Court Opinion

ID: 9885130
Source: CourtListenerOpinion
Date Created: 2023-10-06 03:31:57.307099+00
Date Added: 2024-06-11T07:48:43.809452
License: Public Domain

Mr. Chief Justice Schaefer, dissenting: It is important at the outset to state the actual question before us. It is whether Mississippi, in the light of all of the operations in which it engages in Illinois, is a public utility under section 10-3 of the act, (Ill. Rev. Stat. 1951, chap, mji, par. 10.3,) which defines a public utility as “every corporation * * * that now or hereafter: (a) May own, control, operate or manage, within the State, directly or indirectly, for public use, any plant, equipment or property used or to be used for * * * the production, storage, transmission, sale, delivery or furnishing of heat, cold, light, power, electricity or water; or for the conveyance of oil or gas by pipe line; * * * or that (b) May own or control any franchise, license, permit or right to engage in any such business.” Since the Commerce Commission has not urged that the act of June 21, 1951, (Ill. Rev. Stat. 1953, chap. 104, pars. 104-112,) is conclusive of Mississippi’s status as a public utility, the applicability of that act need not be considered. Mississippi is the sole supplier of natural gas in the Alton-East St. Louis area. It transports gas by pipeline from Louisiana to Illinois, and sells it in Illinois to two public utilities and to twenty-three industrial consumers. These twenty-three industrial consumers were selected by Mississippi because of their financial stability and their large and constant demand for gas. Mississippi’s operations in bringing gas to Illinois and in selling it to local public utilities for ultimate public consumption are conducted under a certificate of public convenience and necessity issued by the Federal Power Commission under the Federal Natural Gas Act. (15 U.S.C. 717 et seq.) In this phase of its activities its monopoly is protected and its rates are regulated by the Federal Power Commission. Under the Federal statute it has the right of eminent domain. 15 U.S.C. 717!(h). It seems clear to me that the certificate of convenience and necessity which Mississippi holds under the Federal Natural Gas Act brings it squarely within the express language of paragraph (b) of section 10-3 of the Public Utilities Act. It holds a “franchise, license, permit or right” from the Federal government to engage in “the conveyance of * * * gas by pipe line.” That fact alone, in my opinion, subjects it to the jurisdiction of the commission, and I am unable to understand the statement in the opinion of the court that Mississippi “has never taken any municipal or other public franchise to sell its gas.” It is not necessary, as the opinion of the court seems to suppose, that Mississippi’s direct sales to industrial consumers, considered without regard to its sales to utilities for resale to the public, should in themselves suffice to identify it as a public utility. It is true that the commission is not seeking to exercise jurisdiction over Mississippi’s sales to the Illinois utility companies, but that is because those sales are excluded from State control by virtue of the commerce clause and the Federal Natural Gas Act. (Missouri v. Kansas Gas Co. 265 U.S. 298; Illinois Natural Gas Co. v. Central Illinois Public Service Co. 314 U.S. 498.) Mississippi’s sales to the two utilities are unmistakably sales for public use under section 10. (See Central Illinois Public Service Co. v. Illinois Natural Gas Co. 375 Ill. 634; Chicago District Pipeline Co. v. Commerce Com. 361 Ill. 296.) The fact that they are, for constitutional reasons, controlled by Federal rather than State authority, does not permit us to ignore them in determining whether Mississippi is a public utility. Cases in which the concept of public use has been held to prevent control of essentially private operations such as the incidental sale of water procured or power generated for its own internal use by a concern primarily engaged in other activities, are, in my opinion, wide of the mark. (See Highland Dairy Farms Co. v. Helvetia Milk Condensing Co. 308 Ill. 294; State ex rel. Danciger v. Public Service Com. 275 Mo. 483, 205 S.W. 36; cf. Pipe Line Cases, 234 U.S. 548.) Mississippi’s entire business is the transportation and sale of gas. To hold that by restricting its industrial sales to a selected group of the most desirable customers, Mississippi can require us to regard such sales as for private use is, in my opinion, to condition the application of the statute upon the willingness of a company to comply with it. Other cases relied upon in the opinion of the court, involving mutual telephone companies furnishing service only to their members and lacking entirely any vendor-vendee relationship, are not in point. See Public Utilities Com. v. Bethany Mutual Telephone Ass’n, 270 Ill. 183; Public Utilities Com. ex rel. Evansville Tel. Co. v. Okaw Valley Mutual Telephone Ass’n, 282 Ill. 336; but cf. Public Utilities Com. ex rel. Noble Tel. Co. v. Noble Mutual Telephone Co. 268 Ill. 411. That those who purchase from Mississippi are content with the situation is irrelevant. A multitude of factors, which may, — or may not, — be related to the public interest, will determine whether the immediate parties are satisfied with their arrangement. It is precisely to insure that factors related to public interest are accorded their proper significance that monopolies are regulated. The volume of Mississippi’s industrial sales is substantial, amounting, in 1950, to 23,923,265 cubic feet, five times the amount sold to its utility customers. Mississippi itself concedes that it has chosen the industrial customers to whom it sells because they are the larger industries having the most substantial gas requirements and the greatest financial strength. One of the purposes of the act is to protect established utilities from competition. (See West Suburban Transportation Co. v. Chicago and West Towns Railway Co. 309 Ill. 87, 91; Illinois Power and Light Corp. v. Commerce Com. 320 Ill. 427, 429.) In this case, Mississippi competes directly with the utilities to which it sells. That competition may have important results to those utilities and their consumers. Not long ago we pointed out the inevitable interrelation between sales of gas to industrial consumers and other sales of gas. (See Produce Terminal Corp. v. Commerce Com. ex rel. Peoples Gas Light and Coke Co. 414 Ill. 582.) The local utilities here involved sell gas to' industrial consumers under regulation of the Commerce Commission. By the court’s decision, Mississippi’s sales, directly competitive, are unregulated. Factual situations almost identical have recently been before the courts of Indiana and Michigan, and in both cases the power of the State commission over selective industrial sales by the pipe line company was sustained. (Public Service Com. v. Panhandle Eastern Pipeline Co. 224 Ind. 662, 71 N.E. 2d 117, aff’d, 332 U.S. 507; Panhandle Eastern Pipe Line Co. v. Michigan Public Service Com. 328 Mich. 650, 44 N.W. 2d 324, aff’d, 341 U.S. 329; cf. Industrial Gas Co. v. Public Utilities Com. of Ohio, 135 Ohio St. 408, 21 N.E. 2d 166.) The statutory provision involved in the Indiana case was substantially equivalent to section .10 of our statute, and the same contention was made there as appellee makes in this case. In rejecting it, the court stated, “The primary duty of a public utility is to serve on reasonable terms all those who desire the service it tenders. This duty does not permit it to pick and choose and to serve only those portions of the territory which it finds most profitable, * * *.” 224 Ind. 662, 686, 71 N.E. 2d 117, 127. The opinion goes on to quote with approval the language of the Ohio court in Industrial Gas Co. v. Public Utilities Commission of Ohio: “* * * a corporation, calculated to compete with public utilities and take away business from them, should be under like regulatory restriction if effective governmental supervision is to be maintained. * * *. otherwise corporations could be organized to operate like appellant and in competition with bona fide utilities until the whole state would be honeycombed with them and public regulation would become a sham and a delusion.” The fact that Mississippi has not exercised its power of eminent domain does not appear significant to me. By virtue of its Federal certificate of convenience and necessity, Mississippi has that power. (15 U.S.C. yiyf (h) ; see Federal Power Com. v. Fast Ohio Gas Co. 338 U.S. 464, 468.) Whether or not it has heretofore found it necessary or convenient to exercise the power is immaterial. Nor does the fact that Mississippi sells to its industrial consumers at varying rates militate in its favor. It made a somewhat similar argument when it unsuccessfully resisted enforcement of the Federal Natural Gas Act. The Circuit Court of Appeals disposed of it shortly, saying, “The argument furnishes an additional reason why petitioner’s contracts should be within the regulatory scope of the act.” Mississippi River Fuel Corp. v. Federal Power Commission, 121 Fed. 2d 159, 164 (C.C.A. 8, 1941.) The argument of the court based upon administrative interpretation by the Commerce Commission is not persuasive to me. It is true that over a period of many years the Commerce Commission did not attempt to assert jurisdiction over Mississippi’s sales to industrial users. It is also true, however, that during the same period the Commerce Commission has exercised the jurisdiction which it here asserts over pipe line companies whose activities are similar to or identical with those of Mississippi. Chicago District Pipeline Co. v. Commerce Com. 361 Ill. 296; Central Illinois Public Service Co. v. Illinois Natural Gas Co. 375 Ill. 634; Illinois Commerce Com. v. Panhandle Eastern Pipeline Co. 92 P.U.R. (N.S.) 370. It may be added, finally, that the provision in appellee’s articles of incorporation and in its license to do business in Illinois to the effect that it shall not function as a public utility cannot, in my opinion, defeat the jurisdiction of the commission. We have not been so naive in the application of other statutes. We have looked to the facts rather than to the self-serving characterizations of the parties. (Commonwealth Life and Accident Ins. Co. v. Board of Review, 414 Ill. 475, 482; Parks Cab Co. v. Annunzio, 412 Ill. 549; Murphy v. Daumit, 387 Ill. 406, 415.) The appropriate disposition of this contention is that which was made of a similar argument by Mr. Justice Holmes in Terminal Taxicab Co. v. District of Columbia, 241 U.S. 252, 253: “The facts are agreed. The plaintiff is a Virginia corporation authorized by its charter, with copious verbiage, to build, buy, sell, let and operate automobiles, taxicabs, and other vehicles, and to carry passengers and goods by such vehicles,' but not to exercise any of the powers of a public service corporation. It does business in the District, and the important thing is what it does, not what its charter says.” Mr. Justice Hershey concurs in this dissenting opinion.