Panama Refining Co v. Ryan Amazon Petroleum Corporation v. Same
| Decision Date | 07 January 1935 |
| Docket Number | 260,Nos. 135,s. 135 |
| Citation | 293 U.S. 388,79 L.Ed. 446,55 S.Ct. 241 |
| Parties | PANAMA REFINING CO. et al. v. RYAN et al. AMAZON PETROLEUM CORPORATION et al. v. SAME |
| Court | U.S. Supreme Court |
[Syllabus from pages 388-390 intentionally omitted] Messrs. J. N. Saye, of Longview, Tex., and F. W. Fischer, of Tyler, Tex., for petitioners.
[Argument of Counsel from pages 391-398 intentionally omitted]
Mr. Harold M. Stephens, Asst. Atty. Gen., for respondents.
[Argument of Counsel from pages 398-405 intentionally omitted]
On July 11, 1933, the President, by Executive Order No. 6199 (15 USCA § 709 note), prohibited 'the transportation in interstate and foreign commerce of petroleum and the products thereof produced or withdrawn from storage in excess of the amount permitted to be produced or withdrawn from storage by any State law or valid regulation or order prescribed thereunder, by any board, commission, officer, or other duly
authorized agency of a State.'1 This action was based on section 9(c) of title 1 of the National Industrial Recovery Act of June 16, 1933, 48 Stat. 195, 200, 15 U.S.C. tit. 1, § 709(c), 15 USCA § 709(c). That section provides:
'Sec. 9. * * *
On July 14, 1933, the President, by Executive Order No. 6204 (15 USCA § 709 note), authorized the Secretary of the Interior to exercise all the powers vested in the President 'for the purpose of en-
forcing Section 9(c) of said act and said order' of July 11, 1933, 'including full authority to designate and appoint such agents and to set up such boards and agencies as he may see fit, and to promulgate such rules and regulations as he may deem necessary.'2 That order was made under section 10(a) of the National Industrial Recovery Act, 48 Stat. 200, 15 U.S.C. § 710(a), 15 USCA § 710(a), authorizing the President 'to prescribe such rules and regulations as may be necessary to carry out the purposes' of title 1 of the National Industrial Recovery Act and providing that 'any violation of any such rule or regulation shall be punishable by fine of not to exceed $500, or imprisonment for not to exceed six months, or both.'
On July 15, 1933, the Secretary of the Interior issued regulations to carry out the President's orders of July 11 and 14, 1933. These regulations were amended by orders
of July 25, 1933, and August 21, 1933, prior to the commencement of these suits. Regulation IV provided, in substance, that every producer of petroleum should file a monthly statement under oath, beginning August 15, 1933, with the Division of Investigations of the Department of the Interior giving information with respect to the residence and post office address of the producer, the location of his producing properties and wells, the allowable production as prescribed by state authority, the amount of daily production, all deliveries of petroleum, and declaring that no part of the petroleum or products produced and shipped had been produced or withdrawn from storage in excess of the amount permitted by state authority. Regulation V required every purchaser, shipper (other than a producer), and refiner of petroleum, including processors, similarly to file a monthly statement under oath, giving information as to residence and post office address, the place and date of receipt, the parties from whom and the amount of petroleum received and the amount held in storage, the disposition of the petroleum, particulars as to deliveries, and declaring, to the best of the affiant's information and belief, that none of the petroleum so handled had been produced or withdrawn from storage in excess of that allowed by state authority. Regulation VII provided that all persons embraced within the terms of section 9(c) of the act, 15 USCA § 709(a) and the executive orders and regulations issued thereunder, should keep 'available for inspection by the Division of Investigations of the Department of the Interior adequate books and records of all transactions involving the production and transportation of petroleum and the products thereof.'
On August 19, 1933, the President, by Executive Order No. 6256, stating that his action was taken under title 1 of the National Industrial Recovery Act, approved a 'Code of
Fair Competition for the Petroleum Industry.'3 By a further Executive Order of August 28, 1933, the President designated the Secretary of the Interior as Administrator, and the Department of the Interior as the federal agency, to exercise on behalf of the President all the powers vested in him under that act and code. Section 3(f) of title 1 of the National Industrial Recovery Act, 15 USCA § 703(f), provides that, when a code of fair competition has been approved or prescribed by the President under that title, 'any violation of any provision thereof in any transaction in or affecting interstate or foreign commerce shall
be a misdemeanor and upon conviction thereof an offender shall be fined not more than $500 for each offense, and each day such violation continues shall be deemed a separate offense.'
This 'Petroleum Code' (in its original form and as officially printed) provided in section 3 of article III relating to 'Production' for estimates of 'required production of crude oil to balance consumer demand for petroleum products' to be made at intervals by the federal agency. This 'required production' was to be 'equitably allocated' among the several states. These estimates and allocations, when approved by the President, were to be deemed to be 'the net reasonable market demand,' and the allocations were to be recommended 'as the operating schedules for the producing States and for the industry.' By section 4 of article III, the subdivision, with respect to producing properties, of the production allocated to each state, was to be made within the state. The second paragraph of that section further provided:
'If any subdivision into quotas of production allocated to any State shall be made within a State any production by any person, as person is defined in Article I, Section 3 of this code in excess of any such quota assigned to him, shall be deemed an unfair trade practice and in violation of this code.'
By an Executive Order of September 13, 1933, No. 6284-a, modifying certain provisions of the Petroleum Code, this second paragraph of section 4 of article III was eliminated. It was reinstated by Executive Order of September 25, 1934, No. 6855.
These suits were brought in October, 1933.
In No. 135, the Panama Refining Company, as owner of an oil refining plant in Texas, and its coplaintiff, a producer having oil and gas leases in Texas, sued to restrain the defendants, who were federal officials, from enforcing Regulations IV, V, and VII prescribed by the Secretary of the Interior under section 9(c) of the National Industrial
Recovery Act. Plaintiffs attacked the validity of section 9(c) as an unconstitutional delegation to the President of legislative power and as transcending the authority of the Congress under the commerce clause. The regulations, and the attempts to enforce them by coming upon the properties of the plaintiffs, gauging their tanks, digging up pipe lines, and otherwise, were also assailed under the Fourth and Fifth Amendments of the Constitution.
In No. 260, the Amazon Petroleum Corporation and its coplaintiffs, all being oil producers in Texas and owning separate properties, sued to enjoin the Railroad Commission of that state, its members and other state officers, and the other defendants who were federal officials, from enforcing the state and federal restrictions upon the production and disposition of oil. The bill alleged that the legislation of the state and the orders of its commission in curtailing production violated the Fourteenth Amendment of the Federal Constitution. As to the federal requirements, the bill not only attacked section 9(c) of the National Industrial Recovery Act, and the regulations of the Secretary of the Interior thereunder, upon substantially the same grounds as those set forth in the bill of the Panama Refining Company, but also challenged the validity of provisions of the Petroleum Code. While a number of these provisions were set out in the bill, the contest on the trial related to the limitation of production through the allocation of quotas pursuant to section 4 of article III of the code.
As the case involved the constitutional validity of orders of the state commission and an interlocutory injunction was sought, a court of three judges was convened under section 266 of the Judicial Code (28 U.S.C. § 380 (28 USCA § 380)). That court decided that the cause of action against the federal officials was not one within section 266, but was for the consideration of the District Judge alone. The parties agreed that the causes of action should be severed and that each cause
should be submitted to the tribunal having jurisdiction of it. Hearing was had both on the applications for interlocutory injunction and upon the merits. The court of three judges, sustaining the state orders, denied injunction, and dismissed the bill as against the state authorities. Amazon Petroleum Corp. v. Railroad Comm. (D.C.) 5 F.Supp. 633, 634, 639.
In both cases against the federal officials, that of the Panama...
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