Gulfstream Petroleum Corp. v. Layden

1981 OK 56, 632 P.2d 376, 71 Oil & Gas Rep. 66, 1981 Okla. LEXIS 226
CourtSupreme Court of Oklahoma
DecidedMay 12, 1981
Docket55809
StatusPublished
Cited by40 cases

This text of 1981 OK 56 (Gulfstream Petroleum Corp. v. Layden) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gulfstream Petroleum Corp. v. Layden, 1981 OK 56, 632 P.2d 376, 71 Oil & Gas Rep. 66, 1981 Okla. LEXIS 226 (Okla. 1981).

Opinions

LAVENDER, Justice:

This is an original action in which the petitioner, Gulfstream Petroleum Corporation, asks this court to prohibit the respondent trial judge from further proceeding in the cause before him, a quiet title action filed by Hamilton Brothers Oil Company. The land involved is section 18, township 5 north, range 17 east, Pittsburg County, Oklahoma. Both Gulfstream and Hamilton Brothers own oil and gas leases in the section.

In 1978 Gulfstream filed applications with the Oklahoma Corporation Commission to space and pool certain formations underlying section 18. The applications were heard, recommended, and granted, but for some reason the pooling order was issued two weeks before the spacing order. Later, Gulfstream applied for an extension of time to drill a well. At the hearing on Gulf-stream’s application Hamilton Brothers, out of time, sought to elect under the pooling order to participate in the well. Gulf-stream’s application for an extension of time was granted; Hamilton Brothers’ election was denied. Gulfstream then drilled a producing well to the Middle Atoka (Red Oak) formation.

Hamilton Brothers has never sought administrative or appellate relief from any of these orders of the Corporation Commission. Instead, in February 1980, some nineteen months after the pooling order was issued, Hamilton Brothers filed this quiet title action. In it they seek, among other things, a determination that the Commission was without jurisdiction to issue the pooling order because there was no spacing order in effect and that the pooling order is void.

Gulfstream now petitions this court to assume original jurisdiction and issue a writ of prohibition, prohibiting the trial court from further proceeding in the cause. They argue that all necessary elements of jurisdiction existed at the time the Commission entered the pooling order. The question of whether a spacing order existed when the pooling order was entered is not, Gulf-stream argues, a fact question constituting proof of one of the necessary elements of the Commission’s jurisdiction. They conclude that the trial court lacks jurisdiction to entertain such a question, because to do so would be to allow a collateral attack on an order of the Corporation Commission.

We assume original jurisdiction, but decline to issue the writ.

[378]*378I.

By statute, collateral attacks on orders of the Corporation Commission are prohibited.1 Generally, the district courts of this state lack the jurisdiction to even inquire into the validity of these orders.2 A district court in a collateral proceeding may, however, examine a Corporation Commission order for the limited purpose of determining the jurisdiction of the Commission, or its lack thereof, to issue the order.3

The three elements of jurisdiction are (1) jurisdiction over the person, (2) jurisdiction over the subject matter, and (3) jurisdiction to render the particular judgment.4 There is no problem here with personal jurisdiction or subject-matter jurisdiction. The question is whether the Corporation Commission had jurisdiction to render the particular judgment, the pooling order.. That question in turn depends on whether the entry of a spacing order is a jurisdictional prerequisite to the entry of a pooling order. It is commonly thought to be,5 and we have implied that it is.6 This court, however, has not been called upon to answer the question directly.

The answer to the question is a matter of statutory interpretation. If the statute that creates the authority for the Commission’s spacing and pooling orders, 52 O.S.

Supp.1977 § 87.1,7 makes the entry of a spacing order before a pooling order merely directory, then the requirement is not jurisdictional.8 If on the other hand the statute makes it mandatory, then the requirement is jurisdictional.9 Whether a statute is directory only or is mandatory depends, to the extent it can be determined, upon the intent of the legislature. We have held:

If the lawmakers in providing the method of such steps had in mind only an advisable manner of orderly advancement, and had not in mind the nature of the judgment to be rendered when the course was run, then such statutes are usually regarded as directory, and will be considered only in determining the procedure, and are entitled to no consideration in determining the judicial power of the court to render a judgment. Facts showing compliance with such statutes are clearly quasi jurisdictional only, and not subject to consideration in collateral attack. On the other hand, if it appears that in the enactment of such statute the lawmakers, while providing a step in the procedure, had uppermost in mind the effect of such a step upon the judgment thereafter to be rendered, and intended the taking of such step in the procedure as a condition precedent to the existence of the judicial power of a court to there[379]*379after render the particular judgment, then such facts, while in a sense being quasi jurisdictional, are clearly jurisdictional facts, necessary to the existence of the third element of jurisdiction. Such statute is a mandatory one.10

We believe that the legislature, in providing for pooling orders, had uppermost in mind the effect of a prior spacing order. This is clear from the language of the provision authorizing pooling orders, 52 O.S. Supp.1977 § 87.1(e), which provides:

When two or more separately owned tracts of land are embraced within an established spacing unit, or where there are undivided interests separately owned, or both such separately owned tracts and undivided interests embraced within such established spacing unit, the owners thereof may validly pool their interests and develop their lands as a unit. Where, however, such owners have not agreed to pool their interests and where one such separate owner has drilled or proposes to drill a well on said unit to the common source of supply, the Commission, to avoid the drilling of unnecessary wells, or to protect correlative rights, shall, upon a proper application therefor and a hearing thereon, require such owners to pool and develop their lands in the spacing unit as a unit. [Emphasis added.]

The above language makes a prior spacing order mandatory.

The necessity for a prior spacing order also appears from the statutory scheme. The purpose of the conservation statutes, of which section 87.1 is one, is to prevent waste and protect correlative rights.11 The correlative rights of royalty interest owners and of working interest owners are treated separately. A pooling order serves to protect the correlative rights of working interest owners, by pooling their interests.12 A spacing order is necessary and sufficient to satisfy the other conservation purposes.13 It creates the unit. It directs that only one well be drilled in the unit,14 within a specific location,15 and drilling a well at another location or operating a well drilled in violation of the spacing order is prohibited.16 The spacing order also pools the royalty interests within the unit.17

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Bluebook (online)
1981 OK 56, 632 P.2d 376, 71 Oil & Gas Rep. 66, 1981 Okla. LEXIS 226, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gulfstream-petroleum-corp-v-layden-okla-1981.