Bandini Petroleum Co. v. Superior Court of Cal.

• Decision Date: 23 November 1931
• Docket Number: No. 43,43
• Citation: 52 S.Ct. 103,76 L.Ed. 136,284 U.S. 8,78 A. L. R. 826
• Parties: BANDINI PETROLEUM CO. et al. v.
• Court: U.S. Supreme Court

284 U.S. 8

52 S.Ct. 103

76 L.Ed. 136

BANDINI PETROLEUM CO. et al.

v SUPERIOR COURT OF STATE OF CALIFORNIA IN AND FOR LOS ANGELES COUNTY et al.

No. 43.

Argued Oct. 13, 14, 1931.

Decided Nov. 23, 1931.

Mr. Robert B. Murphey, of Los Angeles, Cal., for appellants.

[Argument of Counsel from page 9 intentionally omitted] Messrs. James S. Bennett, of Los Angeles, Cal., and U. S. Webb, of San Francisco, Cal., for appellees.

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, Cal. 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 912, p. 1724; 1929, c. 535, p. 924. Section 8b found in sections 8b and 14b of what is called the Oil and Gas Conservation Act of California. Stat. Cal. 1915, c. 718, p. 1404; 1917, c. 759, p. 1586; 1919, c. 536, p. 1165; 1921, c. 912, p. 1724; 1929. c. 535, p. 924. Section 8b prohibits 'the unreasonable waste of natural gas,' and section 14b authorizes suit by the director of natural resources to enforce the prohibition.¹

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.² 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.

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 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 section 237(a) of the Judicial Code. U. S. C., tit. 28, § 344(a), 28 USCA § 344(a); Weston v. Charleston, 2 Pet. 449, 464, 7 L. Ed. 481; Mt. Vernon Cotton Company v. Alabama Power Company, 240 U. S. 30, 31, 36 S. Ct. 234, 60 L. Ed. 507; State of Missouri ex rel. St. Louis B. & M. Rwy. Co. v. Taylor, 266 U. S. 200, 206, 45 S. Ct. 47, 69 L. Ed. 247, 42 A. L. R. 1232; Michigan Central R. R. Co. v. Mix, 278 U. S. 492, 494, 49 S. Ct. 207, 73 L. Ed. 470. 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 ju- dicial 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 page 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 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 page 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...