Missouri-Kansas-Texas R. Co. v. State

• Decision Date: 24 December 1985
• Docket Number: MISSOURI-KANSAS-TEXAS,No. 60429,60429
• Parties: RAILROAD COMPANY, Appellant, v. The STATE of Oklahoma and the Etsi Pipeline Project, a Joint Venture of Texas Eastern Slurry Transport Company, Slurco Corporation, Northern Coal Pipeline Company and Overseas Bechtel, Inc., Appellees.
• Court: Oklahoma Supreme Court

Page 40

712 P.2d 40

1985 OK 108

MISSOURI-KANSAS-TEXAS RAILROAD COMPANY, Appellant, v. The STATE of Oklahoma and the Etsi Pipeline Project, a Joint Venture of Texas Eastern Slurry Transport Company, Slurco Corporation, Northern Coal Pipeline Company and Overseas Bechtel, Inc., Appellees.

No. 60429.

Supreme Court of Oklahoma.

Dec. 24, 1985.

H.D. Binns, Jr., James Bailey, Gretchen Hoover, Oklahoma Corp. Com'n, Oklahoma City, for appellant.

Mike Turpen, Atty. Gen., Oklahoma City, Andrew Wilcoxen, Muskogee, for appellee, State ex rel Okla. Corp. Comn.

Chris Rhodes, John H. Tucker, Tulsa, for appellee, ETSI.

Dickson M. Saunders, Tulsa, for Public Service Co. of Oklahoma.

Leslie Pain, Anadarko, for Western Farmers.

Robert W. Sullivan, Vinita, Gene Stipe, Oklahoma City, for Grand River Dam Authority.

SUMMERS, Justice.

This controversy is the first challenge to the application and interpretation of Oklahoma law regulating the use of eminent domain by coal slurry pipelines. 27 O.S.1981, § 7.1 et seq.

The appellant, Missouri-Kansas-Texas Railroad Co. (MKT) is contesting the decision of the Corporation Commission to grant Appellee ETSI Pipeline Project (ETSI) a license to exercise eminent domain powers in the construction of a coal slurry pipeline, Corporation Commission Order No. 238528. The license was granted after months of hearings and discovery. The licensing was vigorously contested by the Oklahoma Railways Committee, an unincorporated association composed of Oklahoma's major railroads, of which MKT is a component part. After the license was granted, MKT filed this appeal of the Corporation Commission's order.

ETSI and the Corporation Commission have challenged MKT's standing to appeal the issuance of Commission Order No. 238528. This Court deferred a ruling on ETSI's Motion to Dismiss MKT's appeal

until all issues of this case were fully briefed. These issues are as follows:

ISSUES

1. Whether MKT has standing to appeal the issuance of Corporation Commission Order No. 238528.

2. Whether the Corporation Commission has subject matter jurisdiction over ETSI.

3. Whether the regulation of ETSI has been pre-empted by the federal government.

4. Whether 27 O.S.1981 § 7.1, et seq. as regulation of coal pipelines is unconstitutional.

5. Whether the right to exercise eminent domain can be conferred under 27 O.S.1981 § 7.1, et seq. upon ETSI as a joint venture.

6. Whether the evidence in the record is sufficient to support Corporation Commission Order No. 238528 under the statutory standards set forth in 27 O.S.1981 § 7.1, et seq.

I.

DOES MKT HAVE STANDING TO APPEAL THE ISSUANCE OF CORPORATION

COMMISSION ORDER NO. 238528?

Whether a party has a right to contest an administrative action is largely a question of law. ¹ 27 O.S.1981 § 7.1 et seq. is a legislative attempt to confer upon the Corporation Commission the regulation of coal pipelines in the state of Oklahoma. No provision for appeal is made in these sections. Art. 9, Oklahoma Constitution, which created the Corporation Commission and vested it with certain specific administrative powers ² also provides that the legislature may confer additional powers and duties upon the Commission. ³ It further provides that from all orders of the Corporation Commission an appeal will be to this court by a "party affected" or by "any person deeming himself aggrieved". ⁴ The use of the word "person" along with the word "party" suggests that others than those technically a party to the proceeding before the Commission may appeal. The issue present, therefore, is whether MKT is a party affected or a person deeming himself aggrieved by Corporation Commission Order No. 238528 or both.

ETSI contends that MKT does not have standing to institute an appeal in this cause No. 27470 because MKT was not a party to that proceeding. The authority cited by ETSI does not support its contention under the facts of this case. To the contrary, the Oklahoma Railways Committee is an unincorporated association. ⁵ An unincorporated association has no legal entity or existence apart from its members. ⁶ MKT, as a member and component part of the Oklahoma Railways Committee, appeared before the Corporation Commission and opposed ETSI's application for license. We find, therefore, MKT was a party to this proceeding before the Corporation Commission.

ETSI next urges that MKT does not have standing to appeal cause No. 27470 because it has not been aggrieved by Commission Order No. 238528.

Oklahoma case law defines an "aggrieved party" as one whose pecuniary interest in the subject matter is directly and injuriously affected or one whose right in property is either established or divested by the decision from which the appeal is prosecuted. To render a party aggrieved by a decision, its adverse effect must be direct, substantial and immediate rather than contingent Oklahoma case law has not defined either a "party affected" or "any person deeming himself aggrieved". Here we are faced with the issue of whether a competitor belongs to one or both of the classes of "party affected" or "any person deeming himself aggrieved". The doctrine that a competitor belongs to the class of persons whose injury is sufficiently direct, substantial, and immediate to qualify as "aggrieved" has been adopted in several types of cases.

on some possible remote consequence or a mere possibility of an unknown future eventuality. ⁷

In Cia Mexicana De Gas v. Federal Power Commission, ⁸ a case brought under § 19(b) of the Natural Gas Act, the court thought it "clear" that a natural gas company which competed with a certificate applicant had standing to seek judicial review of the order granting the certificate.

In National Coal Ass'n. v. Federal Power Commission, ⁹ the National Coal Association and others filed petitions for review of an order of the Federal Power Commission granting a certificate of public convenience and necessity for the construction of a gas pipe line to supply the Atomic Energy Commission's plant at Oak Ridge, Tennessee. The court held that the petitioners, a trade association of competing coal companies and labor unions of their employees, were sufficiently aggrieved by the grant to maintain proceedings for review.

The U.S. Supreme Court has held that one threatened with financial loss through increased competition resulting from a Federal Communications Commission is "aggrieved" and entitled as such to a review of the order by the Court of Appeals. ¹⁰

In an action by a data processor's association and data processing corporation to review rulings of the Comptroller that national banks, including defendant bank, could make data processing services available to other banks and to bank customers, the Supreme Court held that plaintiffs, as competitors of national banks which are engaging in data processing services, were "aggrieved" persons who, under the Administrative Procedure Act, were entitled to judicial review of the ruling. ¹¹

We think the reasoning of this authority is sufficient to support the proposition that a competitor whose pecuniary interest is directly and injuriously affected and to whom the adverse effect of the Commission's order is direct, substantial and immediate is a "party affected" and/or "any person deeming himself aggrieved" within the meaning of Art. 9, § 20, Oklahoma Constitution.

MKT in an affidavit filed with its Response to Motion to Dismiss stated that in 1981 MKT transmitted 12,540 carloads of coal from Wyoming to the Grand River Dam Authority (GRDA) at Pryor, Oklahoma, in 1982, 17,144 carloads, through the first six months of 1983, 7,044 carloads, with an estimate of an additional 11,500 for a total of 18,594 carloads in 1983.

GRDA has contracted with Carter Mines at Rawhide Junction, Wyoming, to purchase a minimum of 18,000 carloads per year from 1984 through 1987 and from 1988 through 1999, a minimum of 20,000 carloads per year. Therefore, MKT projects that it will deliver a minimum of 18,000 carloads of coal per year to the GRDA from 1984 through 1987, inclusive. From 1988 through 1999, a minimum of 20,000 carloads per year.

GRDA had advised that unit number two will become operational effective January 1, 1986. It has contracted a minimum 9,000 carloads per year from 1986 through 1988 and 10,000 per year from 1987 through 1999.

MKT claims that it would lose fifty percent (50%) of the carload shipments covering unit number one and all shipments for unit number two if the license authorized in case No. 27470 (Order No. 238528) is issued and ETSI is allowed to build its coal slurry pipeline.

MKT presently earns approximately four hundred fifty nine dollars ($459.00) per carload. The total projected loss of income to MKT for both units number one and two commencing January, 1986 through 1999 is one million two hundred sixty-two thousand two hundred fifty dollars ($1,262,250). MKT's pecuniary interest in the shipping of coal from Wyoming to Oklahoma is directly and injuriously affected by the construction of the ETSI coal slurry pipeline. Upon completion of the coal slurry pipeline, the adverse effect upon MKT will be direct, substantial and immediate.

Under these facts we find, therefore, that MKT as one threatened with financial loss through increased competition from the Commission's order is a "party affected" or a "person deeming himself aggrieved" under Art. 9, § 20, Oklahoma Constitution, and has standing to appeal Commission Order No. 238528.

II.

DOES THE OKLAHOMA CORPORATION COMMISSION HAVE SUBJECT MATTER

JURISDICTION OVER ETSI?

MKT urges on appeal that the Oklahoma Corporation Commission lacks subject matter jurisdiction over coal pipelines. The pertinent Oklahoma Constitutional provisions are as follows:

Art. 9, § 18, reads as follows:

"The Commission shall have the power and authority and be charged with the duty of supervising, regulating, and controlling all transportation and transmission companies doing business in this State...." (...