1. In Oklahoma, as generally elsewhere, the owners of the land
containing an oil and gas pool do not have absolute title to those
minerals as they permeate below the surface, but each has the
right, through wells on his own land, to take all the oil and gas
that he may be able to reduce to possession, including that coming
from the land of the others. P. 286 U. S.
2. This right, however, is constitutionally subject to
reasonable regulation by the state, to the end that the natural gas
pressure available for lifting the oil to the surface may not be
unreasonably and wastefully used, and that the common supply of gas
and oil may not be unreasonably and wastefully depleted to the
injury of the others who are entitled to take from the same pool.
3. Even though an operator have facilities for making useful
disposition of all the oil and gas that may naturally flow from his
wells, he has not a constitutional right to operate them at full
production where such operation, by improvident use of natural gas
pressure, would itself cause a serious diminution of the quantity
of oil ultimately to be recovered from the pool, and, by compelling
Page 286 U. S. 211
owners to speed production in self-defense, would cause them to
add to that waste and cause them to waste oil on the surface by
producing it in excess of their means of transport and proper
storage and their market demand. P. 286 U. S.
4. A statute of Oklahoma prohibits waste of petroleum. Section 3
defines waste to include, in addition to its ordinary meaning,
economic, underground and surface waste, and waste incident to
production in excess of transportation or marketing facilities or
reasonable market demands, and it empowers a Commission to make
regulations for the prevention of such waste. Section 4 provides
that, whenever full production from any common source of supply
"can only be had under conditions constituting waste as herein
defined," then any person having a right to produce from such
"may take therefrom only such proportion of all crude oil and
petroleum that may be produced therefrom, without waste, as the
production of the well or wells of such person . . . bears to the
total production of such common source of supply."
that, in this case, it is not shown that the rule
of proration prescribed in § 4, or any other provision involved,
amounts to or authorizes arbitrary interference with private
business or property rights or that such statutory rule is not
reasonably calculated to prevent the wastes specified in § 3. P.
286 U. S.
5. Section 2 of the statute, objected to as authorizing the
regulation of prices of crude oil, is separable from the parts
under which the order of proration, to prevent waste, was made in
this case, and its constitutionality need not be considered.
6. A declaration in a statute that invalidity of any part shall
not affect the validity of the other parts creates a presumption
that, eliminating invalid parts, the legislature would have enacted
the reminder. Id.
7. Proration orders applying to the production of oil but not to
sales or transportation held
consistent with the commerce
clause of the national Constitution. P. 286 U.S. 235
8. An order of the Oklahoma Corporation Commission prorating the
production of oil from a common source to prevent waste will not be
set aside at the suit of one of the producers when not shown to be
arbitrary or discriminatory in fact merely because information as
to production etc., upon which the Commission acted, was procured
by other producers in the same field, serving the Commission
without pay, and by an umpire whose salary and expenses, in default
of legislative appropriations, were paid by such producers. P.
286 U. S.
Page 286 U. S. 212
9. Since a proration order, though valid under the Oklahoma
statute at one time, may, through change of conditions, cease to be
so, and may become unjust and arbitrary at a later time, denial of
an injunction will not preclude the plaintiff from applying again
on a different state of facts. P. 286 U. S.
10. To warrant an injunction to restrain criminal proceedings
under a state statute as unconstitutionally affecting property
rights, there must be a present danger that such proceedings will
be taken. P. 286 U. S.
11. In a suit attacking the constitutionality of administrative
orders made under a state statute, held
that the federal
court had authority to stay their enforcement pending an appeal
from its order denying a temporary injunction. P. 286 U. S.
12. Section 9 of the Oklahoma statute, supra,
that any person violating the Act shall be subject to have his
producing property placed in the hands of a receiver by a court of
competent jurisdiction at the suit of the state through the
Attorney General, but that such receivership shall only extend to
the operating of producing wells and the marketing of the
production thereof under the provisions of the Act.
(1) That a proceeding under the section, taken in a state court
against the plaintiff in a pending suit in the federal court, was
properly restrained by the latter pending its final decision on the
validity of provisions of the statute and orders made under it. P.
286 U. S.
(2) The fact that the Attorney General dismissed the proceeding
brought, though not required to do so, did not establish that
prosecution under the section was no longer imminent. P.
286 U. S.
(3) The section, considered with other parts of the Act, is
plainly a penal provision. Id.
(4) As such, it is void under the due process clause of the
Fourteenth Amendment because it purports to punish violations of
regulatory provisions of the Act, §§ 1, 3, 4, (not orders of the
Commission) which are too vague and indefinite to afford a standard
of conduct. P. 286 U. S.
51 F.2d 823
affirmed with modifications.
Appeals in a suit brought by the Refining Company for the
purpose of enjoining the enforcement of certain provisions of the
Oklahoma "Curtailment Act," as to oil and gas, and of certain
orders made under it by the Corporation Commission. No. 122 was an
appeal from an order denying a temporary injunction. It is
dismissed. The other two branches were cross-appeals from different
parts of the final decree.
Page 286 U. S. 223
MR. JUSTICE BUTLER, delivered the opinion of the court.
The refining company by this suit seeks to enjoin the
Commission, Attorney General, and other state officers from
enforcing certain provisions of c. 25 of the Laws of Oklahoma
enacted February 11, 1915,** and certain orders of
Page 286 U. S. 224
the Commission on the ground that they are repugnant to the due
process and equal protection clauses of the Fourteenth Amendment
and the commerce clause. The District Court consisting of three
judges, 28 U.S.C. § 380, denied plaintiff's application for a
temporary injunction, and No. 122 is plaintiff's appeal from such
refusal. As final judgment has been entered, this appeal will be
dismissed. The final decree sustains certain regulatory
Page 286 U. S. 225
provisions of the Act, but declares invalid some of its penal
clauses. 51 F.2d
. No. 485 is plaintiff's appeal from the first-mentioned
portion of the decree, and No. 486 is defendants' appeal from the
The Act prohibits the production of petroleum in such a manner
or under such conditions as constitute waste.
Page 286 U. S. 226
§ 1. Section 3 defines waste to include, in addition to its
ordinary meaning, economic, underground, and surface waste and
waste incident to production in excess of transportation or
marketing facilities or reasonable market demands, and empowers the
Commission to make rules and regulations for the prevention of such
wastes. Whenever full production from any common source can only be
under conditions constituting waste, one having the right to
produce oil from such source may take only such proportion of all
that may be produced therefrom without waste as the production of
his wells bears to the total. The Commission is authorized to
regulate the taking of oil from common sources so as to prevent
unreasonable discrimination in favor of one source as against
others. § 4. Gauges are to be taken for the purpose of determining
production of wells. And the Commission is directed to promulgate
rules and regulations and to appoint such agents as may be
necessary to enforce the Act. § 5. Since the passage of the Act,
the Commission has from time to time made "proration orders."
The court made its findings, which, so far as need be given
here, are indicated below:
Plaintiff is engaged in Oklahoma in the business of producing
and refining crude oil and transporting and marketing it and its
products in intrastate and interstate commerce. It has oil and gas
leases in both the Greater Seminole and the Oklahoma City fields.
In each field, it has nine wells. It owns a refinery having a daily
capacity of 15,000 barrels of crude, and there produces gasoline
and other products. It has approximately 735 tank cars, operates
about 470 miles of pipeline, including adequate facilities for the
transportation of crude oil from the fields to its refinery, and
has about 256 wholesale and 263 retail gasoline stations in
Oklahoma and other states which are supplied from its refinery. At
the refinery, it has gas-tight
Page 286 U. S. 227
steel storage tanks with a total capacity of about 645,000
barrels. It does not use earthen storage or permit its crude to run
at large, or waste any oil produced at its wells. All that it can
produce will be utilized for commercial purposes. It also purchases
The Greater Seminole area covers a territory fifteen to twenty
by eight to ten miles, and has eight or more distinct pools in
formations which do not overlie each other. The first pool was
discovered in 1925, and by June 15, 1931, there were 2,141
producing wells having potential production of 564,908 barrels per
day. The wells are separately owned and operated by 80 lessees.
About three-fourths of them, owning wells with 40 percent of the
total potential capacity of the field, have no pipelines or
refineries, and are entirely dependent for an outlet for their
crude upon others who purchase and transport oil. Five companies,
owning wells with about 13 percent of the potential production,
have pipelines or refinery connections affording a partial outlet
for their production. Nineteen other companies own or control
pipelines extending into this area having a daily capacity of
468,200 barrels, and most of them from time to time purchase oil
from other producers in the field.
The Oklahoma City field, about 65 miles west of the Seminole, is
about six by three miles, and part of it has been divided into
small lots. All of plaintiff's leases are in that portion of the
field. Oil was discovered there in December, 1928, and is being
produced from four different formations more than 6,000 feet below
the surface. In some parts of the area, two or more overlie each
other, and at many points the wells penetrate all overlying
formations and are capable of producing from all of them. The field
is not yet fully developed. June 15, 1931, there were 746 producing
wells having an estimated potential of 2,987,993 barrels per day.
These wells are owned by 53 different lessees. Thirty-six of them
are wholly, and
Page 286 U. S. 228
eight are partially, nonintegrated; they operate wells having
about 90 percent of total potential production. The ten producing
companies control pipelines extending into this area with a
carrying capacity of only 316,000 barrels per day. Most of them
from time to time purchase oil from other producers there.
Crude oil and natural gas occur together or in close proximity
to each other, and the gas in a pool moves the contents toward the
point of least resistance. When wells are drilled into a pool, the
oil and gas move from place to place. If some of the wells are
permitted to produce a greater proportion of their capacity than
others, drainage occurs from the less active to the more active.
There is a heavy gas pressure in the Oklahoma City field. Where
proportional taking from the wells in flush pools is not enforced,
operators who do not have physical or market outlets are forced to
produce to capacity in order to prevent drainage to others having
adequate outlets. In Oklahoma prior to the passage of the Act,
large quantities of oil produced in excess of transportation
facilities or demand therefor were stored in surface tanks, and, by
reason of seepage, rain, fire, and evaporation, enormous waste
occurred. Uncontrolled flow of flush or semiflush wells for any
considerable period exhausts an excessive amount of pressure,
wastefully uses the gas, and greatly lessens ultimate recovery.
Appropriate utilization of gas energy is especially important in
the Oklahoma City field, where, because of the great depth of the
wells, the cost of artificially recovering the oil would be very
The first of the present series of proration orders took effect
August 1, 1927, and applied to the then flush and semiflush pools
in the Seminole. Similar orders have been in effect almost
continuously since that time. Soon after the discovery of oil in
the Oklahoma City field, production exceeded market demand there.
The first proration order applicable in that field took effect
Page 286 U. S. 229
1929. Such orders usually covered short terms because of rapidly
changing potential production and market demand from each of the
All the proration orders attacked by plaintiff were made
pursuant to §§ 1, 3, 4, 5, and 6 of the Act. Each, and the findings
that it contained, were made after notice to all interested persons
and were based upon evidence adduced at the hearings. The
allegations of the complaint that the orders were made by the
Commission without having heard the testimony of witnesses under
oath or any legal evidence were not sustained before the court.
The Commission construes the Act as intended to empower it to
limit production to the amount of the reasonable daily market
demand and to require ratable production by all taking from the
common source. In current orders, it has found that waste of oil
will result in the prorated areas unless production is limited to
such demand. In order No. 5189, June 30, 1930, it found that the
potential production in the United States was approximately
4,730,000 barrels per day, and that imports amounted to about
300,000 barrels, creating a supply of over 5,000,000 barrels as
against an estimated domestic and export demand of 2,800,000
barrels. And it found that the existing stocks of crude in storage
exceeded the needs of the industry, and that purchasers were
unwilling to buy in Oklahoma for storage in any amount sufficient
to take the surplus of potential production in that state. Similar
findings are contained in the Commission's subsequent orders.
Based on findings of the daily potential of the Oklahoma City
field and the amount of the market outlet for oil there -- that is,
the amount that could be produced without waste as defined by the
Act -- plaintiff at the time of the trial was limited by the
proration orders to about 6 percent of the total production of its
wells in that field. And the orders also operated to restrict
Page 286 U. S. 230
to much less than the potential production of its nine wells in
the Seminole pools.
The court found that, at all times covered by orders involved,
there was a serious potential overproduction throughout the United
States, and particularly in the flush and semiflush pools in the
Seminole and Oklahoma City fields; that, if no curtailment were
applied, crude oil for lack of market demand and adequate storage
tanks would inevitably go into earthen storage and be wasted; that
the full potential production exceeded all transportation and
marketing facilities and market demands; that, accordingly, it was
necessary, in order to prevent waste, that production of flush and
semiflush pools should be restricted as directed by the proration
orders, and that, to enforce such curtailment with equity and
justice to the several producers in each pool, it was necessary to
enforce proportional taking from each well and lease therein, and
that, upon the testimony of operators and others, a comprehensive
plan of curtailment and proration conforming to the rules
prescribed in the Act was adopted by the Commission and was set
forth in its orders.
The Commission, acting under § 5 of the Act and with the consent
of the Governor of the state, appointed one Collins as its umpire
and agent, and constituted certain producers in each pool an
operating committee to assist him in administering the prescribed
rules and regulations. Later, one Bradford was appointed assistant
umpire and agent. He spent all his time in the Oklahoma City field,
leaving Collins to serve in the other prorated areas. They
supervised the taking of gauges, ascertained daily production of
prorated wells, checked the same against quantities transported,
and kept complete records, to the end that wells in each pool
should be operated in accordance with the Commission's rules and
that violations be detected and reported. No appropriation had been
made for the payment of umpires or agents. The Commission did not
Page 286 U. S. 231
sufficient regular help for the administration of the proration
orders. Members of operators' committees served without pay.
Collins' salary and expenses have been paid by voluntary
contributions of certain producers in the Seminole field, and
Bradford's by voluntary contribution of producers in the Oklahoma
City field. In each field, a great majority of the producers joined
to raise such funds, and contributions were prorated on the basis
of production. This method of paying for such help has been
followed since 1927, and at all times has been known to the
Commission, the Governor, and the public. In that period, there
have been two sessions of the legislature, and it has not forbidden
the practice or provided funds to pay for the work. Neither the
umpire nor the members of the committee are public officers; they
are mere agents or employees of the Commission. The evidence does
not establish that they have been guilty of favoritism or
dishonesty, or that the Commission has acted arbitrarily or
discriminated in favor of the groups paying such agents, or that
the plaintiff has suffered any injury by reason thereof.
The Commission has not discriminated against the Oklahoma City
field or any other prorated area, nor in favor of the Seminole. The
relation between potential production of each pool and the amount
of crude oil that, without waste, could be produced therefrom was
not the same in all prorated pools, and therefore the applicable
percentages of curtailment varied. The same pipelines and
purchasers did not serve or take oil from all the pools, and, in
some the reasonable market demand was greater in proportion to
potential production than in others. Some were prorated longer and
had purchasers whose facilities do not extend to others. When oil
was discovered in the Oklahoma City field, the pools in the
Seminole area were quite fully developed, and some had passed flush
production. The latter is a more favored location
Page 286 U. S. 232
in respect of trunk pipelines and has a larger market demand,
although the daily production of the former is greater. The
constant bringing in of new wells in the Oklahoma City field has
resulted in a continuous and rapid increase in the potential
production of that field, whereas market demand for oil there has
increased very slowly.
None of the Commission's orders has been made for the purpose of
fixing the price of crude oil, or has had that effect. When the
first order was made, the price was more than two dollars per
barrel, but it declined until, at the time of the trial, it was
only thirty-five cents. In each case, the Commission has allowed to
be produced the full amount of the market demand for each pool. It
has never entered any order under § 2 of the Act.
It was not shown that the Commission intended to limit the
amount of oil entering interstate commerce for the purpose of
controlling the price of crude oil or its products, or of
eliminating plaintiff or any producer or refiner from competition,
or that there was any combination among plaintiff's competitors for
the purpose of restricting interstate commerce in crude oil or its
products or that any operators' committee made up of plaintiff's
competitors formulated the proration orders.
The evidence before the trial court undoubtedly sustains the
findings above referred to, and they are adopted here.
1. Plaintiff here insists that the Act is repugnant to the due
process and equal protection clauses of the Fourteenth
We need not consider its suggestion that the business of
production and sale of crude oil is not a public service, and that
it does not devote its property to the public use. The proration
orders do not purport to have been made, and in fact were not made,
in respect of services or charges
Page 286 U. S. 233
of any calling so affected with a public interest as to be
subject to regulation as to rates or prices.
Plaintiff insists that it has a vested right to drill wells upon
the lands covered by its leases and to take all the natural flow of
oil and gas therefrom, so long as it does so without physical waste
and devotes the production to commercial uses. But if plaintiff
should take all the flow of its wells, there would inevitably
result great physical waste even if its entire production should be
devoted to useful purposes. The improvident use of natural gas
pressure inevitably attending such operations would cause great
diminution in the quantity of crude oil ultimately to be recovered
from the pool. Other lessees and owners of land above the pool
would be compelled, for self-protection against plaintiff's taking,
also to draw from the common source, and so to add to the wasteful
use of lifting pressure. And, because of the lack, especially on
the part of the nonintegrated operators, of means of transportation
or appropriate storage and of market demand, the contest would, as
is made plain by the evidence and findings, result in surface waste
of large quantities of crude oil.
In Oklahoma, as generally elsewhere, landowners do not have
absolute title to the gas and oil that may permeate below the
surface. These minerals, differing from solids in place such as
coal and iron, are fugacious, and of uncertain movement within the
limits of the pool. Every person has the right to drill wells on
his own land and take from the pools below all the gas and oil that
he may be able to reduce to possession, including that coming from
land belonging to others, but the right to take and thus to acquire
ownership is subject to the reasonable exertion of the power of the
state to prevent unnecessary loss, destruction, or waste. And that
power extends to the taker's unreasonable and wasteful use of
Page 286 U. S. 234
pressure available for lifting the oil to the surface, and the
unreasonable and wasteful depletion of a common supply of gas and
oil to the injury to others entitled to resort to and take from the
same pool. Ohio Oil Co. v. Indiana, 177 U.
; Lindsley v. Natural Carbonic Gas Co.,
220 U. S. 61
220 U. S. 77
Bandini Co. v. Superior Court, 284 U. S.
; Brown v. Spilman, 155 U.
, 155 U. S. 669
Walls v. Midland Carbon Co., 254 U.
, 254 U. S. 323
Rich v. Doneghey,
71 Okl. 204, 177 P. 86; People v.
Associated Oil Co.,
211 Cal. 93, 100 et seq.,
It is not shown that the rule for proration prescribed in § 4 or
any other provision here involved amounts to or authorizes
arbitrary interference with private business or plaintiff's
property rights, or that such statutory rule is not reasonably
calculated to prevent the wastes specified in § 3.
We put aside plaintiff's contentions resting upon the claim that
§ 2 or § 3 authorizes or contemplates directly or indirectly
regulation of prices of crude oil. The Commission has never made an
order under § 2. The court found that none of the proration orders
here involved were made for the purpose of fixing prices. The fact
that the Commission never limited production below market demand
and the great and long continued downward trend of prices
contemporaneously with the enforcement of proration strongly
support the finding that the orders assailed have not had that
effect. And if § 2 were to be held unconstitutional, the provisions
on which the orders rest would remain in force. The
unconstitutionality of a part of an Act does not necessarily defeat
or affect the validity of its remaining provisions. Unless it is
evident that the legislature would not have enacted those
provisions which are within its power independently of that which
is not, the invalid part may be dropped if what is left is fully
operative as a law. Connolly v. Union Sewer Pipe Co.,
184 U. S. 540
184 U. S. 565
Pollock v. Farmers' Loan
Page 286 U. S. 235
Trust Co., 158 U. S. 601
158 U. S. 635
Reagan v. Farmers' Loan & Trust Co., 154 U.
, 154 U. S.
-396; Field v. Clark, 143 U.
, 143 U. S.
-696, allowed to be produced the full amount of the
that the invalidity of any part of the Act shall not in any manner
affect the remaining portions. That discloses an intention to make
the Act divisible, and creates a presumption that, eliminating
invalid parts, the legislature would have been satisfied with what
remained, and that the scheme of regulation derivable from the
other provisions would have been enacted without regard to § 2.
Williams v. Standard Oil Co., 278 U.
, 278 U. S. 242
Crowell v. Benson, 285 U. S. 22
Utah Power & Light Co. v. Pfost, ante,
p. 286 U. S. 165
orders involved here were made under other sections which provide a
complete scheme for carrying into effect, through action of the
Commission, the general rules laid down in §§ 3 and 4 for the
prevention of waste. See Julian Oil & Royalties Co. v.
145 Okl. 237, 243, 292 P. 841. The validity of § 2
need not be considered.
2. Plaintiff contends that the Act and proration orders operate
to burden interstate commerce in crude oil and its products in
violation of the commerce clause. It is clear that the regulations
prescribed and authorized by the Act and the proration established
by the Commission apply only to production, and not to sales or
transportation of crude oil or its products. Such production is
essentially a mining operation, and therefore is not a part of
interstate commerce, even though the product obtained is intended
to be and in fact is immediately shipped in such commerce.
Oliver Iron Co. v. Lord, 262 U. S. 172
262 U. S. 178
Hope Gas Co. v. Hall, 274 U. S. 284
274 U. S. 288
Foster-Fountain Packing Co. v. Haydel, 278 U. S.
, 278 U. S. 10
Utah Power & Light Co. v. Pfost, supra.
of the commerce clause is shown.
3. Plaintiff assails the proration orders as unauthorized,
lacking basis in fact, and arbitrary. But it failed to show that
the orders were not based upon just and reasonable
Page 286 U. S. 236
determinations of the governing facts -- namely, that proportion
of all crude oil, which may be produced from a common source
without waste, that the production of plaintiff's wells bears to
the total production from such source. Gauges were taken to
determine the potential production of each well under rules and
regulations prescribed by the Commission and not shown to be
inappropriate or liable to produce arbitrary or discriminatory
results. It does not appear that the agents -- umpires and
committees -- employed by the Commission with the consent of the
Governor to enforce the provisions of the Act did more than to make
investigations necessary to secure for the Commission data required
to make the proration directed by § 4, or that they acted otherwise
than as faithful subordinates. Plaintiff has not shown that any act
or omission of these agents subjected it to any disadvantage, or
that the prorations were arbitrary or discriminatory in any
respect. Obviously the Commission, without agents and employees,
could not make or enforce proration as directed by the Act. The
plaintiff is not entitled to have the Commission's orders set at
naught and the purposes of the Act thwarted merely because, in the
absence of legislative appropriations therefor, the salaries and
expenses of agents or employees were paid out of funds raised by
operators interested in having proration established under the
Proration, required to prevent waste defined in § 3 and to give
effect to the rule prescribed by § 4, changes according to
conditions existing from time to time, and percentages valid at one
time may be inapplicable, unjust, and arbitrary at another.
Bluefield Co. v. Public Service Comm'n, 262 U.
, 262 U. S. 693
Knoxville v. Water Co., 212 U. S. 1
212 U. S. 19
plaintiff has failed to prove that any order in force at the time
of the trial was not in accordance with the rule prescribed by § 4
or otherwise invalid, the part of the decree from which it appealed
will be affirmed. But
Page 286 U. S. 237
such affirmance will not prevent it in an appropriate suit, a
different state of facts being shown to exist, from having an
injunction to restrain the enforcement of any order proved to be
not authorized by the Act or unjust and arbitrary and to operate to
plaintiff's prejudice. Cf. Euclid v. Ambler Co.,
272 U. S. 365
272 U. S.
This is defendant's appeal from that part of the final decree
that declares that §§ 8 and 9 are not valid and enjoins the
Attorney General and county attorney from enforcing them. In its
conclusions of law, the court below declares that these sections in
terms impose penalties for violation of the Act, and not for
violation of the orders of the Commission; that §§ 1, 3, 4, 5, and
6 are too indefinite and uncertain to warrant the imposition of the
prescribed penalties, and that therefore both sections are invalid.
The opinion points out that the Act is a penal statute and also a
regulatory measure to be supplemented by rules, regulations, and
orders of the Commission. It suggests that an operator or producer
of oil from a common pool should not be required, at the peril of
severe penalties, to determine whether, in the operation of his oil
well, he is committing "economic waste" or producing in excess of
the "reasonable market demands," because these terms are not
defined in the Act and are of uncertain and doubtful meaning.
1. Defendants insist that no question concerning the validity of
§ 8 was before the court.
We do not find any direct or definite allegation in the record
that defendants have threatened or are about to cause plaintiff to
be prosecuted under § 8. The court found that no prosecution had
been commenced against plaintiff, its officers, or employees, under
that section. There is no finding, or evidence sufficient to
require one, that any such prosecution was imminent or
Page 286 U. S. 238
And the opinion states, in substance, that § 9 was the only
provision of the Act as a penal statute that was before the
Equity jurisdiction will be exercised to enjoin the threatened
enforcement of a state law which contravenes the Federal
Constitution whenever it is essential in order effectually to
protect property rights and the rights of persons against injuries
otherwise irremediable, and in such a case, a person who, as an
officer of the state, is clothed with the duty of enforcing its
laws and who threatens and is about to commence proceedings, either
civil or criminal, to enforce such a law against parties affected
may be enjoined from such action by a federal court of equity.
Terrace v. Thompson, 263 U. S. 197
263 U. S. 214
and cases cited. The burden was upon plaintiff seeking to invoke
that rule definitely to show that, in order to protect its property
rights, it was necessary to restrain defendants from enforcing § 8.
Indeed, the record before us indicates that plaintiff did not show
that its rights were directly affected by any danger of prosecution
under § 8, and therefore had no standing to invoke equity
jurisdiction against its enforcement. Oliver Iron Co. v. Lord,
supra, 262 U. S.
-181; Massachusetts v. Mellon, 262 U.
, 262 U. S. 488
Aetna Insurance Co. v. Hyde, 275 U.
, 275 U. S. 446
Undoubtedly § 8, if invalid, may be severed from
other parts of the Act without affecting the provisions under which
the prorations were made. Ohio Tax Cases, 232 U.
, 232 U. S. 594
It follows that the lower court erred in passing upon the validity
of that section, and the decree will be modified to declare that no
question as to § 8 was before the court.
2. Defendants also maintain that no question as to the validity
of § 9 was before the court.
The record shows that, plaintiff having taken crude oil in
excess of the quantities allowed by the orders, the Attorney
Page 286 U. S. 239
General, May 28, 1931, brought suit under § 9 in a state court
to have a receiver appointed for its wells. And he procured that
court to issue a temporary injunction restraining plaintiff from
producing oil or violating the Act or proration orders pending the
appointment of a receiver. On the next day, plaintiff filed an
amended and supplemental bill applying for a stay of enforcement of
the proration orders pending the determination of the appeal, No.
122, to this Court.
June 13, the lower court, upon plaintiff's application and
affidavits submitted by the parties, found that plaintiff would
suffer irreparable loss and injury unless the stay be granted. And
it entered an order restraining the Commission from instituting
proceedings under § 6 of the Act; restraining the Attorney General
and county attorney from prosecuting under § 9 receivership
proceedings against plaintiff; allowing plaintiff, on conditions
which need not be stated here, to produce up to 10,000 barrels
daily, and requiring the Attorney General immediately to have the
state court injunction dissolved.
It is clear, if § 9 is invalid, that the enforcement of its
provisions pending the trial of this case would, as plaintiff
claimed and the lower court found, have inflicted irreparable loss
and damage upon the plaintiff. Defendants do not show or claim that
the evidence does not establish that finding. The lower court had
authority to stay the enforcement of the assailed orders pending
the determination of plaintiff's appeal from the denial of its
motion for temporary injunction. Hovey v. McDonald,
109 U. S. 150
109 U. S. 161
Cotting v. Kansas City Stock-Yards Co.,
82 F. 839, 857;
Cumberland Tel. Co. v. Pub. Serv. Comm'n, 260 U.
; Virginian Ry. Co. v. United States,
272 U. S. 658
272 U. S. 669
The jurisdiction of the court was properly invoked
to determine whether plaintiff was entitled to protection against
the shutting down
Page 286 U. S. 240
and seizure of its wells and the sale of its oil pending the
federal court's final decision.
The Attorney General, though not required so to do, dismissed
the suit in the state court, and here insists that, as no
proceeding for a receiver was pending, the court erred in
construing or passing on the validity of § 9. But, when regard is
had to the facts and circumstances, it is clear that such dismissal
did not require that court to hold that thereby the purpose of the
Attorney General and county attorney had changed, or that
prosecution under the section was no longer imminent. The court was
therefore properly called upon to pass upon its validity.
3. Section 9 provides:
"That, in addition to any penalty imposed under the preceding
section, any person, firm, or corporation violating the provisions
of this act shall be subject to have his or its producing property
placed in the hands of a receiver by a court of competent
jurisdiction at the suit of the state through the Attorney General,
or any county attorney, but such receivership shall only extend to
the operating of producing wells and the marketing of the
production thereof under the provisions of this act."
The language used applies to violations of the Act, and does not
extend to violations of orders of the Commission. It is plain, and
leaves no room for construction. A direct and unambiguous
expression would be required to warrant an inference that the state
legislature intended to authorize the seizure of producers' wells
and the sale of their oil for a mere violation of an order.
The context and language used unmistakably show that the section
imposes a penalty, and is not a measure in the nature of, or in aid
of remedy by, injunction to prevent future violations. By § 6, the
Commission, which in respect of such matters is a court of record
(state constitution, Art. IX, § 19), is empowered to punish as for
contempt violation of the Commission's orders by fines up to $500
per day during continuance of such violation.
Page 286 U. S. 241
Sections 3498, 3499, C.O.S.1921; Planters' Cotton &
Ginning Co. v. West Bros.,
82 Okl. 145, 147, 198 P. 855. And §
8 declares that, "in addition to any penalty" that may be imposed
by the Commission for contempt, one directly or indirectly
"violating the provisions of this act" shall be guilty of a
misdemeanor, and be punished by fine or imprisonment. And,
similarly, the liability under § 9 is for "violating the provisions
of this act," and is "in addition to any penalty" imposed by § 8.
Both deal with an act already committed. Moreover, liability under
§ 9 is not limited to seizure and operation of the offender's
wells, but extends to the marketing of his oil. Absolute liability
arises from a single transgression, and prosecution therefor may be
had after all occasion for restraint of production has ceased.
There is nothing in the Act by which the duration of the
receivership may be determined. An owner whose wells are so seized
may not, as of right, have production reduced or withheld to await
a better demand or have any voice as to quantities to be produced,
or continue to have his oil transported by means of his own
pipelines or other facilities, or have it sent to his own refinery
or delivered in fulfillment of his contracts. Plainly such a taking
deprives the owner of property without compensation, even if the
moneys received for oil sold less expenses are accounted for by the
receiver. The suit is prosecuted by the state to redress a public
wrong denounced as crime. The provisions of § 9 are not consistent
with any purpose other than to inflict punishment for violation of
the Act, and they must be deemed as intended to impose additional
penalties upon offenders having oil producing wells. Boyd v.
United States, 116 U. S. 616
116 U. S. 634
United States v. Reisinger, 128 U.
, 128 U. S. 402
Huntington v. Attrill, 146 U. S. 657
146 U. S.
As § 9 declares that one "violating the provisions of this act
shall be subject" to the prescribed penalties, it is necessary to
refer to the regulatory provisions here involved.
Page 286 U. S. 242
Section 1 prohibits "production of crude oil . . . in such
manner and under such conditions as to constitute waste." Section 3
declares that, "in addition to its ordinary meaning," "waste" shall
"economic waste, underground waste, surface waste, and waste
incident to the production of crude oil or petroleum in excess of
transportation or marketing facilities or reasonable market
Section 4 provides that, whenever full production from any
common source can only be obtained "under conditions constituting
waste," then one having the right to produce from such source may
take therefrom only such proportion "that may be produced
therefrom, without waste, as to the production of the well or
wells" of such taker "bears to the total production of such common
source of supply."
There is nothing to support defendants' suggestion that the
regulatory provisions of the Act do not become operative until the
Commission has defined permissible production. As shown above, § 9
does not cover violations of orders of the Commission. The validity
of its provisions must be tested on the basis of the terms
employed. In Connally v. General Construction Co.,
269 U. S. 385
269 U. S. 391
this Court has laid down the rule that governs here:
"That the terms of a penal statute creating a new offense must
be sufficiently explicit to inform those who are subject to it what
conduct on their part will render them liable to its penalties is a
well recognized requirement, consonant alike with ordinary notions
of fair play and the settled rules of law, and a statute which
either forbids or requires the doing of an act in terms so vague
that men of common intelligence must necessarily guess at its
meaning and differ as to its application violates the first
essential of due process of law."
The general expressions employed here are not known to the
common law or shown to have any meaning in the
Page 286 U. S. 243
oil industry sufficiently definite to enable those familiar with
the operation of oil wells to apply them with any reasonable degree
of certainty. The meaning of the word "waste" necessarily depends
upon many factors subject to frequent changes. No act or definite
course of conduct is specified as controlling, and, upon the trial
of one charged with committing waste in violation of the Act, the
court could not foresee or prescribe the scope of the inquiry that
reasonably might have a bearing or be necessary in determining
whether, in fact there had been waste. It is no more definite than
would be a mere command that wells shall not be operated in any way
that is detrimental to the public interest in respect of the
production of crude oil. And the ascertainment of the facts
necessary for the application of the rule of proportionate
production laid down in § 4 would require regular gauging of all
producing wells in each field -- a work far beyond anything that
reasonably may be required of a producer in order to determine
whether, in the operation of his wells, he is committing an offense
against the Act.
In the light of our decisions, it appears upon a mere inspection
that these general words and phrases are so vague and indefinite
that any penalty prescribed for their violation constitutes a
denial of due process of law. It is not the penalty itself that is
invalid, but the exaction of obedience to a rule or standard that
is so vague and indefinite as to be really no rule or standard at
all. United States v. L. Cohen Grocery, 255 U. S.
, 255 U. S. 89
Small Co. v. Am. Sugar Rfg. Co., 267 U.
, 267 U. S. 239
Connally v. General Construction Co., supra; Cline v. Frink
Dairy Co., 274 U. S. 445
274 U. S. 454
Smith v. Cahoon, 283 U. S. 553
283 U. S.
No. 122, dismissed
No. 485, affirmed
No. 486, modified and, as modified, affirmed.
* Together with No. 485, Champlin Refining Co. v.
Corporation Commission of Oklahoma et al.,
and No. 486,
Corporation Commission of Oklahoma et al. v. Champlin Refining
** C.O.S. 1921, §§ 7954-7963.
"§ 1. That the production of crude oil or petroleum in the
Oklahoma, in such manner and under such conditions as to constitute
waste, is hereby prohibited. [§ 7954.]"
"§ 2. That the taking of crude oil or petroleum from any
oil-bearing sand or sands in the Oklahoma at a time when there is
not a market demand therefor at the well at a price equivalent to
the actual value of such crude oil or petroleum is hereby
prohibited, and the actual value of such crude oil or petroleum at
any time shall be the average value as near as may be ascertained
in the United states at retail of the byproducts of such crude oil
or petroleum when refined less the cost and a reasonable profit in
the business of transporting, refining and marketing the same, and
the Corporation Commission of this state is hereby invested
] with the authority and power to investigate and
determine from time to time the actual value of such crude oil or
petroleum by the standard herein provided, and when so determined
said Commission shall promulgate its findings by its orders duly
made and recorded, and publish the same in some newspaper of
general circulation in the state. [§ 7955.]"
"§ 3. That the term 'waste' as used herein, in addition to its
ordinary meaning, shall include economic waste, underground waste,
surface waste, and waste incident to the production of crude oil or
petroleum in excess of transportation or marketing facilities or
reasonable market demands. The Corporation Commission shall have
authority to make rules and regulations for the prevention of such
wastes, and for the protection of all fresh water strata, and oil
and gas bearing strata, encountered in any well drilled for oil. [§
"§ 4. That, whenever the full production from any common source
of supply of crude oil or petroleum in this state can only be
obtained under conditions constituting waste as herein defined,
then any person, firm, or corporation, having the right to drill
into and produce oil from any such common source of supply, may
take therefrom only such proportion of all crude oil and petroleum
that may be produced therefrom, without waste, as the production of
the well or wells of any such person, firm or corporation, bears to
the total production of such common source of supply. The
Corporation Commission is authorized to so regulate the taking of
crude oil or petroleum from any or all such common sources of
supply, within the State of Oklahoma, as to prevent the inequitable
or unfair taking, from a common source of supply, of such crude oil
or petroleum, by any person, firm, or corporation, and to prevent
unreasonable discrimination in favor of any one such common source
of supply as against another. [§ 7957.]"
"§ 5. That, for the purpose of determining such production, a
gauge of each well shall be taken under rules and regulations to be
prescribed by the Corporation Commission, and said Commission is
authorized and directed to make and promulgate, by proper order,
such other rules and regulations, and to employ or appoint such
agents with the consent of the Governor, as may be necessary to
enforce this act. [§ 7958.]"
"§ 6. That any person, firm, or corporation, or the Attorney
General on behalf of the state, may institute proceedings before
the Corporation Commission, or apply for a hearing before said
Commission, upon any question relating to the enforcement of this
act, and jurisdiction is hereby conferred upon said Commission to
hear and determine the same. Said Commission shall set a time and
place, when and where such hearing shall be had and give reasonable
notice thereof to all persons or classes interested therein, by
publication in some newspaper or newspapers having general
circulation in the state, and, in addition thereto, shall cause
reasonable notice in writing to be served personally on any person,
firm, or corporation complained against. In the exercise and
enforcement of such jurisdiction, said Commission is authorized to
determine any question or fact arising hereunder, and to summon
witnesses, make ancillary orders, and use mesne and final process,
including inspection and punishment as for contempt, analogous to
proceedings under its control over public service corporations, as
now provided by law. [§ 7959.]"
"§ 7. That appellate jurisdiction is hereby conferred upon the
Supreme Court in this state to review the action of said Commission
in making any order, or orders, under this act. Such appeal may be
taken by any person, firm, or corporation, shown by the record to
be interested therein, in the same manner and time as appeals are
allowed by law from other orders of the Corporation Commission.
Said orders so appealed from shall not be superseded by the mere
fact of such appeal's being taken, but shall be and remain in full
force and effect until legally suspended or set aside by the
Supreme Court. [§ 7960.]"
"§ 8. That, in addition to any penalty that may be imposed by
the Corporation Commission for contempt, any person, firm, or
corporation, or any officer, agent or employee thereof, directly or
indirectly violating the provisions of this act shall be guilty of
a misdemeanor, and, upon conviction thereof in a court of competent
jurisdiction, shall be punished by a fine in any sum not to exceed
five thousand dollars ($5,000.00), or by imprisonment in the county
jail not to exceed thirty (30) days, or by both fine and
imprisonment. [§ 7961.]"
"§ 9. That, in addition to any penalty imposed under the
preceding section, any person, firm, or corporation violating the
provisions of producing property be subject to have his or its
producing property placed in the hands of a receiver by a court of
competent jurisdiction at the suit of the state through the
Attorney General, or any county attorney, but such receivership
shall only extend to the operating of producing wells and the
marketing of the production thereof under the provisions of this
act. [§ 7962.]"
"§ 10. That the invalidity of any section, sub-division, clause,
or sentence of this act shall not in any manner effect
] the validity of the remaining portion thereof. [§