Mobil Oil Corp. v. Coastal Petroleum Co.

• Decision Date: 04 March 1982
• Docket Number: 81-5812,Nos. 81-5533,s. 81-5533
• Citation: 671 F.2d 419
• Parties: MOBIL OIL CORPORATION, a New York Corporation, Plaintiff-Appellant, v. COASTAL PETROLEUM COMPANY, a Florida Corporation, Defendant-Appellee. MOBIL OIL CORPORATION, a New York Corporation, Plaintiff-Appellant, v. COASTAL PETROLEUM COMPANY, a Florida Corporation, and The State of Florida Department of Natural Resources and The Board of Trustees of the Internal Improvement Trust Fund of the State of Florida, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 419

671 F.2d 419

MOBIL OIL CORPORATION, a New York Corporation, Plaintiff-Appellant, v. COASTAL PETROLEUM COMPANY, a Florida Corporation,

Defendant-Appellee.

MOBIL OIL CORPORATION, a New York Corporation, Plaintiff-Appellant, v. COASTAL PETROLEUM COMPANY, a Florida Corporation, and The

State of Florida Department of Natural Resources and The

Board of Trustees of the Internal Improvement Trust Fund of

the State of Florida, Defendants-Appellees.

Nos. 81-5533, 81-5812.

United States Court of Appeals, Eleventh Circuit.

March 4, 1982.

King & Spalding, Charles H. Kirbo, Michael C. Russ, Atlanta, Ga., Holland & Knight, Julian Clarkson, Hume F. Coleman, Tallahassee, Fla., for Mobil Oil Corp.

James R. Hubbard, Beckham, McAliley & Proenza, Miami, Fla., Robert J. Beckham, Jacksonville, Fla., Joseph C. Jacobs, Ervin, Varn, Jacobs, Odom & Kitchen, Tallahassee, Fla., for Bd. of Trustees of Intern. Imp. Trust Fund for State of Fla.

Robert J. Angerer, Joseph C. Jacobs, Tallahassee, Fla., C. Dean Reasoner, Washington, D. C., for Coastal Petroleum Co.

Appeals from the United States District Court for the Northern District of Florida.

Before MORGAN, TJOFLAT and JOHNSON, Circuit Judges.

TJOFLAT, Circuit Judge:

I.

These consolidated appeals arise out of a lawsuit whose complex procedural history we need only summarize. On September 24, 1976, Mobil Oil Corporation (Mobil) filed a complaint in the Circuit Court for Leon County, Florida, seeking a declaration of its rights under an oil exploration agreement with Coastal Petroleum Company (Coastal). Coastal responded with five counterclaims, the second of which alleged Mobil's conversion of phosphate from lands owned by the State of Florida and leased by Coastal. Coastal joined as a necessary party to the second counterclaim the Trustees of the Internal Improvement Trust Fund of the State of Florida (the Trustees), who hold title to state lands.

On November 20, 1979, Mobil filed a counterclaim (the reply counterclaim) against Coastal and the Trustees, seeking a declaration of the parties' rights based on an 1862 deed from the Trustees to Mobil's predecessor in interest encompassing eighty acres of unmined land coursed by the Peace River. On December 20, 1979, the Trustees and Coastal (appellees) removed the case to the district court, asserting that Mobil's reply counterclaim raised a substantial federal question by challenging the Trustees' sovereignty claim to the subject land. Mobil moved to remand the case to the state court, but the district court denied the motion.

In December of 1980, Coastal's fourth counterclaim was tried in the district court, resulting in a final judgment on a jury verdict in favor of Coastal. In No. 81-5533, Mobil appeals that judgment, contending that the district court lacked subject matter jurisdiction of the reply counterclaim, and therefore of the case, and that the district court committed error in the conduct of the trial. ¹

On July 29, 1981, Coastal moved the district court for an injunction to prohibit Mobil from proceeding further in a related state court quiet title action. The district court entered an order enjoining the parties from filing or further litigating in any state or federal court any lawsuit which would require the determination of any legal or factual issue forming the basis of this lawsuit or necessarily relating thereto. In No. 81-5812, Mobil appeals the injunction, contending that it is prohibited by the Anti-Injunction Act, 28 U.S.C. § 2283 (1976), and, again, challenging the subject matter jurisdiction of the district court. Because we conclude that the district court lacks jurisdiction of this case, we reach none of the other issues raised in these consolidated appeals.

II.

The federal removal statute, 28 U.S.C. § 1441 (1976), permits defendants to remove state court civil actions of which the federal courts have original jurisdiction. ² The jurisdictional question presented in this case is whether Mobil's reply counterclaim arises under federal law within the meaning of 28 U.S.C.A. § 1331(a) (West Supp.1980) ³ so as to be removable. ⁴ The reply counterclaim alleges in relevant part:

ALLEGATIONS COMMON TO ALL COUNTS

1. This is an action for declaratory judgment pursuant to Chapter 86, Florida Statutes. The subject matter of the controversy exceeds $2,500 in value.

2. MOBIL owns, and is in possession of the SE 1/4 of NW 1/4 and SW 1/4 of NE 1/4 of Section 23, Township 31 South, Range 25 East, Polk County, Florida. The Peace River courses a part of these lands and parts lie within the swamps that adjoin the river.

3. MOBIL's ownership is based on a continuous chain of title which began with a deed from the State of Florida to Henry S. Seward dated November 20, 1862. The deed ... does not mention any rivers, waterbodies or watercourses nor does it reserve any interest in STATE.

4. STATE and COASTAL have asserted in this suit that MOBIL has converted phosphate by having mined certain lands allegedly owned by STATE and that are subject to a mineral lease between STATE and COASTAL .... The lands described in paragraph 2, above, have not been mined and, accordingly, are not among the lands from which phosphate has allegedly been converted.

5. The conversion claims of STATE and COASTAL are bottomed on the contention that the lands from which the phosphate was allegedly taken underlie waterbodies or watercourses which were navigable in fact when Florida became a State on March 3, 1845, and, as such, are sovereignty lands.

COUNT I

(Lands are not sovereignty in character)

10. The Peace River was not "meandered" (which would have indicated navigability) nor otherwise designated as navigable, by the original government surveyors or those who prepared the original township plats at any point north of the dividing line between Townships 38 and 39.

11. The Peace River was not navigable in fact on March 3, 1845, at any point north of the dividing line between Townships 38 and 39. Township 31 is north of that line.

12. Inasmuch as there were no navigable waterbodies on the lands described in paragraph 2, above, on March 3, 1845, no part of the lands are sovereignty lands.

The eight remaining counts of the reply counterclaim involve, all parties agree, only state law questions.

For a case to arise under federal law, a right or immunity created by that law must be an essential element of the plaintiff's claim; the federal right or immunity that forms the basis of the claim must be such that the claim will be supported if the federal law is given one construction or effect and defeated if it is given another. Maxwell v. First Nat'l Bank of Monroeville, 638 F.2d 32, 35 (5th Cir. 1981) ⁵; In Re Carter, 618 F.2d 1093, 1100 (5th Cir. 1980), citing Gully v. First Nat'l Bank in Meridian, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936). In order to determine whether the claim arises under the Constitution or laws of the United States, we look to the complaint unaided by anticipated defenses and with due regard to the real nature of the claim. Maxwell, 638 F.2d at 35; Gully, 299 U.S. at 113, 57 S.Ct. at 98. "A suit to enforce a right which takes its origin in the laws of the United States is not necessarily, or for that reason alone, one arising under those laws, for a suit does not so arise unless it really and substantially involves a dispute or controversy respecting the validity, construction or effect of such a law, upon the determination of which the result depends. This is especially so of a suit involving rights to land acquired under a law of the United States." Heirs of Burat v. Bd. of Levee Comm'rs, 496 F.2d 1336, 1342 (5th Cir.), cert. denied, 419 U.S. 1049, 95 S.Ct. 625, 42 L.Ed.2d 644 (1974), quoting Shulthis v. McDougal, 225 U.S. 561, 569, 32 S.Ct. 704, 706, 56 L.Ed. 1205 (1912).

Acknowledging these precepts, the parties differently characterize Mobil's pleading. Pointing to the reply counterclaim's challenge to Florida's acquisition of title to the disputed lands as sovereignty lands, the Trustees and Coastal argue that Mobil's claim turns on a federal question, namely, the navigability of the Peace River on March 3, 1845, the date Florida was admitted to the Union. If the Peace River was navigable at that date, title to the lands beneath the river passed from the United States to the State of Florida under the equal footing doctrine ⁶ and were received by Florida as sovereign lands. The passing of title under the equal footing doctrine, the argument continues, is a federally created right which is governed by federal law; thus, the navigability of the Peace River on March 3, 1845, is a substantial federal question supporting federal subject matter jurisdiction.

Mobil maintains that its reply counterclaim involves a mere title dispute between Florida land claimants, each of whom derives its claim from the State, so that Florida law, and not federal law, governs the controversy. While federal law may determine the navigability of waters for the limited purpose of ascertaining whether title to a riverbed passed from the United States to Florida when Florida became a state, once title has passed, as the parties agree has occurred here, Florida law governs any subsequent claim to the property.

In its denial of Mobil's motion to remand, the district court embraced the characterization advanced by the Trustees and Coastal:

The navigability of the waterbodies in issue in 1845 and the location of the ordinary high water line of the waterbodies in 1845, if they were navigable, are issues to be determined by federal law. Additionally, in this case the determination of these federal questions is a condition precedent to a declaration of Mobil's rights of ownership with respect to the lands which it claims through various deeds and patents. Mobil correctly states that a determination of whether the property in question was transferred into private ownership is a state question, which must be determined...