Iowa RCO Ass'n v. Illinois Commerce Commission

409 N.E.2d 77, 86 Ill. App. 3d 1116, 42 Ill. Dec. 582, 1980 Ill. App. LEXIS 3360
CourtAppellate Court of Illinois
DecidedAugust 6, 1980
DocketNo. 15878
StatusPublished
Cited by6 cases

This text of 409 N.E.2d 77 (Iowa RCO Ass'n v. Illinois Commerce Commission) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Iowa RCO Ass'n v. Illinois Commerce Commission, 409 N.E.2d 77, 86 Ill. App. 3d 1116, 42 Ill. Dec. 582, 1980 Ill. App. LEXIS 3360 (Ill. Ct. App. 1980).

Opinion

Mr. JUSTICE GREEN

delivered the opinion of the court:

Pursuant to section 55 of the Public Utilities Act (Ill. Rev. Stat. 1977, ch. 1112/3, par. 56), Northern Pipe Line Company of Delaware, Inc. (Northern), filed a petition with the Illinois Commerce Commission (Commission) on October 7, 1977, requesting a certificate of public convenience and necessity to construct and operate a 200-mile-long crude-oil pipeline running from Wood River, Illinois, to Pine Bend, Minnesota. The Commission granted the petition and Iowa RCO Association (RCO), the only objector at the Commission hearing, appealed to the circuit court of Greene County which entered an order affirming the Commission on October 23,1979. RCO appeals that order.

RCO asserts that the Commission erred because (1) Northern was not a “public utility” within the meaning of the Act and, therefore, not entitled to such a certificate, (2) the Commission failed to adequately address environmental issues, and (3) the Commission erred in ruling upon evidence concerning action of the Minnesota Energy Agency. We examine these contentions in the light of the rules that (1) the Commission order is deemed to be “prima facie reasonable” (Ill. Rev. Stat. 1977, ch. Ill 2/3, par. 72), and (2) the burden is on the party seeking to overturn the Commission order (RCO) to show the order to be in error, lowa-Illinois Gas & Electric Co. v. Illinois Commerce Com. (1960), 19 Ill. 2d 436, 442, 167 N.E.2d 414, 417. Accord, Eagle Bus Lines, Inc. v. Commerce Com. (1954), 3 Ill. 2d 66, 119 N.E.2d 915.

The evidence at the Commission hearing showed the following facts to be undisputed. Companies affiliated with Northern owned and operated at Pine Bend, Minnesota, a refinery having a capacity of 127,000 barrels per day. The proposed pipeline would be 24 inches in diameter and would extend across Illinois in essentially a straight line through farmland. The purpose of the pipeline would be to send crude oil to the affiliated company’s refinery and a nearby one owned by Ashland Oil Co. with other refineries in that area renting excess capacity. Refineries in the north central part of the country have in the past been dependent largely on Canadian crude oil, but Canada has not cut down upon permissible oil exports and announced a plan that will eventually eliminate all such exports.

The term “public utility” is defined in the pertinent part of section 10.3 of the Public Utilities Act as including:

6 6 every corporation * * ° that owns, controls, operates or manages, within this State, directly or indirectly, for public use, any plant, equipment or property used or to be used for ° ° °:
# # #
e. the conveyance of oil or gas by pipe line.” (Emphasis added.) (Ill. Rev. Stat. 1977, ch. Ill 2/3, par. 10.3.)

Plaintiff RCO contends that the pipeline was not shown to be “for public use” within the meaning of the Act because it would take only crude oil for companies affiliated with Northern and because it would provide only for interstate shipments. Plaintiff maintains that the proposed route was such that there could be no convenient terminal points in Illinois.

In arguing that Northern’s proposed pipeline would not be for public use, RCO relies on Roy v. Illinois Commerce Com. (1926), 322 Ill. 452, 153 N.E. 648, Austin Brothers Transfer Co. v. Bloom (1925), 316 Ill. 435, 147 N.E. 387, Springfield Gas & Electric Co. v. City of Springfield (1920), 292 Ill. 236, 126 N.E. 739, aff'd (1921), 257 U.S. 66, 66 L. Ed. 131, 42 S. Ct. 24, State Public Utilities Com. v. Bethany Mutual Telephone Association (1915), 270 Ill. 183, 110 N.E. 334, Illinois Highway Transportation Co. v. Hantel (1944), 323 Ill. App. 364, 55 N.E.2d 573, and Central Trust Co. v. Calumet Co. (1931), 260 Ill. App. 410. Each differs materially from the instant case. In Roy, a Commission order granting a certificate of convenience and necessity for a railroad was reversed because the evidence showed that it was not needed and adequate service was given by a nearby line. A certificate of convenience and necessity was held to be required for a taxi driver who indiscriminately picked up passengers along a route between cities in Austin Brothers Transfer Co. But such certificates were held to be unnecessary for an association furnishing telephone service only to its members in Bethany Mutual Telephone Association and unnecessary for a bus operator under contract with an entity operating a factory to transport its employees in Illinois Highway Transportation Co. The Public Utilities Act was held not to apply to the ownership and operation by a municipality of an electric generation and distribution system in Springfield Gas & Electric Co. In Central Trust Co., a landlord leasing property to a public utility was held not to be protected by mortgage foreclosure restrictions statutorily granted to public utilities.

Plaintiff RCO relies upon language in the foregoing cases stating that to be a public utility, an entity must be under a duty to serve the public, treating each user alike. Here testimony was presented that several nonaffiliated companies wished to use the pipeline and that Northern would furnish service to them. Here, unlike in the cited cases except Roy and Central Trust, Northern, the entity whose status is in issue, claims to be a public utility. It would be operating in interstate commerce and would be required under the Interstate Commerce Act (49 U.S.C. §1(4) (1976)) to furnish nondiscriminatory service to its nonaffiliated users and others wishing to do so. Because of its claim to be subject to the provisions of the Public Utilities Act it would be estopped to deny that, subject to preemptive Federal regulations, it was also required to furnish nondiscriminatory service pursuant to the provisions of section 38 of the Public Utilities Act (Ill. Rev. Stat. 1977, ch. 111 2/3, par. 38). A sufficient showing was made that the pipeline would be for a public use.

The fact that the use of the pipeline would be almost entirely, if not entirely, interstate did not keep Northern from being subject to the provisions of the Public Utilities Act.

In Service Pipe Line Co. v. Ruder (1960), 19 Ill. 2d 332, 167 N.E.2d 419, a corporation seeking to build and operate a wholly interstate pipeline filed a petition in an Illinois circuit court seeking to condemn rights of way. The circuit court dismissed the complaint, and the supreme court affirmed on appeal. It noted that the corporation was an interstate carrier subject to regulation by the Interstate Commerce Commission but having no Federal right to condemn for right of way. It also described the corporation as being a public utility within the meaning of the Public Utilities Act but stated that such a utility had power to condemn under that act only after first obtaining a certificate of convenience and necessity, as had been done here.

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409 N.E.2d 77, 86 Ill. App. 3d 1116, 42 Ill. Dec. 582, 1980 Ill. App. LEXIS 3360, Counsel Stack Legal Research, https://law.counselstack.com/opinion/iowa-rco-assn-v-illinois-commerce-commission-illappct-1980.