1. A judgment of a state court denying a writ of prohibition to
restrain another state court and one of its judges from enforcing
an injunction order
held a final judgment within the
meaning of Jud.Code, § 237(a). P. 14.
2. A proceeding in California for a writ of prohibition to
restrain a California court from exercising jurisdiction in an
injunction suit under a statute of that state alleged to be in
conflict with the Federal Constitution goes only to the
jurisdiction of that court to entertain the suit before it, and if,
on its face, as construed by the state courts, the statute be
valid, judgment denying prohibition should be affirmed here;
constitutional and other questions as to the application of the
statute to the situation developed in the injunction suit should be
decided and reviewed in that proceeding; they cannot be imported
into the prohibition case. P.
284 U. S. 14.
3. The Oil & Gas Conservation Act of California (§§ 8b and
14b) prohibits "the unreasonable waste of natural gas" in oil and
gas fields, and authorizes the Director of Natural Resources to
enforce the prohibition. The term "unreasonable waste," as
construed by the state supreme court, means allowing gas to come to
the surface in excess of a reasonable proportion to the amount of
oil produced, so that the power of the gas to lift oil from the oil
"sand" or formation is not fully utilized, and that court has found
that this reasonable proportion could not be determined by the
legislature by definite ratios or percentages which would operate
without discrimination, but can be judicially ascertained with fair
certainty in each individual case.
Held that the statute
is not invalid on its face for uncertainty, so as to deprive a
state court of jurisdiction to consider relevant questions of fact
and determine with respect to a particular field whether there has
been the unreasonable waste that the statute condemns. P.
284 U. S. 16.
4. The provision of the above-mentioned statute that "the
blowing, release or escape of natural gas into the air shall be
prima facie evidence of unreasonable waste" is not
invalid. P.
284 U. S. 18.
Page 284 U. S. 9
5. Construed a regulating the correlative right of surface owner
with respect to a common source of supply of oil and gas, the
statute is valid upon its face. P.
284 U. S. 22.
109 Cal.App. ___, 293 P. 899, affirmed.
Appeal from a judgment denying a writ of prohibition. The
Supreme Court of the state declined to review.
Page 284 U. S. 10
MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.
The appellants are producers of oil and gas from their
respective wells in the Santa Fe Springs oil field, in Los Angeles
county, California. In September, 1929, the state, acting through
its director of natural resources, brought suit in the superior
court of the state against the appellants and others, seeking to
enjoin an alleged unreasonable waste of natural gas in that field.
The authority for that suit was found in §§ 8b and 14b of what is
called the Oil and Gas Conservation Act of California, Stats.Cal.
1915, c. 718; 1917, c. 759; 1919, c. 536; 1921, c. 912; 1929. c.
535. Section 8b prohibits "the unreasonable waste of natural gas,"
and § 14b authorizes suit by the director of natural resources to
enforce the prohibition. [
Footnote
1]
Page 284 U. S. 11
The superior court granted a preliminary injunction after a
hearing upon the pleadings, affidavits, oral testimony, and
documents submitted. The court recited in its order that there
appeared to be an unreasonable waste of natural gas in the Santa Fe
Springs oil field, and that an injunction was necessary in order
"to preserve the subject matter of the action to abide the decree
of the court at the conclusion of the trial." The court restricted
the average daily production of "net formation gas" from "any lease
or other property unit" to the amount shown for each operator in an
accompanying schedule. [
Footnote
2]
Page 284 U. S. 12
The court also directed each defendant to file reports showing
the daily production of gas and oil, and the order was without
prejudice to the right of any of the parties to move on five days'
notice for modification of the injunction. The court later modified
the order in particulars not important here. Appellants state that
the order curtailed their production of gas from 57,120,000 to
27,187,000 cubic feet a day.
Page 284 U. S. 13
Thereupon the appellants sought a writ of prohibition from the
district court of appeal, Second Appellate District of the state,
restraining the superior court and the respondent, William Hazlett,
as one of its judges, from enforcing the injunction order. The
jurisdiction of the superior court was attacked upon the ground of
the invalidity of the statute invoked. The appellants contended, in
substance, that the statute violated the due process clause of the
Fourteenth Amendment in that it afforded no certain or definite
standard as to what constituted "waste" or "unreasonable waste,"
and unlawfully delegated power to the superior court to legislate
upon that subject, in that, upon the facts and as applied against
the appellants, the statute prohibited them "from utilizing such
amount of natural gas produced from their respective wells" as was
"reasonably necessary to produce oil therefrom in quantities not
exceeding a reasonable proportion to the amount of oil produced
from the same well;" and in that the statute required appellants to
curtail their production of oil and gas "for the purpose of
conserving such natural gas for the benefit of the general public"
without eminent domain proceedings and without just compensation,
and was so arbitrary and oppressive that it was in excess of the
power of the state. By reference to their pleadings in the
injunction suit, the appellants also assailed, under the due
process clause, the provision of the statute as to what should
constitute
prima facie evidence of unreasonable waste, and
the appellants further insisted that the statute as enforced
against them impaired the obligation of their lease contracts in
violation of the contract clause of the Federal Constitution and
that they were denied the equal protection of the laws as
guaranteed by the Fourteenth Amendment.
The respondents (appellees here) demurred to the petition, and
the district court of appeal, entertaining and overruling the
contentions of the appellants under the
Page 284 U. S. 14
due process clause, denied the writ of prohibition. 293 P. 899.
The appellants then applied for a hearing in the supreme court of
the state, and, this having been denied, they seek in this Court a
review of the judgment of the district court of appeal.
This Court has jurisdiction. The proceeding for a writ of
prohibition is a distinct suit, and the judgment finally disposing
of it is a final judgment within the meaning of § 237(a) of the
Judicial Code. U.S.C. Tit. 28, § 344(a);
Weston v.
Charleston, 2 Pet. 449,
27 U. S. 464;
Mt. Vernon Cotton Co. v. Alabama Power Co., 240 U. S.
30,
240 U. S. 31;
Missouri ex rel. St. Louis B. & M. Ry. Co. v. Taylor,
266 U. S. 200,
266 U. S. 206;
Michigan Central R. Co. v. Mix, 278 U.
S. 492,
278 U. S. 494.
That judgment, however, merely dealt with the jurisdiction of the
superior court of the suit for injunction, and the only question
before us is whether the district court of appeal erred in deciding
the federal questions as to the validity of the statute upon which
that jurisdiction was based. Moreover, with all questions of fact,
or with questions of law which would appropriately be raised upon
the facts adduced in the trial of the case in the superior court,
as a court competent to entertain the suit, we are not concerned on
this appeal. The appellants annexed to their petition in the
prohibition proceeding, and made a part of it, the pleadings in the
injunction suit and the affidavits presented upon the hearing of
the application for preliminary injunction. But they could not in
that manner, or by their characterization of the evidence thus
adduced, or by pleading the conclusions derived therefrom,
substitute the district court of appeal for the superior court in
the determination of the facts, or of the law as addressed to the
facts, which should properly be considered by the latter tribunal.
It appears that in California, in accordance with the general
conception of the province of the writ, prohibition is for the
purpose of arresting the proceedings of any tribunal exercising
judicial
Page 284 U. S. 15
functions when such proceedings are without, or in excess of,
jurisdiction. Cal.Code of Civ.Proc. §§ 1102, 1103;
Jacobsen v.
Superior Court, 192 Cal. 319, 219 P. 986, 29 A.L.R. 1399.
See also Baar v. Smith, 201 Cal. 87, 101, 255 P. 827, 833.
The writ of prohibition is not available as a substitute for an
appeal from a court having jurisdiction. As was said by the Supreme
Court of California, in
Truck Owners & Shippers, Inc. v.
Superior Court, 194 Cal. 146, 155, 228 P. 19, 22, 23:
"If the superior court has jurisdiction to entertain the action,
it has the power to define the right sought to be protected. . . .
If the judgment of the superior court be incorrect, it may be
reversed on appeal, but not on prohibition."
After the decision of the district court of appeal, and before
the denial by the supreme court of the state of a hearing in the
instant case, the latter court passed upon the constitutional
validity of the statute in question. That decision was made upon an
application for a writ of supersedeas pending an appeal by certain
codefendants of the appellants here (who were not parties to the
appeal) from the above-mentioned injunction order.
People ex
rel. Stevenot, Director of Natural Resources v. Associated Oil
Company et al., 211 Cal. 93, 294 P. 717. The supreme court
found no reason to interfere with the action of the superior court,
and, later, the supreme court, on that appeal, affirmed the
injunction order holding that, under the statute the superior court
had the power to determine what wastage of gas in the production of
oil was unreasonable.
Id., 297 P. 536, 537. The district
court of appeal, in the instant case, had expressed the same
opinion, and accordingly decided that it could not interfere by
writ of prohibition. 293 P. at 907.
It follows that, in considering and deciding federal questions
in the prohibition proceeding, the district court of appeal must be
regarded, as its opinion imports, as
Page 284 U. S. 16
having determined merely that the statute was valid upon its
face so that the superior court had jurisdiction to entertain the
injunction suit. It is that determination alone that we can now
consider.
The district court of appeal overruled the contention that the
statute was so uncertain and devoid of any definition of a standard
of conduct as to be inconsistent with due process. The supreme
court of the state, reaching the same conclusion (in the opinion
above cited, 211 Cal. 93, 294 P. at 724), described the general
condition in which oil and gas were found in California and the
standard which the court considered to be established by the
statute. After observing that courts were entitled to take judicial
notice of the condition and development of the petroleum industry,
and of matters of science and common knowledge, and referring to
scientific reports, the supreme court said:
"For present purposes, it need only be noted that oil in this
state is found under layers of rock in a sand or sandstone
formation termed lentille or 'lentil,' under pressure caused by the
presence of natural gas within the formation. The layers of rock
thus form a gas-tight dome or cover for the oil reserve. The oil
adheres in the interstices between the sand particles. The natural
gas may be in a free state at the top of the dome, but is also in
solution with the oil, thus increasing the fluidity of the oil and
the ease with which the oil is lifted with the gas in solution when
the pressure on the gas is released by drilling into the oil
'sand.' It is estimated that only from 10 to 25 percent of the
total amount of oil deposited in a reservoir is ultimately
recovered, depending on the natural characteristics of the
reservoir and the methods employed in utilizing the lifting power
of the gas. The importance of gas in the oil-producing industry has
therefore become a question of great concern to the industry itself
and to government, to the end that its
Page 284 U. S. 17
function may be fully utilized without waste. It fairly appears
on this application that, depending on its location in the oil
reservoir, the extent of the oil 'sand,' the degree of pressure
within the formation, the amount of oil in the 'sand,' the amount
of gas in solution with the oil, the porosity of the 'sand,' and
other considerations, each oil and gas well has a best mean gas and
oil ratio in the utilization of the lifting power of the gas and
the production of the greatest quantity of oil in proportion to the
amount of gas so utilized, and which may be computed as to each
individual well to a reasonable degree of certainty and be
regulated accordingly."
In view of these circumstances, the supreme court concluded that
it might be said that there was an "unreasonable waste" of gas
where it "has been allowed to come to the surface without its
lifting power having been utilized to produce the greatest quantity
of oil in proportion." It was such a waste of gas, the court said,
that the Legislature of California intended to prohibit. In support
of this conclusion, the court referred to the provisions of § 8d of
the statute. [
Footnote 3] These
provisions showed, in the opinion of the court, that the
legislature had "plainly adopted the standard so expressed," that
is
"that gas
Page 284 U. S. 18
may not be produced, under existing conditions where the
production thereof so greatly exceeds the market demand therefor,
in quantities exceeding a reasonable proportion to the amount of
oil produced."
And, in explanation of its reasons for considering such a
standard sufficiently definite, the court said that
"because of the many and varying conditions peculiar to each
reservoir and to each well, which will bear upon a determination of
what is a reasonable proportion of gas to the amount of oil
produced, it may be said that it would be impossible for the
legislature to frame a measure based on ratios or percentages or
definite proportions which would operate without discrimination,
and that what is a reasonable proportion of gas to the amount of
oil produced from each well or reservoir is a matter which may be
ascertained to a fair degree of certainty in each individual
case."
The statute is to be read with the construction placed upon it
by the state court.
Lindsley v. Natural Carbonic Gas Co.,
220 U. S. 61,
220 U. S. 73.
And, so read, we find no ground for concluding that the statute
should be regarded as invalid upon its face, merely by reason of
uncertainty, so as to deprive the superior court of jurisdiction to
consider the relevant questions of fact and to determine with
respect to a particular field whether or not there has been the
unreasonable waste of gas which the statute condemns.
Nash v.
United states, 229 U. S. 373,
229 U. S. 377;
Miller v. Strahl, 239 U. S. 426,
239 U. S. 434;
Omaechevarria v. Idaho, 246 U. S. 343,
246 U. S. 348;
Hygrade Provision Co. v. Sherman, 266 U.
S. 497,
266 U. S.
502.
The appellants make the further contention that the statute is
invalid because of the provisions of § 8b (
supra, p.
284 U. S. 10)
that "the blowing, release or escape of natural gas into the air
shall be
prima facie evidence of unreasonable waste." The
state, in the exercise of its general power
Page 284 U. S. 19
to prescribe rules of evidence, may provide that proof of a
particular fact, or of several facts taken collectively, shall be
prima facie evidence of another fact when there is some
rational connection between the fact proved and the ultimate fact
presumed. The legislative presumption is invalid when it is
entirely arbitrary, or creates an invidious discrimination, or
operates to deprive a party of a reasonable opportunity to present
the pertinent facts in his defense.
Mobile, J. & K.C. R.
Co. v. Turnipseed, 219 U. S. 35,
219 U. S. 43;
Bailey v. Alabama, 219 U. S. 219,
219 U. S. 238;
Lindsley v. Natural Carbonic Gas Co., supra, at pp.
220 U. S. 81-82;
Manley v. Georgia, 279 U. S. 1,
279 U. S. 5-6;
Western & Atlantic v. Henderson, 279 U.
S. 639,
279 U. S. 642.
In the present case, there is a manifest connection between the
fact proved and the fact presumed, and, under the construction
placed upon the statute by the state court, there appears to be no
deprivation of a full opportunity to present all the facts relating
to operations within the field.
The question remains whether the statutory scheme of regulation,
with the standard which it sets up under the construction of the
state court, is on its face beyond the power of the state. The
district court of appeal, in the instant case, approached this
question by considering the correlative rights, under the law of
California, of surface owners in the same field. The court
concluded that, under the law of California, "on account of the
self-propelling or migratory character of natural gas, as well as
oil," the owner of the surface did not have an absolute title to
the gas and oil beneath, and could acquire such a title only when
he had reduced these substances to possession. As justifying this
opinion, the court cited the case of
Acme Oil Co. v.
Williams, 140 Cal. 681, 74 P. 296, where the supreme court of
the state had said, with respect to oil, that it is
"of a fluctuating, uncertain, fugitive
Page 284 U. S. 20
nature, lies at unknown depths, and the quantity, extent, and
trend of its flow are uncertain. It requires but a small surface
area, in what is known as an oil district, upon which to commence
operations for its discovery. But when a well is developed, the oil
may be tributary to it for a long distance through the strata which
hold it. This flow is not inexhaustible, no certain control over it
can be exercised, and its actual possession can only be obtained,
as against others in the same field, engaged in the same
enterprise, by diligent and continuous pumping. It is anybody's
property who can acquire the surface right to bore for it, and when
the flow is penetrated, he who operates his well most diligently
obtains the greatest benefit, and this advantage is increased in
proportion as his neighbor similarly situated neglects his
opportunity."
And the supreme court of the state, in its decision dealing with
the statute in question, quoted this language and held that "the
same rule would apply to natural gas." 211 Cal. 93, 294 P. at
722.
It was with that understanding of the law of the state that the
district court of appeal considered the statute, taken as a whole,
as one regulating and adjusting the coexisting rights of the
surface owners in the same field, and accordingly sustained the
statute as a valid exercise of state power against the contentions
under the due process clause. The court said:
"It is the coexistence of these rights which authorizes the
state to make use of its legislative power. When the rights of one
impinge upon the rights of others, the state may interpose for the
purpose of adjusting and regulating the enjoyment of those
rights."
The district court of appeal apparently thought it doubtful
whether the state might restrict or regulate the production of oil
or gas "on the theory of the public's interest in their natural
resources," but deemed it unnecessary to
Page 284 U. S. 21
decide that question in the present case. That court explicitly
refused to accept the view that the statute "does not proceed upon
the theory of correlative rights, but only upon the policy of
conserving or preserving the common supply." And, replying to the
suggestion that the legislature was without authority to restrict
the production of oil, the district court of appeal concluded its
opinion with the statement that the record did not
"indicate that the temporary injunction was founded upon such a
theory. Nor are we determining that the act attempts to confer upon
the court any such power. Rather we are convinced that a proper
construction of the enactment confines the authority within the
limits of enjoining the production of gas when in excess of the
reasonable proportion to the oil for the particular field involved,
when not conveniently necessary for other than lifting
purposes."
While this was the basis of the decision of the district court
of appeal, the appellants insist that, in the subsequent decisions
upon the appeal from the injunction order of the superior court,
the supreme court of the state has taken a broader ground and has
upheld the statute as one designed to protect the public interest
in the conservation of natural resources. 211 Cal. 93, 294 P. at
722, 723. We do not understand, however, that the supreme court, in
taking that view, denied the operation of the statute as a
safeguard of the coexisting rights of surface owners. On the
contrary, the supreme court, in its second decision affirming the
injunction order of the superior court, summed up its conclusions
in these words (81 Cal. at p. 471; 297 P. at 537, 538):
"We reiterate that the legislation in question has lawfully
vested in the superior court the power to determine what wastage of
gas in the production of oil is reasonable or unreasonable.
Page 284 U. S. 22
Whether such wastage be reasonable or unreasonable is a question
of fact and should be determined in view of the necessity of one
land owner to make productive use of his parcel, in view of the
equal right of the adjoining owners not to be deprived of
correlative production from their parcels, and in view of the right
of the public to prevent the waste of that which cannot be
replaced."
If the statute be viewed as one regulating the exercise of the
correlative rights of surface owners with respect to a common
source of supply of oil and gas, the conclusion that the statute is
valid upon its face -- that is, considered apart from any attempted
application of it in administration which might violate
constitutional right -- is fully supported by the decisions of this
Court.
Ohio Oil Co. v. Indiana, 177 U.
S. 190,
177 U. S.
210-211;
Lindsley v. Natural Carbonic Gas Co.,
supra, at p.
220 U. S. 77;
Walls v. Midland Carbon Co., 254 U.
S. 300,
254 U. S. 323.
In that aspect, the statute unquestionably has a valid operation,
and it cannot be said that the superior court was without
jurisdiction to entertain the suit in which the injunction order
was granted. That was all that the district court of appeal
determined in the judgment now under review. It is not necessary to
go further and to deal with contentions not suitably raised by the
record before us. Constitutional questions are not to be dealt with
abstractly. Having jurisdiction of the suit, the superior court had
authority to take steps to protect the subject matter of the action
pending the trial on the merits. The injunction order stated that
to be its purpose. Upon the trial, all questions of fact and of law
relevant to the application and enforcement of the statute may be
raised, and every constitutional right which these appellants may
have in any aspect of the case as finally developed may be
appropriately asserted and determined in due course of
procedure.
Judgment affirmed.
[
Footnote 1]
These sections are as follows:
"See. 8b. The unreasonable waste of natural gas by the act,
omission, sufferance, or insistence of the lessor, lessee or
operator of any land containing oil or gas, or both, whether before
or after the removal of gasoline from such natural gas, is hereby
declared to be opposed to the public interest and is hereby
prohibited and declared to be unlawful. The blowing, release or
escape of natural gas into the air shall be
prima facie
evidence of unreasonable waste."
Stats.Cal.1929, c. 535, p. 927.
"Sec. 14b. Whenever it appears to the director of the department
of natural resources that the owners, lessors, lessees or operators
of any well or wells producing oil and gas or oil or gas are
causing or permitting an unreasonable waste of gas, he may
institute, or have proceedings instituted, in the name of the
people of the California, to enjoin such unreasonable waste of gas
regardless of whether proceedings have or have not been instituted
under section 8 hereof, and regardless of whether an order has or
has not been made therein. Such proceedings shall be instituted in
the superior court for the county in which the well or wells from
which the unreasonable waste of gas is occurring or any thereof are
situated. The owners, lessors, lessees or operators causing or
permitting an unreasonable waste of gas in the same oil or gas
field, although their properties and interests may be separately
owned and their unreasonable waste separate and distinct, may be
made parties to said action. In such suits, no restraining order
shall be issued
ex parte, but otherwise the procedure
shall be governed by the provisions of chapter three, title seven,
part two of the Code of Civil Procedure of the California and no
temporary or permanent injunction issued in such proceedings shall
be refused or dissolved or stayed pending appeal upon the giving of
any bond or undertaking, or otherwise."
Stats.Cal.1929, ch. 535, p. 930.
[
Footnote 2]
The injunction order sets forth
"that the evidence available to the Court at this time shows
that the unreasonable waste of natural gas in said field may be
substantially reduced and that the equities of all parties may be
fairly conserved by a preliminary injunction which will limit the
waste of gas by restricting the production thereof to a quantity
reasonably in excess of the present outlets for beneficial use
above ground, require the extraction of gasoline from the gas
produced in the field; that, accordingly for the purposes of this
order, and total gas outlets for all uses with a reasonable
tolerance to take care of fluctuating demands and the necessary
waste is taken at approximately two hundred eighty-five million
(285,000,000) cubic feet of gas each day, and the estimated
potential production of oil is taken at two hundred thirty-seven
thousand five hundred seventy-six (237,576) barrels each day
distributed among leases and other operating property units, as
shown in the schedule hereafter set out, and that sufficient cause
has been shown for the extraordinary relief of a preliminary
injunction pending the trial of the action on the merits, and the
entry of a final judgment herein;"
"It is Ordered and Decreed that the above named defendants . . .
be and they hereby are restrained and enjoined . . . until the
further order of this Court as follows:"
"1. From blowing, releasing or permitting any natural gas to
escape into the air from any well or wells in the Santa Fe Springs
Oil Field before the removal of the gasoline from such natural
gas."
"2. From operating any well producing natural gas in the Santa
Fe Springs Oil Field except while exercising a high degree of care
in the selection and adjustment of appliances and in the use
thereof for the purpose of keeping each producing well in its
'optimum gas-oil ratio' -- the term 'optimum gas-oil ratio' being
defined as the smallest number of cubic feet of gas which can be
produced with each barrel of oil from the same well at the same
time."
"3. From producing more net formation gas on the average day of
each seven (7) day period from any lease or other property unit
than is set forth in and 'Allowed Gas Production' column than that
shown for each operator in the accompanying schedule."
[
Footnote 3]
Section 8d relates to the procedure upon complaint of undue
waste, and the portion quoted by the supreme court of the state is
as follows:
"If it shall appear that gas is being produced from any oil well
or wells in quantities exceeding a reasonable proportion to the
amount of oil produced from the same well or wells, even though it
is shown that such excess gas is being used in the generation of
light, heat, power, or other industrial purpose and that there is
sufficient other gas available for such uses from other wells in
the same or other fields in which the gas produced is not in excess
of the amount which bears a reasonable proportion to the amount of
oil produced from such other wells and that there are adequate
gas-pipeline connections between such other wells and the place of
utilization of such gas the state oil and gas supervisor shall hold
that such excess production of gas is unreasonable waste thereof if
such holding will not cause an unreasonable waste of gas in any
other field."