United States v. Champlin Refining Co.
Concurring in Part
The term “common carrier” has but one meaning in the Act — the meaning given it by § 1. That definition was held in Champlin Refining Co. v. United States, 329
Opinion of the Court
delivered the opinion of the Court.
Section 1 of the Interstate Commerce Act provides that “common carriers” engaged in the “transportation” of oil or other commodities shall be subject to the regulatory requirements specified in other sections of the statute.
The facts here are substantially the same as in the earlier case. Champlin owns and operates a pipe line running from its refinery at Enid, Oklahoma, to terminals at Hutchinson, Kansas; Superior, Nebraska; and Rock Rapids, Iowa — a distance of 516 miles. It uses the pipe line solely to carry its own refined petroleum products, such as gasoline and kerosene. No other refiner has connections with the line, and none has ever shipped products through it. The line does not connect with any other pipe line. Champlin has storage facilities at each of its three terminals. Jobbers purchasing Champlin products supply their own transportation from the storage tanks to their bulk depots.
Since the first case, there has been a change in Cham-plin’s method of quoting prices. At the time of the earlier proceeding, the price was computed as f. o. b. the Enid refinery, plus a differential equal to the through rail rate from Enid to the purchaser’s destination minus the charges for local transportation between the nearest pipeline terminal and the destination. However, Champlin made frequent and substantial departures from this formula in order to meet competitive prices at various locations. In May 1948, the company began quoting prices as f. o. b. the respective terminals, a policy which is still in effect. But as before, adjustments are made so that
On the basis of these and other facts, the Government contends (1) that there are no significant factual differences between this and the prior case, and therefore Cham-plin is barred by collateral estoppel from relitigating the holding of this Court that it is a “common carrier” engaged in “transportation” within the meaning of § 1 of the Act; (2) that since the definition of “common carrier” in § 1 applies to §§ 6 and 20 as well as to § 19a, the Court’s prior holding per se establishes the validity of the present order; (3) that even if estoppel does not apply, the facts are adequate under the statute to support the Commission’s order; (4) that the alleged constitutional question is frivolous.
Champlin claims (1) that factual changes remove this case from the realm of collateral estoppel; (2) that the Court specifically reserved the statutory issue presented by this case, namely whether the I. C. C. may convert a private carrier into a common carrier for hire; and (3) that the lower court was correct in holding that the Act violates the Fifth Amendment if construed to authorize the I. C. C.’s order.
We agree with the Government that there have been no significant factual changes in Champlin’s operations since the prior case. The practice of quoting prices f. o. b. Enid made it superficially more obvious that transportation charges were being collected, a point which the Court brought out. 329 U. S. at 34. And the record indicates that the change to an f. o. b. terminal formula resulted in minor alterations in the pattern of relative delivered prices at various locations. But Champlin is still transporting, and unless it has launched on a calculated plan of bankruptcy, its prices on the average are necessarily intended to cover transportation costs as well as other costs. Champlin further points out that it has con
However, we disagree with the Government’s contention that the prior holding disposes of all the statutory issues in this case. To be sure, the literal terms of the statute lend some weight to the Government’s argument. Section 1 (1) provides that “the provisions of this part” shall apply to “common carriers” as defined, the word “part” referring to §§ 1-27 inclusive. Section 19a, under which the earlier order was issued, applies to “every common carrier subject to the provisions of this part.” Section 20 applies to “carriers,” which is defined in subpara-graph (8) as “common carrier[s] subject to this chapter”; and § 6 applies to “every common carrier subject to the provisions of this chapter.” Hence, the Commission’s jurisdiction to issue orders under any of these sections is determined by a decision that a company is a “common carrier” under § 1. The Government in effect argues, however, that a decision as to jurisdiction also settles the merits, that facts adequate to support a specific valuation order under § 19a are also adequate to support an order under § § 6 and 20. But this is the very conclusion which this Court necessarily rejected in Champlin I. In
The reasons for this approach were suggested in Valvoline Oil Co. v. United States, 308 U. S. 141, 146 (1939). Collection of information has a significance independent from the imposition of regulations, whether or not such regulations ever come forth. Valuation and cost data from companies not subject to rate making may add to the statistical reliability of standards imposed on those companies which are. “Publicity alone may give effective remedy to abuses, if any there be.” Id. at 146. Disclosure may alter the future course of a company otherwise disposed to indulge in activities which the statute condemns. Disclosure provides the basis for prompt action should a future change in circumstances make full-scale regulation appropriate. Finally, reports may bring to light new abuses and thus provide the groundwork for future statutory amendments. We assume that the Congress which passed the Interstate Commerce Act was well aware of these benefits. We conclude, as before, that the Congress did not mean to eschew them by omitting a general provision empowering the Commission to collect pertinent data from all interstate pipe lines.
The prior holding, therefore, supports that part of the Commission’s order involving § 20 of the Act. The re
At the same time, we find it hard to conclude, despite the generality of the statutory terms used, that Congress intended to apply the sanctions of § 6 — imposing the duty of serving the public at regulated rates — on all private pipe lines merely because they cross state lines. The statute cannot be divorced from the circumstances existing at the time it was passed, and from the evil which Congress sought to correct and prevent. The circumstances and the evil are well-known. Pipe lines were few in number and heavily concentrated under the control of one company, Standard Oil. That company, through the ownership of subsidiaries and affiliates, 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. . . . Availing itself of its monopoly of the means of transportation [it] refused through its subordinates to carry any oil unless the same was sold to it or to them ... on terms more or less dictated by itself.” Pipe Line Cases, supra, at 559. Small independent producers — who lacked the resources to construct their own lines, or whose output was so small that a pipe line built to carry that output alone would be economically unfeasible — were in a desperate competitive position. There is little doubt, from the legislative history, that the Act was passed to eliminate the competitive advantage which existing or future integrated companies might possess from exclusive ownership of a pipe line.
Yet on the record before us, this is precisely what the Commission is attempting to do. Unlike the crude-oil gathering lines of Valvoline, which carried the products of over 3,800 independent owners and operators, Cham-
“Only about 1.98 percent of the total gasoline consumed in [Champlin’s marketing] area is moved through the pipe line and sold from respondent’s terminal storage facilities. . . . The total capacity of the common-carrier lines into the Nebraska market is about 13 times that of the Champlin line and about 10 times that of the latter into the Iowa market. The common-carrier pipe-line capacity available to refineries in Oklahoma and Kansas aggregates 172,800 barrels a day [in contrast to Champlin’s capacity of 9,800 barrels], and respondent’s pipe line is the small*300 est of any common-carrier or private pipe line operating in this territory. Apparently, common-carrier pipe-line transportation is available to any small refiner in this area desiring such transportation.
“So far as appears, no other pipe-line company has threatened to force ... a connection [with Cham-plin’s], and because of the ample common-carrier pipe-line facilities available, as revealed by respondent, no refinery would be likely to interest itself in such a connection.” 2741. C. C. 412-413, 415 (1949). (Emphasis supplied.)
The court below, in its Findings of Fact, concluded that “Champlin does not have a monopoly or any power to establish a monopoly either in the transportation of petroleum products into the trade territory or in the sale of petroleum products therein.” It further found that “Champlin ... is a small company in comparison with companies with which it competes in the area reached by its pipe line. . . . Champlin’s acts create competition.” See also Chairman Splawn, dissenting from the Commission report. 2741. C. C. 416.
The judgment below will be modified by striking out those portions setting aside the Commission’s order in Cause No. 29912, Champlin Refining Company Accounts and Reports, and as modified, it is affirmed.
So ordered.
49 U. S. C. § 1:
“(1) Carriers subject to regulation.
“The provisions of this chapter shall apply to common carriers engaged in—
“(b) The transportation of oil or other commodity, except water and except natural or artificial gas, by pipe line ....
“(3) ... (a) The term ‘common carrier’ as used in this chapter shall include all pipe-line companies;
49 U. S. C. § 19a:
“(a) Physical valuation of property of carriers; classification and inventory.
“The Commission shall . . . investigate, ascertain, and report the*292 value of all the property owned or used by every common carrier subject to the provisions of this chapter ....
“(e) . . . Every common carrier subject to the provisions of this chapter shall furnish to the commission or its agents from time to time and as the commission may require maps, profiles, contracts, reports of engineers, and any other documents . . . .”
49 U. S. C. §20:
“(1) Reports from carriers and lessors.
“The Commission is authorized to require annual, periodical, or special reports from carriers ....
“(3) Uniform system of accounts.
“The Commission may, in its discretion, for the purpose of enabling it the better to carry out the purposes of this chapter, prescribe a uniform system of accounts applicable to any class of carriers subject thereto ....
“(4) Depreciation charges.
"The Commission shall . . . prescribe for carriers the classes of property for which depreciation charges may properly be included under operating expenses, and the rate or rates of depreciation which shall be charged ....
“(8) . . . the term‘carrier’means a common carrier subject to this chapter . . . .”
49 U. S. C. § 6:
“(1) Schedule of rates, fares, and charges; filing and posting.
“Every common carrier subject to the provisions of this chapter shall file with the commission . . . and print and keep open to public inspection schedules showing all the rates, fares, and charges for transportation . . . .”
Section 1 (5) of the Act provides that all charges “shall be just and reasonable.” 49 U. S. C. § 1 (5).
Champlin is sole owner of the stock of the Cimarron Valley Pipe Line Company, an intrastate crude-oil gathering system which supplies oil from both its own and others’ wells to the Champlin refinery. However, the Commission both in this case and in Champlin I gave no consideration, either in the hearings or the orders, to Champlin’s gathering facilities.
In any event, it would seem that Champlin’s exclusive ownership of the refined-products line would be of no concern to independent crude-oil producers unless the following assumptions were true: (a) that independent refiners were shut out of gasoline markets which they would otherwise enter; (b) that this reduced their output below the capacity of their refineries; (c) that this decreased their demand for crude oil, thus reducing their competition with Champlin in the purchase of crude, and thus depressing the price which crude-oil producers could get. As to the first, and crucial, assumption, the Commission found precisely to the contrary. See text, infra.
“. . . [T]he evidence is clear that there has been, and is, no holding out by Champlin of a common-carrier service either directly or indirectly. None of the products moved through the line has ever been purchased from any other interest. Moreover, the evidence shows that the products transported through Champlin’s pipe line constitutes an inconsequential part of the total volume of products that moves by pipe line to the consuming territory served by Cham-plin from its storage facilities.
“Requiring Champlin to comply with our valuation orders and the requirements of section 20 of the act . . . is one thing, but to require
“The purpose of the amendment in 1906 was to protect small independent producers from monopoly power. This report construes that amendment so as to convert into a common carrier the pipe line wholly owned and completely utilized by a relatively small independent company, though the company is wholly dependent upon such facility ... in the conduct of its refining business. This ultra literal construction regardless of differing conditions and circumstances might well have the effect of destroying small independent companies instead of affording them the protection intended by the amendment.” (Emphasis supplied.)
Dissenting Opinion
dissenting.
From whatever angle this case is approached, it seems to me that the holding of the Court is wrong. The decision rides roughshod over clear statutory language making the Hepburn Act
I.
The Court’s holding that Champlin must comply with § 20 of the Hepburn Act, but need not comply with § 6, cannot be reconciled with clear language in those sections or with our previous decisions construing the same language. Section 20 authorizes the Interstate Commerce Commission to require that “all common carriers subject to the provisions of this Act”
The Court may be saying that § 6 is something sui generis, that no pipe-line company need comply with that section unless it is something more than a "common carrier subject to the . . . Act.”
II.
Far more important than the judicial exemption of Champlin from filing papers under § 6, however, is the Court’s holding that pipe-line companies engaged in inter
That Champlin is a common carrier within the literal language of this provision is shown by the unchallenged findings of fact made by the I. C. C.: Champlin, a fully integrated company, produces, refines, transports and markets petroleum products. Through a wholly owned subsidiary it also buys, gathers and transports to its refinery oil produced from the wells of others.
That the Hepburn Act did convert Champlin into a public carrier for hire is made even clearer by the legislative history. The pipe-line provision was sponsored in 1906 by Senator Henry Cabot Lodge of Massachusetts who offered to amend a pending railroad bill in a manner which would convert interstate oil-carrying pipe lines into common carriers subject to regulation by the I. C. C.
III.
The Court, without mentioning it, necessarily overrules one or more of our previous decisions construing the Hepburn Act. In the Pipe Line Cases, supra, it was held that the Hepburn Act converted into common carriers for hire all private pipe-line companies “engaged in the transportation of oil or other commodity” across state lines, a decision which meant that all such companies are by law required to offer their services to the public.
Nor do I understand how today’s holding can be reconciled with Valvoline Oil Co. v. United States, supra, where we held that Valvoline was a “common carrier subject to” the Act. The pattern of operations of Valvoline and Champlin are identical with two minor exceptions: (1) Valvoline’s interstate pipe lines transported crude oil while Champlin’s trunk line transports gasoline. This difference is immaterial; even assuming that “gasoline” is not “oil” within the meaning of § 1, that section makes the Act apply not merely to any pipe-line company carrying “oil” but to pipe-line companies carrying any “other commodity.” (2) Valvoline chose to operate its gathering lines and purchase oil from independent producers in its own corporate name while Champlin chooses to operate its gathering lines and purchase oil in the name of a wholly owned subsidiary. The Court, however, had no difficulty in the Pipe Line Cases in treating as a single unit the Standard Oil Company and its wholly owned or even partly owned subsidiaries.
It should be noted, moreover, that Valvoline unsuccessfully made the same contention that the Court now
The Court nevertheless seeks to distinguish the Valvoline case on the ground that Valvoline “carried the products of over 3,800 independent owners and operators.” The quoted language correctly states a fact only if it is understood to mean that Valvoline made purchases from 3,800 independents and then carried the purchased oil in its pipe line. This fact, however, certainly does not distinguish the two cases. Like Valvoline, Champlin carries the “oil of others” all the way from the well to the market area: over half of the oil and gasoline carried by Champlin is originally purchased as crude oil from independent producers in the field before transportation begins.
IV.
In the first Champlin case we upheld findings of fact made by the I. C. C., 49 Val. Rep. (I. C. C.) 463, 470, that appellant was “engaged in transportation” and was “a common carrier subject to the provisions of” the Act. Since these questions were “distinctly put in issue and directly determined,” Champlin may not dispute them in this second proceeding between the same parties unless there is a departure from the principles most recently announced in United States v. Munsingwear, 340 U. S. 36,
Y.
Why should the Court interpret the Hepburn Act in a way which nullifies its purpose? I am forced by process of elimination to consider whether the decision reflects either a hostility to the policy of the Act or an unarticu-lated belief that it is unconstitutional, if enforced as written. Neither this Court nor any other should strangle an Act because of judicial disagreement with congressional policy. If destruction of the Act results from a feeling that the Constitution forbids Congress to convert private companies into public servants, I think that this view should be announced here, as it was by a majority of the court below. Pipe-line companies, administrators of the law, the bench, the bar, and the Congress are entitled to no less. Of course, the same constitutional contention was expressly rejected in 1914 in the Pipe Line Cases, supra: As to companies which, like Champlin, built their lines after passage of the Act, Justice Holmes, speaking for the Court, dismissed the challenge brusquely with less than a sentence, stating merely that “there can be no doubt that it [the pipe line provision] is valid.” 234 U. S. at 561. Again, in 1922, the Court, relying on the Pipe Line Cases, supra, rejected a somewhat similar constitutional argument as “futile to the point almost of being frivolous.” Pierce Oil Corp. v. Phoenix Rfg. Co., 259 U. S. 125, 128. Surely a contention deemed “almost frivolous” twenty-nine years ago should not now be reinvigorated by implication.
No one can be sure that under the Act as now rewritten by the Court the Commission can or should succeed in forcing any oil company — even those now complying with the Act — to carry gasoline or oil for others as a common carrier. Even without the newly engrafted, Court-created hurdles, the pipe-line provisions, for one reason or another, have never been enforced as effectively as might be desired.
I would reverse.
On May 4, 1906, President Theodore Roosevelt transmitted to the Congress a report describing and condemning various monopolistic practices in the petroleum industry. 40 Cong. Rec. 6358. Senator Lodge of Massachusetts on the same day introduced an amendment to § 1 of the Hepburn Act making pipe-line companies engaged in the interstate transportation of oil and other commodities common carriers:
“[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 natural gas or water for municipal purposes, 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 . . . .” Id. at 6361.
Senator Nelson in reply stated that Foraker’s suggestion would “practically nullify the provision, because every one of these pipe lines can say ‘we refuse to do business for the public.’ Practically the [Lodge] amendment would be of no use at all.” Id. at 6365. And Senator Lodge added: “[T]he amendment suggested by [Senator Foraker] to the effect that no pipe line, unless it carries for the public, shall come under this rule, will, as [Senator Nelson] says, absolutely destroy the value of my amendment.” Id. at 6365.
During the course of the debate an attempt was made to make the Lodge amendment applicable only to carriers “for the public” or to “transportation for hire” or “for compensation,” but it was unsuccessful. Id. at 7000. Senator Lodge again stated that such an amendment would “absolutely destroy” his proposal “so far as its effectiveness is concerned.” Id. at 7000.
There can be no doubt but that the proponents knew and stated their purpose. Senator Lodge declared: “[T]he purpose of this amendment is to bring the transportation of oil and other commodities within the inter
The “commodities clause” of the Hepburn Act was designed to prevent railroads from owning businesses whose shipments they carried. When that clause was first considered in the Senate, it applied to “common carriers subject to” the Act. Some senators realized that the “commodities clause” — read together with the Lodge Amendment making every pipe-line company subject to the Act — would force a divorcement of pipe lines from refineries. To avoid this, they again suggested that the Lodge proposal be amended so as to apply only to pipe lines operating for the public. Senator Lodge said: “What I want to suggest to the Senator is that this [original Lodge] amendment makes the pipe lines and
34 Stat. 584. The Hepburn Act was passed in 1906 as an amendment to the Interstate Commerce Act of 1887, 24 Stat. 379, and may now be found in 49 U. S. C. §§ 1-27. All quotations in the text follow the original language of the Hepburn Act, this Court twice having held that subsequent minor modifications changed neither the purpose nor the meaning of the Act. Valvoline Oil Co. v. United States, 308 U. S. 141, 145-146; Champlin Rfg. Co. v. United States, 329 U. S. 29, 32, note 4.
34 Stat. 593, now 49 U. S. C. § 20, which provides that the I. C. C. may require reports “from carriers” and “. . . the term 'carrier’ means a common carrier subject to this chapter . . . .”
34 Stat. 586, now 49 U. S. C. § 6: “Every common carrier subject to the provisions of this chapter shall file . . . .”
The mystery is not lessened by the Court’s use of the concept of the “Commission’s jurisdiction” in connection with tariffs. For the duty of a common carrier to file tariffs is not dependent on any “jurisdiction” or any order of the I. C. C. Section 6 unequivocally commands that common carriers subject to the Act “shall file.” See note 3, supra.
I am unable to find any support for this interesting theory in the language or history of any part of the Act, or from any other source. But see Splawn, Commissioner, dissenting, 274 I. C. C. 416; compare the opinion of Commissioners Aitchison, Splawn and All-dredge in the first Champlin case, 49 Val. Rep. (I. C. C.) 463.
See Part III, infra.
The holding of the last two cited cases was that Valvoline and Champlin had to comply with 49 U. S. C. § 19a (a) and (e). Section 19a, like § 6 and § 20, applies to “every common carrier subject to the provisions of this chapter . . . .”
I do not think that the Court in Champlin I reserved “as an independent statutory issue on a proper record” (emphasis added) the question whether Champlin could be converted into a public carrier for hire; rather the question left open was whether the Fifth Amendment barred converting Champlin into a public carrier.
Of course, the Government argued in Champlin I, as it did in Valvoline, that the Act’s provisions should be treated as “separable” in passing on the constitutional question raised. But the Government has never intimated that the sections of the Act as a matter of statutory construction were “separable.” Even an assumption that the sections were separable, however, would not justify the Court in exempting Champlin from § 6 unless it could find support for such an exemption in some statutory language. The Court has pointed to no such exclusionary language; I can find none. Moreover, as an Appendix to this opinion, infra, p. 315, shows, Senator Lodge intended to make “the pipe lines and the oil companies subject to all the provisions of the bill” unless expressly excluded in a particular provision.
34 Stat. 584, now 49 U. S. C. § 1: “(1) ... The provisions of this chapter shall apply to common carriers engaged in— . . . (b) [t]he transportation of oil or other commodity ... by pipe line .... (3) ... (a) The term 'common carrier’ as used in this chapter shall include all pipe-line companies; . . . .” See note 1, supra.
Mr. A. G. E. Leverton, Comptroller of the Champlin Refining Company, testified: “We have never produced more than approximately 45 percent of the crude oil required by our refinery and hence have always been compelled to purchase on the open market, more than half of our crude oil requirements. . . .”
The total cost of Champlin’s pipe line and appurtenant facilities as of December 31, 1940, was $3,189,028.66. Champlin, according to the I. C. C., owns: (1) Approximately 149 oil wells on 53 leases
The “pipe line provision” was added to § 1 of the Hepburn Act and is the language quoted from § 1 in the text accompanying note 9, supra. That provision is now found in 49 U. S. C. § 1. See note 9, supra.
Immediately before Senator Lodge introduced his amendment, President Theodore Roosevelt transmitted to the Congress a report on the transportation of petroleum. 40 Cong. Rec. 6358. The report pointed out the advantage possessed by Standard Oil as a result of its control of pipe lines. H. R. Doc. No. 100, 59th Cong., 1st
Control of pipe-line transportation is still important today. See, e. g., the statement of Alfred M. Landon: “Very little crude oil is moved in any other way than by pipe line. There is only a small amount moved by intrastate shipments. The independent producer therefore finds himself at the mercy of his competitor in the business of producing oil when that competitor controls practically one hundred per cent of the transportation facilities, because it becomes simply a question of bookkeeping as to the end of the business in which this big monopoly shows its profit. It can pay less for the oil and make its profit from the transportation. The independent refiner is choked also by this same means — the control of the transportation facilities.” Hearings before House Committee on Interstate and Foreign Commerce on H. R. 16695, 71st Cong., 3d Sess. 59.
As to the danger involved in interpreting this Act as aimed at a single corporation, see McFarland v. American Sugar Co., 241 U. S. 79.
Justice Holmes wrote for the Court: “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 intended 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.” 234 U.S. at 559-560.
Both the Interstate Commerce Commission and the Commerce Court had construed the statute as requiring all interstate, oil-carrying pipe lines to serve as common carriers for hire. 241. C. C. 1 (1912); 204 F. 798 (1913). It is true that the Commerce Court held the Hepburn Act unconstitutional as a taking of property without due process of law, one judge dissenting. But on appeal, Pipe Line Cases, 234 U. S. 548, this Court reversed, holding the Act constitutional: As to those pipe lines in existence before passage of the Act, one ground assigned by the Court was that they were already common carriers in substance. As to pipe lines built subsequent to the passage of the Act, see Part V, injra.
329 U. S. at 34. In the Pipe Line Cases, supra, the Uncle Sam Oil Company, which operated its business on the border between Oklahoma and Kansas, was held not to be so “engaged” because it was “simply drawing oil from its own wells across a state line to its own refinery for its own use, and that [was] all . . . .” 234 U. S. at 562. There is no Uncle Sam problem in this case since a majority of the Court today reaffirms the former holding that Cham-plin is “engaged in transportation.”
But cf. United States v. Elgin, J. & E. R. Co., 298 U. S. 492; United States v. South Buffalo R. Co., 333 U. S. 771.
As to the factual similarity between Champlin’s and Valvoline’s domination (or lack of domination) in the fields served, compare 274 I. C. C. 413 (“[apparently, common-carrier pipe-line transportation is available to any small refiner in [Champlin’s] area desiring such transportation”) with 47 Val. Rep. (I. C. C.) 534, 535 (“[a]t least one common-carrier pipe-line company serves each of the fields reached by the Valvoline”).
See note 10, supra. Whether Champlin buys from more or less than 3,800 independent producers does not appear in the record. But the exact number cannot have legal significance here. See Valvoline Oil Co. v. United States, 308 U. S. 141, 147.
Even if Champlin produced all the oil it transported, the Act would require its regulation because of the effect of exclusive pipe
“The major oil companies have their greatest control in the transportation of crude oil. . . . The control of transportation today by the majors appears in many respects to be just as complete and effective as was the case of the Standard Oil Trust.” Report of the Temporary National Economic Committee, 76th Cong., 3d Sess., Monograph 39 (1941), p. 28. This report contains an excellent discussion of transportation problems in the petroleum industry. Id. at 19-28. And see Kemnitzer, Rebirth of Monopoly (1938), 78-95; Whitesel, Recent Federal Regulation of the Petroleum Pipe Line as a Common Carrier, 32 Cornell L. Q. 337, 355-369.
See, e. g., the statement of Alfred M. Landon: “The crushing strength of the old Standard Oil Co. lay in the fact that, of its thirty-odd companies, some were producers only, some were transporters only, some were refiners only, and some were marketers only.
“But the master minds that controlled the old Standard Oil Co. coordinated these thirty and odd companies into one vast company— a great single, integrated, coordinated ‘unit’ that, as a corporate entity, did all of these things (producing, transporting, refining, and marketing) — and all of them within the corporate inclusiveness of ‘one’ company.
“Therein rested the terrific, the overpowering strength of the old
“To-day, from a corporate standpoint, we have the ‘equivalent,’ many times over, of the old Standard Oil Co. . . .
“It is inevitable that the only escape from monopolistic domination in the oil industry — and it is being rapidly accomplished through mergers and integration — is to clearly, definitely, and effectively segregate, first, the entire pipe line transportation system of the oil industry from the rest of the industry. The first effect of this segregation would be the substitution of competition in the transportation of crude oil for the present practice which, in each individual case, is, to all practical purposes, a monopoly.” Hearings before House Committee on Interstate and Foreign Commerce on H. R. 16695, 71st Cong., 3d Sess. 60, 61. For views against the proposed strengthening of the Hepburn Act, see House Report on Pipe Lines, 72d Cong., 2d Sess. (1933), especially Special Counsel Splawn’s conclusions, p. lxxviii.. See also Kemnitzer, Rebirth of Monopoly (1938), 87-90; F. R. Black, Oil Pipe Line Divorcement by Litigation and Legislation, 25 Cornell L. Q. 510.
Reference
- Full Case Name
- UNITED STATES Et Al. v. CHAMPLIN REFINING CO.
- Cited By
- 22 cases
- Status
- Published