Cities Service Gas Co. v. State Corporation Comm'n of Kan.

PETITIONER: Cities Service Gas Co.
RESPONDENT: State Corporation Comm'n of Kan.
LOCATION: Philadelphia Board of Public Education

DOCKET NO.: 85
DECIDED BY: Warren Court (1957-1958)
LOWER COURT:

CITATION: 355 US 391 (1958)
ARGUED: Jan 13, 1958 / Jan 14, 1958
DECIDED: Jan 20, 1958

Facts of the case

Question

Media for Cities Service Gas Co. v. State Corporation Comm'n of Kan.

Audio Transcription for Oral Argument - January 13, 1958 in Cities Service Gas Co. v. State Corporation Comm'n of Kan.

Audio Transcription for Oral Argument - January 14, 1958 in Cities Service Gas Co. v. State Corporation Comm'n of Kan.

Dale M. Stucky:

May it please the Court.

I'd like to start this morning by examining the record to point out some of the evils and abuses in economic problems that existed that made necessary this order.

Now, the history of the field is recounted in some detail in this record.

I'd like to point out that portion of the record on -- from pages 357 to 360, and again from 364 to 396.

Now, there are some 30 or 40 pages there of record which tell about the experiences of the small independent producers and land owners in the field and I'd like just -- to briefly explain to the Court what the situation was during that period of time.

And most of what I'm talking about --

Earl Warren:

Mr. Stucky -- Mr. Stucky, may I ask you this question?

It -- it seems to me that the -- the question here is whether the State of Kansas has the power to do this, not whether it was desirable, not whether these people have made some -- done some wrongful things, but it's a question whether the State of Kansas vis-à-vis the -- the federal government has the right to -- to do it.

Now, that's the thing that we're really interested in and not -- we can get the -- we can get the history and -- and the violations along, so forth, from -- from your briefs, but on the oral argument, we would like to hear the legal question discussed as to power and how your friend -- and particularly, how -- how you would explain the Phillips decision and the broad language that is in that decision.

Dale M. Stucky:

Yes.

I might -- if I may explain why, I thought these facts might be helpful to the Court.

We -- we point out that this order was necessary and proper as a conservation order and to protect correlative rights.

Now, really, that is admitted in the record but Judge Rolston came here and said, “We don't admit that this was necessary for -- for conservation,” although it is admitted to the record.

And the Solicitor General has come here and told this Court that any proper conservation measure, the Federal Power Commission would not object to.

So I thought that if we would point out that the record shows that this order was necessary to conserve gas in Kansas and was proper to protect correlative rights, and if I could describe the economic circumstances which made it necessary and imperative.

The fixed price, life of lease contracts and the distress commodity created by the pipeline monopolies and the destructive competition that I could overcome the inference that this was some kind of a -- an attempt to impose state power in some area where the federal government had supreme power.

Felix Frankfurter:

Are you -- does that mean -- are you implying that if you can show, that as a matter of fact, what Kansas has done here may demonstrably be a force or a pressure influence in the direction of avoiding waste that to that extent, the Phillips case is to be qualified?

In other words, if assuming that the order does in fact fixed price of wellhead of gas going in interstate commerce and therefore, beyond the power of state agency under the Phillips related case, yet in those cases, it wasn't argued that although it does so, wasn't decided.

It also -- the state regulation would have some influence upon conservation that that's a qualification to the doctrine laid down, the Phillips case.Is that what you're going to argue?

Dale M. Stucky:

No.

Your Honor, I don't believe I'm going to argue that.

I -- we think the Phillips case does not apply here.

I was -- I was about to recap these facts also.

I don't want to -- I don't care what you call it.

You can call this a price-fixing case if you want to or you can -- I -- as I prefer to call it a value attribution case.

What is the important is to see how the order operates and its purpose and what it was designed to do and how the 8-cent order did what this was designed to do.

Felix Frankfurter:

Suppose your commission and your Court had said, “We do not battle over language, this is the fixing of price at the wellhead, was stopped that goes into interstate commerce, but although it is such a fixing of the price, it does also have or indeed the justification for it so far as Kansas' concern is that it have the restraining influence upon waste.Suppose your Supreme Court had said that, you'd still be defending the order?

Dale M. Stucky:

I work on two grounds.

Felix Frankfurter:

Very well then.

The question whether it's an attribution of value of price is just word?