United States v. Champlin Refining Co.

341 U.S. 290, 71 S. Ct. 715, 95 L. Ed. 2d 949, 95 L. Ed. 949, 1951 U.S. LEXIS 2348
Supreme Court of the United States·Decided May 7, 1951·No. 433·Published·Cited by 22 cases

Opinions

Mr. Justice Clark

delivered the opinion of the Court.

Section 1 of the Interstate Commerce Act provides that “common carriers” engaged in the “transportation” of oil or other commodities shall be subject to the regulatory requirements specified in other sections of the statute.1 In an earlier proceeding, this Court found that Champlin, as owner of a pipe line, was a “common carrier” within the meaning of § 1; and on the record there presented the Court upheld an I. C. C. order under § 19a (a)-(e) of the Act requiring the company to submit valuation data, maps, charts and other documents pertaining to its operations.2 Champlin Refining Co. v. United States, 329 U. S. [292]*29229 (1946). The present proceeding involves a subsequent I. C. C. order directing Champlin (1) to file annual, periodic and special reports, and to institute and maintain a uniform system of accounts applicable to pipe lines, both under § 20 of the Act;3 and (2) to publish and file schedules showing the rates and charges for interstate transportation of refined petroleum products, pursuant to § 6.4 [293] A specially constituted three-judge District Court, with one member dissenting, refused to enforce the order on the ground that Champlin, at least for the purposes of §§ 6 and 20, is not within the class of carriers intended to be regulated by the Act. It held further that to impose the requirements of § 6 on Champlin would be to take its property without due process in violation of the Fifth Amendment. 95 F. Supp. 170. The Government and the Commission appealed, 28 U. S. C. §§ 1253, 2101 (e), 2325.

The facts here are substantially the same as in the earlier case. Champlin owns and operates a pipe line running from its refinery at Enid, Oklahoma, to terminals at Hutchinson, Kansas; Superior, Nebraska; and Rock Rapids, Iowa — a distance of 516 miles. It uses the pipe line solely to carry its own refined petroleum products, such as gasoline and kerosene. No other refiner has connections with the line, and none has ever shipped products through it. The line does not connect with any other pipe line. Champlin has storage facilities at each of its three terminals. Jobbers purchasing Champlin products supply their own transportation from the storage tanks to their bulk depots.

Since the first case, there has been a change in Cham-plin’s method of quoting prices. At the time of the earlier proceeding, the price was computed as f. o. b. the Enid refinery, plus a differential equal to the through rail rate from Enid to the purchaser’s destination minus the charges for local transportation between the nearest pipeline terminal and the destination. However, Champlin made frequent and substantial departures from this formula in order to meet competitive prices at various locations. In May 1948, the company began quoting prices as f. o. b. the respective terminals, a policy which is still in effect. But as before, adjustments are made so that [294] delivered prices to jobbers will be competitive with those offered by other refiners.

On the basis of these and other facts, the Government contends (1) that there are no significant factual differences between this and the prior case, and therefore Cham-plin is barred by collateral estoppel from relitigating the holding of this Court that it is a “common carrier” engaged in “transportation” within the meaning of § 1 of the Act; (2) that since the definition of “common carrier” in § 1 applies to §§ 6 and 20 as well as to § 19a, the Court’s prior holding per se establishes the validity of the present order; (3) that even if estoppel does not apply, the facts are adequate under the statute to support the Commission’s order; (4) that the alleged constitutional question is frivolous.

Champlin claims (1) that factual changes remove this case from the realm of collateral estoppel; (2) that the Court specifically reserved the statutory issue presented by this case, namely whether the I. C. C. may convert a private carrier into a common carrier for hire; and (3) that the lower court was correct in holding that the Act violates the Fifth Amendment if construed to authorize the I. C. C.’s order.

We agree with the Government that there have been no significant factual changes in Champlin’s operations since the prior case. The practice of quoting prices f. o. b. Enid made it superficially more obvious that transportation charges were being collected, a point which the Court brought out. 329 U. S. at 34. And the record indicates that the change to an f. o. b. terminal formula resulted in minor alterations in the pattern of relative delivered prices at various locations. But Champlin is still transporting, and unless it has launched on a calculated plan of bankruptcy, its prices on the average are necessarily intended to cover transportation costs as well as other costs. Champlin further points out that it has con[295] structed ethyl plants at two of its pipe-line terminals and is there processing some 20 percent of its products. It claims that this change makes the pipe line a part of “manufacturing” facilities and thus brings the company within the Uncle Sam rule, which excepted a class of gathering lines from the coverage of the Act. Pipe Line Cases, 234 U. S. 548, 562 (1914). But a Champlin officer testified in this case that the company has “always done some blending and treating” of its products at the terminals; and 80 percent of the products are still transported in their final form. Hence, there is no justification for reconsidering this Court’s refusal to “expand the actual holding” of the Uncle Sam case to include Cham-plin, and its ruling that Champlin was a “common carrier” as defined by § 1 of the Act.

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United States v. Champlin Refining Co., 341 U.S. 290, 71 S. Ct. 715, 95 L. Ed. 2d 949, 95 L. Ed. 949, 1951 U.S. LEXIS 2348 (1951).

341 U.S. 290 (United States v. Champlin Refining Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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