J. Robert Sealy v. James P. Mitchell, Secretary of Labor, United States Department of Labor

249 F.2d 327, 8 Oil & Gas Rep. 531, 66 A.L.R. 2d 1148, 1957 U.S. App. LEXIS 4624
CourtCourt of Appeals for the Fifth Circuit
DecidedNovember 18, 1957
Docket16750_1
StatusPublished
Cited by5 cases

This text of 249 F.2d 327 (J. Robert Sealy v. James P. Mitchell, Secretary of Labor, United States Department of Labor) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
J. Robert Sealy v. James P. Mitchell, Secretary of Labor, United States Department of Labor, 249 F.2d 327, 8 Oil & Gas Rep. 531, 66 A.L.R. 2d 1148, 1957 U.S. App. LEXIS 4624 (5th Cir. 1957).

Opinions

JOHN R. BROWN, Circuit Judge.

This case, consolidating two actions by the Secretary, one for a record-keeping injunction under Section 17, 29 U.S.C.A. § 217, and the other for unpaid overtime and penalties on behalf of specific employees, 29 U.S.C.A. § 216(c), raises the question whether the drilling of a wild wildcat well in Georgia is itself under the Fair Labor Standards Act as commerce or production of goods for commerce and, if not,' whether it is obliquely brought under coverage by the mere act of furnishing of “cuttings” under a dry hole letter or the occasional handling of oil well drilling supplies received on the well site from out of state. The District Court held that the activity was covered. We disagree.

Of course, if Warren-Bradshaw Drilling Co. v. Hall, 317 U.S. 88, 63 S.Ct. 125, 87 L.Ed. 83, affirming our decision 5 Cir., 124 F.2d 42, is the alpha and omega, and as such is to be read as a perpetual memorial that the drilling of any oil well at any time and at any place is production of goods for commerce, we are setting out on a voyage of short duration. But neither what is there held or said, or elsewhere followed,1 nor the natural application of the decision in rejecting the contention that coverage depends on a mechanical test of the fortuitous result of a producing, not a dry hole, Culver v. Bell & Loffland, Inc., 9 Cir., 146 F.2d 29, compels any such inflexible result.

The drilling for oil itself is not commerce. The drilling for oil may be production of goods for commerce because oil can only be produced by drilling for it. But drilling becomes production of goods only if there is some reasonable expectancy that “goods,” i. e., oil, will be produced either in that well or in those within some reasonable geographical range as a result of scientific and technical knowledge gained from the well, if dry or abandoned, then being drilled.

The Court’s reliance on the fact that “The record contains ample indication that there were reasonable grounds for petitioner [the driller] to anticipate, at the time of drilling, that oil produced by the wells drilled, would move into other states,” Warren-Bradshaw Drilling Co. v. Hall, supra, 317 U.S. at page 92, 63 S.Ct. at page 127, and like emphasis by the Ninth Circuit that “In the course of drilling in oil producing areas, such as we are concerned with here, it is inievitable that some of the holes will turn out to be dry * * * [and] * * Work done in the drilling of a dry hole in a producing field is at least as necessary and as closely related to the process of production as are the services of a building maintenance employee in a building occupied as a factory * * Culver v. Bell & Loffland, supra, 146 F.2d at page 32, reflect quite plainly that there is no magic in a drilling rig, its operation or the act of drilling. It is significant only because it is the means by which “goods” — oil—is to be produced.

Here, while we would agree that the record, skimpy as it is, would yet justify a conclusion that if (“and the if is a big one”, Mitchell v. Hodges Contracting Co., 5 Cir., 238 F.2d 380, 383) oil were [329]*329discovered in commercial quantities from Sealy’s activities, the oil would surely move in interstate commerce, there is no basis for a judicial conclusion either that oil was produced or would likely be produced. Nor is there any evidence whatsoever that in the industry’s relentless search for more oil reserves, the drilling of this well, if ultimately dry as it was, would advance or aid or facilitate production in other fields or areas.

That Sealy, with the inveterate optimism of wildcatters who play long odds to contemplate great recoveries, may have thought or hoped that oil would be found is insignificant in the face of this record. The standard, first, is not a subjective one for even the expectancy that goods will move in interstate commerce is an objective one “according to the normal course of his business,” United States v. Darby, 312 U.S. 100, 118, 61 S.Ct. 451, 459, 85 L.Ed. 609, 619, since an employer, to the law, sees that which he ought to have seen. Mitchell v. Raines, 5 Cir., 238 F.2d 186, 188.

Sealy, on this record at least, a man with no previous experience whatsoever in any phase of the oil business, without knowledge or experience, technical or practical, in the exploration and search for oil, somehow 2 hoped to find oil on his land in Georgia located in Seminole County within half a mile of some leases held by a major oil company.3

Had his hopes come true, he would have made history. For Georgia is without any production of oil or gas in commercial quantities. Indeed, so much sought is the prosperity following in the wake of oil and gas production that the State of Georgia has added to the wildcatter’s dreams the hope of an even higher reward. For by constitutional amendment in recent years, the people of Georgia have held out and increased the bounty to a quarter of a million dollars for the first commercially producing well while reducing the standard of commercial productivity from 250 barrels to 100 barrels per day.4

Except for Sealy’s hope and his willingness to spend his money on a venture which, to this date in this record, no qualified person has yet expressed even a guarded opinion of the remotest prospect of success, there is nothing to afford a basis for a conclusion that they were here producing goods — oil. The concept that coverage must be “determined by practical considerations, not by technical conceptions,” Mitchell v. C. W. Vollmer & Company, Inc., 349 U.S. 427, at page 429, 75 S.Ct. 860, 862, 99 L.Ed. 1196, 1200; Archer v. Brown & Root, 5 Cir., 241 F.2d 663, is a standard which [330]*330cuts both ways. And here, from a practical standpoint, judged in the realities of the oil industry, not a single qualified person expressed even a remote opinion that there were any prospects for oil at this location. And without something more than a hope, the drilling, while closely related and directly essential to demonstrating whether that hope had good or bad foundation, was not then the act of producing oil.5

That this exposition does not furnish a ready, mechanical test by which with •seismographic accuracy, it can be determined whether a given drilling well in a given area or field is or is not within the coverage of the Act does not militate against our conclusion.

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249 F.2d 327, 8 Oil & Gas Rep. 531, 66 A.L.R. 2d 1148, 1957 U.S. App. LEXIS 4624, Counsel Stack Legal Research, https://law.counselstack.com/opinion/j-robert-sealy-v-james-p-mitchell-secretary-of-labor-united-states-ca5-1957.