Court Opinion

ID: 9675266
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:47:34.681321+00
Date Added: 2024-06-11T18:16:32.941775
License: Public Domain

CONCURRING IN PART AND DISSENTING IN PART
GRIFFIN, Justice.
I agree with the judgment of the majority opinion reversing this case and remanding it for a new trial, but I disagree with the reasons announced in that opinion. I do not agree that when the Railroad Commission on August 21, 1964, entered its order withdrawing its order of February 21, 1961, finding discrimination existed and ordering Crown Central to connect its pipelines to the Duffy Lease tanks, it thereby did away with its finding of discrimination.
Neither do I agree that a finding that discrimination existed against petitioners-plaintiffs by defendant Crown Central is an incidental finding to the recovery of damages by the plaintiffs. There can be no recovery of damages under Sec. 11c, Art. 6049a unless there is or has been discrimination against the plaintiffs. That discrimination must be the kind of discrimination prohibited by statute. At common law and prior to the passage of the statutes defining and prohibiting discrimination, a purchaser of petroleum products could purchase from such producers as it pleased and could refuse to purchase from such producers as it pleased, and there was no penalty for such conduct. Such discrimination was not unlawful, but on the contrary was lawful. This practice encouraged monopoly and penalized, or in fact might bankrupt-the producer unable to sell his production.
In 1899 the Legislature passed laws providing that corporations could be formed for the purpose of transporting, buying and selling oil and gas, laying pipelines, constructing terminals, etc. These corporations were given power of eminent domain in acquiring necessary rights-of-way, storage facilities, etc. This law provided that it should be unlawful for any such corporation to discriminate in the use of its pipeline facilities. Penalty for violation was a misdemeanor, and officers and agents of the corporation could be fined and imprisoned in the county jail for permitting or engaging in discrimination. The Railroad Commission was not mentioned as the regulatory body.
By Act of the 35th Legislature (1917), Regular Session, Ch. 30, p. 48, the Legislature defined pipelines as common carriers, declared them public utilities, and gave the Railroad Commission power to regulate them. The Act further prohibited discrimination in favor of or against individuals, associations, or corporations in the conduct of the oil and gas business. The Railroad Commission was given the power to establish and enforce rules and regulations governing the pipeline common carriers in the conduct of their business, and making it the duty of the Commission to exercise such power upon petition of any person having a substantial interest in the subject. Sec. 7 of this Act prevented discrimination by the pipeline common carriers and provided that the general fixing of rates “shall not limit the right of the Commission to prescribe rates and regulations different from or to some places from other rates and regulations” as it may determine; *319“nor shall any carrier be guilty of discrimination when obeying any order of the Commission.” Sec. 7 is found as Art. 6045 of our present Revised Civil Statutes.
Acts, 41st Legislature (1930), 5th C.S., Ch. 36, p. 171, set forth in the caption that it “[was] an act enlarging the powers and duties of the Railroad Commission * * * forbidding discrimination in the purchase of crude petroleum, except as authorized by the Railroad Commission of Texas * * * ” etc. This Act was partialy re-enacted, additions were made, and provisions rewritten by the next Legislature, the 32nd, and Art. 6049a, as it now stands, was the result of this later legislation. Generally speaking, the first six sections of the first Act were set out in haec verba in the last Act. Sec. 7 of the present Art. 6049a provides that either upon complaint or on its own initiative and after proper notice, the Railroad Commission may “authorize or require by order any person * * * or corporation owning or operating pipe lines * * * which is a common carrier as defined by law * * * to extend or enlarge such pipe lines, or storage facilities, provided such extension or enlargement shall be found to be reasonable and required in the public interest and that the expense involved will not impair the ability of such common carrier or public utility to perform its duty to the public.” (Emphasis added.) Who is to determine whether or not an extension of the pipeline of a common carrier is necessary? It can only be the Railroad Commission, and it only after deciding the questions that the extensions are reasonable and required in the public interest and will not impair the ability of the common carrier or public utility to serve the public. Courts are not to determine these questions of public policy in the face of a statute giving the jurisdiction over these questions to an administrative agency — in our case the Railroad Commission.
The very next section of Art. 6049a, i. e., Sec. 8, prohibits discrimination “in favor of one producer or person against another in the same field, and without unjust or unreasonable discrimination as between fields in this State; the question of justice or reasonableness to be determined by the Railroad Commission taking into consideration the production and age of wells in respective fields and all other proper factors." Can a court make this determination or has the Legislature committed this matter to the Commission? The answer is obvious. The Commission is much better equipped and experienced in this phase of the law, and much more uniformity in decision will result if the Commission, and not the courts, makes this decision. This Section 8 concludes: “The Railroad Commission of Texas shall have authority, however, to relieve any such common purchaser, after due notice and hearing as hereinafter provided, from the duty of purchasing petroleum of inferior quality or grade.” Here again I ask, can a court determine the exception and relieve the purchaser of unlawful discrimination? Discrimination in purchase of products will still exist, but if the Commission permits such, it is not unlawful, and the common purchaser cannot be penalized in or by any court for such discrimination.
Sec. 8a provides in substance that a common carrier or common purchaser of gas “shall purchase, or take, such gas under such rules or regulations as may be prescribed by the Commission” and “under the same inhibitions against discrimination and subject to the same provisions” as apply to common purchasers of oil.
Sec. 8b provides:
“It shall be the duty of the Railroad Commission of Texas to see that the provisions of this Act are fully complied with, and it shall have the power, after notice and hearing, to make rules, regulations and orders, defining the distance that extensions or gathering lines shall be made to all oil or gas wells; and such other rules, regulations or orders as may be necessary to carry out the provisions of this Act, and to prevent discrimination in purchases.”
*320Under the provisions of Sec. 7 the Commission must find such extensions “reasonable and required in the public interest and that the expense involved will not impair the ability of such common carrier or public utility to perform its duty to the public.”
Sec. 9 provides : “The Railroad Commission of Texas shall have authority to make rules and regulations for the enforcement of the provisions of this Act.”
Sec. 10 confers jurisdiction upon the Commission, after proper notice and hearing, to hear and determine any question relating to the enforcement of the Act prohibiting discrimination as defined in Art. 6049a.
Sec. 11 provides that the State of Texas (and it must act through its Attorney General) may bring suit in the District Court of Travis County for violation of any provisions of Art. 6049a, any valid rule, regulation, or order promulgated by the Railroad Commission under Art. 6049a. Sec. 11 further provides that “[o]ne half of such penalty may be recovered by and for the use of any person, association of persons or corporation against whom there shall have been an unlawful discrimination as herein defined * *
Sec. 11c is the provision under which plaintiffs, Duffy et al., brought their suit for private damages. It provides for suit by any person, etc. who “is discriminated against by a common purchaser as defined herein in favor” of its own production over another producer such as Duffy et al.
From a study of the above sections of the statute, we find that it is not every discrimination that is unlawful, and only an unlawful discrimination can be found by the Commission. The Commission is expressly given the power to determine the question of discrimination and to permit discrimination in certain instances. Where the Commission finds no unlawful discrimination or that it is not reasonable or feasible to require a pipeline to connect with a producer’s tank battery, then there is no discrimination for which such producer is given a cause of action. In fact, Art. 6045 provides “nor shall any carrier be guilty of discrimination when obeying any order of the Commission.”
The majority says the determination by the Commission as to the existence of discrimination is an “incidental finding” which is essential to the granting of the relief sought. The finding of unlawful discrimination by the Railroad Commission is the very basis for any cause of action which one that is discriminated against has against the “discriminator.” No discrimination, no cause of action for damages. Sec. 11c, Art. 6409a. Only the Commission can make this finding, for to find discrimination the statute sets out what the Commission must first find. If the majority is correct, then a court can punish a party for discrimination in obeying an order of the Commission, when Art. 6045 expressly prohibits such punishment.
We must keep in mind that it is only by virtue of legislative enactment of the statute that there is any liability for discrimination. Prior to statutory enactment, there was no unlawful discrimination, nor could there be any recovery for discrimination.
In our case the Commission, after notice and hearing, entered its order of February 21, 1962, finding, among other things, “that a reasonable extension of the pipeline transportation system and connections to the B. A. Duffy tank batteries, as prayed for in the complaint filed in this application are [sic] reasonably necessary to prevent discrimination prohibited by law * * Then follows the necessary and requisite findings which Sec. 7 requires before extensions can be ordered by the Commission. This order was a valid and final order when entered, and Art. 6042 provides in part, “ * * * and until set aside or vacated by some order or decree of a court of competent jurisdiction, all orders of the Commission as to any matter within its jurisdiction shall be accepted as prima facie evidence of their validity.” This order, finding unlawful discrimination, has never been set aside, changed, or modified by a *321court of competent jurisdiction. Upon its entry, Crown Central appealed this order to a district court of Travis County, Texas, and the jurisdiction of that court attached to determine the validity of the order. For more than three years Crown Central never tried the case or did anything, so far as this record shows, to bring it to trial.
On August 21, 1964, Crown Central filed its motion with the Commission alleging they had another pipeline company that would make the connection to Duffy’s tank batteries and purchase his production. On that date the Commission entered an order reciting in part that it was of the opinion that its order of February 21, 1962, ordering the connections, would withstand the attack made on it and was a valid order, but that in the interest of providing early pipeline connection to the property involved, it withdrew its order of February 21, 1962, requiring Crown Central to make connections to Duffy’s tank batteries PROVIDED, HOWEVER, the withdrawal of the order is based solely upon the completion of extension and connection within a reasonable time or the order for connection would be reinstated. Not one word was said about the discrimination suffered by Duffy until the connection was made. The record shows the connections were made and Duffy production purchased at the tank batteries about November 1, 1964. Then the Commission recognized the connections had been made, and there was no further need for the original connection order, and that the matter of extension and connection was now moot.
It was after November 1, 1964, and that Commission’s final order, when Crown Central secured a dismissal of its appeal from the Commission order of February 21, 1962.
The nearest case in point I have been able to find is that of Shaver v. National Title & Abstract Co., Tex.Sup., 361 S.W.2d 867 (1962), wherein Shaver had bought a tract of land and the title company had issued its title insurance policy certifying' that there were no encumbrances against the land except as shown in the policy. Suit was brought by Shaver to recover damages against the title company because of an easement across the insured land in favor of a gas company, which easement was not shown or excepted in the policy of title insurance. The case was tried in the district court, and on a jury verdict favorable to plaintiff, a judgment was rendered for the damages found by the jury. When the case reached this Court on appeal, the title company filed a motion to dismiss the cause as moot, for the reason that since the trial of the case in the district court, the gas company had released the pipeline easement and abandoned the use of the pipeline across plaintiffs’ land. This Court denied the motion to dismiss, saying:
“The damages which plaintiffs seek are those resulting from the breach of the defendants’ contract to guarantee plaintiffs a good and indefeasible title. Those damages were suffered prior to the trial of this cause in the District Court and the amount of such damages, if any, suffered by plaintiffs has not been paid. Plaintiffs’ rights to recovery still exist and recompense can be made them only by a final determination of this case. The case is not moot, and we overrule defendants’ motion to dismiss. Sterling v. Ferguson, 122 Tex. 122, 53 S.W.2d 753 (1932) ; Polk v. Davidson, 145 Tex. 200, 196 S.W.2d 632 (1946); 3 Tex.Jur.2d 313, Sec. 50.”
See also the following authorities, whose reasoning is in accord with our holding on this point. 3 Tex.Jur.2d 314, Appeal & Error, Sec. 50; id. p. 318, Sec. 53; and id. p. 323, Sec. 58; 73 C.J.S. Public Administrative Bodies and Procedure § 268, p. 629. In our case at bar, as in the Shaver case, petitioners seek to recover the damages they allege they suffered while they were unlawfully discriminated against by respondents. These damages, if any, must be litigated in a proper court and not before the Railroad Commission. Gregg v. Delh*322i-Taylor Oil Corp., 162 Tex. 26, 344 S.W.2d 411 (1961).
I would hold (1) that only the Railroad Commission is given authority by the Legislature to determine the question as to the existence of unlawful discrimination. A court cannot try out this issue because it involves the exercise of discretion by the Commission as to the best interest of the public and of the public utilities involved and the character of service it can render to the public. (2) That the Commission did determine that discrimination existed in this case. Crown Central has had its day in court on this question by perfecting an appeal from this finding and order of the Commission. Crown Central has never obtained a judgment of a court of competent jurisdiction setting aside, modifying, or reversing such order. Therefore, it is a valid, existing order and may not now be collaterally attacked in this proceeding. (3) Plaintiffs must have a trial of their cause of action seeking damages and be given an opportunity to present such case as they may be able to establish. (4) The granting of summary judgment was incorrect, and this case should be tried in the district court.