53 Author Angus McDonald is a research associate with CSPI. He was until recently a consultant for Mid-West Electric Consumers Association and for Farmers Union. He is the 22 years was associated with the National author of a number of studies including "Interlocking Directorates of Electric Companies," "Transportation and Industrial Development in the Missouri Basin," "The Burlington Northern Railroad," "The Farm-Rural Problem-A Program for its Solution." McDonald is the author of Old McDonald had a Farm, a literary Guild best seller, One Hundred Sixty Acres of Water and The San Luis Reclamation Bill, published by McGraw-Hill in 1962. He wrote a farm column for the New Republic between 1946 and 1948. He has appeared hundreds of times before Congressional committees on monopoly, natural resource and rural electric problems, He received a Master's Degree in Political Science from the University of Oklahoma (1934) and is a member of Phi Beta Kappa. He lives in Washington, D.C. with his wife Gail, a talented musician, ard they have three children, 2 of whom are married. The Senate Commerce Committee is currently conducting hearings on various natural gas regulatory proposals. During the hearings today a partial list compiled from public sources of individuals who serve as directors of more than one petroleum company was brought to the attention of the Committee. The Clayton Act (15 U.S.C. 19) provides in relevent part: No person at the same time shall be a director in any two I would appreciate it if you would examine the attached list of directors to determine whether or not such interlocking directorships violate the Clayton Act or any other relevant Federal law. Big Oil... (56 pages).. How Aerosol Sprays Can Affect Your Safety and Health.. (60 pages) .$1. .$3. .$4. .50¢ .$2. .$3. .$12. .$8. .$4. .$4. .$2. .$4. .$2.50 .$3. .$2. $3. .$5. Public Interest Letter... (1 year subscription). [From the Congressional Research Service, American Law Division, Library of Congress] CONSTITUTIONALITY OF VARIOUS SECTIONS OF S. 2506 ("OIL AND GAS REGULATORY REFORM ACT OF 1973") This will refer to your request of October 26, 1973 concerning the constitutionality of various sections of S. 2506. In view of the short time limit, the matters hereinafter discussed have not been subjected to exhaustive and conclusive research, though we believe our conclusions are in conformity with the current state of the law. A. Secs. 102 and 103. These sections would subject intrastate transportation and sale of natural gas to the regulatory jurisdiction of the Federal Power Commission.' The power of Congress to regulate intrastate commerce "(E)xtends to those activities intrastate which so affect interstate commerce or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of the grated power to regulate interstate commerce." United States v. Wrightwood Dairy Co., 315 U.S. 110, 119 (1942). Much is said about a restaurant business being local but even if appellee's activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce. . . ." Wickard v. Filburn, supra, at 125. The activities that are beyond the reach of Congress are 'those which are completely within a particular State, which do not affect other States, and with which it is not necessary to interfere, for the purpose of executing some of the general powers of the government." Gibbons v. Ogden, 9 Wheat. 1, 195 (1824).2 That any particular activity sought to be regulated is trivial in comparison to the total industry is not sufficient to remove that activity from the ambit of federal regulation where the combined effects of all such activities is not trivial.* We wish to note, however, that federal regulation of an intrastate activity must be based upon facts showing the activity to have a substantial effect upon interstate commerce or is an appropriate means to attain the effective execution of a power granted under the Interstate Commerce Clause. Formal findings are not necessary; the necessary showing may be found in legislative history, testimony at hearings or other material before the Congress." Congress may determine for itself that the activity to be regulated substantially effects interstate commerce and that determination is reviewable only to the extent that the legislators should "in light of the facts and testimony before them, have a rational basis for finding a chosen regulatory scheme necessary to the protection of commerce. . . .”. It appears to us that Congress may constitutionally impose a regulatory scheme over intrastate transportation and sale of natural gas provided that a factual showing is made that either such transportation and sales substantially effect interstate commerce or is appropriate for the effective execution of Congress' admitted power to regulate interstate transportation and sale of natural gas. B. Sec. 204. This section provides that the FPC may after notice and hearing, direct an oil pipeline company subject to its jurisdiction "to extend or improve its transportation or storage facilities with the facilities of any person engaged or legally authorized to engage in the refining or distribution of oil" provided that the FPC find that a facility extension would not impair the company's ability to adequately serve its customers. It has been suggested that the extension and interconnection provisions may be unconstitutional. The Court in ICC v. Oregon-Washington A. Co. was faced with an order issued by the ICC pursuant to the line extension provision of § 1(21) of the Interstate Commerce Act." That section provided that the ICC could, after hearing, require It appears that intrastate transportation and sale of oil would not be subjected to the jurisdiction of the FPC. Secs. 202-203; 49 U.S.C. § 1(1) (b). 2 Katzenbach v. McClung, 379 U.S. 294, 302 (1964). 3 Wickard v. Filburn, 317 U.S. 111, 127-28 (1842). Katzenbach v. McClung, supra, 379 U.S. st. 299. Id.; Perez v. United States, 402 U.S. 146, 149-50, 155-56 (1971); Heart of Atlanta Motel, Inc. v. United States, 397 U.S. 241, 252-53 (1964). Katzenbach v. McClung, supra, 379 U.S. at 303-04. 7288 U.S. 14 (1933). 49 U.S.C. § 1(21). a carrier to "provide itself with safe and adequate facilities" and "to extend its line or lines. The ICC had issued an order to the railroad directing it to build an extension into the interior of Oregon. That portion of Oregon was not then served by the railroad. The extension would have been 185 miles long, of which 20 were over swampy lands 15 over alkali flats, and 115 over desert. The region was sparsely settled and with only two towns on the line, the western extreme, neither with a population of over 100. In addition there were no other towns within 20 miles of the proposed extetnsion. The extension would have cost between $9,900,000 and $11,700,000 and would have added 1.2% to the existing mileage of the total system. 10 The Court interpreted the line extension provision to be limited to "extensions within the undertaking of the carrier to serve, and cannot be extended to embrace the building of what is essentially a new line to reach new territory." " The Court reached its decision on the basis that the extension provision "is a part of a single sentence committing to the Commission the power to require carriers to provide a safe and adequate facilities for car service as defined in the act. The reasonable conclusion is, therefore, that the extensions mentioned have to do with car service, and are not intended to cerate a wholly indepedent subject of jurisdiction."" The Court felt buttressed in the opinon by §1(18) of the Act which distinguished between extensions and new lines." In addition the Court felt there were "grave doubts" about the constitutionality of § 1(21) if the extension provision was given the meaning urged by the ICC "The railroads, though dedicated to a public use, remain the private property of their owner, and their assets may not be taken without just compensation." However, the Court did not decide the constitutional issue. In Oklahoma Packing Co. v. Oklahoma Gas & Electric Co.15 the Tenth Circuit Court of Appeals, upon the basis of decisions of the Supreme Court of Oklahoma, held that the Oklahoma Corporation Commission could not require a public utility to serve an area beyond that which it has undertaken to serve. To compel the utility to so serve would be "tantamount to an appropriation of private property for public use without just compensation." " 16 We have found no further cases to the point, and it might appear that OregonWashington R. Co. and Oklahoma Packing Co. reflect the current state of the law. However, we believe there is substantial reason to view those cases as not dispositive of the matter. In Oregon-Washington R. Co. there is a vigorous dissent by Justice Cardozo, Joined by Justices Brandeis and Stone." Therein he stated: The time has gone by when the subjection of a public service corporation to control and regulation by the agencies of the government is to have its origin and justification in the terms of a supposed contract between the corporation and the State. The origin of the subjection and its justification are to be found, not in contract, but in duty, a duty imposed by law as an incident to the enjoyment of a privilege.18 The Fifth Amendment of the Constitution is invoked by the carriers but invoked without avail. Consistently with that Amendment Congress may delegate to the Commission the power to force upon unwilling carriers an extension of their lines into fields of old service and of new. Much of what has been written in this opinion as to the meaning of the statute is pertinent also to an inquiry as to power. Again the thought is to be kept before us that the need of the public, not the acquiescence of the carrier, is the measure of the service, provided only that for such service there is adequate requital. Whether such requital has been assured is a question not susceptible of anwser except in the setting of the circumstances.' 19 It is to the setting of the circumstances to which we now return. Even though 288 U.S. at 30. 10 288 U.S. at 31. 11 288 U.S. at 40. 12 288 U.S. at 35. 18 288 U.S. at 36. 14 288 at 40-41. 15 170 F. 2d 770 (10th Cir. 1938), rev'd on other grounds with directions to dismiss 309 U.S. 4 (1940). 10 179 F. 2d at 776. 17 288 U.S. at 43-52. 18 288 U.S. at 47. 10 288 U.S. at 48-9. |