Commerce Oil Refining Corp. v. Miner, 5475.

• Decision Date: 16 June 1960
• Docket Number: No. 5475.,5475.
• Citation: 281 F.2d 465
• Parties: COMMERCE OIL REFINING CORP., Plaintiff, Appellant, v. William W. MINER et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

281 F.2d 465 (1960)

COMMERCE OIL REFINING CORP., Plaintiff, Appellant, v. William W. MINER et al., Defendants, Appellees.

No. 5475.

United States Court of Appeals First Circuit.

June 16, 1960.

Andrew P. Quinn, Providence, R. I., and Stephen P. Duggan, Jr., New York City, with whom Daniel J. Murray, A. Peter Quinn, Jr., Providence, R. I., Richard Hawkins, William J. Manning, Donald Oresman, New York City, Letts & Quinn, Providence, R. I., and Simpson, Thacher & Bartlett, New York City, were on brief, for appellant.

Salvatore L. Virgadamo, Newport, R. I., with whom Cornelius C. Moore, Newport, R. I., James A. Higgins, Providence, R. I., Francis J. Boyle, Newport, R. I., William C. Dorgan and Charles H. Drummey, Providence, R. I., were on brief, for appellees.

Roberts & Coffey, Dennis J. Roberts, Providence, R. I., amicus curiae for Town of Jamestown, Rhode Island.

Before WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit Judges.

WOODBURY, Chief Judge.

Commerce Oil Refining Corporation, Commerce hereinafter, a Delaware corporation, filed a complaint in two counts. in the court below against seventeen named defendants, all citizens of Rhode Island, as individuals, and nine of them as officers and directors of the Jamestown Protective Association. Commerce alleged in its first count that it had a license from the Town of Jamestown to erect and operate an oil refinery in an area of the town zoned for such use and that the defendants "unlawfully combined and conspired to harass, delay and prevent plaintiff from exercising its right to construct and operate" its refinery and that to effectuate their "unlawful combination and conspiracy" the defendants "formed and used an organization designated as Jamestown Protective Association as part of said unlawful combination and conspiracy." On this count the plaintiff asked that the defendants be enjoined from harassing the plaintiff by suit in the court below or in any Rhode Island court or by any other means and for an award of damages against each defendant in the amount of $500,000 plus costs and exemplary or punitive damages. In its second count, repeating the allegations of count one, the plaintiff asserted a cause of action under the Sherman Anti-Trust Act, as amended, 15 U.S.C.A. § 1 et seq.,¹ and asked for injunctive relief and an award of treble damages against each defendant in the amount of $1,500,000 plus costs and a reasonable attorney's fee.

The defendants answered denying the basic allegations of the complaint, including the validity of the plaintiff's license, and counterclaimed alleging that the plaintiff's refinery when constructed and put into operation would constitute a continuing nuisance causing them great and irreparable harm. Wherefore they asked that a local safety ordinance regulating the construction of oil refineries and the license issued to the plaintiff thereunder be declared null and void. The counterclaim further prayed that the amendment to the zoning ordinance of the Town of Jamestown permitting the construction of oil refineries in a defined area of the town and also an amendment to the local building ordinance which exempted oil refineries from the requirements of that ordinance be declared null and void and that the plaintiff be enjoined from taking any action or doing any act purporting to be authorized by its license and the amendments.

After lengthy preliminary proceedings the case came on for trial before the court below sitting without a jury at the outset of which counsel for the plaintiff announced that no evidence would be offered in support of its claim of an illegal conspiracy. On the defendants' motion the plaintiff's complaint was thereupon dismissed with prejudice and the trial proceeded on the defendants' counterclaim. More than forty days of trial produced a record consisting of thousands of pages of testimony and hundreds of exhibits a great deal of both being highly technical in nature. As a result the court below concluded (1) that the amendment of the town zoning ordinance and the safety ordinance and license issued pursuant thereto, were invalid because of the failure of the Town Council to comply with the statutory procedural requirements for enacting ordinances of the kind involved, (2) that the amendment to the local building ordinance could not be sustained as being within the lawful exercise of the police power of the municipality and was therefore invalid, and (3) that the plaintiff's proposed refinery when put into operation would constitute a nuisance. On the latter point it said:

"After a careful consideration of all the testimony and the reasonable inferences to be drawn therefrom, and recognizing the right of the plaintiff to make a reasonable use of its lands, I am satisfied that the operation of said refinery in the manner and at the location proposed by the plaintiff will cause a substantial diminution both in the values of the defendants\' properties and in their enjoyment thereof as measured by the degree of comfort which the average man living in such a locality has the right to expect. It follows that said use will be unreasonable and hence a nuisance to the defendants against which they are entitled to injunctive relief."

Commerce has taken this appeal from the judgment entered by the court below in conformity with its opinion wherein it declared the Jamestown ordinances and the plaintiff's license invalid and, with costs to the appellees, permanently enjoined Commerce from proceeding with the erection of its refinery.

In our view there was no occasion for the court below, and there is no occasion for us, to pass upon the validity of the local ordinances and hence of the plaintiff's license, for it is the generally accepted rule that "* * * the validity or constitutionality of an ordinance is not an issue before a court, and the court need not pass upon it, * * * where the determination of it is not necessary to a proper disposition of the case * * *." 6 McQuillin, Municipal Corporations, § 20.10 (3d ed. 1949).

The plaintiff's license was issued pursuant to a local ordinance enacted by the Town Council under the authority conferred by Section 21 of Chapter 333 of the General Laws of Rhode Island, Revision of 1938, upon town and city councils to make and ordain all ordinances and regulations for their towns or cities "which they may deem necessary for the safety of their inhabitants from the manufacture, processing, storage, keeping, having in possession, transportation, sale or use of * * * crude petroleum, gasoline, kerosene, heating fuels, lubricating oils and greases, allied petroleum products, and any and all other explosives, explosive chemicals and inflammable substances * * *." Obviously this enabling act authorizes local regulation of the handling of the substances named therein in order to provide protection from fire or explosion. There is nothing in it authorizing local governments to regulate air pollution. Indeed, authority for local regulation in that respect was conferred at the time the local ordinance was adopted by a different enabling act. Chapter 1760 of the Rhode Island Acts and Resolves, Jan.Sess. (1946), now General Laws of R. I. (1956) §§ 23-25-21 et seq. Nor is there anything in the amendment to the safety ordinance or the license issued thereunder relating to air pollution. The local regulation purports to extend and extends only to risks of fire and explosion. But, the District Court did not base its finding that the plaintiff's refinery when constructed would constitute a private nuisance because of any such danger. On the contrary, it found as a matter of common knowledge that although an oil refinery was a potential source of danger from fire or explosion unless properly constructed, such dangers could "be substantially lessened if not entirely eliminated by the imposition of proper restrictions and safeguards relating to its construction." 170 F.Supp. 402 Clearly the District Court's finding of anticipatory nuisance rested upon subsidiary findings that the refinery when in operation would pollute the air with noisesome and noxious gases, matters not covered in the amendment to the local ordinance or the license issued under it. Thus, even if we should assume arguendo that a license would be a defense, the present license would not be, for the alleged nuisance does not arise from the explosive or inflammable nature of the substances stored or the processes carried out on the premises, but from the deleterious, unpleasant and noxious effects of the gases which are the byproducts of the refinery process. In this situation the license is of no consequence as pointed out in Commonwealth v. Kidder, 1871, 107 Mass. 188, 193, wherein, considering an indictment laid against an oil refinery constructed in accordance with statutory safety requirements as a common law nuisance because it polluted the air, the court said:

"These enactments are manifestly intended to protect the public against dangers arising from the explosive and inflammable nature of petroleum; and, having regulated the whole subject in that aspect, they might well be deemed to protect any establishment, guarded as they direct, from indictment as a nuisance on account of such dangers only. But they contain no provisions for preventing the spread of unwholesome and offensive odors in the course of the manufacture; and if the defendants\' position were sustained, the result would be that no limit would be put to such manufacture in the most crowded and populous portions of any town or city. The reasonable, if not the necessary, inference is, that it was not the intention of the legislature to establish a new rule in this regard, but to leave the question whether the manufacture is carried on at such places and in such a manner as to be unwholesome and offensive to the public, and on that account indictable as a nuisance, to be determined by the rules of the common law."

Moreover, in spite...