Marshall v. El Paso Natural Gas Co.

874 F.2d 1373, 1989 WL 50298
CourtCourt of Appeals for the Tenth Circuit
DecidedMay 17, 1989
DocketNo. 87-1829
StatusPublished
Cited by69 cases

This text of 874 F.2d 1373 (Marshall v. El Paso Natural Gas Co.) 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
Marshall v. El Paso Natural Gas Co., 874 F.2d 1373, 1989 WL 50298 (10th Cir. 1989).

Opinion

BRORBY, Circuit Judge.

This appeal arises out of a diversity suit initiated by plaintiffs Mr. and Mrs. Marshall (Marshalls) against defendants El Paso Natural Gas Company and Meridian Oil Production, Inc. to recover damages related to the drilling and plugging of an oil and gas well on Marshalls’ real property. For purposes of this appeal we will refer to El Paso Natural Gas Company and Meridian Oil Production, Inc. jointly as Meridian. The jury returned a verdict for Marshalls, awarding $350,050 for diminution in value of the property, $50,000 for nuisance damages, and punitive damages of $5,000,000. Meridian appeals, asserting the district court erred: (1) in refusing to stay its proceedings and refer the factual issues of the case to the Oklahoma Corporation Commission under the doctrine of primary jurisdiction; (2) in excluding Meridian’s proffered evidence of the Commission’s authority to order remedial actions to correct Marshalls’ property damage; and (3) in failing to instruct the jury that punitive damages in excess of actual damages may be awarded only upon a finding of clear and convincing evidence rather than a finding of a preponderance of the evidence. Finding no errors we affirm.

I. Primary Jurisdiction

Meridian asserts the district court erred in refusing to stay its judicial proceedings under the doctrine of primary jurisdiction in order to refer technical questions to the Oklahoma Corporation Commission (Commission). We disagree.

Primary jurisdiction is invoked in situations where the courts have jurisdiction over the claim from the very outset but it is likely that the case will require resolution of issues which, under a regulatory scheme, have been placed in the hands of an administrative body. Sunflower Elec. Coop. v. Kansas Power & Light Co., 603 F.2d 791, 796 (10th Cir.1979) (citing United States v. Western Pacific R.R. Co., 352 U.S. 59, 64, 77 S.Ct. 161, 165, 1 L.Ed.2d 126 (1956)). Meridian does not contend the district court is without subject matter jurisdiction; rather it asserts the district court should have referred this case to the Commission under primary jurisdiction. The doctrine of primary jurisdiction provides that where the law vests in an administrative agency the power to decide a controversy or treat an issue, the courts will [1377]*1377refrain from entertaining the case until the agency has fulfilled its statutory obligation. Sunflower, 603 F.2d at 795 (citing California v. Federal Power Comm’n, 369 U.S. 482, 82 S.Ct. 901, 8 L.Ed.2d 54 (1962)). Under the doctrine of primary jurisdiction, the judicial process is suspended pending referral of the issues to the administrative body for its views. Western Pacific, 352 U.S. at 64, 77 S.Ct. at 165. This circuit and Oklahoma courts have referred the issue of oil and gas well drilling costs to the Commission under the doctrine of primary jurisdiction. GHK Exploration Co. v. Tenneco Oil Co., 847 F.2d 650 (10th Cir.1988); Arkla Exploration Co. v. Shadid, 710 P.2d 126, 128 (Okla.App.1985); W.L. Kirkman, Inc. v. Oklahoma Corp. Comm’n, 676 P.2d 283, 287 (Okla.App.1983).

In Far East Conference v. United States, 342 U.S. 570, 574-75, 72 S.Ct. 492, 494-95, 96 L.Ed. 576 (1952), the Supreme Court discusses the factors to be considered in applying the doctrine of primary jurisdiction: whether the issues of fact raised in the case are not within the conventional experience of judges; or whether the issues of fact require the exercise of administrative discretion, or require uniformity and consistency in the regulation of the business entrusted to a particular agency. The district court is not required to defer factual issues to an agency under the doctrine of primary jurisdiction if those factual issues are of the sort that the court routinely considers. United States v. Zweifel, 508 F.2d 1150, 1156 (10th Cir.), cert. denied, 423 U.S. 829, 96 S.Ct. 47, 46 L.Ed.2d 46 (1975) (court determination of good faith location of mining claims does not require deference to agency); Denver Union Stockyard Co. v. Denver Live Stock Comm’n Co., 404 F.2d 1055, 1059 (10th Cir.1968), cert. denied, 394 U.S. 1014, 89 S.Ct. 1631, 23 L.Ed.2d 40 (1969) (court consideration of monopolization of business in private antitrust suit did not require stay of judicial proceedings although industry was regulated by an agency).

We review under an abuse of discretion standard the district court’s decision whether to apply primary jurisdiction and refer this case to the Commission. See, Burford v. Sun Oil Co., 319 U.S. 315, 318, 63 S.Ct. 1098, 1099, 87 L.Ed. 1424 (1943) (discretionary standard applied to review abstention doctrine); Grimes v. Crown Life Ins. Co., 857 F.2d 699, 703 (10th Cir.1988), cert. denied, — U.S. -, 109 S.Ct. 1568, 103 L.Ed.2d 934 (1989) (same).

Meridian asserts the district court should have referred this case to the Commission because the following factual issues were raised requiring the application of primary jurisdiction: whether defendants’ operations have created a “time bomb” that will “explode” in the immediate future; whether and to what extent defendants’ operations have damaged the environment; and what remedial action, if any, is required to rectify any error defendants may have made in carrying out their operations. Meridian contends these factual issues are not within the conventional knowledge of judges or jurors, and will result in inconsistent orders of the district court and the Commission.

The “time bomb” issue goes to the Mar-shalls’ claim that Meridian deficiently plugged the well. The jury was instructed it could find liability based on either a theory of negligence or negligence per se for violation of Commission rules. Instruction No. 12. The jury was also specifically instructed on the Marshalls’ contentions of how the well was improperly plugged.1

The issue of negligent plugging of an oil and gas well has been determined by [1378]*1378the Oklahoma courts without referring the case to the Commission. See, Sunray Mid-Continent Oil Co. v. Tisdale, 366 P.2d 614 (Okla.1961) (the question of negligence in plugging an exploratory well which allowed salt water to pollute a fresh water stratum was left to the jury); Harper-Turner Oil Co. v. Bridge, 311 P.2d 947 (Okla.1957) (action for negligent plugging of an oil and gas well resulting in pollution of a water well submitted to a jury). The issue of negligence per se in plugging an oil and gas well has also been determined by the Oklahoma courts without referring the case to the Commission. See, Nichols v. Burk Royalty Co., 576 P.2d 317, 320 n. 2 (Okla.Ct.App.1977) (jury instructed on negligence per se theory); Sheridan Oil Co. v. Wall, 187 Okla.

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Bluebook (online)
874 F.2d 1373, 1989 WL 50298, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marshall-v-el-paso-natural-gas-co-ca10-1989.