Humble Oil & Refining Co. v. United States. Moseley v. United States

198 F.2d 753
CourtCourt of Appeals for the Tenth Circuit
DecidedOctober 6, 1952
Docket4419, 4420
StatusPublished
Cited by7 cases

This text of 198 F.2d 753 (Humble Oil & Refining Co. v. United States. Moseley v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Humble Oil & Refining Co. v. United States. Moseley v. United States, 198 F.2d 753 (10th Cir. 1952).

Opinions

HUXMAN, Circuit Judge.

This is an appeal from a judgment of conviction following a jury’s verdict on nine counts in an indictment, charging appellants with violation of the Connally Act, 15 U.S.C.A. § 715 et seq. There were two indictments which were consolidated for trial. Separate reference to the indictments is unnecessary. Count one charged a conspiracy to violate the act and the remaining numerous counts charged substantive vio[754]*754lations thereof. Appellants were acquitted, of the conspiracy charge and all of the substantive offenses save those charged in counts eighteen to twenty-six, inclusive. All of tírese counts in substance charged that on the dates set forth therein appellants knowingly and unlawfully failed and omitted to make and keep complete and accurate daily records of the oil’produced and delivered from their wells described in each count of the indictment.

The declared purpose of the 'Connally Act, § 715 is to protect interstate and foreign commerce from the diversion and obstruction of, and the burden and harmful effect upon, such commerce caused by contraband oil and to encourage the conservation of deposits of crude oil within the United States. Contraband oil is defined as being petroleum which, or any part thereof, was produced, transported, or withdrawn from-storage in excess of the amounts permitted to be produced, transported, or withdrawn from storage under the laws of the state or under any regulation or order prescribed thereunder by any board, commission, officer, or other duly authorized agent of such state, or any of the products of such petroleum.

§ 715d empowers the President to prescribe such regulations as he may find necessary or appropriate for the enforcement of the act, including but not limited to regulations requiring reports, maps, affidavits and other documents relating to the production, storage, refining, processing, transporting, or handling of petroleum products and providing for the keeping of books and records and for the inspection of such books and records.

Pursuant to statutory authority, Regulation 30 C.F.R. § 302 was promulgated. It designated that part of the State of New Mexico comprising Lea and Eddy Counties as being covered by the promulgated regulations.1 § 302.6 required the keeping of accurate and complete records with respect to production, refining, processing, manufacturing, transporting, withdrawing or otherwise handling petroleum or petroleum products in the designated area. The data required to be furnished related to the location of the producing properties, the number and location of wells thereon, the allowable production from each property and well, daily production in barrels of petroleum produced from each lease and well, the amount of petroleum consumed upon each property daily, and a record of all deliveries of petroleum or petroleum products, showing the names and places of business of all persons to whom such products were delivered, as well as other information. Wilfully and knowingly failing to comply with the requirements of these regulations was made a criminal offense.

New Mexico has enacted a comprehensive oil conservation law for the prevention of waste of oil and gas and to protect correlative rights therein.2 The act created the Oil Conservation Commission, which was given jurisdiction and authority to enforce the provisions of the act. It was empowered to regulate the production of crude petroleum so as to prevent waste by over production. Pursuant to the provision of the act, the Commission from time to time issued general proration orders, fixing the total allowable for the state as a whole. It also by regulations fixed the allowable for individual leases and wells, including those of the appellant, the Humble Oil and Refining Company. Monthly allowables were fixed for the production of oil from the wells of appellant company during all the time involved in the counts of the indictment, on which appellant was found guilty.

At the trial, the Government introduced the general proration orders and also the specific proration orders applicable to Humble’s production alone. Appellant filed a motion to suppress all these proration orders on the ground that they were void. The court overruled the motion as to the general orders, but sustained it as to the specific orders, fixing the allowable for appellant’s wells during the time in question, on the ground that these orders were issued without giving notice, as required by statute, and on the further ground that the Commission itself did not make these orders but delegated its duty and responsibility to C. G. [755]*755Staley, Chairman of the Engineers SubCommittee of the Lea County Operators.

It may be that because of the manner in which these individual proration orders were promulgated they were unenforceable and that appellant could in a proper proceeding have successfully challenged them and have had them set aside. But it does not follow therefrom that they were incompetent in considering whether appellant was guilty of violating the Connally Act and regulations promulgated thereunder as will be pointed out more specifically hereinafter. For the purpose of this opinion, however, it may be conceded that the court’s conc'usion as to the validity of these specific proration orders was correct.

It is our conclusion that the Connally Act applies only to those states which have in effect proration statutes, having for their purpose the prevention of waste of oil and gas resources, the encouragement of the conservation of oil and gas deposits, the protection of correlative rights of individual owners in a common source of supply, and are engaged in the administration thereof. New Mexico has enacted and has in full force a valid comprehensive oil conservation law. The act created the Oil Conservation Commission, which was given jurisdiction and powers to administer the law. The Commission was set up and was and is functioning and its validity is not in question. It has from time to time issued general proration orders, fixing the total allowable for the state. The validity of some of the general proration orders in effect, during the time involved in the counts on which appellant was convicted, was upheld by the trial court and these orders were received in evidence. In effect appellant concedes that at least some of the general orders during the time in question were valid.3

We are dealing here with a broad remedial statute, the New Mexico Conservation Law. The Connally Act was passed to implement it and aid the state in the administration of its conservation law. Since New Mexico had a valid conservation law, a validly constituted board engaged in administering the law, and at least valid general proration orders in effect, New Mexico was a state in which conservation and proration were an established policy and by its specific provisions the Connally Act applied to New Mexico.

To be guilty of a violation of the Connally Act, it was not necessary to show that appellant was producing excess oil or that it was capable of doing so. It was not charged with the production or transportation of “hot” oil. It was charged with the offense of keeping false records in violation of the regulations promulgated under the Connally Act.

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Related

State v. Pina
561 P.2d 43 (New Mexico Court of Appeals, 1977)
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284 F. Supp. 273 (W.D. Missouri, 1968)
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355 U.S. 286 (Supreme Court, 1958)

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Bluebook (online)
198 F.2d 753, Counsel Stack Legal Research, https://law.counselstack.com/opinion/humble-oil-refining-co-v-united-states-moseley-v-united-states-ca10-1952.