1. The transportation of gas in a pipeline from one state to
another and its prompt delivery to purchasers at local destinations
is interstate commerce. P.
270 U. S. 554
2. The passing of custody and title at the state boundary
without arresting the movement to the destinations intended are
minor details which do not affect the essential nature of the
Page 270 U. S. 551
3. Where local gas, destined for local consumption, is added to
a pipeline carrying gas from another state after it has crossed the
state line, the gas, to the extent so added, is in intrastate
commerce and subject to local regulation. P. 270 U. S.
279 Pa. 252 affirmed.
Error to two judgments of the Supreme Court of Pennsylvania
sustaining an order of the Public Service Commission requiring the
Gas Company to furnish gas to another company for sale to consumers
in a city. See also
s.c. 79 Pa.Super.Ct. 560.
MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.
These two cases are practically but one. The matter in
controversy is the constitutional validity of an order of the
Public Service Commission of Pennsylvania requiring the People's
Natural Gas Company to continue its prior practice of supplying
natural gas to another company at Johnstown for sale to consumers
in that city. On successive appeals to the superior court and the
supreme court of the state, the People's Company challenged the
order as directly regulating and burdening interstate commerce and
depriving the company of property without
Page 270 U. S. 552
due process of law in violation of constitutional restraints on
state action, but both contentions were overruled, and the order
was sustained. 79 Pa.Superior Ct. 560; 279 Pa. 252. On these writs
of error, the company relies only on the contention that the order
is a forbidden interference with interstate commerce.
The People's Company is a public service corporation created
under the laws of Pennsylvania and engaged in producing,
purchasing, transporting by pipeline, and selling natural gas. It
purchases about two-thirds of the gas which it transports and sells
from a producing company in West Virginia having pipelines leading
from wells in that state to the boundary between the two states,
and it produces the other one-third from its own wells in the
southwestern counties of Pennsylvania. It has a system of pipelines
in Pennsylvania, which is connected at the state boundary with the
lines of the West Virginia company, and leads thence to Pittsburgh,
Johnstown, and other Pennsylvania cities and boroughs, where it
sells the gas. The gas coming from West Virginia is transported,
through the pipelines as connected at the state boundary, in a
continuous stream from the places of production in one state to
those of consumption in the other. At the state boundary, that gas
passes through a registering meter, and that point is treated as
the place of delivery to the People's Company; but the
transportation is not interrupted there. The gas from the company's
wells in Pennsylvania is fed into the moving stream at different
points after it crosses the state boundary. The movement of the
stream towards the points of destination is accelerated by means of
pumps in Pennsylvania -- one near the state line and one remote
The People's Company sells directly to consumers at the several
places of consumption. other than Johnstown, and there it sells to
an independent company, having a local franchise and distributing
plant, which sells to consumers.
Page 270 U. S. 553
For upwards of 10 years, the gas sold to that company was
supplied under a contract, but when the order in question was made,
the People's Company had exercised a reserved privilege of
terminating the contract, and the Commission, in making the order,
proceeded on the theory that the People's Company is a public
service corporation, and may be required, irrespective of the terms
of the contract, to continue supplying gas to the local company,
and thus to continue its indirect service to Johnstown consumers.
The order does not fix the rate for this service, but contemplates
that it shall be fixed primarily by a schedule to be filed by the
People's Company and shall be subject to supervision by the
Commission as respects its reasonableness.
In the state courts, the cases had many features which are
immaterial here and need not be noticed.
The supreme court of the state, in overruling the contention
that the order is a forbidden interference with interstate
commerce, put its decision on two grounds: first, that no
interstate commerce is involved, and, secondly, that, if such
commerce is involved, the order is not a forbidden interference,
but an admissible exertion of power, which exists in the state in
the absence of regulation by Congress under its paramount power.
The first ground of decision was based on two conclusions: one,
that, as the West Virginia gas is delivered at the state boundary
and the title passes there, interstate commerce therein ends at
that boundary and the further transportation and sale in
Pennsylvania are in intrastate commerce, and the other that the gas
produced in Pennsylvania and there fed into the pipelines is more
than sufficient to enable the company to comply with the order, and
that, when the order is construed in the light of this situation,
it does not require that any West Virginia gas be used in complying
with it. Both conclusions are earnestly challenged by the People's
Company -- the former as departing
Page 270 U. S. 554
from the decisions of this Court respecting the nature of
transactions in natural gas transported from one state to another,
and the other as without an adequate basis in the evidence and
treating the Pennsylvania gas, after it is unavoidably commingled
with that from West Virginia, as being separable and having a
As respects the West Virginia gas, we are of opinion, in view of
its continuous transportation from the places of production in one
state to those of consumption in the other, and its prompt delivery
to purchasers when it reaches the intended destinations, that it
must be held to be in interstate commerce throughout these
transactions. Prior decisions leave no room for discussion on this
point, and show that the passing of custody and title at the state
boundary without arresting the movement to the destinations
intended are minor details which do not affect the essential nature
of the business. Western Union Telegraph Co. v. Foster,
247 U. S. 105
247 U. S.
-113; Public Utilities Commission v. Landon,
249 U. S. 236
249 U. S. 245
Pennsylvania Gas Co. v. Public Service Commission,
252 U. S. 23
252 U. S. 28
United Fuel Gas Co. v. Hallanan, 257 U.
, 257 U. S.
-281; Pennsylvania v. West Virginia,
262 U. S. 553
Binderup v. Pathe Exchange, 263 U.
, 263 U. S. 309
Missouri v. Kansas Natural Gas Co., 265 U.
; Ohio Railroad Commission v.
Worthington, 225 U. S. 101
Lemke v. Farmers' Grain Co., 258 U. S.
; Shafer v. Farmers' Grain Co., 268 U.
As respects the Pennsylvania, gas we think it must be held to be
in intrastate commerce only. Feeding it into the same pipelines
with the West Virginia gas works no change in this regard. Of
course, after the commingling, the two are undistinguishable. But
the proportions of both in the mixture are known, and that of
either readily may be withdrawn without affecting the
transportation or sale of the rest. So, for all practical
Page 270 U. S. 555
the two are separable, and neither affects the character of the
business as to the other. Eureka Pipe Line Co. v.
Hallanan, 257 U. S. 265
United Fuel Gas Co. v. Hallanan, 257 U.
, 257 U. S. 281
And see Hallanan v. Eureka Pipe Line Co., 261 U.
; Hallanan v. United Fuel Gas Co.,
261 U. S. 398
supreme court of the state has found that more than enough
Pennsylvania gas goes into the mixture to meet the requirements of
the order, and on this basis has construed the order as leaving the
company free to deal in usual course with so much of the mixture as
represents the gas from West Virginia. We think the finding has
ample support in the evidence, and we accept, of course, that
court's construction of the order. In these circumstances, the
conclusion is unavoidable, we think, that the order does not
interfere with or affect the interstate commerce in which the
company is engaged.
Whether the order, if it did apply to gas in such commerce,
could be sustained becomes immaterial in view of the conclusion
just stated, and therefore need not be considered.