Respondent, relying for federal jurisdiction on 28 U.S.C. §
1331(a), brought this action in District Court for the reasonable
value of helium beyond what petitioner had already paid respondent
for natural gas under the sales contract. The District Court
granted petitioner's motion to dismiss for lack of federal
jurisdiction. The Court of Appeals reversed on the basis of its
decision in
Northern Natural Gas Co. v. Grounds, 441 F.2d
704, a federal interpleader action, in which the court found that
the statutory provisions in the Helium Act Amendments of 1960 and
the Natural Cas Act do not apply to a sale of commingled helium as
a component of the natural gas stream, and that natural gas rates
authorized by the Federal Power Commission would thus not bar the
seller from recovering the reasonable value of the helium
constituent.
Held: Respondent's suit is, in effect, an action in
quantum meruit, whose source is state, and not federal, law. Under
the
Grounds decision, supra, those federal statutory
provisions do not create a federal right of recovery, but only
preclude interposition of a plea of payment to defeat a
quasi-contractual suit for the helium constituent, which
is insufficient to support federal jurisdiction under 28 U.S.C. §
1331(a).
Gully v. First National Bank, 299 U.
S. 109,
299 U. S.
113.
Certiorari granted; 481 F.2d 70, reversed.
PER CURIAM.
The respondent, Texaco, brought this action against the
petitioner, Phillips Petroleum Co., in the Northern District of
Oklahoma. The complaint asserted that Texaco had not been
compensated for the helium constituent of natural gas sold by
Texaco to Phillips. Texaco claimed it was entitled to the
reasonable value of this helium in addition to the sums already
paid by Phillips for the natural gas under the contract of
sale.
Page 415 U. S. 126
It is conceded that there is no diversity of citizenship between
the parties. Accordingly, Texaco relied, as the basis for federal
jurisdiction, on 28 U.S.C. § 1331(a), asserting that its claim
"[arose] under the Constitution, laws, or treaties of the United
States." Phillips moved to dismiss for want of federal jurisdiction
of the subject matter. The District Court granted this motion, and
Texaco appealed to the Court of Appeals for the Tenth Circuit,
which, by a divided vote, reversed the District Court's
determination that federal jurisdiction was lacking. Phillips seeks
certiorari to review the Tenth Circuit's decision, and contends
that past decisions of this Court make clear that Texaco's claim
cannot be said to "aris[e] under the Constitution, laws, or
treaties of the United States."
The substantive claim in this case is an outgrowth of an earlier
decision of the Tenth Circuit,
Northern Natural Gas Co. v.
Grounds, 441 F.2d 704 (1971). That was a federal interpleader
action in which the Court of Appeals held that lessee-producers of
natural gas could recover the reasonable value of helium contained
in the gas that they produced and sold to pipeline companies, which
later extracted and marketed the helium. The essence of the
Grounds decision was its rejection of the buyers'
contention that the contract price paid for the natural gas was
compensation for "the gas stream in its entirety and, absent an
express reservation, [that] the buyer gets the whole stream for
such purposes as it may determine." [
Footnote 1]
Id. at 720. The Court of Appeals
reasoned that, as a result of the Helium Act Amendments of 1960, 74
Stat. 922, which added § 11 (50 U.S.C. § 167i) to the Helium
Conservation Act, 43 Stat. 1110,
Page 415 U. S. 127
"the Natural Gas Act, and the FPC fixed service rates, do not
apply" to "[a] sale of the commingled helium as a component of the
[natural] gas stream." 441 F.2d at 721. Accordingly, the Court of
Appeals concluded that
"the reconciliation of the Natural Gas Act and of the 1960
amendments to the Helium Act . . . requires the conclusion that the
FPC service rates
do not apply to deny recovery for the
contained helium"
in the natural gas stream sold by the lessee-producers.
Id. at 723. (Emphasis added.) The court went on to hold
that the lessee-producers could therefore recover "the reasonable
value of the helium content of the processed gas."
Ibid.
Because of the presence of federal interpleader jurisdiction,
the court in
Grounds did not consider whether there
existed an independent basis for the exercise of federal
jurisdiction. Texaco contends that the Court of Appeals in
Grounds read the Natural Gas Act and § 11 of the Helium
Conservation Act together to imply a federal cause of action for
the recovery of the reasonable value of the helium constituent in
natural gas. On the other hand, Phillips' position is that
Grounds held only that the effect of these federal
statutory provisions is to preclude the defense of payment to a
quasi-contractual action brought for the recovery of the
reasonable value of the helium. Hence, Phillips argues that the
federal questions raised in the complaint are not part of Texaco's
claim, but are merely asserted in anticipation of a probable
defense by Phillips.
This Court has repeatedly held that, in order for a claim to
arise "under the Constitution, laws, or treaties of the United
States," "a right or immunity created by the Constitution or laws
of the United States must be an element, and an essential one, of
the plaintiff's cause of action."
Gully v. First National
Bank, 299 U. S. 109,
299 U. S. 112
(1936). The federal questions "must be disclosed upon the face of
the complaint, unaided by
Page 415 U. S. 128
the answer." Moreover,
"the complaint itself will not avail as a basis of jurisdiction
insofar as it goes beyond a statement of the plaintiff's cause of
action and anticipates or replies to a probable defense."
Gully, supra, at
299 U. S. 113.
See also Metcalf v. Watertown, 128 U.
S. 586 (1888);
Tennessee v. Union & Planters'
Bank, 152 U. S. 454
(1894);
Louisville & Nashville R. Co. v. Mottley,
211 U. S. 149
(1908);
Taylor v. Anderson, 234 U. S.
74 (1914);
Skelly Oil Co. v. Phillips Petroleum
Co., 339 U. S. 667
(1950).
The
Grounds case cannot properly be read as creating a
federal cause of action, deriving from the Natural Gas Act and § 11
of the Helium Conservation Act, for the recovery of the reasonable
value of helium contained in natural gas sold at rates sanctioned
by the Federal Power Commission. Indeed, in commenting on its
earlier
Grounds decision, the Court of Appeals in the
present case concluded that
"satisfactory utility regulation
does not permit a
utility rate to be used to obtain a commodity which is not within
the contemplation of that rate."
481 F.2d 70, 73. (Emphasis added.) In other words, the
Grounds case simply held that payment for natural gas at
rates established or permitted by the Commission under the
authority of the Natural Gas Act will not be regarded as payment
for the helium constituent, and cannot be asserted as a defense to
a suit for the recovery of the value of that helium. In short, the
federal statutory provisions do not, under
Grounds, create
a federal right of recovery, but only preclude the interposition of
a plea of payment to defeat a
quasi-contractual suit for
the value of the helium. [
Footnote
2]
Page 415 U. S. 129
Texaco's suit for the reasonable value of the helium is, in
effect, an action in
quantum meruit, whose source is state
law and not federal law.
Cf. Oneida Indian Nation v. County of
Oneida, 414 U. S. 661
(194). To the extent that the Natural Gas Act and the 1960 Helium
Act Amendments may bear on this action for the recovery of the
reasonable value of constituent helium in natural gas, it is clear
that their effect is no more than to overcome a potential defense
to the action. Under the settled precedent of our past decisions
noted above, it thus cannot be said that this suit "arises under
the Constitution, laws, or treaties of the United States."
Accordingly, there is no federal jurisdiction under 28 U.S.C. §
1331(a).
The petition for a writ of certiorari is granted, and the
judgment of the Court of Appeals is reversed.
MR. JUSTICE DOUGLAS and MR. JUSTICE BRENNAN dissent from the
summary disposition of this case without full briefing and oral
argument. They would grant the petition and set the case for oral
argument.
MR. JUSTICE WHITE took no part in the consideration or decision
of this case.
[
Footnote 1]
The price paid here was in accordance with rates sanctioned by
the Federal Power Commission, which has authority to establish such
rates under the Natural Gas Act of 1938, 52 Stat. 821, 15 U.S.C. §§
717-717w.
[
Footnote 2]
Texaco has not pointed to any language either in the Natural Gas
Act and the 1960 Helium Act Amendments or in the legislative
history of these enactments that could be read to create a federal
cause of action for the recovery of the reasonable value of the
helium under the circumstances of this case.