Corporation Comm'n of Okla. v. Lowe

Background

William Lowe, who runs cotton gins at Capitol Hill in Oklahoma City and at Wheatland, sued to stop the Farmers Union Cooperative Gin Company from getting a license to build and run a gin at Packingtown, about two and a half miles from his Capitol Hill plant. The Corporation Commission of Oklahoma licenses and regulates cotton gins, sets rates, and had approved the cooperative’s application unless a court stopped it. Lowe said the cooperative’s special statutory privileges to make patronage distributions (called "patronage dividends") would let it offer returns or rebates that he, as an individual operator bound by the commission’s rules, could not match, and that this would injure his business and violate his rights under the Constitution’s guarantee of equal treatment and due process.

Reasoning

The Court focused on whether the Oklahoma law actually forbids an individual gin operator from making similar distributions to patrons, creating an unlawful discrimination. The Court noted there was no state statute or commission regulation pointed out that prevented Lowe from distributing net earnings like a cooperative, and counsel for the Commission said he knew of no such law. The Court also relied on the rule that a party invoking constitutional protection must show clear discriminatory treatment. Because Lowe did not prove the State denied him the same privilege, the Court concluded his complaint failed.

Real world impact

By reversing the injunction and dismissing the complaint, the Court allowed the cooperative’s license process to go forward and the new gin to be built and operated. The ruling means a competitor cannot block a license on the theory of a possible legal advantage unless discrimination is clearly shown. If, later, the Commission’s regulation or the cooperative’s conduct produces an actual unequal treatment, Lowe can seek relief then.