Texas American Asphalt Corporation v. Walker, Civ. A. No. 12622.

CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
Writing for the CourtINGRAHAM
Citation177 F. Supp. 315
Decision Date18 September 1959
Docket NumberCiv. A. No. 12622.
PartiesTEXAS AMERICAN ASPHALT CORPORATION, Plaintiff, v. Charles J. WALKER, Sr., and C. M. Maier, Defendants.

177 F. Supp. 315

TEXAS AMERICAN ASPHALT CORPORATION, Plaintiff,
v.
Charles J. WALKER, Sr., and C. M. Maier, Defendants.

Civ. A. No. 12622.

United States District Court S. D. Texas, Houston Division.

September 18, 1959.


177 F. Supp. 316
COPYRIGHT MATERIAL OMITTED
177 F. Supp. 317
John Peace and Bradford F. Miller, San Antonio, Tex., E. J. Dryer, Washington, D. C., Fulbright, Crooker, Freeman, Bates & Jaworski, W. N. Arnold, Jr., Houston, Tex., for plaintiff

George Cochran Doub, Asst. Atty. Gen., and Donald B. MacGuineas, Atty., Dept. of Justice, Washington, D. C., William B. Butler, U. S. Atty., Houston, Tex., for defendants.

INGRAHAM, District Judge.

Plaintiff, a Texas corporation which operates a petroleum refinery at Lacoste, Texas, for the production of asphalt, seeks to enjoin the Collector and Deputy Collector of Customs at Galveston and Houston, Texas, from preventing plaintiff from importing Venezuelan crude oil in noncompliance with the Mandatory Oil Import Program promulgated by the President in Proclamation 3279, issued March 10, 1959 (24 F.R. 1781), 19 U.S. C.A. § 1352a note. Plaintiff also seeks a declaratory judgment that it is entitled to import such crude oil at the rate of 10,000 barrels per day.

Proclamation 3279 was issued by the President pursuant to Section 8 of the Act of August 20, 1958 (72 Stat. 673, 678-679).1 That section authorizes the Director of the Office of Civil and Defense Mobilization to make investigations to determine the effects on the national security of imports of articles and, if the Director is of the opinion that a particular article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security, he shall so advise the President, and the President, unless he determines that the article is not being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security, shall take such action as he deems necessary to adjust the imports of such article and its derivatives so that such imports shall not so threaten to impair the national security.

The statute provides that the Director and the President in taking such action shall give consideration to a number of stated factors, such as the domestic production needed for projected national defense requirements, the capacity of domestic industries to meet such requirements, the existing and anticipated availabilities of products essential to the national defense, the requirements of growth of such industries, the effect of the importation of goods upon such industries and the capacity of the United States to meet national security requirements, and the effects resulting from displacement of any domestic products by excessive imports.

On January 28, 1959, the Director of the Office of Civil and Defense Mobilization published in the Federal Register, in accordance with regulations which he had issued providing that upon public notice of his undertaking an investigation under this statute any interested party might submit comment, opinion, or data, a notice that he was undertaking an investigation with respect to imports of crude oil pursuant to a request by the Secretaries of State and Defense (24 F.R. 601-2, 619).

Following such investigation, the Director of the Office of Civil and Defense

177 F. Supp. 318
Mobilization informed the President that on the basis of his study of the relationship of oil imports to the national security he had determined that imports of excessive quantities of low-priced oils from foreign sources, where production costs are substantially lower than in this country, were bringing about a decline in exploratory drilling in the United States; and that this trend was upsetting a reasonable balance between imports and domestic production, with deleterious effect upon the adequate exploration and development of additional reserves in this country. The Director concluded that crude oil and its derivatives and products "are being imported in such quantities and under such circumstances as to threaten to impair the national security."

On March 6, 1959, a Special Committee to Investigate Crude Oil Imports (composed of the Acting Secretary of State, the Secretary of Defense, the Secretary of the Treasury, the Secretary of the Interior, the Secretary of Labor, and the Secretary of Commerce) recommended to the President that in the light of this conclusion of the Director of the Office of Civil and Defense Mobilization the Voluntary Oil Import Program then in effect (referred to in Executive Order 10761, March 27, 1958, 23 F.R. 2067) 41 U.S.C.A. § 10d note2 be replaced by a mandatory program which would limit the imports of crude oil and derivatives to such levels as the national security requires and would allocate such imports among companies in a fair and equitable manner.

Proclamation 3279 recites that the President and the Director of the Office of Civil and Defense Mobilization have considered the matters which the statute requires them to consider, that the President agrees with the conclusion of the Director of the Office of Civil and Defense Mobilization that crude oil and its principal derivatives and products are being imported in such quantities and under such circumstances as to threaten to impair the national security, and that the President finds that adjustments must be made in imports of crude oil, unfinished oils, and finished products so that they will not threaten to impair the national security; and it provides that after March 11, 1959, no crude oil or unfinished oils may be entered for consumption or withdrawn from warehouse for consumption except by or for the account of a person to whom a license has been issued by the Secretary of the Interior pursuant to an allocation made by the Secretary in accordance with regulations to be issued by him.

The Proclamation also provides that in Districts I-IV (continental United States east of the Rocky Mountains) the maximum level of imports of crude oil, etc., shall be approximately 9% of the total demand in these districts, as estimated by the Bureau of Mines for periods fixed by the Secretary of the Interior; and that additional imports of crude may be permitted "as are necessary to meet the minimum requirements of refiners, and pipeline companies using crude oil directly as fuel, which are not able to obtain sufficient quantities of domestic crude oil by ordinary and continuous means, such as by barges, pipelines, or tankers." The Proclamation authorizes the Secretary of the Interior to issue implementing regulations, consistent with the import levels established in the Proclamation, which shall provide for a system of allocation of authorized

177 F. Supp. 319
imports of crude oil and the issuance of licenses. Such regulations are required by the Proclamation to "provide, to the extent possible, for a fair and equitable distribution among persons having refinery capacity in these districts in relation to refinery inputs during an appropriate period or periods selected by the Secretary * * *."

The Proclamation further authorizes the Secretary of the Interior to establish an Appeals Board, comprised of officials of the Departments of the Interior, Defense, and Commerce of the rank of Deputy Assistant Secretary or higher, which may be empowered "on grounds of hardship, error, or other relevant consideration * * * to grant allocations of crude oil and unfinished oils in special circumstances to persons with importing histories who do not qualify for allocations under such regulations."3

On March 13, 1959, the Secretary of the Interior issued implementing regulations (24 F.R. 1907) which provide that allocations of imports of crude oil would initially be made for the period March 11-June 30, 1959, and would thereafter be made for six months' periods; that a person is not eligible for an allocation to import crude oil during the period ending June 30, 1959, unless he had refinery inputs during 1958;4 and that when an allocation is made to a person the Oil Import Administrator issues a license based on the allocation specifying the amount of crude oil which may be imported during a prescribed period of time and a copy of such license is sent to the Collector of Customs at the stated port of entry.

Plaintiff corporation was organized in September 1958 with a total capitalization of $1,000 by James A. Clements, who is the corporation's president. In November 1957 he had acquired a lease of oil producing properties in the Taylor-Ina Field in Medina County, Texas. After drilling some wells on this property, which produce an asphaltic type of crude, Clements found that he could not market his oil profitably and decided to construct a refinery near the Taylor-Ina Field to produce asphalt from this crude. Clements had no experience in producing asphalt and only limited experience in operating a refinery. After making plans for the construction of a refinery at Lacoste, approximately twelve miles from the Taylor-Ina Field, Clements learned that not all asphaltic crude would make asphalt meeting specifications for road building, etc. Plaintiff also made plans for the construction of a second refinery at Ennis, Texas, designed to make asphalt from petroleum produced in fields in Titus County, Texas.5 Clements then learned that he could not obtain crude from these fields because the producers felt it would be injurious to their reserves to increase their production, which was already committed to others.

After plaintiff started to purchase materials for the construction of its refinery at Lacoste, Clements learned, early in November 1958, that the Taylor-Ina crude would not make specification asphalt products unless that crude was mixed with other crudes produced at the Rinehart Field. Clements also learned that he could obtain from the Cactus Petroleum Company, which gathered the oil from the wells in the...

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8 practice notes
  • O'Donnell v. Bassler, No. 8
    • United States
    • Court of Appeals of Maryland
    • February 12, 1981
    ...F.2d 459 (9th Cir. 1973); Midwest Truck Lines, Ltd. v. ICC, 269 F.Supp. 554, 567 (D.D.C.1967); Texas American Asphalt Corp. v. Walker, 177 F.Supp. 315, 322-23 (S.D.Tex.1959); Salzburg v. United States, 176 F.Supp. 867, 870 (S.D.N.Y.1959); Civil Serv. Comm'n of Tucson v. Mills, 23 Ariz.App. ......
  • Algonquin SNG, Inc. v. Federal Energy Administration, Nos. 75-1202
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • August 11, 1975
    ...cited to us interpreting section 1862(b) and find that none dictate an opposite conclusion. Both Texas American Asphalt Corp. v. Walker, 177 F.Supp. 315, 326 (S.D.Tex.1959) and Pancoastal Petroleum, Ltd. v. Udall, 121 U.S.App.D.C. 193, 348 F.2d 805 (1965) dealt with challenges to particular......
  • Eastern States Petroleum & Chemical Corp. v. Walker, Civ. A. No. 12682.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • September 18, 1959
    ...Oil Import Program are fully set forth in this court's opinion issued September 18th in Texas American Asphalt Corporation v. Walker, 177 F.Supp. 315. Under the Voluntary Oil Import Program1 which was in effect prior to the mandatory program, plaintiff was given an import allocation of 18,3......
  • Heath v. Aspen Skiing Corporation, Civ. A. No. C-2890.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • March 30, 1971
    ...Beck (10 Cir.), 257 F. 2d 575; McNeil v. Leonard (D.C.Mont.), 199 F.Supp. 671 and Texas American Asphalt Corp. v. Walker (D.C.S.D.Tex.), 177 F.Supp. 315. However, the philosophy of present Rule 19 is to avoid dismissal whenever possible, and, although the case would not be permitted to proc......
  • Request a trial to view additional results
8 cases
  • O'Donnell v. Bassler, No. 8
    • United States
    • Court of Appeals of Maryland
    • February 12, 1981
    ...F.2d 459 (9th Cir. 1973); Midwest Truck Lines, Ltd. v. ICC, 269 F.Supp. 554, 567 (D.D.C.1967); Texas American Asphalt Corp. v. Walker, 177 F.Supp. 315, 322-23 (S.D.Tex.1959); Salzburg v. United States, 176 F.Supp. 867, 870 (S.D.N.Y.1959); Civil Serv. Comm'n of Tucson v. Mills, 23 Ariz.App. ......
  • Algonquin SNG, Inc. v. Federal Energy Administration, Nos. 75-1202
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • August 11, 1975
    ...cited to us interpreting section 1862(b) and find that none dictate an opposite conclusion. Both Texas American Asphalt Corp. v. Walker, 177 F.Supp. 315, 326 (S.D.Tex.1959) and Pancoastal Petroleum, Ltd. v. Udall, 121 U.S.App.D.C. 193, 348 F.2d 805 (1965) dealt with challenges to particular......
  • Eastern States Petroleum & Chemical Corp. v. Walker, Civ. A. No. 12682.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • September 18, 1959
    ...Oil Import Program are fully set forth in this court's opinion issued September 18th in Texas American Asphalt Corporation v. Walker, 177 F.Supp. 315. Under the Voluntary Oil Import Program1 which was in effect prior to the mandatory program, plaintiff was given an import allocation of 18,3......
  • Heath v. Aspen Skiing Corporation, Civ. A. No. C-2890.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • March 30, 1971
    ...Beck (10 Cir.), 257 F. 2d 575; McNeil v. Leonard (D.C.Mont.), 199 F.Supp. 671 and Texas American Asphalt Corp. v. Walker (D.C.S.D.Tex.), 177 F.Supp. 315. However, the philosophy of present Rule 19 is to avoid dismissal whenever possible, and, although the case would not be permitted to proc......
  • Request a trial to view additional results

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