Mid-America Pipeline Co. v. Iowa State Commerce Commission

• Decision Date: 03 April 1962
• Docket Number: No. 50555,MID-AMERICA,50555
• Citation: 114 N.W.2d 622,253 Iowa 1143
• Parties: PIPELINE COMPANY, Appellant, v. IOWA STATE COMMERCE COMMISSION, and Bernard J. Martin, Ray H. Thompson, Harold E. Hughes, being the Chairman and Commissioners of said Iowa State Commerce Commission, and Northern Gas Products Company, Appellees.
• Court: Iowa Supreme Court

Page 622

114 N.W.2d 622

253 Iowa 1143

MID-AMERICA PIPELINE COMPANY, Appellant, v. IOWA STATE COMMERCE COMMISSION, and Bernard J. Martin, Ray H. Thompson, Harold E. Hughes, being the Chairman and Commissioners of said Iowa State Commerce Commission, and Northern Gas Products Company, Appellees.

No. 50555.

Supreme Court of Iowa.

April 3, 1962.

Rehearing Denied June 12, 1962.

Herrick, Langdon, Sandblom & Belin, Des Moines, for appellant.

Gibson, Stewart & Garrett, Des Moines, for appellee, Northern Gas Products Company.

Waldo F. Wheeler, Commerce Counsel, Des Moines for appellees. Iowa State Commerce Commission and Bernard J. Martin, Ray H. Thompson, Harold E. Hughes, being the Chairman and Commissioners of said Iowa State Commerce Commission.

THOMPSON, Justice.

Plaintiff's action is in three divisions. Each division is based on the alleged illegality of a permit for the construction of a pipe line issued by the defendant Iowa State Commerce Commission to the defendant Northern Gas Products Company. The first division asks issuance of a writ of certiorari against the commission, asserting the illegality of its act in issuing the permit. The second asks an injunction restraining the defendant Northern Gas Products Company, hereafter referred to as Northern, from building the pipe line; and the third is for a declaratory judgment asking that the order and permit of the commission be declared illegal and void and that Northern has no rights thereunder. The basis for the prayer of each division is supported by the same pleaded facts. Since the trial court granted motions to dismiss each division and plaintiff elected to stand upon the rulings and judgment was entered against it, we have before us only the well pleaded facts and permissible conclusions which under well settled rules we must take as admitted and true.

I. The two major questions for determination are whether the commission had a right under constitutional statutes to grant the permit; and whether the plaintiff is in such a position that it may challenge the commission's action. It appears from the petition and amendments that the plaintiff has been at all times material the operator of a pipe line, originating in New Mexico and western Texas, for the purpose of public transportation of liquid hydrocarbons. It serves western Iowa through one branch and eastern Iowa through another, and, at the time of the hearing before the commission on Northern's application for a permit, had commenced the construction of a pipe line which would serve central Iowa.

On April 18, 1961 Northern's petition for a permit to construct and operate a pipe line from near Pacific Junction, Iowa, to Des Moines came on for hearing. The plaintiff appeared and objected, acting under the provisions of Section 490.9 of the 1958 code, I.C.A., which we quote: 'Objections. Any person, corporation, company, city or town whose rights or interests may be affected by said pipe line or lines or gas storage facilities may file written objections to said proposed pipe line or lines or gas storage facilities or to the granting of said permit.'

At the hearing before the commission, it was 'brought out' as the commission's record shows, that Northern intends to handle only its own products by pipe line and is not a common carrier of such products. This points up the first question which must be determined. The commission, under Chapter 490 of the code, has the power to issue permits for the construction of pipe lines in Iowa. Stress is placed upon the necessity for safety; and Section 490.25 says 'Any pipe-line company having secured a permit for pipe lines as in this chapter provided shall thereupon be vested with the right of eminent domain to such extent as may be necessary and as prescribed and approved by said state commerce commission * * *.' The permit, No. 409, issued by the commission to Northern provides that 'During the period of time this permit is in force the said company is vested with the right of eminent domain to such extent as may be necessary and as prescribed and approved by the Iowa State Commerce Commission, not exceeding seventy-five (75) feet in width for right-of-way and not exceeding one (1) acre in any one location in addition to the right-of-way for the location of pumps, * * *.' In granting the permit, the commission was within the terms of Chapter 490. But the plaintiff says that so interpreted the statute is unconstitutional in that it permits granting the right of eminent domain for solely private purposes, and without any showing of public necessity or convenience.

Taking the allegations of the petition, Northern is a private corporation intending to operate the proposed pipe line for private purposes. This may not be done; and any statute giving such a right is beyond the pale of constitutional authority. The power of eminent domain may be granted and exercised only where a public use is involved. Abolt v. City of Fort Madison, 252 Iowa 626, 108 N.W.2d 263, 267, and citations. We must agree that the grant of the power of eminent domain for a strictly private purpose and use, as Chapter 490 seems to authorize, is beyond legislative authority and when the commission attempts to follow the statute in granting such right it is acting illegally and beyond its jurisdiction. It has no right to put into effect unconstitutional provisions of a statute.

The defendants say the plaintiff has not yet been injured; that the commission, under Section 490.25 and the issued permit, may yet deny the right of eminent domain. We are unable to agree. The commission's intent to permit the use of such power too well appears. It is true the statute and the permit both use the language 'to such extent as may be necessary and as prescribed and approved by the (commission).' But there seems no doubt the commission regards this as giving it supervision only over the limits to which the power may be exercised by Northern. In view of the fact it appeared at the hearing, as plaintiff shows in its petition, that Northern intends to build the pipe line for a private use only, there would have been no ground for issuance of the permit, at least in the form it was done, unless the power of eminent domain was thought to be granted. In an exhibit attached to and made a part of the petition is set out what is termed, apparently by the commission, a 'Discussion', which is somewhat in the nature of an opinion by the commission. In there we find it stated that the commission found that public convenience and necessity was not an issue in the hearing and was not heard. It was also stated therein that 'the line will be for the purpose of the liquid hydrocarbons only of said company.' It is futile to urge that the commission may at some future date deny the power of eminent domain to Northern; its intent to do so, and its belief that it must follow the terms of the statute, too clearly appear. We hold the provisions of Chapter 490 if interpreted to authorize the grant of the power of eminent domain for private uses only are unconstitutional and void. Nor will it avail defendants to now assert that the proposed pipe line will in fact serve the public convenience and necessity, and so be for a public use. We do not reach this question under the situation here. That is not case made by the pleadings, which limit our consideration strictly to the grant of the power of eminent domain for private use.

II. The defendant Northern urges that an interstate pipe line operated by a private concern to put its products in the market in interstate commerce is a common carrier subject to regulation by the Interstate Commerce Commission. In support of this it cites Champlin Refining Company v. United States, 329 U.S. 29, 67 S.Ct. 1, 91 L.Ed. 22. That Northern may be subject to regulation by the ...