Mid-America Pipe Line Co. v. Missouri Pacific Railroad

298 F. Supp. 1112, 1969 U.S. Dist. LEXIS 10854
CourtDistrict Court, D. Kansas
DecidedFebruary 8, 1969
DocketCiv. A. No. W-3969
StatusPublished
Cited by1 cases

This text of 298 F. Supp. 1112 (Mid-America Pipe Line Co. v. Missouri Pacific Railroad) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mid-America Pipe Line Co. v. Missouri Pacific Railroad, 298 F. Supp. 1112, 1969 U.S. Dist. LEXIS 10854 (D. Kan. 1969).

Opinion

MEMORANDUM

FINDINGS OF FACT AND CONCLUSIONS OF LAW

WESLEY E. BROWN, District Judge.

This , is an injunction action arising out of Mid-America Pipeline Company’s construction of an anhydrous ammonia pipeline across defendant’s railroad right of way at seven locations in the State of Kansas. It is before the Court for entry of findings of fact and conclusions of law following trial to the Court and oral argument. The temporary injunction entered in March 1968 remains in effect but by agreement of the parties the bond has been discharged.

Fundamentally this case involves the interpretation of K.S.A. 17-618, an eminent domain statute, as it applies to Mid-America, plaintiff at bar. Mid-America is a corporation organized under the laws of the State of Delaware with its principal place of business in Tulsa, Oklahoma. Defendant Railroad is a corporation organized under the laws of Missouri and having its principal place of business in St. Louis, Missouri. In an injunctive action, as the one at bar, the amount in controversy is the value of the right to be protected. Pyramid Life Ins. Co. v. Masonic Hosp. Ass'n of Payne Co., 191 F.Supp. 51 (W.D.Okl.1961). Mid-America cannot complete its estimated $13,300,000.00 anhydrous ammonia pipeline unless it can protect its crossing rights at the seven points where the line intersects the railroad’s easements in Kansas. The Court thus finds that the amount in controversy exceeds $10,000.00 exclusive of costs and interest and the Court concludes that it has jurisdiction pursuant to § 1332.

FINDINGS OF FACT

1. Mid-America was organized in 1958 as a publicly owned common-carrier and commenced operations in the interstate transportation of natural gas liq[1115]*1115uids through its petroleum products pipeline in 1960. The Railroad presently holds easements for railroad purposes throughout the State of Kansas. Pursuant to revocable license agreements executed in 1960, Mid-America’s petroleum products pipeline crosses Railroad easements at several locations in Kansas.1 Mid-America has begun construction of a second pipeline, running parallel to the petroleum products line, which will be used to transport liquid anhydrous ammonia.2 In October 1967 the Railroad through one of its general managers, executed seven revocable license agreements granting Mid-America the right to cross defendant’s easements with the anhydrous ammonia pipeline.3 Then, by letter dated February 23,1968, the Railroad gave Mid-America a 30-day notification that the aforesaid licenses were to be can-celled.4 The Railroad is not faulted because it admits that competition played a role in the cancellation.5 Following receipt of the cancellation letter, Mid-America instituted proceedings in the state district courts of Pratt, Reno, Saline and Washington Counties, Kansas for the purpose of condemning a 60-foot right of way across Railroad’s easements at the seven locations noted in the can-celled license agreements.6 On March 15, 1968 Mid-America filed this action seeking a restraining order and praying for a permanent injunction which would enjoin the Railroad from interference with (a) construction of the anhydrous ammonia pipeline and (b) operation of the petroleum products pipeline. The restraining order, currently in effect, was issued at that time.

2. We are not concerned with the question of damages, or with the right of Mid-America to condemn in connection with its petroleum products pipeline. The parties have stipulated as to damages. Mid-America’s pipe line for petroleum products is in operation, and has been for some time. The sole issue for this court’s determination concerns the right of Mid-America to condemn for purposes of the second pipeline, designed to carry anhydrous ammonia. Railroad concedes that the pipeline crossings which have already been constructed for the anhydrous ammonia line are in accordance with its requirements and specifications. [Tr. 7],

3. In its early stage Mid-America’s petroleum products line was connected to twenty-eight gasoline plants and one refinery along with seven distribution terminals. Today the pipeline is joined with fifty-six gasoline plants, five refineries and has fourteen distribution terminals. The types of petroleum products transported by the line have increased from one to seven, while the number of shippers serviced has grown from twelve to ninety.7 Among petroleum products transported by Mid-America as common carrier are propane, butane, raffinate and natural gasoline. The operations of the 2700 miles of petroleum products pipeline are confined to common carrier services in and through some ten states. Services on the line are governed by tariffs filed by Mid-America with the Interstate Commerce Commission (ICC). While Mid-America has no contracts similar to a “throughput agreement” with its propane shippers, it does have what are tantamount to “pipeage contracts” with shippers of specialty products on the petroleum products line.8

[1116]*11164. Mid-America first considered utilizing the petroleum products pipeline for the transportation of anhydrous ammonia, but discarded the notion as not being economically feasible when it was discovered that the propane and anhydrous ammonia seasons overlapped.9 Before undertaking construction of the second line, Mid-America made offers to three corporations to construct an anhydrous ammonia line.10 On July 14, 1967 Mid-America entered into a twenty year “throughput agreement” with Hill Chemical Company (Hill). This was Mid-America’s first firm commitment and the agreement, as amended, provides that Mid-America will ship anhydrous ammonia from Hill’s plant at Borger, Texas to distribution terminals at Conway, Kansas, Beatrice and Greenway, Nebraska, and Whiting, Early, Gardner, Sand-born and Ogden, Iowa. Under an addendum, Hill may direct Mid-America to delete either the leg leading to Sandborn, Iowa or the leg going to Ogden, Iowa or both.11

5. Volumetrically, the agreement provides that Mid-America will transport a minimum of 1,200 tons per day from Hill’s single plant at Borger, Texas or 2,000 tons per day if Hill should decide to construct a second plant. Mid-America may be required to shift around up to 8,000 tons per day among various storage facilities and terminals in Iowa.12 The present capacity of the anhydrous ammonia line is 1,300 tons per day and it may be increased to 3,000 tons per day by the addition of five booster stations. The practical economic capacity of the line is 5,000 tons per day, although this capacity could be further increased by additional booster stations if the economics of the situation are ignored. Mid-America contemplates the addition of booster stations as traffic develops.13

6. Under the 1200 tons per day minimum contract with Hill, Mid-America’s anhydrous ammonia pipeline is a “very marginal project financially.” The line must have other business to be successful, and Mid-America has always planned to get additional business. Mid-America is and has been actively soliciting additional business for its new line from members of the public both producing, and using anhydrous ammonia.14

7.

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Cite This Page — Counsel Stack

Bluebook (online)
298 F. Supp. 1112, 1969 U.S. Dist. LEXIS 10854, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mid-america-pipe-line-co-v-missouri-pacific-railroad-ksd-1969.