Court Opinion

ID: 9651254
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:11:25.815013+00
Date Added: 2024-06-11T18:12:31.328235
License: Public Domain

WALLER, Circuit Judge
(dissenting).
In order to set out my views more clearly on this controversy I shall state some facts in addition to those set forth in the main opinion.
Petitioner owns 110 producing gas wells and controls 56,555 acres of natural gas lands in the Monroe Gas Field of Louisiana. It gathers the gas from its wells and also that which it buys from other wells, and, through its own pipe lines, transports same to points within the State of Louisiana and within the Monroe Gas Field, where it is delivered to interstate pipe line companies which in turn transport the gas to individual customers and to utilities in other states which then sell the gas to the ultimate consumer. It is the price received in Louisiana for gas, produced in Louisiana, gathered in Louisiana, sold in Louisiana, -delivered in Louisiana, and to which all right, title, and interest passes in Louisiana, that the Commission has fixed in the order here under review.
Before the gas is transported by the interstate pipe line companies it is first compressed, and its continuous transmission is thus temporarily arrested as it is made ready for its journey in interstate transportation.
Petitioner, of course, knows that the gas which it produces, gathers, and sells will be transported by the purchasers in interstate commerce by whom it will be sold directly to the ultimate consumers or to the owners of distribution systems who will, in turn, sell it to ultimate consumers, in other states.
In another phase of Petitioner’s business it transports and sells some of its gas to points in Louisiana by a pipe line, which, however, runs through a portion of the State of Mississippi. This activity is definitely in interstate commerce, regulable, and regulated, by the Commission, but it, admittedly, is not in issue here. The appeal is from the order of the Commission reducing the selling price in Louisiana of Petitioner’s gas to certain interstate pipe line companies from 7.39¡é to 4.66{i per thousand cubic feet.
Petitioner is in no wise affiliated with any of these purchasers of its gas, as was the situation in Peoples Natural Gas Co. v. Federal Power Commission, 75 U.S.App.D.C. 235, 127 F.2d 153, and in Illinois Gas Co. v. Public Service Co., 314 U.S. 498, 62 S.Ct. 384, 86 L.Ed. 371. In neither of those cases was the Appellant a producer of natural gas as is Petitioner in the case at bar.
The Act by its terms applies: (1) To transportation in interstate commerce of natural gas; (2) to the sale of natural gas in interstate commerce for resale for ultimate public consumption; and (3) to natural gas companies engaged in interstate transportation or sale of natural gas.
In Phillips Petroleum Co. v. Ochsner, 5 Cir., 146 F.2d 138, 139, this Court [footnote 1] noted that under the natural gas contracts in force in the Panhandle Gas Field of Texas “the producer is required to gather the gas at the well and deliver it into the main pipe line of the pipe line company under certain required pressures, * * In the present case, Petitioner gathers and delivers its gas to the interstate pipe lines.
It seems that the gathering, and transporting to market, are necessary incidents to the production of gas, for there can be *954no sustained production unless the gas can be collected and carried to market. “Transportation and sale do not include production or gathering.” Colorado Interstate Co. v. Federal Power Commission, 324 U.S. 581, text 598, 65 S.Ct. 829, 837, 89 L.Ed. 1206.
Congress refused in the Act to confer upon the Federal Power Commission the right to regulate the production, or the power to regulate the gathering, of natural gas. The view seems to be quite reasonable that it did not undertake to regulate the gathering of natural gas because it, doubtless, recognized that gathering was a necessary incident to production — a purely local activity. We do not have here a case where the producer is admittedly regulable, whose producing and gathering facilities must be taken into account in the over-all pattern of rate making, as in Colorado Interstate Co. v. Federal Power Commission, supra.
Without doubt, had Congress desired to exercise the full extent of its power in the regulation of interstate commerce in natural gas, it could have empowered the Commission to regulate, as isolated activities, also the production and gathering of natural gas when same is produced or gathered with knowledge that sale, shipment, and delivery in interstate commerce was intended, as it did, for example, in Sec. 15(a) (1) of the Fair Labor Standards Act, Sec. 215(a) (1), Title 29 U.S.C.A. Congress could easily have given the Act a broader scope by conferring the power upon the Commission to regulate any operation or movement of natural gas which might retard its commercial or industrial use, or which might otherwise adversely affect interstate commerce. It could have made the Act applicable to any facilities that affect interstate transportation as in the Federal Employers’ Liability and Interstate Commerce Commission Acts, 45 U.S.C.A. § 51 et seq., and 49 U.S.C.A. § 1 et seq. It could have defined interstate commerce in natural gas so as to include the production, or the gathering, of natural gas for commerce to the same purpose and extent as was done in the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., wherein “goods produced for commerce” were placed within the coverage of the Act. Instead of doing that, Congress expressly stated that the provisions of the chapter should be applicable only to three specific situations, viz., the transportation in interstate commerce, the sale in interstate commerce for resale for ultimate public consumption, and to natural gas companies engaged in such transportation or sale. After outlining the scope of the Commission’s power, Congress then set out the restrictive enactment that the Act should not apply ito-any other transportation. or sale of natural gas nor to the local distribution of natural gas, nor the facilities used for such local distribution, nor to the production or gathering of natural gas. The Act cannot be applicable to the production and gathering of natural gas except as the valuation of its producing and gathering facilities are inherently a part of the value that must be taken into consideration in regulating rates of natural gas companies engaged in transportation and sale of gas in interstate commerce.
What is meant by a “sale in interstate commerce”? The Act contains its own definition, and there is no occasion for the Court to invent one. This feature of the Act does not appear to have received attention in the majority opinion nor in Peoples Natural Gas Co. v. Federal Power Commission, supra, nor in Illinois Gas Co. v. Public Service Co., supra. Sec. 717a (7), Title 15 U.S.C.A., defines “interstate commerce” to mean “commerce between any point in a State and any point outside thereof, or between points within the same State but through any place outside thereof * * This unapplied definition presents the main point of divergence between my views and those of the majority. The sale made by the Petitioner here was not between any point in the State of Louisiana and any point outside of Louisiana. It was not a contract of sale made in Louisiana with delivery of the commodity to be in another state. The sale was made and the title passed in Louisiana. Petitioner had no further right, title, interest, or concern in such gas after the delivery to the purchaser. Nor did its interstate pipe line purchaser have any further obligation to Petitioner to carry or to safely deliver, the gas which Petitioner had delivered to *955it. There was no continuity of responsibility or liability for the subsequent and safe carriage of the gas as is the case in ordinary movements of commodities in interstate commerce. Petitioner had no interest in what happened to the gas after its delivery to purchaser. Delivery, which is an element of every sale, was completed within the Monroe Gas Field in Louisiana without the use of any facilities of interstate commerce. I can see no sale in interstate commerce, as defined by the Act, made by the Petitioner. True, it made a sale with knowledge that the gas was intended to be transported and sold by its purchaser in interstate commerce, but that is not a sale by it in interstate commerce within the coverage of the Act.
What is meant by “transportation in interstate commerce” ? Under the- definition of interstate commerce in the Act it can only mean the transportation from a point in Louisiana to a point outside that state in the carriage of natural gas. Petitioner is not a carrier of gas for hire such as would characterize it as a part of an interstate system of interstate transportation. Its function is analogous to that of a tram road, or dummy line, of a saw mill that locally hauls its own lumber to the common carrier.
The language of the Act that the provisions of this chapter shall apply “to natural-gas companies engaged in such transportation or sale,” does not sustain the Commission’s contention in the present case because the Petitioner does not sell nor transport the gas, upon which the price is sought to be regulated, except in the State of Louisiana and, therefore, is not a natural gas company under the definition in Sec. 717a(6), Title U.S.C.A.1 The “sale of natural gas in interstate commerce for resale” means a sale, calling for delivery across state lines, to a purchaser which resells to the ultimate consumer, as, for instance, a sale by a pipe line customer of Petitioner in Louisiana to the owner of a gas distribution system in Memphis who will in turn resell it to its consumers.
It seems to require an artificial conjoining of phrases, or verbal manipulation, to place into the Act this interpretation by the majority:
[The Act] “should not apply ‘to the facilities used for such (i. e. local) distribution or to the production or gathering of natural gas’.”
The language of the Act is not that it shall not apply to “the facilities used for the production or gathering of natural gas”, but that it “shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.” “The facilities used to the production or to the gathering of natural gas” would be such an unusual or odd expression that it ought not to be ascribed to Congress. The term “facilities” can only refer to the facilities used in the local distribution of gas in cities and towns. I am unable to accept the view that the Act merely withheld from the Commission “jurisdiction over properties” or facilities of producers and gatherers.
The construction of the Act given to it by the Power Commission and the majority of this Court appears to nullify the plain intent of Congress to except from the operation of the Act the production and the gathering of gas when the producer, gatherer, and the seller, neither transports nor sells gas in interstate commerce, and when the Act nowhere gives the Commission jurisdiction to regulate the production or the gathering and intrastate transportation of gas merely because producer or seller or gatherer knows that the purchaser of such gas will in turn transport it in interstate commerce and sell it in another state chiefly to those who will there resell it to the ultimate consumer.
Congress had the power to have regulated both the production and the intrastate gathering of natural gas when produced and gathered with knowledge that it would be transported or sold in interstate commerce in the same fashion that *956it did in the Fair Labor Standards Act. But in the present Act Congress wholly failed-to take over the regulation of these two phases of the industry, and, in the face of the statute and in the absence of appropriate legislation they must be deemed to be only local activities.
Natural gas must be transported to market to the same extent as any other commercial production. The gathering and transporting of gas to a place of sale is as essential to the production of gas as is the drilling of a gas well. Regulation of the production of natural gas is forbidden, but if the Commission is given the power to regulate the price which the producer and gatherer receives at the end of the intrastate journey at the pipe line of the interstate purchaser, it is also given the power to regulate production. If the price which the producer and gatherer gets for the gas which he has produced and gathered is less than it costs to produce it, production will be thereby regulated indirectly, but, withal, as effectively as if Congress had expressly conferred such authority upon the Commission.
The custom in the industry is for the producer to bring his gas to the interstate pipe line for .market. Here the market was within the same gas field, and within the same State, in which the gas was produced and gathered. The' farmer, for instance, who produces cotton transports it to market where, let us assume, he has previously agreed to sell it to a New England cotton mill. He produced, gathered, and transported that cotton to market in Louisiana and even though he knew that the cotton was to be shipped to New England, he would not be engaged in the transportation or sale of cotton in interstate commerce, and, therefore, regulable, unless Congress had declared otherwise. Congress has the power to regulate enterprises which, in isolation, are purely local, provided such enterprises are determined by Congress to substantially affect interstate commerce or the free flow of goods in commerce. This Congress did not attempt to do in the statute under consideration.
Believing that courts should construe statutes instead of making them, I am unwilling to participate in writing into the Act that which Congress expressly undertook to keep out, even if by so doing a better statute would result

 “ ‘Natural-gas company’ means a person engaged in the transportation of natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale.” Sec. 717a (6), Title 15 U.S.C.A.