Amoco Production Co. v. Sea Robin Pipeline Co., s. 86-4916
| Decision Date | 18 May 1988 |
| Docket Number | Nos. 86-4916,86-4917,s. 86-4916 |
| Citation | 844 F.2d 1202 |
| Parties | AMOCO PRODUCTION COMPANY, Plaintiff-Appellant, v. SEA ROBIN PIPELINE COMPANY, Defendant-Appellee. PENNZOIL PRODUCING COMPANY, Plaintiff-Appellant, v. SEA ROBIN PIPELINE COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
John M. McCollam, Philip N. Asprodites, Gordon, Arata McCollam, Stuart & Duplantis, New Orleans, La., for plaintiff-appellant, Amoco Production Co.
B. Richard Moore, Jr., Ernest L. Edwards, Lemle, Kelleher, Kohlmeyer, Dennery, Hunley, Moss & Frilot, New Orleans, La., Adrian L. Steel, Jr., William H. Knull, III, Kathryn A. Oberly, H. Bruce Golden, Mayer, Brown & Platt, Houston, Tex., W. DeVier Pierson, James M. Costan, Pierson, Semmes & Finley, Washington, D.C., for defendant-appellee.
John F. Whitney, David R. Richardson, Galen S. Brown, Margaret E. Woodward, Barham & Churchill, New Orleans, La., for plaintiff-appellant, Pennzoil Producing Co.
Appeals from the United States District Court for the Western District of Louisiana.
Before BROWN, POLITZ, and JOLLY, Circuit Judges.
The underlying dispute in this case concerns take-or-pay obligations in contracts for the sale/purchase of natural gas, made between Sea Robin Pipeline Co. (Sea Robin) as purchaser, and Amoco Production Co. (Amoco) as seller. But it soon becomes a question of federal jurisdiction. Sea Robin notified Amoco that, due to several circumstances beyond its control, Sea Robin considered that a "general condition of force majeure" existed which excused Sea Robin's "full performance" of obligations under the contracts for the purchase of natural gas from Amoco. Amoco disputed this. Sea Robin continued to purchase gas under extant contracts, but in quantities less than the quantities contemplated by those contracts and without making payments pursuant to the take-or-pay provisions. Amoco filed suit against Sea Robin in the courts of Louisiana. Sea Robin then removed 1 that action to United States District Court, asserting that federal question jurisdiction existed 2 under the Outer Continental Shelf Lands Act (43 U.S.C. Sec. 1331 et seq.) (OCSLA), the Natural Gas Act (15 U.S.C. Sec. 717 et seq.) (NGA), and the Natural Gas Policy Act of 1978 (15 U.S.C. Sec. 3301 et seq.) (NGPA). Amoco's motion for remand was denied by the District Court on the ground the court had jurisdiction over the controversy under section 23 of the Outer Continental Shelf Lands Act (OCSLA). 3
The jurisdictional question is now before this court, having been certified by the District Court for interlocutory appeal pursuant to 28 U.S.C. Sec. 1292(b).
We rule that the District Court had jurisdiction and acted properly when it denied the motion to remand. Consequently, the case goes back to the District Court for trial on the merits.
By letter of October 11, 1983, Sea Robin notified Amoco and all other gas producers with whom Sea Robin had contracts for the purchase of natural gas that, due to several circumstances beyond its control, 4 Sea Robin considered that a "general condition of force majeure, impossibility of performance, and commercial impracticability" existed which excused Sea Robin's take-or-pay obligations under its Amoco contracts for the purchase of natural gas. Sea Robin thereafter continued to purchase some gas under its extant contracts, but found it "necessary ... to reduce, from time to time, purchases of gas under its contracts." Purchases were reduced pro rata. In those instances in which the prorated purchase volume was below that required under the take-or-pay obligation contained in the contract in question, the payments contemplated in such a case by that obligation were not made. In other instances, the prorated purchase volume was also below that required by the contract's minimum-take obligation.
By a follow-up letter dated July 18, 1985, Sea Robin reaffirmed its belief in the persistence of this "general condition of force majeure." A third letter, dated May 15, 1986, was directed specifically to Amoco relating to seven enumerated "Amoco Contracts" gas purchase contracts. 5 That letter reiterated once again Sea Robin's contention as set forth in the two previous letters. Shortly thereafter, Amoco filed suit against Sea Robin in the Fifteenth Judicial District Court for the Parish of Vermilion, State of Louisiana. 6
Sea Robin then removed that suit to the Lafayette/Opelousas Division of the United States District Court for the Western District of Louisiana. Amoco subsequently moved to remand the case to the state court, which the court denied, 7 on the ground that the dispute was one of those over which OCSLA Sec. 23 (43 U.S.C. Sec. 1349(b)(1)) confers jurisdiction upon the District Courts of the United States. The District Court then certified, and this court accepted, the jurisdictional question for interlocutory appeal pursuant to 28 U.S.C. Sec. 1292(b). 8 The District Court apparently did not reach the question of federal jurisdiction under either the NGA or the NGPA, since the District Court did not set forth an analysis of or otherwise address either the NGA or the NGPA.
The OCSLA was originally enacted in 1953 following the enactment of the Submerged Lands Act (SLA) that had been enacted earlier that year. The SLA expressly disclaimed any congressional purpose to relinquish any rights of the United States to the natural resources of the subsoil and seabed of the Continental Shelf seaward of the submerged lands as defined, and then declared that all such natural resources "appertain to the United States and the jurisdiction and control of which by the United States is hereby confirmed." 9 Congress thereby asserted the extent of the authority of the United States federal government as against that of the government of Mexico, Cuba, as well as any other nation that might otherwise undertake to explore for, develop, or produce resources from the subsoil and seabed of the OCS or otherwise to occupy the area for purposes other than the right of free navigation. The OCSLA reaffirmed that assertion of national authority, and went a step further. OCSLA Sec. 4 (43 U.S.C. Sec. 1333) extended the "jurisdiction and control" of the United States to "the seabed and subsoil of the entire Outer Continental Shelf adjacent to the shores of the United States ... and also to the structures for their development such as artificial islands, drilling platforms, etc." 10
The OCSLA also provided that the federal government could undertake to grant leases for the development of the natural resources of the OCS. 11 The OCSLA therefore was also an assertion of the authority of the United States federal government as against that of the governments of the several states, which state governments might otherwise undertake to grant oil and gas leases upon the Outer Continental Shelf, as had the state of Louisiana prior to 1953. 12
In determining federal court jurisdiction, we need not traverse the Serbonian Bog of the well pleaded complaint rule (See, 13B. C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure, Secs. 3562, 3566) because Sec. 23 of OCSLA expressly invests jurisdiction in the United States District Courts. 13
The word "jurisdiction" appears in the OCSLA at several different junctures. Except in Sec. 1349, however, the word was used by Congress as a synonym for "sovereignty" as part of the provisions delineating the relative powers of the United States federal government on the one hand and the governments of other countries and of the several states on the other. 14 Such a use is within the scope of the meaning of the word in general usage. 15 Only in Sec. 1349 is the word "jurisdiction" used in the special sense which is more familiar to the legal community and which is relevant to this interlocutory appeal, in which "jurisdiction" signifies "the authority by which courts and judicial officers take cognizance of and decide cases." 16 Section 1349 confers upon the federal District Courts jurisdiction to hear and determine certain disputes which Congress anticipated that oil and gas leases on the OCS and operations thereunder might generate, among them "cases and controversies arising out of, or in connection with any operation conducted on the outer Continental Shelf (OCS) which involves exploration, development, or production of the minerals ... of the [OCS]." 17
The language of Sec. 1349 is supplemented by lengthy definitions of the terms "exploration," "development," and "production" used in that section. 18 Even with that supplementation, however, Sec. 1349 does not permit automatic application. Neither Sec. 1331 nor any other section of the OCSLA gives express guidance as to the meaning of the undefined term "operation" which appears in Sec. 1349.
Perhaps partly for that reason a split of authority of federal jurisdiction over take-or-pay gas purchase contracts under Sec. 1349 both among and within the several Districts of Louisiana has arisen which have mirrored the parties' arguments in this case. 19
At oral argument, Amoco contended that the word "operation" in Sec. 1349, though not expressly defined in OCSLA, refers to the doing of some physical act. We agree generally. Were it otherwise, the situs of the "operation ... involv[ing] exploration, development, or production of the minerals ... of the [OCS]" would be uncertain making it extremely difficult to ascertain whether that "operation" had been conducted on the OCS or not (as expressly required by Sec. 1349). This interpretation conforms to the common meaning of the word, and also finds support in the use of the word "operation" elsewhere in OCSLA. For instance, ...
To continue reading
Request your trial
-
Bd. of Cnty. Comm'rs of Boulder Cnty. v. Suncor Energy (U.S.A.) Inc.
...OCSLA jurisdiction. The cases cited by Defendants instead involved a more direct connection. See , e.g., Amoco Prod. Co. v. Sea Robin Pipeline Co. , 844 F.2d 1202, 1210 (5th Cir. 1988) (finding that the exercise of take-or-pay rights, minimum-take rights, or both, by Sea Robin necessarily a......
-
Bd. of Cnty. Commissioners of Boulder Cnty. v. Suncor Energy (U.S.A.) Inc.
...rig was directly related to the development of minerals or other natural resources on the OCS."); Amoco Prod. Co. v. Sea Robin Pipeline Co. , 844 F.2d 1202, 1210 (5th Cir. 1988) (stating that the contract rights at issue "necessarily and physically ha[d] an immediate bearing on the producti......
-
City of Hoboken v. Chevron Corp.
...the word "operation" requires courts to decide whether actions occurred "on the [Shelf] or not." Amoco Prod. Co. v. Sea Robin Pipeline Co. , 844 F.2d 1202, 1207 (5th Cir. 1988).The operations covered are tied to "exploration, development, or production," not anything like consumption, combu......
-
Heichman v. American Tel. & Tel. Co., CV 95-2756-SVW(BQRx).
...in a given case as well as the rhetorical task of articulating that decision in a clear manner. Cf. Amoco Production Co. v. Sea Robin Pipeline Co., 844 F.2d 1202, 1205 (5th Cir.1988) (referring to well-pleaded complaint rule as "Serbonian Bog"). These problems are less acute in this case, h......
-
CHAPTER 9 STRATEGIES AND PROCEDURAL ISSUES IN ROYALTY CASES
...Cir. 1988). [33] Id. at 1164-65. [34] Id. at 1165. [35] Id. [36] Id. at 1166. The court cited Amoco Prod. Co. v. Sea Robin Pipeline Co., 844 F.2d 1202, 1207 (5th Cir. 1988) and H. Williams and C. Meyers, Oil & Gas Law (Manual of Terms). [37] Interstate Natural Gas v. FPC, 331 U.S. 682 (1947......