265 U.S. 298 (1924), Missouri ex Rel. Barrett v. Kansas Natural Gas Company

Citation:265 U.S. 298, 44 S.Ct. 544, 68 L.Ed. 1027
Party Name:Missouri ex Rel. Barrett v. Kansas Natural Gas Company
Case Date:May 26, 1924
Court:United States Supreme Court

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265 U.S. 298 (1924)

44 S.Ct. 544, 68 L.Ed. 1027

Missouri ex Rel. Barrett


Kansas Natural Gas Company

United States Supreme Court

May 26, 1924




1. The business of piping natural gas from one state to another and selling it not to consumers, but to independent distributing companies which sell it locally to the consumers is interstate commerce free from state interference. Pennsylvania Gas Co. v. Public Service Comm'n, 252 U.S. 23, distinguished. P. 307.

2. An attempt of a state to fix the rates chargeable in this interstate business is a direct burden on interstate commerce, even in the absence of any regulation of it by Congress. P. 308.

282 F. 341 (No. 155) affirmed.

111 Kans. 809 (No. 133) reversed.

282 F. 680 (No. 137) affirmed.

In the first of these cases, the appellants sought to enjoin the Kansas Natural Gas Company from increasing

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its rates in Missouri without the consent of the Public Utilities Commission of that state. The decree of the district court refusing the injunction is here affirmed.

In the second case, the Kansas Supreme Court allowed a peremptory mandamus to compel the same company to reestablish and maintain certain rates in Kansas until otherwise ordered by the Utilities Commission of that state. Reversed.

The third case was a suit in the federal court in Kansas to enjoin collection by the same company of increased rates in Kansas until allowed by the Kansas Utilities Commission. The injunction was denied. Affirmed.

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SUTHERLAND, J., lead opinion

MR. JUSTICE SUTHERLAND delivered the opinion of the Court.

These cases were consolidated for argument. They present for decision the single question whether the business of the Kansas Natural Gas Company, hereinafter called the Supply Company, consisting of the transportation of natural gas from one state to another for sale, and its sale and delivery, to distributing companies, is interstate commerce, free from state interference?

The facts necessary to be considered in reaching a conclusion are, shortly, as follows:

[44 S.Ct. 545] The Supply Company is a Delaware corporation, engaged in producing and buying natural gas, mostly in Oklahoma but some in Kansas, and, by means of pipelines, transporting it into Kansas and from Kansas into the state of Missouri, and in each state selling and delivering it to distributing companies which then sell and deliver it to local consumers in numerous communities in Kansas and Missouri. The gas originating in Kansas is mingled for transportation in the same lines with that originating in Oklahoma. The pipelines are continuous from the wells to the place of delivery.

The three cases are alike in the fact that they arise from the action of the Supply Company in making an increase of rates from 35 cents to 40 cents per 1,000 cubic feet -- in Missouri, without the consent and approval of the Public Utilities Commission of the state, and in Kansas notwithstanding a previous order of the federal court fixing a 35-cent rate and the action of the Utilities Commission approving and fixing that rate. The power of the Utilities Commission of each state is challenged on the ground that the matter, under

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the commerce clause of the Constitution, is not subject to state control.

In No. 155, appellants brought suit in the federal district court to enjoin the Supply Company from increasing its rates. The injunction prayed was denied. 282 F. 341.

In No. 133, the defendants in error filed a petition in the Kansas Supreme Court for a writ of mandamus to compel the Supply Company to reestablish and maintain the rate of 35 cents per 1,000 cubic feet for gas furnished to the distributing companies, until otherwise ordered by the Utilities Commission. The case was presented to that court on demurrer to the return and answer. The demurrer was sustained, and a peremptory writ of mandamus allowed, as prayed, 111 Kan. 809.

In No. 137, the suit was to enjoin the Supply Company from collecting or attempting to collect the increased rates from various gas distributing companies until the consent thereto of the Utilities Commission of the state should be secured. The federal district court denied the injunction, but retained the bill for another purpose not necessary to be stated. Central Trust Co. of New York v. Consumers' Light, Heat & Power Co., 282 F. 680.

The business of the Supply Company, with an exception not important here, is wholly interstate. The sales and deliveries are in large quantities not for consumption, but for resale to consumers. There is no relation of agency between the Supply Company and the distributing companies, or other relation except that of seller and buyer, Public Utilities Comm'n v. Landon, 249 U.S. 236, 244-245, and the interest of the former in...

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