262 U.S. 553 (2009), Pennsylvania v. West Virginia

Citation:262 U.S. 553, 43 S.Ct. 658, 67 L.Ed. 1117
Party Name:Pennsylvania v. West Virginia
Case Date:June 11, 1923
Court:United States Supreme Court
 
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Page 553

262 U.S. 553 (2009)

43 S.Ct. 658, 67 L.Ed. 1117

Pennsylvania

v.

West Virginia

United States Supreme Court

June 11, 1923

IN EQUITY

Syllabus

1. A justiciable controversy between states, in the sense of the Judiciary Article, is presented when the plaintiff state, relying on the Commerce Clause of the Constitution, seeks to enjoin the defendant state from consummating a purpose, evinced by her statutory enactment, and about to be carried out by her officials, of withdrawing natural gas from an established current of commerce moving from her territory into that of the plaintiff, when such withdrawal is likely to be productive of great injury to the interests of the plaintiff as the proprietor of public institutions and schools in which the gas is largely used, and to private consumers, including most of the inhabitants of many urban communities and a substantial part of the population of the plaintiff state, whose health, comfort, and welfare are seriously jeopardized by the threatened withdrawal of the gas from the interstate stream. P. 591.

2. Suits by Pennsylvania and Ohio to enjoin West Virginia from enforcing an act of her legislature (c. 71, Acts 1919) intended, through regulation of pipeline companies, to compel the retention

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within West Virginia of all natural gas there produced, that might be required for local needs, were not premature in not awaiting an actual test of the act or an order of the public service commission vested by it with functions for its enforcement, since the act contains procedural, penal, and remedial provisions adequate to accomplish its purpose, and the situation when the suits were brought was such that, directly and immediately, it would work a large curtailment of the volume of gas moving into the complaining states and, in a few years, with increasing demand and decreasing production, would work a practical cessation of the interstate stream which it was the object of the suits to protect. P. 692.

3. In such suits, neither the pipeline companies transporting and supplying the gas nor consumers in the defendant state who would be benefited by an enforcement of the act were essential parties. P. 595.

4. A state wherein natural gas is produced and is a recognized subject of commercial dealings may not require of those producing and transporting it that, in its sale and disposal, consumers in that state shall be accorded a preferred right of purchase over consumers in other states when the requirement necessarily will operate to withdraw a large volume of the gas from an established interstate current whereby it is supplied in other states to consumers there. P. 595.

5. The purpose of the Commerce Clause is to protect commercial intercourse from invidious restraints, to prevent interference through conflicting or hostile state laws, and to insure uniformity of regulation. It means that, in the matter of interstate commerce, we are a single Nation -- one and the same people. P. 596.

G. The transmission of natural gas from one state to another, for sale and consumption in the latter is interstate commerce, and a state law, whether of the state where the gas is produced or of that where it is to be sold, which by its necessary operation prevents, obstructs, or burdens such transmission is a regulation of interstate commerce -- a prohibited interference. P. 596.

7. The power of a state to require gas pipeline companies to furnish reasonably adequate service within reasonable territorial limits will not enable her to enforce preference to local consumption at the expense of interstate business which has grown up with her sanction and encouragement. P. 597.

8. Interference with interstate commerce in natural gas cannot be justified upon the ground that it is a measure designed to conserve the gas as a natural product of the state in the interest of her

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people because the gas has become a necessity, and the supply is no longer sufficient to satisfy local needs and be used abroad. P. 598. West v. Kansas Natural Gas Co., 221 U.S. 229.

9. The Court, on full consideration, having reached the conclusion that the West Virginia Act is unconstitutional, and that its intended enforcement will subject the complaining states to injury of serious magnitude, operating with obvious inequity against them, the appropriate decree is one declaring the act invalid and enjoining its enforcement, leaving any needed regulation of the interstate commerce involved to be sought elsewhere. P. 600.

Decrees for complainants.

These were two suits, brought originally in this Court, to enjoin the defendant state from enforcing an enactment of her legislature (c. 71, Acts 1919) upon the ground that it would curtail or cut off the supply of natural gas produced within her territory and carried by pipelines into the territory of the plaintiff states, and there sold and used for fuel and lighting purposes. The act, and the facts constituting the situation to which it applied, are fully analyzed in the opinion.1

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VANDEVANTER, J., lead opinion

MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.

These are suits, one by the Commonwealth of Pennsylvania and the other by the State of Ohio, to enjoin the State of West Virginia from enforcing an act passed by her legislature (Acts 1919, c. 71) which the complainants believe will largely curtail or cut off the supply of natural gas heretofore and now carried by pipelines from West Virginia into their territory and there sold and used for fuel and lighting purposes. Although distinct, the suits are so much alike that they have been presented at the bar substantially as a single case. They will be dealt with accordingly in this opinion.

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The West Virginia act is set forth at length in the margin.2 The complainants challenge its validity on the ground that it directly interferes with interstate commerce, and therefore contravenes the commerce clause of

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the Constitution of the United States, and they rest their right to relief on the grounds that to enforce the act will subject them to irreparable injury in respect of many of their public institutions and governmental agencies, which

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long have been and now are using this gas, and will subject them to further and incalculable injury, in that (a) it will imperil the health and comfort of thousands of their people who use the gas in their homes and are largely

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dependent thereon, and (b) will halt or curtail many industries which seasonally use great quantities of the gas and wherein thousands of persons are employed and millions of taxable wealth are invested.

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The conditions out of which the suits have arisen and the facts material to their disposal are as follows:

Natural gas is found at pronounced depths in porous strata -- usually sand rock -- constituting a natural reservoir, and is brought to the surface and reduced to possession through wells drilled into the containing strata. When a surface owner thus reduces it to possession, he becomes its owner, and it becomes a subject of commerce, like any product of the forest, field, or mine. In the inclosing strata, it is under great pressure, called rock pressure, which causes it to flow out rapidly when the strata are penetrated. If one surface owner drills wells and [43 S.Ct. 661] begins to draw off the gas, others desiring to exercise their common right must take the same course, for otherwise the gas under their lands may be drained out by those wells. After the gas is drawn from the inclosing strata, there is no practicable mode of storing and holding it. It must be used promptly. Its chief use consists in producing heat and light by burning it. The points of use generally are in centers of population or of industry more or less remote from the places of production. The intervening transmission is effected through pipelines. The normal rock pressure will carry the gas considerable distances, and when that pressure wanes or is inadequate, it can be supplemented by using compressors.

In West Virginia, the production of natural gas began as much as 30 years ago, and, for the last 14 years, has been greater than in any other state. The producing fields include 32 of her 55 counties. At first, the gas was produced only in the course of oil operations, was regarded as a nuisance, and was permitted to waste into the air. But it soon came to be regarded as valuable for heating and lighting, and the economy and convenience attending its use made it a preferred fuel. Its use within the state became relatively general, but was far less than the production, so the producers turned

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to neighboring states, notably Pennsylvania and Ohio, for a further market.

West Virginia sanctioned that effort. She permitted the formation under her laws of corporations for the purpose of constructing pipelines from her gas fields into other states and carrying gas into the latter and there selling it; she also permitted corporations of other states to come into her territory for that purpose, and she extended to all these companies the use of her power of eminent domain in acquiring rights of way for their pipelines. In no way did she then require, or assert any power to require, that consumers within her limits be preferred over consumers elsewhere. The effort to find a further market succeeded, and the gas came to be extensively carried into Pennsylvania as far as Pittsburgh, and into Ohio as far as Cleveland, Toledo, and Cincinnati. In that way, the entire production was made of value to the producers. Landowners and lessees in the gas fields were greatly benefited, and the taxable wealth of the state was largely increased. Approximately $300,000,000 were [43 S.Ct. 662] invested in the...

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