State v. Crown Central Petroleum Corp.

Decision Date26 June 1963
Docket NumberNo. 11111,11111
Citation369 S.W.2d 458
PartiesThe STATE of Texas et al., Appellants, v. CROWN CENTRAL PETROLEUM CORPORATION et al., Appellees.
CourtTexas Court of Appeals

Waggoner Carr, Atty. Gen., Linward Shivers, Asst. Atty. Gen., James N. Ludlum, John Davenport, Austin, for appellants.

Vinson, Elkins, Weems & Searls, Raybourne thompson, W. H. Drushel, Jr., Houston, Clark, Thomas, Harris, Denius & Winters, James H. Keahey, Austin, Cable & McDaniel, Baltimore, of counsel, for appellees.

ARCHER, Chief Justice.

This is an appeal by appellants The State of Texas, acting by and through its Attorney General, Waggoner Carr, and Merle Hart Duffy, B. Pete Jackson, R. L. Foree, and the Texas Independent Producers and Royalty Owners Association, from an order of the 53rd District Court, Travis County, sustaining a motion for Summary Judgment by appellee (defendants below) Crown Central Petroleum Corporation and Crown Central Pipe Line Company, said judgment reciting that appellants 'take nothing' as to their penalty suit against appellee alleging violation of the Texas statutes prohibiting discrimination in the purchasing and transporting of crude oil in Texas. Appellees, after an answer setting out a general denial, filed a motion for summary judgment, which the Trial Court, after opposition filed by plaintiff and intervenors, sustained and summarily rendered judgment that:

'(1) Neither Plaintiff nor Intervenors have a cause of action for penalties and mandamus for the refusal of Defendants to comply with Special Order No. 7-47,648 issued by the Railroad Commission on February 21, 1962, because Defendants are appealing said Order in the 126th District Court in Cause No. 126,174 and have the right to appeal such Order without, at the same time, being subjected to penalties and/or mandamus for refusing to comply with such Order.

(2) Neither Plaintiff nor Intervenors have a cause of action based on alleged acts of discrimination and not the subject matter of the Railroad Commission Order No. 7-47,648 because the Railroad Commission has exclusive original jurisdiction of all of the complaints of discrimination alleged this suit and the Plaintiff and Intervenors must first present their complaints to the Railroad Commission.'

The appeal is predicated on five points assigned as error by the Trial Court in sustaining appellees' Motion for Summary Judgment (a) because appellants seek only penalties for violation of the discrimination statutes, (b) insofar as appellants are required to submit their complaints to the Railroad Commission, since administrative action is not required, (c) because the effect of the judgment is to prevent enforcement of the anti-discrimination statutes (Articles 6045, 6048 and Section 8 of 6049a) through penalty suits authorized by Article 6047 and Section 11 of Article 6049a, Vernon's Ann.Civ.St., (d) because the Attorney General had properly determined that violation had occurred (e) and finally because there were genuine issues of material fact raised by the pleadings and the evidence before the Court.

Appellees take the position that appellants have no cause of action for penalties and mandamus for the refusal of defendants to comply with Special Order No. 7-47,648, because appellees are appealing such order and have the right to do so without being subject to penalties for refusing to comply with such order, and that appellants have no cause of action based on alleged acts of discrimination which are not the subject matter of Order No. 7-47,648, and since appellants do not seek penalties for violation of a Commission Order but for violation of the statutes against discrimination the Court correctly rendered judgment; that the Commission has exclusive jurisdiction to enforce the Oil and Gas Statutes, and the Attorney General cannot usurp that function since the Attorney General can bring suits to end discrimination, only after the Commission has determined by a valid order that discrimination exists and finally that this suit is, as a matter of law, barred; that there are no genuine issues of fact which are material.

On September 10, 1961, B. A. Duffy, now deceased, filed a complaint with the Commission requesting a hearing to investigate the refusal of the present appellees to extend a pipeline to the leases of Duffy, and to determine if a pipeline connection should be required by the Commission in order to prevent unreasonable discrimination.

The complaint was filed pursuant to a Commission Order, called the June 4, 1958 Order, prescribing procedures for requiring common carrier pipelines to connect to leases and wells, which order, in brief, provided that the carrier should, upon application and tender of crude oil by a producer, connect to such lease, when (1) such request is made for connection of lease batteries in the general area served by such carrier, which is an affiliate or subsidiary of a common purchaser, as defined by Section 8 of Article 6049a, and (2) within individual fields, when any common carrier possesses the only pipeline serving such filed and request is made for connection of an unconnected lease battery; provided that for just cause common carrier pipelines may seek exceptions. There is a further provision that when application has been made for a connection and such is refused, a complaint for failure to connect may be filed with the Commission and an allegation of discrimination is made. When the matter comes to the Commission either as an exception by the pipeline or as a producer's complaint for failure to connect, ten days notice shall be given to all affected parties, after which a hearing shall be had, and the Commission will require and consider among other factors, evidence relating to ability of the pipeline to transport the quality of oil, the market for tendered oil, and the period required to return the capital investment for the connection.

After a hearing on the Duffy complaint, the Commission by its Order No. 7-47,648, dated February 21, 1962, required the Crown Companies to extend their pipeline and to connect the tank batteries of the leases.

A hearing was overruled and appellees brought suit in the 126th Judicial District Court of Travis County attacking the Order dated February 21, 1962 on the grounds:

(1) That Crown is not now and has never purchased oil at lease tank batteries in the field, and that the Commission is not empowered under any law of this State to order it to do so;

(2) That the purchase by Crown of oil produced from the 11 Duffy-operated leases at the Teague Station rather than at the lease tank batteries does not constitute discrimination (3) That the refusal or Crown Pipe Line to construct a gathering system for the Duffy-operated leases does not constitute discrimination prohibited by law;

(4) That Crown Pipe Line has never undertaken to render a pipeline gathering service in the Haskell County Regular Field, and that the order of the Commission requiring the construction of a system to serve the Duffy leases at a cost of $42,000 denies to it due process of law;

(5) That the action of the Commission in ordering the construction of the gathering system, and failing to establish rates and charges, has the effect of taking Crown's property without due process of law; and finally,

(6) A pipeline gathering system for the Duffy leases is not required by the public convenience and necessity.

The Commission answered by a general denial. Subsequently Duffy et al and Texdas Independent Producers and Royalty Owners Association intervened. This case is pending in the 126th Judicial District Court.

On July 23, 1962 the instant suit was filed in the 53rd Judicial District Court, seeking a mandatory injunction to require the Crown Companies to comply with the February 21, 1962, Order which was then under attack in the 126th Judicial District Court.

Appellees answered on August 17, 1962 by general denial and a plea in abatement based on the pendency of the suit in the 126th Judicial District Court.

On September 21, 1962 TIPRO et al and Duffy et al...

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6 cases
  • Railroad Commission of Texas v. City of Austin
    • United States
    • Texas Supreme Court
    • March 5, 1975
    ...This Court in the above Foree v. Crown Central Pet. Co. opinion expressly disapproved the holding of State v. Crown Central Pet. Corp., 369 S.W.2d 458 (Tex.Civ.App.--1963, writ ref. n.r.e.) which was another phase of that same case. In the disapproved opinion, it had been held that under th......
  • State v. Harrington
    • United States
    • Texas Supreme Court
    • October 12, 1966
    ...not have the authority to maintain the suit. We disagree. The defendants rely upon such cases as State v. Crown Central Petroleum Corporation, et al., 369 S.W.2d 458, (Tex.Civ.App., 1963), ref. n.r.e., and Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714, to support their contention......
  • Foree v. Crown Central Petroleum Corp., B--460
    • United States
    • Texas Supreme Court
    • June 19, 1968 the 126th Court should finally be adjudged a valid order. The court of civil appeals affirmed. State of Texas v. Crown Central Petroleum Corp., 369 S.W.2d 458 (Tex.Civ.App.--Austin 1963). We refused writ of error, no reversible After petitioners' suit for damages was transferred to Harri......
  • State v. Crown Central Petroleum Corporation
    • United States
    • Texas Court of Appeals
    • June 26, 1963 al., Appellees. No. 11111. Court of Civil Appeals of Texas, Austin. June 26, 1963. Dissenting opinion. For majority opinion see 369 S.W.2d 458. HUGHES, In so far as the majority holds that the State has no cause of action based on failure to comply with Railroad Commission Special Order ......
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