Court Opinion

ID: 8883772
Source: CourtListenerOpinion
Date Created: 2022-11-26 21:17:36.298762+00
Date Added: 2024-06-11T17:06:48.344489
License: Public Domain

VAUGHT, District Judge
(dissenting).
,1 regret the necessity of disagreeing with the majority opinion.
In the majority opinion, however, the facts are fairly and clearly stated, as well as the issue of law.
Were we considering the Act of Congress, 49 U.S.C.A. § 1(3), for the first time, I might be constrained to agree with my associates in their conclusion. However, the Supreme Court has considered this very question in The Pipe Line Cases, 234 U.S. 548, 34 S.Ct. 956, 58 L.Ed. 1459, and Valvoline Oil Co. v. United States et al., 308 U.S. 141, 60 S.Ct. 160, 84 L.Ed. 151.
The question at issue is whether or not, for the purposes of valuation, the pipe line of the plaintiff is a common carrier within the terms of Section 1, Chapter 1, of the Act, 49 U.S.C.A. § 1.
The suit also involves the question of whether the required compliance with the Commission’s valuation order would constitute a violation of the Constitution of the United States, by taking property of the plaintiff without just compensation, depriving it of its property without due process, or denying it equal protection of the law.
The pertinent sections of the statute are as follows:
49 U.S.C.A. § 1:
. “(l)The provisions of this chapter shall apply to common carriers engaged in—
Hí * * * Hí
*983“(b) The transportation of oil or other commodity, except water and except natural or artificial gas, by pipe line, or partly by pipe line and partly by railroad or by water; or
“(c) * * * from one State * * * to any other State.
* # * * *
“(3) Definitions. The term ‘common carrier’ as used in this chapter shall include all pipe-line companies; telegraph, telephone, and cable companies operating by wire or wireless; express companies; sleeping-car companies; and all persons, natural or artificial, engaged in such transportation or transmission as aforesaid as common carriers for hire. * * * ”
49 U.S.C.A. § 19a:
“(a) The commission shall, as hereinafter provided, investigate, ascertain, and report the value of all the property owned or used by every common carrier subject to the provisions of this chapter.
* * * ifc *
“(e) Every common carrier subject to the provisions of this chapter shall furnish to the commission or its agents from time to time and as the commission may require maps, profiles, contracts, reports of engineers, and any other documents, records, and papers, or copies of any or all of the same, in aid of such investigation and determination of the value of the property of said common carrier, * *
This case involves the interpretation of the statute as it pertains to the facts presented, and the distinguishing features, if any, between the facts shown in The Pipe Line Cases, supra, and Valvoline Oil Co. v. United States et al., supra.
In The Pipe Line Cases, the court had under consideration the act as it was amended June 29, 1906, 34 Stat. 584 (known as the Hepburn Act), in which section 1(3) then read:
“That the provisions of this Act shall apply to any corporation or any person or persons engaged in the transportation of oil or other commodity, except water and except natural or artificial gas, by means of pipe lines, or partly by pipe lines and partly by railroad, or partly by pipe lines and partly by water, who shall be considered and held to be common carriers within the meaning and purpose of this Act, * *
In the body of the opinion at page 559 of 234 U.S., 34 S.Ct. 958, 58 L.Ed. 1459, the court said:
“ * * * The main question is whether the act does and constitutionally can apply to the several constituents that then had been united into a single line.
“Taking up first the construction of the statute, we think it plain that it was intended to reach the combination of pipe lines that we have ' described. The provisions of the act are to apply to any person engaged in the transportation of oil by ■means of pipe lines. The words ‘who shall be considered and held to be common carriers within the meaning and purpose of this act’ obviously are not intended to cut down the generality of the previous declaration to the meaning that only those shall be held common carriers within the act who were common carriers in a technical sense, but an injunction that those in control of pipe lines and engaged in the transportation of oil shall be dealt with as such. * * * Its evident purpose was to bring within its scope pipe lines that, although not technically common carriers, yet were carrying all oil offered, if only the offerers would sell at their price.
“ * * * So far as the statute contemplates future pipe lines and prescribes the conditions upon which they may be established there can be no doubt that it is valid. So the objection is narrowed to the fact that it applies to lines already engaged in transportation. But, as we already have intimated, those lines that we are considering are common carriers now in everything but form. They carry everybody’s oil to a market, although they compel outsiders to sell it before taking it into their pipes. * * * ”
In that case the Standard Oil Company controlled a number of pipe lines of other organizations, which, when taken together, formed a pipe line for transportation of oil across several states, and as stated by the court in 234 U.S. at page 559, 34 S.Ct. at page 958, 58 L.Ed. 1459:
“* .* * To meet the present amendment the Standard Oil Company took a conveyance of the New Jersey and Maryland lines, and the common carrier lines now end at insignificant places where there are neither market nor appliances except those of the Standard Oil, by which it would seem that the whole transport of the carriers’ lines is received. * * *
*984“Availing itself of its monopoly of the means of transportation the Standard Oil Company refused, through its subordinates, to carry any oil unless the same was sold to it or to them, and through them to it, on terms more or less dictated by itself. * * * »
There can be no question but that the oil thus transported, at the time of its transportation, was owned by the Standard Oil Company and that it was transporting its own oil through its own pipe line. The court then considered the Uncle Sam Oil Company and held that the facts as to that company did not fall within the description of the act as the transportation by that company was “merely an incident to use at the end,” and said:
“There remains to be considered only the Uncle Sam Oil Company. This company has a refinery in Kansas and oil wells in Oklahoma, with a pipe line connecting the two which it has used for the sole purpose of conducting oil from it^own wells to its own refinery. It would be a perversion of language, considering the sense in which it is used in the statute, to say that a man was engaged in the’transportation of water whenever he pumped a pail of water from his well to his house. So as to oil. When, as in this case, a company is simply drawing oil from its own wells across a state line to its own refinery, for its own use, and that is all, we do not regard it as falling within the description of the act, the transportation being merely an incident to use at the end. * * * ”
The plaintiff contends it falls squarely within the holding as to the Uncle Sam Oil Company.
In Valvoline Oil Co. v. United States, supra, Valvoline Oil Company owned a pipe line of 1,426 miles running to 9,020 wells in three states, into which it gathered some 75,000 barrels of oil per month for its two refineries in Pennsylvania which manufactured the products to be distributed to its trade. All of the oil was purchased from producers at the well, 50 per cent, originating in Pennsylvania, 38 per cent, in West Virginia, and 12 per cent, in Ohio. Surplus oil, not needed in its operations in its refineries, was sold to refineries in Pennsylvania and West Virginia; none of which came out of the state of the refinery. Because it did not transport interstate other oil than that which it purchased at the well for its own use, it claimed it was not a common carrier of oil subject to the Interstate Commerce Act, nor that it should be held to come within the terms of the statute. It contended that it was not a common carrier within the provisions of the act, that its pipe line was used primarily to transport oil to its own refineries, and that such transportation was not clothed with a public interest. The court, in passing upon the issues, said (308 U.S. page 145, 60 S.Ct. 162, 84 L.Ed. 151):
“In the present Act there is a change of language but we perceive none in meaning. Speaking of the amendments of the Transportation Act of 1920 * * * which recast the Hepburn Amendment into the present form, the House Committee on Interstate and Foreign Commerce reported that the section here under consideration ‘amends the first five paragraphs of section 1 of the Commerce Act, making minor corrections and classifying language in several respects, but making no important changes in policy.’ As now written the section brings railroads under the Act by means of the last clause of subsection (3) only. This clause is a conjunctive not a modifier. It does not affect the generality of the first clause as to pipe-line companies.
“The appellant relies upon the Pipe Line Cases to show that the present act does not cover a pipe line transporting oil for its own refining purposes only. The discussion referred to is that concerning the Uncle Sam Oil Company. But that company’s pipe line was used for the ‘sole purpose of conducting oil from its own wells to its awn refinery.1 This was held not to be transportation under the Act. Here, however, it is the purchase from many sources and subsequent carriage that determine the applicability of the statute to Valvoline.” (Emphasis supplied.)
Under the holding in The Pipe Line Cases it was determined that not every “pipe line” that may be engaged in the transportation of oil is a common carrier, within the terms of the statute, even though it transports oil across state lines, and the Uncle Sam Oil Company’s line was held to be an exception. In the Valvoline Case that distinction under the statute as amended was recognized and maintained, the court saying: “But that company’s pipe line was used for the ‘sole purpose of conducting oil from its own wells to its own refinery.’ ” While in The Pipe Line Cases the court said: “When, as in this case, a company is simply drawing oil from its own wells across a state line to'its own *985refinery, for its own use, and that is all, we do not regard it as falling within the description of the act, the transportation being merely an incident to use at the end.”
Let us now consider the facts in The Pipe Line Cases and the Valvoline Case as distinguished from the facts shown in the instant case.
In The Pipe Line Cases the Standard Oil Company owned or controlled the pipe lines, which were engaged in transporting the oil from many owners. The court described the situation as follows, (234 U.S. 559, 34 S.Ct. 958, 58 L.Ed. 1459):
“Availing itself of its monopoly of the means of transportation the Standard Oil Company refused, through its subordinates, to carry any oil unless the same was sold to it or to them, and through them to it, on terms more or less dictated by itself. In this way it made itself master of the fields without the necessity of owning them, and carried across half the continent a great subject of international commerce coming from many owners, but, by the duress of which the Standard Oil Company was master, carrying it all as its own.
“It not only would be a sacrifice of fact to form, but would empty the act if the carriage to the seaboard of nearly all the oil east of California were held not to be transportation within its meaning, because by the exercise of their power the carriers imposed as a condition to the carriage a sale to themselves. * * * Its evident purpose was to bring within its scope pipe lines that, although not technically common carriers, yet were carrying all oil offered, if only the offerers would sell at their price.”
In the instant case we have none of these distinguishing features. The Champlin Refining Company is not engaged in “carrying all oil offered” but is carrying only its own refined product. It is not monopolizing “the means of transportation” of oil. It is not refusing to carry oil unless it is sold to it on its terms or any other terms. It simply is not engaged in carrying any oil except its own product, refined at its own refinery, and transported for its own use to its own terminals.
In the Valvoline Case, the Valvoline Oil Company had two refineries in Pennsylvania. Its pipe lines embraced 1,426 miles which ran to 9,020 wells located in Pennsylvania, West Virginia, and Ohio. It gathered from these wells some 75,000 barrels of oil per month for the purpose of refining the product to be distributed to its trade. It could not use all the oil so gathered in its refineries and sold the surplus to other refineries, located one in Pennsylvania and one in West Virginia. I think the court distinguishes the fact situation in the Valvoline Case from the case at bar when it said: “Here, however, it is the purchase from many sources amd subsequent carriage that determine the applicability of the statute to Valvoline.”
In the instant case the Champlin Refining Company is not gathering through its pipe line the product it transports. The product it transports originates at its own refinery at Enid, Oklahoma. As so originated, it is owned by the company in its entirety, the pipe line being “merely an incident to use at the end,” which is the marketing of its product. And, as stated by the court in the Valvoline Case, supra, in distinguishing between the facts there shown and the facts shown in The Pipe Line Cases, as to the Uncle Sam Oil Company: “But that company’s pipe line was used for the ‘sole purpose of conducting oil from its own wells to its own refinery.’ This was held not to be transportation under the Act.”
Is the general public interested in such transportation as shown in the case at bar ? The record does not disclose that anyone has sought to have oil transported through this pipe line. It does not disclose that the company transports any product but its own, nor • that it holds itself out to the public as - a carrier of the product of any who offer to avail themselves of its facilities, but on the contrary, it discloses that the line is constructed and maintained in such a manner that such facilities would not be available to any such transportation. It merely shows that the Champlin Refining Company refines its own product at its own refinery and transports it to market with its own facilities, for its own use, which use is to place it on the market. Certainly, the fact that the plaintiff added to the price of its products at its terminals what it considered to be a fair sum to cover the cost of transportation, would not and could not interest the buying public. It would have to compete with others at the market who were offering products of a like kind. The record discloses that its means of transportation had cost a large sum of money and that it had to maintain *986its transportation facilities, if it was an “incident to use at the end.”
There is a distinct difference between a pipe line engaged in interstate commerce and a pipe line which is a common carrier. In the first instance the pipe line may or may not be a common carrier. The determining factors are the use to which the pipe line is put and the statute which defines “common carrier.”
If a pipe line is not operated for hire, then the statute, as construed by The Pipe Line Cases and the Valvoline Case, would not apply.
For the foregoing reasons, therefore, I respectfully dissent to the majority opinion.