Producers Transp Co v. Railroad Commission of State of California, 219

• Decision Date: 05 January 1920
• Docket Number: No. 219,219
• Citation: 251 U.S. 228,40 S.Ct. 131,64 L.Ed. 239
• Parties: PRODUCERS' TRANSP. CO. v. RAILROAD COMMISSION OF STATE OF CALIFORNIA et al
• Court: U.S. Supreme Court

251 U.S. 228

40 S.Ct. 131

64 L.Ed. 239

PRODUCERS' TRANSP. CO.

v RAILROAD COMMISSION OF STATE OF CALIFORNIA et al.

No. 219.

Argued Dec. 12, 1919.

Decided Jan. 5, 1920.

Messrs. A. V. Andrews, Lewis W. Andrews, and Thomas O. Toland, all of Los Angeles, Cal., for plaintiff in error.

Mr. Douglas Brookman, of San Francisco, Cal., for defendants in error.

Mr. Justice VAN DEVANTER delivered the opinion of the Court.

We here are concerned with a statute of California and an order made thereunder by the state Railroad Commission, both of which are said to be repugnant to the Constitution of the United States, and therefore invalid.

The statute declares that every private corporation or individual operating 'any pipe line or any part of any pipe line * * * for the transportation of crude oil, * * * directly or indirectly, to or for the public, for hire, * * * and which said pipe line * * * is constructed or maintained upon, along, over or under any public highway, and in favor of whom the right of eminent domain exists,' shall be deemed a common carrier and subject to the provisions of a prior act investing the Railroad Commission with extensive powers over the rates and practices of those who operate public utilities. Stats. 1913, c. 327; Stats. 1911, Ex. Sess. c. 14.

The order of the commission was made after notice and a full hearing; is based upon a finding that the Producers' Transportation Company, the plaintiff in error, has a pipe line from the San Joaquin oil fields to Port Harford, on the Pacific Coast, whereby it transports crude oil for pay in such circumstances that the statute requires that it be regarded and dealt with as a common carrier; and directs the filing with the commission of the company's schedule of rates or charges and the rules and regulations under which the transportation is conducted.

In the state court the company contended that the evidence before the commission, all of which was before the court, conclusively established that the pipe line was constructed solely to carry crude oil for particular producers from their wells to the seacoast under strictly private contracts, and that there had been no carrying for others, nor any devotion of the pipe line to public use; and the company further contended that the statute, as applied to this pipe line, was repugnant to the due process of law clause of the Fourteenth Amendment and the contract clause of section 10 of article 1 of the Constitution, and that the order of the commission was void as offending against these clauses. The state court sustained both the statute and the order, 176 Cal. 499, 169 Pac. 59, and the company sued out this writ of error.

The company was organized under the laws of California in 1909 and its pipe line was put in operation in 1910. The statute in question took effect August 10, 1913, and the order was made December 31, 1914.

It is, of course, true that if the pipe line was constructed solely to carry oil for particular producers under strictly private contracts and never was devoted by its owner to public use, that is, to carrying for the public, the state could not, by mere legislative fiat or by any regulating order of a commission, convert it into a public utility or make its owner a common carrier; for that would be taking private property for public use without just compensation which no state can do consistently with the due process of law clause of the Fourteenth Amendment. Chicago, Burlington & Quincy Ry. Co. v. Drainage Commissioners, 200 U. S. 561, 593, 26 Sup. Ct. 341, 50 L. Ed. 596, 4 Ann. Cas. 1175; Northern Pacific Ry. Co. v. North Dakota, 236 U. S. 585, 595, 35 Sup. Ct. 429, 59 L. Ed. 735, L. R. A. 1917F, 1148, Ann. Cas. 1916A, 1; Associated Oil Co. v. Railroad Commission, 176 Cal. 518, 523, 526, 169 Pac. 62, L. R. A. 1918C, 849. And see Munn v. Illinois, 94 U. S. 113, 126, 24 L. Ed. 77; Louisville & Nashville R. R. Co. v. West Coast Naval Stores Co., 198 U. S. 483, 495, 25 Sup....