Panama Refining Co. v. Ryan

293 U.S. 388, 55 S. Ct. 241, 79 L. Ed. 446, 1935 U.S. LEXIS 251, 1 Ohio Op. 389
CourtSupreme Court of the United States
DecidedJanuary 7, 1935
Docket135 and 260
StatusPublished
Cited by1,084 cases

This text of 293 U.S. 388 (Panama Refining Co. v. Ryan) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S. Ct. 241, 79 L. Ed. 446, 1935 U.S. LEXIS 251, 1 Ohio Op. 389 (1935).

Opinions

[405]*405Mr. Chief Justice Hughes

delivered the opinion of the Court.

On July 11, 1933, the President, by Executive Order, prohibited “ the transportation in interstate and foreign commerce of petroleum and the products thereof produced or withdrawn from storage in excess of the amount permitted to be produced or withdrawn from storage by any State law or valid regulation or order prescribed thereunder, by any board, commission, officer, or other duly [406]*406authorized agency of a State.”1 This action was based on § 9 (c) of Title I of the National Industrial Recovery Act of June 16,1933, 48 Stat. 195, 200, 15 U. S. C. Tit. I, § 709 (c). That section provides:

“ Sec. 9 . . .
“(c) The President is authorized to prohibit the transportation in interstate and foreign commerce of petroleum and the products thereof produced or withdrawn from storage in excess of the amount permitted to be produced or withdrawn from storage by any state law or valid regulation or order prescribed thereunder, by any board, commission, officer, or other duly authorized agency of a State. Any violation of any order of the President issued under the provisions of this subsection shall be punishable by fine of not to exceed $1,000, or imprisonment for not to exceed six months, or both.”

On July 14, 1933, the President, by Executive Order, authorized the Secretary of the Interior to exercise all the powers vested in the President “ for the purpose of en[407]*407forcing Section 9 (c) of said act and said order ” of July 11, 1933, including full authority to designate and appoint such agents and to set up such boards and agencies as he may see fit, and to promulgate such rules and regulations as he may deem necessary.” 2 That order was made under § 10 (a) of the National Industrial Recovery Act, 48 Stat. 200, 15 U. S. C. 710 (a), authorizing the President " to prescribe such rules and regulations as may be necessary to carry out the purposes ” of Titlé I of the National Industrial Recovery Act and providing that “ any violation of any such rule or regulation shall be punishable by fine of not to exceed $500, or imprisonment for not to exceed six months, or both.”

On July 15, 1933, the Secretary of the Interior issued regulations to carry out the President’s orders of July 11 and 14, 1933. These regulations were amended by orders [408]*408of July 25, 1933, and August 21, 1933, prior to the commencement of these suits. Regulation IV provided, in substance, that every producer of petroleum should file a monthly statement under oath, beginning August 15, 1933, with the Division of Investigations of the Department of the Interior, giving information with respect to the residence and post-office address of the producer, the location of his producing properties and wells, the allowable production as prescribed by state authority, the amount of daily production, all deliveries of petroleum, and declaring that no part of the petroleum or products produced and shipped had been produced or withdrawn from storage in excess of the amount permitted by state authority. Regulation V required every purchaser, shipper (other than a producer), and refiner of petroleum, including processors, similarly to file a monthly statement under oath, giving information as to residence and post-office address, the place and date of receipt, the parties from whom and the amount of petroleum received and the amount held in storage, the disposition of the petroleum, particulars as to deliveries, and declaring, to the best of the affiant’s information and belief, that none of the petroleum so handled had been produced or withdrawn from storage in excess of that allowed by state authority. Regulation VII provided that all persons embraced within the terms of § 9 (c) of the Act, and the Executive Orders and regulations issued thereunder, should keep “ available for inspection by the Division of Investigations of the Department of the Interior adequate books and records of all transactions involving the production and transportation of petroleum and the products thereof.”

On August 19, 1933, the President, by Executive Order, stating that his action was taken under Title I of the National Industrial Recovery Act, approved a “ Code of [409]*409Fair Competition for the Petroleum Industry.” 3 By a further Executive Order of August 28, 1933, the President designated the Secretary of the Interior as Administrator, and the Department .of the Interior as the Federal Agency, to exercise on behalf of the President all the powers vested in him under that Act and Code. Section 3 (f) of Title I of the National Industrial Recovery Act provides that when a code of fair competition has been approved or prescribed by the President under that title, “ any violation of any provision thereof in any transaction in or affecting interstate or foreign commerce shall [410]*410be a misdemeanor, punishable by fine of not more than $500 for each offense, each day of said violation to be deemed a separate offense.”

This “ Petroleum Code (in its original form and as officially printed) provided in § 3 of Article III relating to “ Production,” for estimates of required production of crude oil to balance consumer demand for petroleum products ” to be made at intervals by the Federal Agency. This “ required production ” was to be equitably allocated ” among the several States. These estimates and allocations, when approved by the President, were to be deemed to be “ the net reasonable market demand,” and the allocations were to be recommended “ as the operating schedules for the producing States and for the industry.” By § 4 of Article III, the subdivision, with respect to producing properties, of the production allocated to each State, was to be made within the State. The second paragraph of that section further provided:

If any subdivision into quotas of production allocated to any State shall be made within a State any production by any person, as person is defined in Article I, Section 3 of this code, in excess of any such quota assigned to him, shall be deemed an unfair trade practice and in violation of this code.”

By an Executive Order of September 13, 1933, modifying certain provisions of the Petroleum Code, this second paragraph of § 4 of Article III was eliminated. It was reinstated by Executive Order of September 25, 1934.

These suits were brought i'n October, 1933.

In No. 135, the Panama Refining Company, as owner of an oil refining plant in Texas, and its co-plaintiff, a producer having oil and gas leases in Texas, sued to restrain the defendants, who were federal officials, from enforcing Regulations IV, V and VII prescribed by the Secretary of the Interior under § 9 (c) of the National Industrial [411]*411Recovery Act. Plaintiffs attacked the validity of § 9 (c) as an unconstitutional delegation to the President of legislative power and as transcending the authority of the Congress under the commerce clause.

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Cite This Page — Counsel Stack

Bluebook (online)
293 U.S. 388, 55 S. Ct. 241, 79 L. Ed. 446, 1935 U.S. LEXIS 251, 1 Ohio Op. 389, Counsel Stack Legal Research, https://law.counselstack.com/opinion/panama-refining-co-v-ryan-scotus-1935.