Rocky Mountain Oil and Gas Ass'n v. State

• Decision Date: 04 June 1982
• Docket Number: No. 5517,5517
• Citation: 645 P.2d 1163
• Parties: ROCKY MOUNTAIN OIL AND GAS ASSOCIATION, a non-profit corporation, acting through its Wyoming division, the Petroleum Association of Wyoming, a corporation, Robert E. Hudson, an individual, Burton/Hawks, Inc., a corporation, Marathon Oil Company, a corporation, Amoco Production Company, a corporation, and Terra Resources, Inc., a corporation, and True Oil Company, a partnership, Appellants (Plaintiffs), v. STATE of Wyoming, The Environmental Quality Council of the State of Wyoming, Robert E. Sundin, as Director of the Department of Environmental Quality, and William L. Garland, as Administrator of the Water Quality Division of the Department of Environmental Quality, Appellees (Defendants).
• Court: Wyoming Supreme Court

Page 1163

645 P.2d 1163

ROCKY MOUNTAIN OIL AND GAS ASSOCIATION, a non-profit corporation, acting through its Wyoming division, the Petroleum Association of Wyoming, a corporation, Robert E. Hudson, an individual, Burton/Hawks, Inc., a corporation, Marathon Oil Company, a corporation, Amoco Production Company, a corporation, and Terra Resources, Inc., a corporation, and True Oil Company, a partnership, Appellants (Plaintiffs), v. STATE of Wyoming, The Environmental Quality Council of the State of Wyoming, Robert E. Sundin, as Director of the Department of Environmental Quality, and William L. Garland, as Administrator of the Water Quality Division of the Department of Environmental Quality, Appellees (Defendants).

No. 5517.

Supreme Court of Wyoming.

June 4, 1982.

Houston G. Williams and Richard L. Williams of Williams, Porter, Day & Neville, P. C., Casper, signed the brief and appeared in oral argument on behalf of appellants.

Steven F. Freudenthal, Atty. Gen., Walter Perry, III, Senior Asst. Atty. Gen., and Steve Jones, Asst. Atty. Gen., signed the brief and Steven Jones, Asst. Atty. Gen., appeared in oral argument on behalf of appellees.

Before ROSE, C. J., and RAPER, THOMAS, ROONEY and BROWN, JJ.

ROONEY, Justice.

Appellee, The Environmental Quality Council of the State of Wyoming (hereinafter referred to as appellee Council), promulgated certain rules and regulations on September 4, 1980, which undertook, among other things, to regulate discharges of commercial, municipal and industrial wastes, including "oil field wastes including water produced with oil and gas," and including "any discharge to the subsurface." Such rules and regulations require the obtaining of permits for such discharges. On November 14, 1980, appellants filed an action in the district court seeking (1) a judgment declaring that promulgated rules and regulations were invalid as being beyond and in excess of the powers and jurisdiction of appellees, and (2) an injunction restraining appellees from enforcing the provisions of such rules and regulations. The trial court granted appellees' amended motion to dismiss the complaint and its causes. In doing so, it found that the doctrine of sovereign immunity precluded the action against appellees, and it based the dismissal upon this ground. It also found that the independent action for declaratory judgment would not lie inasmuch as it was "in the nature of a petition for review" of an administrative action and was not filed within the time allowed for such review. On appeal, appellants present the issue of whether or not the doctrine of sovereign immunity is applicable. And if it is not applicable, appellants present the additional issue of whether or not an action for declaratory judgment is available as an independent action.

We reverse and remand with directions to deny the amended motion to dismiss.

IMMUNITY

Section 30-5-104, W.S.1977, grants to the Wyoming Oil and Gas Conservation Commission the authority and power to regulate all phases of the drilling and operation of oil and gas wells, and disposal wells in connection with oil and gas production. It specifically provides:

"(d) The commission has authority:

"(ii) To regulate, for conservation purposes:

"(D) Disposal of salt water, nonpotable water, and oil-field wastes;"

Subsequent to the enactment of § 30-5-104, the Wyoming Environmental Quality Act, §§ 35-11-101 through 35-11-1207, W.S.1977, Cum.Supp.1981, was enacted. The questioned rules and regulations of appellee Council were promulgated pursuant to the power delegated in such act. Among other things, the declared policy and purpose of the act is "to enable the state to prevent, reduce and eliminate pollution," § 35-11-102, W.S.1977. See Tri-State Generation and Transmission Association, Inc. v. Environmental Quality Council, Wyo., 590 P.2d 1324 (1979). Section 35-11-103(c) of the act provides in pertinent part:

"(c) Specific definitions applying to water quality:

"(i) 'Pollution' means contamination or other alteration of the physical, chemical or biological properties of any waters of the state, including change in temperature, taste, color, turbidity or odor of the waters or any discharge of any acid or toxic material, chemical or chemical compound, whether it be liquid, gaseous, solid, radioactive or other substance, including wastes, into any waters of the state which creates a nuisance or renders any waters harmful, detrimental or injurious to public health, safety or welfare, to domestic, commercial, industrial, agricultural, recreational or other legitimate beneficial uses, or to livestock, wildlife or aquatic life, or which degrades the water for its intended use, or adversely affects the environment. This term does not mean water, gas or other material which is injected into a well to facilitate production of oil, or gas or water, derived in association with oil or gas production and disposed of in a well, if the well used either to facilitate production or for disposal purposes is approved by authority of the state, and if the state determines that such injection or disposal well will not result in the degradation of ground or surface or water resources." (Emphasis added.)

Appellants contend that, by its rules and regulations, appellee Council is attempting to do that which the Wyoming Oil and Gas Conservation Commission has been authorized to do and which the legislature has excepted from the powers of the Council. This issue is not before us on this appeal. ¹ The only issue before us is whether or not the district court is precluded from reaching the question on the merits concerning the relative powers of the two state agencies because of the doctrine of sovereign immunity.

The majority rule is that generally the state may not be subject to a declaratory judgment action as a defendant because of the doctrine of sovereign immunity. 22 Am.Jur.2d Declaratory Judgments, § 85. Yet it is said as a general proposition:

"Declaratory judgment proceedings have been considered particularly useful in determining the rights of the individual vis-a-vis public authorities and administrative agencies. A judicial determination as to the power of public regulatory agencies and the validity of their rules and regulations enables the private individual to avoid uncertainty as to his rights and duties and to avoid the risks of civil and criminal liability without requiring him to use the more cumbersome writs of certiorari, mandamus, quo warranto, or prohibition. * * * " 22 Am.Jur.2d Declaratory Judgments, § 31, p. 880.

When a money judgment is not involved, when the only issue is one of construction or validity of a statute or constitutional provision, there would seem to be no reason to preclude a declaratory judgment on the basis of sovereign immunity in an action in which the state, its agencies, or its officers are defendants. ² At common law, the root for the sovereign immunity defense was the tenet that the "King can do no wrong." The basis for the doctrine is now said to be a "social policy, which protects the state from burdensome interference with the performance of its governmental functions and preserves its control over state funds, property and instrumentalities." 72 Am.Jur.2d States, Territories, and Dependencies, § 99, p. 491. When the question, as here, has nothing to do with whether or not the King is doing wrong, or whether or not the governmental function should be performed, but rather when it has to do with which arm of the King is doing the right, or which voice of the state is directing the governmental function, acknowledged to be proper, it would seem that sovereign immunity is not involved. In this instance, the issue is: Which of two state agencies can properly make rules and decisions in the exercise of a specific police power? To contend that the question should not be answered in a declaratory judgment action is without reason.

Appellees refer to Retail Clerks Local 187 v. University of Wyoming, Wyo., 531 P.2d 884 (1975), as holding that a declaratory judgment action will not lie against the state or its agencies under any circumstances on the ground of sovereign immunity. However, that action was for injunction and damages in addition to one for declaratory judgment. Because there was involved a money judgment and because the only issue was not one of construction or validity of a statute or constitutional provision, the rational and proper rule, supra, would not apply. ³

In any event, subsequent legislation has changed the status of the doctrine of sovereign immunity. The state has fortified its waiver of immunity in declaratory judgment actions. The Wyoming Governmental Claims Act (§§ 1-39-101 through 1-39-119, W.S.1977, Cum.Supp.1981) ⁴ waives sovereign immunity for various actions grounded in tort and contract. It would be incongruous to preclude a declaratory judgment action on the basis of sovereign immunity if such action pertained to the tort and contract actions for which immunity is waived.

It is also inconsistent to recognize a waiver of immunity in declaratory judgment cases which also pertain to a money judgment on a tort or contract action, but not to recognize such waiver in cases, such as this one, wherein the potential for interference with governmental functions and control over state funds is much less, i.e., in cases wherein the only object is to obtain a determination of "rights, status and other legal relations."

Based on (1) the waiver of immunity as reflected in the Wyoming Governmental Claims Act, and (2) common-sense application of the purpose and intent expressed in the Declaratory Judgments Act, the state, its agencies and its officers may not raise the defense of sovereign immunity to actions under the Declaratory Judgments Act; provided that if such actions also concern those contract and tort claims which are subject of the Wyoming Governmental Claims Act, the procedural aspects of that act must be...