221 U.S. 229 (1911), 916, West v. Kansas Natural Gas Company

Docket Nº:No. 916
Citation:221 U.S. 229, 31 S.Ct. 564, 55 L.Ed. 716
Party Name:West v. Kansas Natural Gas Company
Case Date:May 15, 1911
Court:United States Supreme Court
 
FREE EXCERPT

Page 229

221 U.S. 229 (1911)

31 S.Ct. 564, 55 L.Ed. 716

West

v.

Kansas Natural Gas Company

No. 916

United States Supreme Court

May 15, 1911

Argued April 4, 5, 1911

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES

FOR THE EASTERN DISTRICT OF OKLAHOMA

Syllabus

When a state recognizes an article to be a subject of interstate commerce, it cannot prohibit that article from being the subject of interstate commerce, and so held that corporations engaged in interstate commerce cannot be excluded from transporting from a state oil and gas produced therein and actually reduced to possession.

In matters of foreign and interstate commerce, there are no state lines; in such commerce, instead of the states, a new power and a new welfare appears that transcends the power and welfare of any state.

The welfare of the United States is constituted of the welfare of all the states, and that of the states is made greater by mutual division of their resources; this is the purpose and result of the commerce clause of the Constitution.

Natural gas and oil, when reduced to possession by the owner of the land, are commodities belonging to him subject to his right of sale thereof, and are subjects of both intrastate and interstate commerce.

Page 230

There is a distinction between the police power of the state to regulate the taking of a natural product such as natural gas and prohibiting that product from transportation in interstate commerce. The former is within, and the latter is beyond, the power of the state. Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, distinguished.

A state does not have the same ownership in natural gas and oil after the same have been reduced to possession as it does over the flowing waters of its rivers. Riparian owners have no title to the water itself as a commodity. Hudson County Water Co. v. McCarter, 209 U.S. 349, distinguished.

The right to engage in interstate commerce is not the gift of a state, nor can a state regulate or restrain such commerce or exclude from its limits a corporation engaged therein.

Inaction by Congress in regard to a subject of interstate commerce is a declaration of freedom from state interference.

Where a state grants the use of its highways to domestic corporations engaged in intrastate commerce in a commodity, it cannot deny the same use, under the same restrictions, to foreign corporations engaged in interstate commerce in the same commodity, and so held that the statute of Oklahoma prohibiting foreign corporations from building pipelines across highways and transporting natural gas therein to points outside the state is unconstitutional as a interference with, and restraint upon, interstate commerce, and as a deprivation of property without due process of law.

172 F. 545 affirmed.

The facts, which involve the constitutionality of a statute of Oklahoma restricting interstate commerce in oil and natural gas, are stated in the opinion.

Page 239

MCKENNA, J., lead opinion

MR. JUSTICE McKENNA delivered the opinion of the Court.

This appeal brings up for review the decree entered in the Circuit Court of the United States for the Eastern District of Oklahoma in four suits consolidated by stipulation of the parties.

The suits had the common purpose of attacking the constitutional validity of a statute of Oklahoma, enacted in 1907, which is referred to as chapter 67 of the Session Laws of 1907. It is inserted in the margin in full. * All

Page 240

of the bills have the same foundation -- that is, the right to buy, sell, and transport natural gas in interstate commerce notwithstanding the provision of the statute.

The suits were numbered in the court below 856, 857,

Page 241

858, and 859. In 856, the Kansas Natural Gas Company was complainant. It is a corporation of the State of Delaware, and is engaged in the business of purchasing and distributing natural gas to consumers. It has a contract

Page 242

for the purchase of all the gas that can be produced from a certain well in Washington County, Oklahoma, and has acquired by purchase the right of way over the land upon which the well is located for the laying of a pipeline for the transportation of the gas, and proposes to extend its trunk pipelines from the present southern terminus thereof in the State of Kansas, southward across the Oklahoma state line to the well. It also proposes to construct lateral and [31 S.Ct. 566] branch lines from the trunk line so extended, for the purpose of gathering and receiving such gas as it may be able to purchase from the owners of other wells. Its line will not be used in any way for local traffic, but only for the transportation of the gas from the wells in Oklahoma into the States of Kansas and Missouri.

Page 243

In No. 857, the Marnet Mining Company, a corporation of West Virginia, is complainant. For the purpose of transporting from the producers of gas in the State of Oklahoma to purchasers and consumers in Kansas and Missouri, it has purchased a right of way over certain lands in the state, and proposes to construct a system of pipelines to be used exclusively in such interstate transportation, and not in any way for local traffic.

In No. 858, A. W. Lewis, a citizen and resident of the State of Ohio, is complainant. He is the owner of an oil and gas [31 S.Ct. 567] lease by which he has acquired the right to construct wells on a certain tract of land in Oklahoma, and to take gas therefrom for the period of fifteen years. He has constructed a well, in accordance with his lease, which

Page 244

is capable of producing many millions of cubic feet of gas per day, which, being in excess of the local demand, he is unable to sell in the state, and he alleges that, being prevented from transporting it from the state, he has suffered great loss and damage, and is deprived of his property without compensation.

In No. 859, O. A. Bleakley, a citizen and resident of Pennsylvania, is complainant. He has received from the Secretary of the Interior a right of way over the land of certain Indians over a designated route, paying to the Indian agent, by law and the rules and regulations of the Interior Department, the value of such right of way and the damages which the owners of the land over which he will pass for the laying and maintaining of a pipeline for the exclusive purpose of transporting natural gas from Oklahoma to Kansas.

It is alleged in the bills that a great number of wells have been drilled in the state at great expense, which are capable of producing more than 1,000,000,000 cubic feet of gas per day; that such amount is more than necessary for the demands of the people of the state, and the excess of supply is required to meet the wants of those residing in Missouri and Kansas. This want, it is alleged, may be supplied through the distributing plants now constructed and those contemplated by complainants, but that, under the present conditions, the owners are required to cease development work, and to keep large and valuable wells capped and inoperative, to their great injury and damage. It is alleged that, in constructing lines for such transportation, it will not be necessary to go along the highways of the state, but only across or over them, and that the lines to be constructed will be private lines, will endanger the lives and property of no one, and will be constructed in just conformity with all reasonable rules and regulations of the state.

It is averred that each of the defendants is charged by

Page 245

virtue of his office to execute the laws and constitution of the state, and that he has undertaken to enforce the act hereinbefore referred to by proceedings in courts and by force of arms, and it is his intent and avowed purpose to prevent the transportation of gas beyond the limits of the state. The particular acts are set forth.

The bills pray discovery, that the act above referred to be declared void as being in conflict with § 8, Article I, and the Fourteenth Amendment of the Constitution of the United States, and that the defendants be enjoined from the things attributed to them. General relief is also prayed.

Demurrers were filed to the bills, which were overruled (172 F. 545), and the defendants answered.

It was subsequently stipulated that the causes be consolidated and that appellant file an amended answer in each of the cases, and the answers of the other defendants be withdrawn. It will only be necessary to consider the amended answer, not, however, its details either of denial or averment, but only of certain facts especially relied on. These are: the present daily capacity of the gas wells of the state is approximately 1 1/4 billion cubic feet, the daily consumption being more than can be safely taken from them "without rapidly destroying their efficiency and depleting this great natural resource of the state." The gas area of the state is found in oil-producing sand, and the experience of all other natural gas fields demonstrates that the gas found in and taken from such sand is of much shorter duration than that found in purely gas sand, and if the acts of complainants be permitted, "the field will be exhausted in a very short time." While it is true that the gas in Oklahoma is found in a gas and oil-producing sand which extends underneath large contiguous areas of land, every well takes from this unbroken area and diminishes the producing capacity of every other well and of the entire field, the acts of the complainants, if permitted,

Page 246

will greatly damage and injury the entire field and take the property of all other owners therein, and

that the act of the legislature of the State of Oklahoma alleged in the bill to be unconstitutional was an effort on the part of the legislature of the state to preserve the natural gas field of the state from destructive waste.

Certain cities of the states which, by reason of their proximity to the gas field, should be supplied...

To continue reading

FREE SIGN UP