United States v. Ohio Oil Company United States v. Standard Oil Company United States v. Standard Oil Company of Louisiana United States v. Prairie Oil Gas Company United States v. Uncle Sam Oil Company United States v. Robert Benson

• Decision Date: 22 June 1914
• Docket Number: No. 506,506,507,No. 482,No. 507,Nos. 481,No. 481,No. 483,483,482,508,No. 508,481,s. 481
• Citation: 58 L.Ed. 1459,234 U.S. 548,34 S.Ct. 956
• Parties: UNITED STATES et al., Appts., v. OHIO OIL COMPANY. UNITED STATES et al., Appts., v. STANDARD OIL COMPANY. UNITED STATES et al., Appts., v. STANDARD OIL COMPANY OF LOUISIANA. UNITED STATES et al., Appts., v. PRAIRIE OIL & GAS COMPANY. UNITED STATES et al., Appts., v. UNCLE SAM OIL COMPANY. UNITED STATES et al., Appts., v. ROBERT D. BENSON et al., Doing Business under the Partnership Name of the Tide Water Pipe Company, Limited
• Court: U.S. Supreme Court

234 U.S. 548

34 S.Ct. 956

58 L.Ed. 1459

UNITED STATES et al., Appts.,

v OHIO OIL COMPANY.

No. 481.

UNITED STATES et al., Appts.,

v STANDARD OIL COMPANY.

No. 482.

UNITED STATES et al., Appts.,

v STANDARD OIL COMPANY OF LOUISIANA.

No. 483.

UNITED STATES et al., Appts.,

v PRAIRIE OIL & GAS COMPANY.

No. 506.

UNITED STATES et al., Appts.,

v. UNCLE SAM OIL COMPANY.

No. 507.

UNITED STATES et al., Appts.,

v. ROBERT D. BENSON et al., Doing Business under the

Partnership Name of the Tide Water Pipe Company, Limited.

No. 508.

Nos. 481, 482, 483, 506, 507, 508.

Argued and submitted October 15 and 16, 1914.

Decided June 22, 1914.

Solicitor General Davis for the United States.

Mr. Charles W. Needham for the Interstate Commerce Commission.

[Argument of Counsel from pages 549-553 intentionally omitted] Messrs. John G. Milburn, Frank L. Crawford, and Walter F. Taylor M. F. Elliott for appellee in No. 481.

Messrs. John G. Milburn, Chester O. Swain, and for appellee in Nos. 482 and 483.

[Argument of Counsel from pages 554-557 intentionally omitted] Messrs. W. S. Fitzpatrick, J. B. F. Cates, L. W. Keplinger, and C. W. Trickett for appellee in No. 506.

Mr. Albert L. Wilson for appellee in No. 507.

Messrs. W. I. Lewis, Archibald F. Jones, and R. R. Lewis for appellees in No. 508.

Mr. Justice Holmes delivered the opinion of the court:

By the act of Congress of June 29, 1906, chap. 3591, 34 Stat. at L. 584, the act to regulate commerce was amended so that the 1st section reads in part as follows: 'That the provisions of this act shall apply to any corporation or any person or persons engaged in the transportation of oil or other commodity, except water and except natural or artificial gas, by means of pipe lines, or partly by pipe lines and partly by railroad, or partly by pipe lines and partly by water, who shall be considered and held to be common carriers within the meaning and purpose of this act.' Thereafter the Interstate Commerce Commission issued an order requiring the appellees, among others, being parties in control of pipe lines, to file with the Commission schedules of their rates and charges for the transportation of oil. 24 Inters. Com. Rep. 1. The appellees thereupon brought suit in the commerce court to set aside and annul the order, and a preliminary injunction was issued by that court, on the broad ground that the statute applies to every pipe line that crosses a state boundary, and that thus construed it is unconstitutional, 204 Fed. 798. The United States, the Interstate Commerce Commission, and other intervening respondents appealed.

The circumstances in which the amendment was passed are known to everyone. The Standard Oil Company, a New Jersey corporation, owned the stock of the New York Transit Company, a pipe line made a common carrier by the laws of New York, and of the National Transit Company, a Pennsylvania corporation of like character, and by these it connected the Appalachian oil field with its refineries in the east. It owned nearly all the stock of the Ohio Oil Company, which connected the Lima-Indiana field with its system; and the National Transit Company, controlled by it, owned nearly all the stock of the Prairie Oil & Gas Company, which ran from the mid-continent field in Oklahoma and Kansas and the Caddo field in Louisiana to Indiana, and connected with the previously mentioned lines. It also was largely interested in the Tide Water Pipe Company, Limited, which connected with the Appalachian and other fields and pursued the methods of the Standard Oil Company about to be described. By the before-mentioned and subordinate lines the Standard Oil Company had made itself master of the only practicable oil transportation between the oil fields east of California and the Atlantic ocean, and carried much the greater part of the oil between those points. Before the recent dissolution, the New York and Pennsylvania companies had extended their lines into New Jersey and Maryland to the refineries, and the laws of those states did not require them to be common carriers. To meet the present amendment the Standard Oil Company took a conveyance of the New Jersey and Maryland lines, and the common carrier lines now end at insignificant places where there are neither market nor appliances except those of the Standard Oil, by which it would seem that the whole transport of the carriers' lines is received. There is what seems to be merely a formal breach of continuity when the carriers' pipes stop. The change is not material to our view of the case.

Availing itself of its monopoly of the means of transportation the Standard Oil Company refused, through its subordinates, to carry any oil unless the same was sold to it or to them, and through them to it, on terms more or less dictated by itself. In this way it made itself master of the fields without the necessity of owning them, and carried across half the continent a great subject of international commerce coming from many owners, but, by the duress of which the Standard Oil Company was master, carrying it all as its own. The main question is whether the act does and constitutionally can apply to the several constituents that then had been united into a single line.

Taking up first the construction of the statute, we think it plain that it was intended to reach the combination of pipe lines that we have described. The provisions of the act are to apply to any person engaged in the transportation of oil by means of pipe lines. The words 'who shall be considered and held to be common carriers within the meaning and purpose of this act' obviously are not in- tended to cut down the generality of the previous declaration to the meaning that only those shall be held common carriers within the act who were common carriers in a technical sense, but an injunction that those in control of pipe lines and engaged in the transportation of oil shall be dealt with as such. If the Standard Oil Company and its cooperating companies were not so engaged no one was. It not only would be a sacrifice of fact to form, but would empty the act if the carriage to the seaboard of nearly all the oil east of California were held not to be transportation within its meaning, because by the exercise of their power the carriers imposed as a condition to the carriage a sale to themselves. As applied to them, while the amendment does not compel them to continue in operation, it does require them not to continue except as common carriers. That is the plain meaning, as has been held with regard to other statutes similarly framed. Atlantic Coast Line R. Co. v. Riverside Mills, 219 U. S. 186, 195, 203, 55 L. ed. 167, 178, 181, 31 L.R.A.(N.S.) 7, 31 Sup. Ct. Rep. 164. Its evident purpose was to bring within its scope pipe lines that, although not technically common carriers, yet were carrying all oil offered, if only the offerers would sell at their price.

The only matter requiring much consideration is the constitutionality of the act. That the transportation is commerce among the states we think clear. That conception cannot be made wholly dependent upon technical questions of title, and the fact that the oils transported belonged to the owner of the pipe line is not conclusive against the transportation being such commerce. Rearick v. Pennsylvania, 203 U. S. 507, 512, 51 L. ed. 295, 297, 27 Sup. Ct. Rep. 159. See Texas & N. O. R. Co. v. Sabine Tram Co. 227 U. S. 111, 57 L. ed. 442, 33 Sup. Ct. Rep. 229. The situation that we have described would make it illusory to deny the title of commerce to such transportation, beginning in purchase and ending in sale, for the same reasons that make it transportation within the act.

The control of Congress over commerce among the states cannot be made a means of exercising powers not intrusted to it by the Constitution, but it may require those who are common carriers in substance to become so in form. So far as the statute contemplates future pipe lines and prescribes the conditions upon which they may be established there can be no doubt that it is valid. So the objection is narrowed to the fact that it applies to lines already engaged in transportation. But, as we already have intimated, those lines that we are considering are common carriers now in everything but form. They carry everybody's oil to a market, although they compel outsiders to sell it before taking it into their pipes. The answer to their objection is not that they may give up the business, but that, as applied to them, the statute practically means no more than they must give up requiring a sale to themselves before carrying the oil that they now receive. The whole case is that the appellees, if they carry, must do it in a way that they do not like. There is no taking and it does not become necessary to consider how far Congress could subject them to pecuniary loss without compensation in order to accomplish the end in view. Hoke v. United States, 227 U. S. 308, 323, 57 L. ed. 523, 527, 43 L.R.A.(N.S.) 906, 33 Sup. Ct. Rep. 281, Ann. Cas. 1913E, 905; Lottery Case (Champion v. Ames) 188 U. S. 321, 357, 47 L. ed. 492, 501, 23 Sup. Ct. Rep. 321, 13 Am. Crim. Rep. 561.

These considerations seem to us sufficient to dispose of the cases of the Standard Oil Company, the Ohio Oil Company, the Prairie Oil & Gas Company, and the Tide Water Pipe Company, Limited. The Standard Oil Company of Louisiana was incorporated since the passage of the amendment, and before the beginning of this suit, to break up the monopoly of the New Jersey Standard Oil Company. It buys a large part of its oil from the Prairie Oil & Gas Company, which buys it at the wells in the mid-continent field and transfers the title to the Louisiana Company in that state. Its case also is covered by what we have said.

There remains to be considered only the Uncle Sam Oil Company. This company has a refinery in Kansas and oil wells in Oklahoma, with a pipe line connecting the two which it has used...