United Fuel Gas Co. v. Hallanan
257 U.S. 277 (1921)

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U.S. Supreme Court

United Fuel Gas Co. v. Hallanan, 257 U.S. 277 (1921)

United Fuel Gas Company v. Hallanan

No. 276

Argued November 9, 10, 1921

Decided December 12, 1921

257 U.S. 277

ERROR TO THE SUPREME COURT OF APPEALS

OF THE STATE OF WEST VIRGINIA

Syllabus

1. A writ of error sustained, following Eureka Pipe Line Co. v. Hallanan, ante,257 U. S. 265. P. 257 U. S. 280.

2. Natural gas, collected and purchased by a pipeline company within a state and moving through its pipes, and the pipes of other companies to which it sells it, in continuous streams destined beyond the state, is a subject of interstate commerce, the transportation of which the state may not tax. P. 257 U. S. 280.

3. Held, that the interstate character of the gas so destined was not affected by the right of transporting companies to divert to local destinations or by the fact that smaller quantities for local delivery were commingled with the other, and the proportions between the two were not precisely fixed. P. 257 U. S. 281.

87 W.Va. 396 reversed; petition for certiorari dismissed.

Error to a judgment sustaining a tax in a suit by the plaintiff in error to restrain its enforcement. See the preceding case, ante,257 U. S. 265.

Page 257 U. S. 278

MR. JUSTICE HOLMES delivered the opinion of the Court.

This is a bill in equity that seeks to restrain the application to the plaintiff of the same statute that has been

Page 257 U. S. 280

considered in Eureka Pipe Line Co. v. Hallanan, ante,257 U. S. 265. Acts of Extraordinary Session, 1919, c. 5. The statute taxes the transportation of natural gas as well as of oil by pipelines, and the plaintiff Gas Company makes the same objection that was made by the oil company in the former case to the constitutionality of the act, as well as others that it will not be necessary to discuss. The two cases were heard together, and were disposed of in a single opinion by the Supreme court of Appeals. The circuit court of the state held the statute void, but he supreme court, as before, upheld it as valid with regard to intrastate business "as above defined," and defined the plaintiff's business as intrastate. The plaintiff drew in question the validity of the statute "as construed and applied," Merchants National Bank of Richmond v. Richmond,256 U. S. 635, and took this writ of error. It also filed a petition for a writ of certiorari. For the reasons given in the Eureka case, the writ of error will be entertained, and the petition for certiorari dismissed.

The case was heard upon the pleadings and a stipulation as to facts. It appears that the plaintiff gathers and purchases natural gas, mostly in West Virginia, and distributes it through its pipes which extend to or beyond the state line in various places and also connect with the pipes of other companies that extend beyond the state. The total amount dealt with by the plaintiff in the year ending July 1, 1919, was 54,973,588 M cubic feet, of which all but a little over a million M. cubic feet was gathered in West Virginia. There were sold directly to consumers in West Virginia 11,590,656 M. cubic feet, a little over 10,000,000 M cubic feet to consumers in other states, and the remainder was sold to four connecting companies. It is admitted that the gas sold to one of these, the Ohio Fuel Supply Company, is transported in interstate commerce, so that that may be laid on one side. Another of them is the Columbia Gas & Electric Company. Ninety-nine

Page 257 U. S. 281

percent of the gas received by it is carried out of the state and sold, yearly. A third is the Pittsburgh-West Virginia Gas Company, which yearly disposes of eighty-eight percent of the gas in the same way. The fourth is the Hope Natural Gas Company, which, in like manner, carries sixty-seven percent of the gas bought from the plaintiff out of the state and sells it there.

In short, the great body of the gas starts for points outside the state and goes to them. That the necessities of business require a much smaller amount destined to points within the state to be carried undistinguished in the same pipes does not affect the character of the major transportation. Neither is the case as to the gas sold to the three companies changed by the fact that the plaintiff, as owner of the gas, and the purchasers, after they receive, it might change their minds before the gas leaves the state, and that the precise proportions between local and outside deliveries may not have been fixed, although they seem to have been. The typical and actual course of events marks the carriage of the greater part as commerce among the states, and theoretical possibilities may be left out of account. There is no break, no period of deliberation, but a steady flow ending, as contemplated from the beginning, beyond the state line. Ohio R. Co. Commission v. Worthington,225 U. S. 101, 225 U. S. 108; United States v. Reading Co.,226 U. S. 324, 226 U. S. 367; Western Union Telegraph Co. v. Foster,247 U. S. 105, 247 U. S. 113. We have mentioned only such facts as are sufficient for our decision, and have not noticed other objections urged against the law. What we have stated seems to us enough to condemn it as applied to this case.

Decree reversed.

Petition for certiorari dismissed.

MR. JUSTICE BRANDEIS dissents.

MR. JUSTICE CLARKE also dissents as to the jurisdictional question.

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