Lone Star Gas Co. v. City of Fort Worth

• Decision Date: 15 January 1938
• Docket Number: No. 8257.,8257.
• Citation: 93 F.2d 584
• Parties: LONE STAR GAS CO. v. CITY OF FORT WORTH et al.
• Court: U.S. Court of Appeals — Fifth Circuit

93 F.2d 584 (1937)

LONE STAR GAS CO. v.CITY OF FORT WORTH et al.

No. 8257.

Circuit Court of Appeals, Fifth Circuit.

December 9, 1937.

Rehearing Denied January 15, 1938.

Ogden K. Shannon, of Fort Worth, Tex., and Roy C. Coffee and Marshall Newcomb, both of Dallas, Tex., for appellant.

R. E. Rouer and Geo. C. Kemble, both of Fort Worth, Tex., for appellees.

Before SIBLEY and HOLMES, Circuit Judges, and STRUM, District Judge.

SIBLEY, Circuit Judge.

Lone Star Gas Company sought to enjoin as contrary to the Fourteenth Amendment of the Constitution an ordinance of the City of Fort Worth which fixed standards for fuel gas sold within the city and prohibited dilution of it.The cause was referred to a master, whose report was in the main upheld by the District Judge, who denied relief and dismissed the bill.

The facts are not in serious controversy, though the conclusions to be drawn are.The master's report is not unassailable as is argued.The reference does not appear to have been by consent of both parties to an agreed master, but if it had been it would under the new Equity Rule 61½, 28 U.S.C.A.followingsection 723, be only advisory.The District Judge appears to have felt himself overmuch bound by it.Since there is really no question of the truthfulness of witnesses, but only of the weight of their expert opinions, we are quite free to consider the evidence de novo.

It appears that the gas company owns extensive pipe lines in Texas and Oklahoma and supplies fuel gas to numerous towns and cities, including Fort Worth and Dallas, Tex.In Fort Worth alone does it retail gas.There it has a long-established business.Prior to 1923 it supplied the city with gas from Oklahoma and Texas fields to the east and north.In that year it sought further supplies in West Texas, both from dry oil wells and casinghead gas saved from active oil wells.This gas is of much higher heat content than the others, but is variable and gave some trouble in the effort to use it, so that in 1924 at a cost of about $500,000 what is known as the Joshua Plant was established at which nitrogen gotten from the air was mixed with the gas so as to reduce and render more constant the heat content.The process was a new one and not used elsewhere.The gas from West Texas was thus "stabilized" at a little over 1,000 British Thermal Units per cubic foot, and then carried on to Dallas and Fort Worth, and some smaller towns.At Fort Worth gases from the north and east continued to be used, the mixture of them having about the same richness, but was introduced at a gate to the north while the gas from Joshua was used at that gate and also at two others to the east of the city.Ten years later in 1934, it having appeared that the nitrogen introduced at Joshua had been increased from an average of 9 per cent. to an average of 19 per cent., so that hundreds of millions of cubic feet of nitrogen per year were being fed through the meters and paid for as gas, a great discontent arose at Fort Worth.The gas company explains that the richness of the gas to be treated had increased, and that the quality of the mixture had only been held constant.There was also some complaint, not made very specific, that illnesses and a few deaths had been caused in Fort Worth by gas.Dallas and Fort Worth joined in having men from the United States Bureau of Standards make elaborate experiments with the various gases furnished and their respective behavior in heating apparatus and their efficiency.An elaborate report was made.Dallas took no action, but Fort Worth passed an ordinance in 1934, modified and superseded in 1935 by that before us.The ordinance makes no legislative findings and recitals, but in section 1 requires that only natural fuel gas be furnished and distributed in the city, of the quality and character produced by nature in the oil and gas fields; that helium, sulphur, gasolene, oil, vapors, propane, and butane may be extracted; but no air or the elements of air from which the oxygen had been extracted shall be added, except what is unavoidable in producing the gas at the wells.Section 2 requires that the gas shall contain not less than 1,000 British Thermal Units per cubic foot at a stated pressure and temperature.Section 3 deals with delivery at higher pressures by agreement; but section 4 requires that ordinarily it be delivered at the meters at a pressure of not less than four nor more than eight ounces above atmospheric pressure.Section 5 declares that if any part of the ordinance be found invalid or inoperative or void, the balance shall stand.Section 6 repeals conflicting ordinances, and section 7 fixes penalties for violations.

The gas company attacks the ordinance, and particularly sections 1and4, as arbitrary, depriving it of its established business and the value of its investments at Joshua and Fort Worth without due process of law, interfering with a lawful and harmless and indeed necessary and useful treatment of its merchandise without any good reason.The city asserts its charter power to fix the quality of the gas and the service in connection with it, and insists that the prohibition of dilution in section 1 is needful for the health and safety of the citizens.The master found that the diluted gas had some tendency to "lift" from the burners and possibly form carbon monoxide, but that this was insignificant, and not enough to prevent it being a gas which gives safe and satisfactory service in cities where it is the only gas supplied.He found a more serious trouble in the effort to use the gas from Joshua interchangeably with the other gases in the same burners at Fort Worth, since there was a difference in specific gravity, which he thought would require a change in the adjustment of the burners.He thought the undiluted West Texas gas would interchange better, but he found that the best interchange would be secured if the West Texas gas was diluted with only 4 or 5 per cent. of nitrogen instead of 19 per cent.In this he followed the opinion of the Bureau of Standards men.He sustained the ordinance finally in its total prohibition of dilution on the ground that daily variations in the West Texas gas made scientific accuracy in dilution impracticable, and that the difficulty of supervision made it reasonable to forbid dilution entirely.The District Judge did not uphold the master as to the impracticability of accurate dilution, but upheld his last conclusion that more satisfactory and safer service would result from compliance...