Woods Exploration & Producing Co. v. Aluminum Co. of America

• Decision Date: 20 August 1964
• Docket Number: No. 7,7
• Parties: WOODS EXPLORATION & PRODUCING COMPANY, Inc., et al., Appellants, v. ALUMINUM COMPANY OF AMERICA et al., Appellees.
• Court: Texas Court of Appeals

Page 343

382 S.W.2d 343

WOODS EXPLORATION & PRODUCING COMPANY, Inc., et al., Appellants, v. ALUMINUM COMPANY OF AMERICA et al., Appellees.

No. 7.

Court of Civil Appeals of Texas, Corpus Christi.

Aug. 20, 1964.

Rehearing, Denied Oct. 8, 1964.

Levert J. Able and Nick Nichols, Houston, for appellants.

Leroy Jeffers, of Vinson, Elkins, Weems & Searls, James W. Dilworth, of Andrews, Kurth, Campbell & Jones, Houston, C. Kinnear Earl, El Campo, for appellees.

SHARPE, Justice.

This appeal is from a judgment of the District Court of Calhoun County, Texas, sustaining pleas to the jurisdiction and in abatement filed by some of the appellees and dismissing the case.

Appellants, Woods Exploration & Producing Company, Inc., and Southeastern Pipe Line Company, sued appellees, Aluminum Company of America, Crown Central Petroleum Corporation, Carl E. Siegesmund, Lavaca Pipe Line Company, Lumar Gas Corporation, F. E. Appling and Fred Wolcott, for damages allegedly due to violations of the Texas Antitrust Statutes involving a conspiracy and combination by appellees to eliminate appellants and small tract owners from competing in the production of gas from the Appling field located in Calhoun and Jackson counties, Texas, and to restrict production from appellants' wells. The conspiracy was allegedly carried out by various means, one of which was the filing of false and fictitious nominations or Producers Forecasts with the Railroad Commission of Texas.

Appellants assert six points of error, in reply to which the appellees urge four counterpoints. We have concluded that appellants first five points present reversible error and that the case should be remanded to the lower court for trial.

The Appling field was discovered in 1953. The history of its development is set out in the opinions of the Supreme Court of Texas and the Austin Court of Civil Appeals in the case of Railroad Commission of Texas et al. v. Aluminum Company of America et al., decided by the Supreme Court of Texas on May 27, 1964, 380 S.W.2d 599, rehearing overruled, July 15, 1964, reversing the Austin Court of Civil Appeals opinion reported 368 S.W.2d 818, which case will be further referred to hereafter in this opinion.

The trial court findings herein may be summarized as follows:

1. The facts and the law on the pleas in abatement and to the jurisdiction are with the defendants (appellees).

2. That the sole and exclusive jurisdiction of the matters in issue and controversy herein is vested first in the Railroad Commission of Texas and that sole and exclusive jurisdiction for the judicial review or adjudication of said issues and the matters in controversy herein is vested in the district court of Travis County, Texas.

3. That a prior action in which the Aluminum Company of America, Crown Central Petroleum Corporation, and Woods Exploration & Producing Company, Inc., are parties and involving substantially the same issues and matters in controversy herein is in fact pending in the district court of Travis County, Texas, in which a final judgment has been entered and is now on appeal by the said Woods Exploration and Production Company, Inc., to the Court of Civil Appeals for the Third Supreme Judicial District of Texas.

4. That the district court of Calhoun County is without jurisdiction of this action and that said pleas in abatement and to the jurisdiction should be in all things, sustained.

Based upon such findings and conclusions, the trial court dismissed this case.

We will first consider appellants' points 2 and 4 concerning the alleged errors of the trial court in holding that exclusive jurisdiction of this case is vested first in the Railroad Commission of Texas, and, for review, in the district court of Travis County, Texas, (such findings appearing in paragraph 2 of the summary of the trial court findings hereinbefore set out), along with appellees' counterpoint I which is urged in support of said rulings.

This case was determined by the trial court on the pleadings and evidence offered in support of appellees' pleas to the jurisdiction and in abatement. Such evidence consisted only of certified copies of pleadings and orders of the court in a case pending in Travis County, Texas, which will be hereafter referred to in more detail, and copies of certain nominations or Producers Forecasts filed by appellees with the Railroad Commission of Texas.

The nature and character of this suit, as determined from the allegations contained in the pleadings, appear to be dispositive of the contentions now under consideration. Analysis of appellants' petition reflects that the cause of action therein asserted is based upon alleged violations by appellees of the antitrust statutes of Texas and a conspiracy and scheme entered into by them to eliminate appellants as competitors and to restrict the free pursuit of their business and production. It is alleged that as a part of such conspiracy and antitrust violations the appellees have filed false nominations or Producers Forecasts with the Railroad Commission of Texas, causing a reduction in the amount of gas which appellants could produce. Appellants rely upon various antitrust statutes of Texas, particularly Art. 7426, subdivisions 1, 6, and 7, ¹ and Art. 7429, Vernon's Ann.Civ.St.Tex. ² Appellants further point out that the statutes relating to the Railroad Commission and its functions specifically provide that the antitrust and monopoly statutes of Texas shall not be affected thereby. ³

We recognize, as appellees contend, that the Railroad Commission of Texas is an administrative body having broad powers and discretion in connection with the subjects or conservation and production of crude petroleum oil and natural gas as well as with production nominations and allowables in connection therewith, ⁴ and that the orders, rules and regulations of said commission and the validity thereof are subject to review only by the district court of Travis County, Texas. ⁵ However, the Railroad Commission is not a court and does not have jurisdiction to entertain and determine many matters which are within the jurisdiction of district courts, including a suit for damages brought under the antitrust laws of Texas. ⁶ Under the allegations of appellants' petition this is not a suit to test the validity of an order of the Railroad Commission, even though one phase of the case involves the alleged conduct of appellees in making false nominations to said commission as a part of the conspiracy, scheme and antitrust violations. Regardless of the outcome of this suit the orders of the Railroad Commission will remain unaffected.

The parties hereto are also involved in another case styled Woods Exploration & Producing Company, Inc. et al. v. Aluminum Company of America et al., Civil Action No. 14,699, 36 F.R.D. 107, in the United States District Court for the Southern District of Texas, Houston Division, which arises out of the same fact situation as is presented here but is brought under federal antitrust statutes, particularly the Clayton Act (15 U.S.C.A. Secs. 15, 26), which case will hereafter be referred to as the 'Houston federal court case.' In passing upon a motion to dismiss filed by defendants (appellees here) in that case, based upon substantially the same grounds as are here urged under appellees points 2 and 4, Judge Ingraham, in an opinion dated August 2, 1963, 36 F.R.D. 111, said:

'The defendants, in urging that this court is without jurisdiction, misconstrue the gravamen of the plaintiffs' complaint. It is urged that plaintiffs are attacking the validity of an order of the Texas Railroad Commission and that this may be done only in accordance with Section 8 of Article 6049c, Vernon's Annotated Texas Statutes. The plaintiffs, however, are attacking a conspiracy under the anti-trust laws, and are alleging that one of the manifestations of the conspiracy is the submission of false nominations to the Rail-road Commission. The relief prayed for does not in any way challenge the validity of an order of the Commission. Rather, this court is asked to enjoin both the conspiracy and the further submission of false nominations and to award damages for injury sustained as a result of the conspiracy. If, after trial, the conspiracy were established and relief were granted, any order of the Texas Railroad Commission would still stand. This is purely an anti-trust action * * *. Jurisdiction is well founded.'

We believe the same reasoning is applicable in this case and that its nature and character require that it be tried by a district court in which it is properly filed and that the issues herein presented are not exclusively within the jurisdiction of the Rail-road Commission or the district court of Travis County, Texas. We believe that the cases of Chenoweth v. Nordan & Morris, 171 S.W.2d 386 (Tex.Civ.App.1943, wr. ref. w. m.); Chenoweth v. Railroad Commission, 184 S.W.2d 711 (Tex.Civ.App.1945, wr. ref. w. m.); Deep South Oil Co. of Texas v. Texas Gas Corp., 328 S.W.2d 897 (Tex.Civ.App.1959, wr. ref. n. r. e.); or Superior Oil Co. v. El Paso Natural Gas Co., 377 S.W.2d 691 (Tex.Civ.App.1964), relied on by appellees, do not require a contrary holding. Appellants' points 2 and 4 are sustained and appellees' counterpoint I is overruled.

We will next consider appellants' point 5 concerning the alleged error of the trial court in holding that it was without jurisdiction because of the pendency of a prior action in the district court of Travis County, Texas, in which, at the time of the trial court judgment herein, final judgment had been entered and appeal was pending (such findings appearing in paragraph 3 of the summary of the trial court findings hereinbefore set out), along with appellees' counterpoint II which is urged in support of such ruling. The Travis County case referred to was No. 121,595, in the 126th Judicial District Court, Styled Aluminum Company of America, et al. v. Railroad Commission of Texas...