of New Jersey, through the latter State to its refineries at Bayonne and Bay way; and (c) a line from Fawn Grove, in the State of Pennsylvania, near the boundary of Maryland, through the latter State to its refinery at Baltimore. The record indicates that much the greáter part of the oil transported through these lines, and perhaps all of it, is oil which this company has purchased.
“The Standard Oil Company of Louisiana is a corporation organized in 1909 under the laws of that State. It owns and operates a refinery at Baton Rouge and a trunk line extending thereto from the town of Ida, near the northern line of Louisiana, and also gathering lines in the Caddo field, in the States of Louisiana and Texas. It purchases a considerable part of the crude oil which its lines transport.
“None of the petitioning corporations is organized or *570derives any of its corporate powers from laws of the State of its creation under which common carrier or other public service corporations are organized, but each of them was formed and has always conducted its operations under and in compliance with state laws which relate to private as distinguished from public business.”
The companies do not possess the right of eminent domain, and their lines are laid over private rights of way, except some of them for short distances 'have laid their lines along the rights of way of certain railroads under some contract arrangement with the railroads, one of them for a distance of about 300 miles. They, however, have in many instances also laid their lines across or along public streets and highways by permission or consent of the local authorities. None of them has ever held itself out as a common carrier or in fact ever carried oil for others, but they have carried only such oil as they produced from their own wells or purchased from othei producers and which they owned when the transportation took place.
Concluding its recitation of facts, the Commerce Court said (p. 803): “In short, so far as their legal status is fixed by the laws of the States of their creation, and so far as their acts and attitude could make them such, all the petitioners [appellee companies] carry on a private business, at least in the sense that they transport only their own oil and have always refused to transport for others; and all of them have evidently sought and claimed to so conduct their operations as to avoid any public activity which might subject them to public regulation.”
These being the facts, it is yet insisted that the appellee companies are common carriers “in substance” and Congress by its action has only made them so “in form,” and that this is unquestionably within the power of Congress. But there is something more to be considered than an antithesis of words. There is an antithesis of *571legal consequences — the subjecting of property to other uses than those of its owner. A manifest taking, therefore.
But let me get away from any appearance of considering words or forms of expression to an estimation of the facts. The Standard Oil Company of New Jersey is made prominent, and the exemplar of all of the other companies, and its stock ownership in some of them is assumed to destroy their individuality and unite them all in operation, character and effect. Indeed, it is represented as the single controlling force and master of the transportation of oil “between the oil fields east of California and the Atlantic ocean.” Under its sway are pictured all the other companies except the Standard Oil of Louisiana, the latter company, however, having a baneful potency of dictation to the other owners in the oil fields, as has its -exemplar, the Standard Oil of New Jersey. In other words it is argued the companies have made themselves masters of their respective fields by the constraint of the sale of the oil of other owners to them upon terms more or less dictated by them by availing themselves of their “monopoly of the means of transportation.” This is the charge. The facts of the case do not sustain it except as they exhibit the advantages of the possession of property which others do not possess. Must it be shared by those others for that reason? The conception of property is exclusiveness, the rights of exclusive possession, enjoyment and disposition. Take away these rights and you take all that there is of property. Take away any of them, force a participation in any of them and you take property to that extent. These are commonplaces, but at times — -it may be always — commonplaces are our best guides when rights are concerned. They are pertinent to this case. The employment of one’s wealth to construct or purchase facilities for one’s business greater than others possess constitutes no monopoly that does not appertain to all property. Such'facilities may give *572advantages and, it may be, power; so does all property and in proportion to its extent. It may well then, be asked — What extent of trade advantages, what degree of power in purchasing, what superiority in facilities of transportation or disposition of articles may be grounds of the exercise of congressional control? If the owner of a small oil well may be given rights in the facilities of the appellee companies, why may not the owner of a small business be given rights in the facilities of a larger business, if Congress sees fit to say that the public welfare requires the gift? Can any privilege be claimed for oil thát cannot be claimed for other commodities? May a jobber of merchandise in Washington who conducts a trade in Baltimore and other places and owns special facilities for the transportation of his merchandise, be compelled to share them with competitors who may not be able to afford as ample ones and in consequence be forced to sell their property to him at a disadvantage? Or, recurring to the illustration of W. W. Cargill Co. v. Minnesota, can one who erects elevators for the storage of grain of his own raising (such instances exist) and uses it as well for grain of his purchase (there are more of such instances), be compelled to share their advantage, with other growers or purchasers of grain? The advantages of his situation are quite as manifest as the advantages the appellees enjoy and the effect on interstate commerce transportation as marked. Upon the same principle, one who builds a railroad to a coal field or to a forest must share it with other owners in the field or forest if he ventures to purchase their productions. Such is the principle of the present decision. Under it what attribute of private property is left?
Let us not exaggerate the conditions or by form of statement put out of view essential elements. What duress is employed that is not employed when terms are exacted as a condition of the use of property? Or, rather, *573and more accurately, what duress is used except the exclusion of others from the use of property which they do not own? There were no prior or present rights in other owners of oil wells to the use of the lines of the appellee companies. They contributed nothing to the construction of the lines and their exclusion from their use is the exclusion resulting from the separate ownership of property as distinguished from rights of community ownership.
There is quite a body of opinion which considers the individual ownership of property economically and politically wrong and insists upon a community of all that is profit-bearing. This opinion has its cause, among other canses, in the power — may I say the duress? — of wealth. If it accumulates 51% of political power, may it put its conviction into law and justify the law by the advancement of the public welfare by destroying the monopoly and mastery of individual ownership?
I submit, with deference, that it is misleading to say that the use of the lines by other oil owners was permitted only on terms dictated by the companies, and that through such dictation they “became masters of the fields without owning them.” And I take it if the companies had not made purchases of oil or refused offers of oil, they would not be held subject to the act. Such is the situation of the Uncle Sam Company and the ground of decision in regard to that company. It is not held to be within the act. It seems to be minimized and considered not big enough for the application of the law, and yet it owns and operates a pipe line from the oil fields of Oklahoma to its refineries in Kansas. The extent to which it purchases oil from producers, if it does so at all, does not appear from the record. It may be supposed that if it venture to make purchases of oil it will lose its immunity. But why its exemption? Why is the fact of purchases of oil important? Is it not the concern of the small oil owners to get to market? Indeed, is not that the advantage they get *574from the law thereby being able to break away from the supposed subjection to, and “duress” of, the superior advantages of the appellee companies? The result which the amendment under review was intended to effect was beneficial to the public welfare. The query then occurs, May all of the other oil companies give up their purchases and, if they should, will they thereby get the freedom of the Uncle Sam Company? What then of the owners of oil? It may be- they cannot sell their oil at all — the local market is taken from them — a distant market is not possible for them. Is not the public welfare concerned for them in such situation? Must they remain in it dependent upon the richer owner balancing the advantages of remaining under the law or becoming free from it? Or may the power which has brought them to such Situation extricate them from it by one more act of legislation in the public interest and to take from the companies their mastery of the fields of production?
United States v. Delaware & Hudson Co., 213 U. S. 366, opens a curious speculation and illustrates the effect of the power exercised in the legislation under review. The appellee companies, the decision is, engaging in interstate commerce may be declared common carriers and made to carry the products of others as well as their own products. Then, having been made common carriers, under the authority of the cited case, they can be forbidden to carry their own products, and so by legal circumlocution property legally devoted to the use of its owners is forbidden such use and devoted wholly to the use of others. A queer outcome.
I have extended this discussion beyond what I had intended. Much more, however, could be said and decisions adduced on the various elements of the case. Prophecies of the result of the principles of the decision could be made which I am afraid could not be pronounced fanciful, and projects whose shadows may even now be discerned *575will plead a justification by the decision in these cases. It is to be remembered that there are many jurisdictions of legislation. It is to be remembered that there cannot be one measure of control for Congress over private property and its uses and another measure of control for the States. In other words, the power which Congress has in its domain, the States have in their domain. Alarms, however, are not arguments, and I grant that legislation must be practical. But while making this concession, and giving to the legislation in question the presumption of constitutionality to which all legislation is entitled, I am yet constrained to say that it transcends the limits of the power of regulation and takes property without due process of law.
As I have not the power of decision, I do not enter into a discussion of the facts which distinguish the cases. It may be that the judgment of the Commerce Court as to the Standard Oil Company should be reversed because the lines of the Company were common carriers before their acquisition, and it may be that the Prairie Oil & Gas Company was made a common carrier by the law which created it. This, however, is in controversy.
I concur in the judgment as to the Uncle Sam Oil Company. From the judgments as to the other companies, I dissent.