Court Opinion

ID: 9711290
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:28:23.400311+00
Date Added: 2024-06-11T18:23:03.425591
License: Public Domain

Dethmers, J.
(dissenting). I do not concur with Mr. Chief Justice Boyles in reversal. I do agree that Panhandle Eastern Pipe Line Co. v. Public Service Commission of Indiana, 332 US 507 (68 S Ct 190, 92 L ed 128), is conclusive of at least one of the issues before us, vis., that the sales of natural gas here involved are in interstate commerce. Although reasoning in Federal Power Commission v. East Ohio Cas Co., 338 US 464 (70 S Ct 266, 94 L ed 268), *666may give rise to some uncertainty as to the court’s continued adherence to that view, nevertheless the court did not therein expressly overrule, despite its specific mention, the Panhandle-Indiana Case. Does the holding in Panhandle-Indiana, as indicated by Mr. Chief Justice Boyles, support defendant’s contention that it may require plaintiff to obtain from it a certificate of public convenience and necessity as a prerequisite to making, within this State, the sales in interstate commerce here involved and, accordingly, order plaintiff to cease and desist from making those sales until such certificate has been obtained? I think not. On the contrary, the opinion in that case, as quoted at length in Mr. Chief Justice Boyles’ opinion in this case, makes it clear that decision therein is confined to the following: First, that the sales are in interstate commerce; second, that, as such, they are subject to State regulation as to rates and service, both under previous decisions of the court and by virtue of the provisions of the Federal natural gas act; third, that the orders of the*Indiana commission requiring plaintiff to file tariffs, rules and regulations, annual reports, et cetera, are valid and permissible initial steps in the State’s application of its regulatory plan to plaintiff. Nowhere in the opinion is it suggested that the Indiana commission sought to require, or that the court was upholding the right of the commission to require, plaintiff to obtain a certificate of public convenience and necessity before making, in Indiana, the sales in interstate commerce there involved. Rather, in holding the State of Indiana clothed with regulatory power as to rates and service, the court, significantly, said (pp 522, 523):
“State power to regulate interstate commerce, wherever it exists, is not the power to destroy it, unless Congress has expressly so provided.”
*667Defendant points to no such express congressional provision either in the Federal natural gas act or elsewhere.
Defendant cites Clark v. Poor, 274 US 554 (47 S Ct 702, 71 L ed 1199), in which the court held constitutional a State regulation providing that before operating over State highways a common carrier by motor shall apply for and obtain a certificate or permit therefor from a State commission and pay an extra tax for maintenance of highways and administration of laws governing their use even though applied to carriers engaged exclusively in interstate commerce. That it is not authority for defendant’s position here clearly appears from the statement in the opinion therein that while the State act called the required certificate a certificate of public convenience and necessity, the State commission had recognized that under Buck v. Kuykendall, 267 US 307 (45 S Ct 324, 69 L ed 623, 38 ALR 286), and Bush & Sons v. Maloy, 267 US 317 (45 S Ct 326, 69 L ed 627), it had no discretionary power to grant or withhold a certificate on the grounds of public convenience and necessity or lack thereof as relates to carriers engaged exclusively in interstate commerce and that the commission was, therefore, willing to grant the certificate upon application and compliance with other provisions of the law. No such situation confronts us here. As stated in Mr. Chief Justice Boyles’ opinion, the commission’s order in the case at bar “is, however, a direct order by the Michigan public service commission, finding that it does have jurisdiction to determine whether a certificate of public convenience and necessity shall be granted to Panhandle. * * * It denies the right of Panhandle to sell natural gas to * # * local consumers for their own consumption, without first obtaining a certificate of public convenience and necessity from the commission. It leaves the door *668bpen for a hearing before the Michigan public service commission as to whether or not. pub lie convenience and necessity requires the granting of such a certificate to Panhandle. * * * The statute states what the commission shall take into consideration in determining the question of public convenience and necessity * * * CL 1948, § 460.505 (Stat Ann § 22.145).” The cited statute requires the commission, in determining the question of public convenience and necessity to “take into consideration the service being rendered by the utility then serving such territory, the investment in such utility, the benefit, if any, to the public in the matter of rates and such other matters as shall be proper and equitable in determining whether or not public convenience and necessity requires the applying utility to serve the territory.” It is the plain intent of the act, from which alone the commission derives its power to grant certificates of public convenience and necessity, that the commission shall not issue such certificate unless and until it shall, have determined, upon the basis of the considerations mentioned in the statute, that public convenience and necessity requires the applying utility to serve the territory. It is,' therefore, the clear legal import of the commission order, here involved, that plaintiff shall not make the sales in question unless and until the commission shall have determined that public convenience and necessity requires such sales and, axiomatically, that plaintiff shall never make such sales so long as the commission remains unpersuaded, in view of existing facilities, that public convenience and necessity do require such sales by plaintiff. So understood, this becomes, then, a plain case of the commission asserting the power to prohibit these sales in interstate commerce if they compete with the sales and business of local utilities. It is no mere coincidence that defendant’s cease and *669desist order, by its own terms, expressly limits its restraint upon plaintiff to operations in municipalities already being served by some other public utility. The extent to which prevention of competition with a local utility was the motivating consideration may be gathered from the pleadings and from exhibits in the case, particularly telegrams from defendant and intervenor to the Federal power commission protesting plaintiff’s invasion of intervenor’s “distribution area.” Prevention of competition with local commerce by interstate commerce is an objective, in and of itself, not permitted under the “commerce clause” to be accomplished by a State. H. P. Hood & Sons v. DuMond, 336 US 525 (69 S Ct 657, 93 L ed 865); Buck v. Kuykendall, supra; Bush & Sons v. Maloy, supra; Baldwin v. Seelig, 294 US 511 (55 S Ct 497, 79 L ed 1032, 101 ALR 55). While a State may regulate the transportation and sale of natural gas in interstate commerce within its boundaries, it may not prohibit it. West v. Kansas Natural Gas Co., 221 US 229 (31 S Ct 564, 55 L ed 716, 35 LRA NS 1193). A State cannot make the right to transport or sell, within its territorial limits, goods in interstate commerce dependent upon satisfying a State authority that public convenience and necessity requires such operation and upon thus securing a certificate of public convenience and necessity from the State. Statutes so providing are, in that respect, unconstitutional. Determination of the adequacy of existing facilities as affecting the right to sell in interstate commerce is distinctly a Federal and not a State function. Buck v. Kuykendall, supra; Bush & Sons v. Maloy, supra. We are not impressed by defendant’s suggestion that the latter 2 cases are overruled by Clark v. Poor, supra, inasmuch as the court there upheld State regulatory action only as it was predicated upon State reeogni*670tion of the force and applicability thereto of the Buch and Bush Cases.
Defendant stresses a difference between the case at bar and the Buch and Bush Cases in that in the latter cases a certificate had been applied for and refused, while here plaintiff has made no such application. The difference is of no legal significance in this connection. In testing the validity of the cpmmission order a consideration of what the commission might do with an application of plaintiff for a certificate is of no consequence. The question is not whether the commission would exercise its powers properly, but, rather,- what are the commission’s powers? Under the commission’s order plaintiff is prohibited from selling natural gas in Michigan to local consumers in interstate commerce until plaintiff secures a certificate of public convenience and necessity from defendant. Under the applicable Michigan statute the power of defendant to issue such certificate is conditioned upon a determination that public convenience and necessity so require. Inherent in the claimed discretionary power to grant is the power to deny the certificate. City of Sault Ste. Marie v. International Transit Co., 234 US 333 (34 S Ct 826, 58 L ed 1337, 52 LRA NS 574). Do the provisions of the “commerce clause” permit the State commission to prohibit plaintiff from making sales in interstate commerce merely because the sales are not required by public convenience and necessity? The answer of the Buch and Bush Cases is “no.” The subsequently enacted Federal natural gas act has conferred no such powers upon the States. It is this lack of power in a State to condition the right to engage in interstate commerce therein upon its view of the requirements of public convenience and necessity which distinguishes this case from such cases as Highland Farms Dairy v. Agnew, 300 US 608 (57 S Ct 549, 81 L ed 835), cited by defend*671ant, in -which the State undertook no more than to license and subject certain intrastate commerce to what the court had theretofore held to be permissible regulatory provisions, the court saying, appropriately enough, that one may not be heard to complain in advance of his application for a license that there is danger of refusal. The inapplicability of that language to a case such as this, in which the State seeks to assert a power which it does not possess, is obvious.
The decree of the trial court reversed the commission order and permanently restrained defendant from interfering with the sales in ■ question. Prom its opinion it appears that the trial court did not thereby intend to prevent lawful regulation of such sales by defendant, but merely to prevent the interference implicit in the commission’s order reversed by the court. So construed, the decree should be affirmed, without costs, a public question being involved.
Reid and Carr, JJ., concurred with Dethmers, J.