ANR Pipeline Co. v. Corporation Com'n of State of Okl.
| Decision Date | 09 November 1988 |
| Docket Number | No. 86-2481,86-2481 |
| Citation | 860 F.2d 1571 |
| Parties | ANR PIPELINE COMPANY; Colorado Interstate Gas Company; Columbia Gas Transmission Corp.; KN Energy, Inc.; Mississippi River Transmission Corp.; Natural Gas Pipeline Company of America; Tennessee Gas Pipeline Co., Plaintiffs-Appellees, Williams Natural Gas Company, Plaintiff-Appellee, El Paso Natural Gas Company, Plaintiff-Intervenor-Appellee, Western Gas Interstate Company, Plaintiff, v. The CORPORATION COMMISSION OF the STATE OF OKLAHOMA, Defendant-Appellant, Southern Natural Gas Company, Defendant-Appellee and Defendant- Intervenor- Appellant, James B. Townsend, Norma Eagleton, and Hamp Baker, Commissioners of the Corporation Commission of the State of Oklahoma, Defendants. |
| Court | U.S. Court of Appeals — Tenth Circuit |
S. Paul Hammons (William J. Legg, with him on the brief) of Andrews, Davis, Legg, Bixler, Milsten & Murrah, Oklahoma City, Okl., for plaintiffs-appellees, ANR Pipeline Co., et al.
Kent L. Jones and Donald L. Kahl of Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Tulsa, Okl., on the brief for plaintiff-appellee, Williams Natural Gas Co.
R. Thomas Seymour (Caralinn W. Cole, Tulsa, Okl., Donald J. MacIver, Jr., Eldon J. Mitrisin, Barry Schneiderwind, Thomas S. Jensen, El Paso, Tex., James M. Gaitis, Reserve, N.M., with him on the brief), Tulsa, Okl., for plaintiff-intervenor-appellee.
Patricia A. Watts (Lindil C. Fowler, Jr., Gen. Counsel, Gretchen P. Hoover, Deputy Gen. Counsel, on the briefs), Asst. Gen. Counsel, Oklahoma Corp. Com'n., Oklahoma City, Okl., for defendant-appellant.
John M. Grower (R. Wilson Montjoy II of Brunini, Grantham, Grower & Hewes, Jackson, Miss., John L. Arrington, Jr. and David E. Crawford of Huffman, Arrington, Kihle, Gaberino & Dunn, Tulsa, Okl., and, Joseph H. Moss, Jr. and John C. Griffin of Southern Natural Gas Co., Birmingham, Ala., with him on the briefs) of Brunini, Grantham, Grower & Hewes, Jackson, Miss., for defendant-appellee and defendant-intervenor-appellant.
Frederick Moring and David H. Soloman of Crowell & Moring, Washington, D.C., filed an amicus curiae brief for Associated Gas Distributors.
Hugh D. Rice and Robert J. Campbell, Jr., of Rainey, Ross, Rice & Binns, and Robert D. Stewart, Jr., Oklahoma Gas & Elec. Co., Oklahoma City, Okl., filed an amicus curiae brief for Oklahoma Gas & Elec. Co.
W. Bland Williamson of Pray, Walker, Jackman, Williamson & Marlar, Tulsa, Okl., Oklahoma Independent Petroleum Ass'n filed an amicus curiae brief for defendant-appellant.
Before MOORE, BARRETT, and BRORBY, Circuit Judges.
The plaintiffs in the district court, several interstate natural gas pipelines (Pipelines), are engaged in the business of purchasing, transporting, and reselling natural gas across state lines. They commenced this action against the defendant Corporation Commission of the State of Oklahoma and its individual members, asking for a declaratory judgment holding that federal law pre-empted Oklahoma's ratable take statute and implementing regulation. They also sought injunctive relief, requesting the court restrain the Commission from attempting to implement or enforce the pre-empted statute and regulation. The district court permitted defendant Southern Natural Gas Company, also an interstate pipeline company, to intervene in order to support the constitutionality of the Oklahoma enactments at issue. Both defendants will be referred to jointly as the Commission.
The district court granted the Pipelines' motion for summary judgment, holding Oklahoma's ratable take statute, Okla.Stat.Ann. tit. 52, Sec. 240 (1981), and the implementing rule, Rule 1-305 of the Oklahoma Corporation Commission, to be in contravention of the Supremacy Clause in Art. VI, Cl. 2 of the United States Constitution for the reason that Oklahoma's regulation of interstate pipeline companies interferes with and is pre-empted by the federal regulatory scheme established by the Natural Gas Act, 15 U.S.C. Secs. 717-717w (1976), and the Natural Gas Policy Act of 1978, 15 U.S.C. Secs. 3301-3432 (1982). The district court also permanently enjoined the Commission from attempting to implement or enforce the provisions of the statute and rule against the Pipelines or any other interstate pipeline company. The decision of the district court is reported as ANR Pipeline Co. v. Corporation Comm'n of Okla., 643 F.Supp. 419 (W.D.Okl.1986).
The Commission generally asserts the district court lacked jurisdiction and the pre-emption analysis of the district court was incorrect. For the reasons set forth in this opinion, we AFFIRM the decision of the district court.
Oklahoma, in 1915, enacted Okla.Stat.Ann. tit. 52, Sec. 240 (1981), 1 which provided that every person engaged in the business of processing and selling natural gas must purchase all of the natural gas offered for sale from a common reservoir, and if unable to purchase all of such gas, then the common purchaser must purchase natural gas from each seller ratably. This statute also gave to the Oklahoma Corporation Commission the authority to make regulations for the equitable purchasing and taking of such natural gas. Oklahoma also enacted Okla.Stat.Ann. tit. 52, Sec. 239 (1981), 2 which provides when full production of natural gas exceeds market demand, the producers of natural gas may take only their proportionate share of the natural flow of the gas. The Commission is given authority to regulate the production of natural gas.
In 1983, the Oklahoma Corporation Commission adopted its Rule 1-305 3 which established a priority schedule mandating the order in which various categories of natural gas are to be purchased when the supply of natural gas exceeds the demand.
In 1985, as a result of numerous filings pursuant to Sec. 240 and Rule 1-305, the Commission held several hearings and issued its order No. 281285 wherein it determined the regulation of interstate pipelines to be an incident of the exercise of the Commission's jurisdiction that is necessary to protect correlative rights and prevent waste. The Commission found Secs. 239 and 240 of Oklahoma law attempt to adjust production of natural gas to demand in order to protect against drainage. It further held its regulatory jurisdiction does not encroach upon the jurisdiction of the Federal Energy Regulatory Commission (FERC), under either the Natural Gas Act or the Natural Gas Policy Act of 1978, because FERC is not vested with jurisdiction over the production and gathering of gas and concluded "[i]n light of the present regulatory atmosphere" the Commission's jurisdiction can co-exist and complement that of FERC.
We must first determine whether or not the district court had jurisdiction to decide this controversy. In their complaint, the Pipelines asserted jurisdiction based upon a federal question, 28 U.S.C. Sec. 1331. A federal district court is given "original jurisdiction of all civil actions arising under the Constitution, laws or treaties of the United States." 28 U.S.C. Sec. 1331 (Supp.1988).
The Commission asserts that the district court lacked subject matter jurisdiction because the Pipelines' claim for declaratory judgment fails to raise a federal question. They contend the present controversy falls within the category of cases best illustrated by Public Serv. Comm'n of Utah v. Wycoff Co., 344 U.S. 237, 73 S.Ct. 236, 97 L.Ed. 291 (1952), where the Supreme Court expressed, by way of dicta, that a declaratory judgment plaintiff who asserts the constitutional invalidity of a state action has only a defense that probably does not provide a basis for invoking federal question jurisdiction. Id. at 248, 73 S.Ct. at 242. Stated differently, the anticipation of a possible defense to state action cannot serve as a basis for federal question jurisdiction.
The cases upon which the Commission relies to assert the district court is without federal question jurisdiction involve an action for declaratory judgment that is not coupled with a request for injunctive relief. See e.g., Madsen v. Prudential Fed. Sav. & Loan Ass'n, 635 F.2d 797 (10th Cir.1980),cert. denied 451 U.S. 1018, 101 S.Ct. 3007, 69 L.Ed.2d 389 (1981); Monks v. Hetherington, 573 F.2d 1164 (10th Cir.1978). These cases stem directly from the dicta in Wycoff. A helpful discussion of the problems presented by Wycoff may be found at 10A C. Wright, A. Miller & K. Kane, Federal Practice & Procedure Sec. 2767 (1983 & Pocket Part 1988). We express no opinion concerning the dicta in Wycoff and its progeny, because this suit is not based solely on a claim for declaratory judgment but also includes a claim for injunction.
The existence of federal question jurisdiction must appear on the face of the plaintiff's well pleaded complaint. Phillips Petroleum Co. v. Texaco Inc., 415 U.S. 125, 127-28, 94 S.Ct. 1002, 1003-04, 39 L.Ed.2d 209 (1974); Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 43, 53 L.Ed. 126 (1908); 1 J. Moore, J. Lucas, H. Fink, D. Weckstein, & J. Wicker, Moore's Federal Practice p 0.62[2.-2] (1988). The Pipelines' complaint clearly and concisely alleges that plaintiffs are interstate gas pipelines as defined by the Natural Gas Policy Act of 1978, and, as such, are subject to regulation by FERC; that each of the plaintiffs is a "natural gas company" within the meaning of the Natural Gas Act and are therefore regulated by FERC; that that Oklahoma statute and administrative order in question are invalid under the United States Constitution as they conflict with and are pre-empted by federal statutes, the Natural Gas Act and the Natural Gas Policy Act of 1978; and, that plaintiffs seek to enjoin state action, under the statute and rule, which interferes with the interstate pipelines' purchase of natural gas.
Federal courts have jurisdiction over suits to enjoin state officials from interfering with federal rights. In the case of Shaw...
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