United Gas Pipe Line Co. v. Watson Oil Corp.

306 So. 2d 731, 51 Oil & Gas Rep. 540, 1975 La. LEXIS 3527
CourtSupreme Court of Louisiana
DecidedJanuary 20, 1975
Docket55575
StatusPublished
Cited by6 cases

This text of 306 So. 2d 731 (United Gas Pipe Line Co. v. Watson Oil Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Gas Pipe Line Co. v. Watson Oil Corp., 306 So. 2d 731, 51 Oil & Gas Rep. 540, 1975 La. LEXIS 3527 (La. 1975).

Opinion

306 So.2d 731 (1975)

UNITED GAS PIPE LINE COMPANY
v.
WATSON OIL CORPORATION.

No. 55575.

Supreme Court of Louisiana.

January 20, 1975.

*732 John T. Guyton, Thomas J. Wyatt, Hargrove, Guyton, Ramey & Barlow, Shreveport, for plaintiff-relator.

R. T. Jorden, Kerry M. Massari, Liskow & Lewis, Lafayette, for defendant-respondent.

CALOGERO, Justice.

We granted writs in this case 303 So.2d 172 (La.1974), to determine whether the District Court erred in dissolving a temporary restraining order earlier granted plaintiff, and dismissing plaintiff's suit without prejudice for lack of jurisdiction. The Court of Appeal, finding no error in the trial court's action, had refused plaintiff's application for writs. (La.App.2d Cir. 1974).

The relevant facts, the substance of the legal controversy and the procedural history in these proceedings follows.

Pursuant to R.S. 30:22 (Sec. 1 of Act 190 of 1962) United Gas Pipeline Co. (hereinafter referred to as United) applied to the State of Louisiana Department of Conservation for authority to use as an underground reservoir for the storage of natural gas, the Pettit Formation in the Lake Bistineau Field, Bienville and Bossier Parishes, Louisiana. Their application further sought of the Department of Conservation the establishment of basic rules and regulations governing the storage, injection and withdrawal of gas from the Formation.

Upon compliance with the statute and after a public hearing the Commissioner of Conservation issued an order, #287-B, dated October 25, 1965, incorporating the findings required by the statute, and granting the authority requested.

The Pettit Formation in the Lake Bistineau Field (the storage area) is a stratum *733 or formation occurring between a depth of 5,030 feet and a depth of 5,430 feet below ground.

One provision of the order set forth that for wells that should be drilled through the Pettit Formation to deeper formations the casing program should include setting a stage cementing tool in the casing string so as to create a cement bond from a point 200 feet below the base of the Pettit Formation to a point at least 500 feet above the top of the Pettit Formation.[1]

Thereafter, on December 3, 1965 United Gas Pipeline Co. entered into two storage agreements with International Paper Co. and the Long Bell Petroleum Co. in which United, for a stipulated consideration, obtained the right to store natural gas in the portion of the reservoir located beneath the land owned by these two companies.[2]

Each of these agreements, duly recorded in Bienville Parish on December 14, 1965, contained the following provision:

"Grantors agree that if they should drill, or cause or allow to be drilled under any future lease or grant, a well on the above described land, they will use or cause to be used in the drilling of such well all reasonable efforts required to protect the Storage Reservoir against damage and against loss of gas stored therein. Grantors further agree that they will not complete or cause or allow to be completed in the Storage Reservoir any well other than a well or wells drilled by Grantee hereunder." (Emphasis provided)

Neither the Commissioner's order relative to casing requirements for wells drilled through the storage area, nor the parties' contractual requirement relative to drilling through the storage area apparently took on any significance until March 22, 1974 when International Paper Company and Long Bell Petroleum Company executed a mineral lease in favor of Jack T. Everett granting the right to explore for minerals, on land owned by International and Long Bell, located below the storage reservoir in question. Watson Oil Corp. (which presumably had acquired an interest in the lease from or through Jack T. Everett) secured a Drilling Permit and commenced preparation to drill to a point below the storage reservoir.

Upon becoming aware of these preparations United filed this suit in the Second Judicial District Court for the Parish of Bienville seeking a temporary restraining order, and a preliminary and permanent injunction in due course, prohibiting Watson *734 from drilling without first setting an intermediate or protective string of casing through the reservoir.[3]

United's petition claimed that this was required by the provisions of the Gas Storage Agreement because "setting of such a protective string of casing through the Storage Reservoir is a reasonable effort which is required to protect the Storage Reservoir against damage and against loss of gas stored therein."[4]

The temporary restraining order was dissolved and dismissed following an informal conference with the attorneys for the parties and the suit dismissed without prejudice "for lack of jurisdiction." As earlier mentioned United's application to the Court of Appeal for supervisory relief was rejected. Upon United's application to this Court we granted a writ of certiorari, ordered reinstated the temporary restraining order earlier issued and directed the Clerk, Second Circuit Court of Appeal to transmit the record in duplicate to this Court.

The lower courts summarily dismissed plaintiff's suit on the basis that the district court was without jurisdiction to consider the case, apparently agreeing with defendant Watson's contention that United's effort to require the intermediate string of casing was a collateral attack on order #287-B (which mandated no such requirement). Watson relies upon R.S. 30:12[5] and Breaux v. Apache Oil Corporation, 240 So.2d 589 (La.App.3rd Cir. 1970); Vincent v. Hunt, 221 So.2d 577 (La.App. 3rd Cir. 1969); Guarisco v. Trahan, 173 So.2d 304 (La.App.1st Cir. 1965) and Mire v. Hawkins, 147 So.2d 892 (La.App.3rd Cir. 1962) for the proposition that any suit attacking, directly or collaterally, an order of the Commissioner, as this suit is alleged to do, must be brought at the domicile of the Commissioner (Parish of East Baton Rouge) as the venue provided in the statute is akin to the non-waivable venue provided in C.C.P. Art. 44, and consequently "jurisdictional" in nature.

United contends, however, that they are not either directly or collaterally attacking the Commissioner's order, asserting that they "assume without question the validity of Order #287-B." Rather they contend that they are simply seeking to enforce their rights under, and the obligations imposed upon Watson by, the storage agreements executed December 3, 1965 (and duly recorded thereafter) following the October 25, 1965 order of the Commissioner, that a proper forum for their lawsuit is the Parish in which the property is located, and that the presence of the Commissioner of Conservation in the suit is neither necessary nor indispensable.

*735 United's contention is that the Gas Storage Agreements' "all reasonable efforts required to protect the storage reservoir" requires an intermediate string of casing in addition to the cement bond required by order #287-B for any drilling through the Reservoir.

Watson cites Alston v. Southern Production Co., 207 La. 370, 21 So.2d 383 (1945); Hardy v. Union Producing Co., 207 La. 137, 20 So.2d 734 (1945); Placid Oil Co. v. North Central Texas Oil Co., 206 La. 693, 19 So.2d 616 (1944); Hunter Co. v. McHugh, 202 La. 97, 11 So.2d 495 (1942); Childs v. Washington, 229 La. 869, 87 So. 2d 111 (1956); Hunter Co. v. Vaughn, 217 La. 459, 46 So.2d 735 (1950), and Crichton v. Lee, 209 La.

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Bluebook (online)
306 So. 2d 731, 51 Oil & Gas Rep. 540, 1975 La. LEXIS 3527, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-gas-pipe-line-co-v-watson-oil-corp-la-1975.