Gulf Oil Corp. v. Corporation Commission

147 F. Supp. 640, 7 Oil & Gas Rep. 830, 1956 U.S. Dist. LEXIS 4142
CourtDistrict Court, W.D. Oklahoma
DecidedDecember 19, 1956
DocketCiv. A. No. 7147
StatusPublished

This text of 147 F. Supp. 640 (Gulf Oil Corp. v. Corporation Commission) is published on Counsel Stack Legal Research, covering District Court, W.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gulf Oil Corp. v. Corporation Commission, 147 F. Supp. 640, 7 Oil & Gas Rep. 830, 1956 U.S. Dist. LEXIS 4142 (W.D. Okla. 1956).

Opinions

WALLACE, District Judge.

The plaintiff, Gulf Oil Corporation, a Pennsylvania corporation, (herein referred to as “Gulf”) brings this action against the Corporation Commission of the State of Oklahoma, Ray C. Jones, Wilburn Cartwright, and Harold Freeman, as Members of said Corporation Commission and as Individuals (herein referred to as “Commission”) to enjoin an order entered by the Commission on or about June 29, 1956, requiring purchasers of crude oil produced in Oklahoma to purchase the full allowable fixed by the Commission for oil wells from which the purchasers take oil, unless the Commission specifically grants permission to take a lesser amount.1 At the time of hearing the court took under advisement defendant’s motion to dismiss; and, for the convenience of the parties permitted the introduction of evidence going toward the merits of the case.

The complainant urges that this court has jurisdiction by virtue of complete diversity of citizenship and because of requisite amount; 2 and, has called upon this three-judge court inasmuch as injunctive relief against the enforcement of a state law is requested.3 The defendants concede that the bare jurisdictional requirements of the relied upon statutes exist, but challenge this court’s right to consider this cause on its merits' due to plaintiff’s failure to exhaust all administrative remedies and further because of the lack of equity jurisdiction.

There is no substance to defendants’ assertion that Gulf has failed to exhaust all necessary administrative remedies prior to the filing of this complaint. Admittedly, Gulf has neither specifically requested the Commission to grant a special exemption as available under the terms of the controverted Paragraph 26 of the Market Demand Order, nor taken a direct appeal from this order of the Commission to the State Supreme Court. However, no such special request by Gulf [642]*642was needed to exhaust its administrative remedy. Although the controverted order contains a provision that exemptions from the order’s terms may be obtained, Gulf has no special cause to claim exemption other than the fact that it is an interstate purchaser. And, on August 21, 1956, at a Commission hearing, Gulf pointed out this interstate condition and requested that purchasers falling in such category be exempted as a class. Subsequently, the order was issued omitting any such exception. Thus, the Commission unmistakably indicated it intended to affect interstate purchasers as well as local purchasers by such order, and, Gulf claims no other special right entitling it to relief.

The Oklahoma law is amply clear that a party aggrieved has the right to directly appeal to the Oklahoma Supreme Court from a contested order, such as the one in view, without first moving for a new trial or pursuing other special provisions for relief;4 and, that such an appeal is judicial in character and not administrative.5 Thus, in those cases wherein the federal court does have jurisdiction no claim can properly lie that the administrative remedy has not been exhausted, since any consideration by the Oklahoma court is at such juncture judicial and not administrative in nature.6

We now turn to the more serious question of whether equity jurisdiction lies.

The defendants urge that the instant case falls clearly within the purview of that doctrine which requires deference by the federal judiciary to local forums thus granting local processes the opportunity to resolve the controversy without a needless calling into play of federal constitutional problems.7 Gulf, although recognizing the doctrine of abstention asserts that the case before us is not one calling for the application of such doctrine inasmuch as the contested order shows on its face that judged by federal constitutional principles the order invades the exclusive province of federal authority.8 Specifically, Gulf argues that the Commission has attempted to regulate the volume of crude oil purchases in interstate commerce contrary to the Interstate Commerce Clause of the Constitution, art. 1, § 8, cl. 8, and the Due Process Clause of the Fourteenth Amendment; and, that the Commission’s attempted action is not -merely the invalid exercise of an admitted power, but is an attempted assertion of authority expressly and wholly denied by federal law.

In urging equity jurisdiction Gulf principally relies upon the cases of Texoma Natural Gas Co. v. Railroad Commission of Texas,9 and Thompson v. Consolidated Gas Utilities Corporation.10 In both these cases three-judge courts granted injunctive relief against the enforcement of local orders. In the Texoma Natural Gas Company case the court held that the Texas Act, Vernon’s Ann. Civ.St. art. 6049a, requiring both common and private pipe line carriers to purchase gas without discrimination between producers was an unconstitutional taking of private property for public use without just compensation; and, that in addition there was an unconstitutional interference with and burden upon inter[643]*643state commerce. And, in the Thompson case, the law under attack was found constitutionally deficient inasmuch as it was enacted solely to compel private pipe line owners to furnish a market to those who had no pipe line connections. However, two pivotal features distinguish the Texoma Natural Gas Company case from the one before us. There, the plaintiffs were private pipe line carriers who were solely devoted to serving their own privately owned wells and had not dedicated their property to public use. Moreover, while the litigated act purported to conserve oil and gas as natural resources of the state, it was conceded that the pipe line operations therein did not result in waste. And, in the Thompson case it was obvious from the face of the order that the exercised authority was neither related to the prevention of waste nor the protection of correlative rights in connection with undue drainage.

In the instant case, Gulf, under Oklahoma law, is a common carrier and common purchaser and is under a public duty, as any other common carrier, to furnish adequate facilities.11 It is in relation to this duty along with the state’s legitimate interest in ratable taking (and conservation) that the countenance of the questioned order must be judged.

Unquestionably, the transactions covered by the controverted order bear some real relationship to interstate commerce. However, such does not alter the fact that the subject matter of this order is of a dominant local character and involves local law.12 Significantly local authorities, in the absence of a clearly defined pre-emption to the federal government, have the right to affect interstate commerce in the absence of placing an unreasonable burden thereon; and, this order cannot be deemed invalid on its face merely because interstate commerce is touched.13 Moreover, the doctrine of abstention is not precluded from application merely because the constitutional issue arises in connection with the commerce clause.14

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Bluebook (online)
147 F. Supp. 640, 7 Oil & Gas Rep. 830, 1956 U.S. Dist. LEXIS 4142, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gulf-oil-corp-v-corporation-commission-okwd-1956.