Transok Pipeline Co. v. Darks

• Decision Date: 12 December 1977
• Docket Number: Nos. 76-1647,76-1648 and 76-1972,s. 76-1647
• Citation: 565 F.2d 1150
• Parties: TRANSOK PIPELINE COMPANY, an Oklahoma Corporation, Plaintiff-Appellee, v. Maxwell DARKS, Marvin Olivo, Agnes Lucas now Wesley, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1150

565 F.2d 1150

TRANSOK PIPELINE COMPANY, an Oklahoma Corporation, Plaintiff-Appellee, v. Maxwell DARKS, Marvin Olivo, Agnes Lucas now Wesley,

Defendants-Appellants.

Nos. 76-1647, 76-1648 and 76-1972.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted Sept. 29, 1977.

Decided Nov. 14, 1977.

Rehearing Denied Dec. 12, 1977.

Andrew Wilcoxen, Muskogee, Okl. (Kenneth W. East, Tutra, Okl., on brief), for plaintiff-appellee.

Carl Michael Smith and Robert G. Grove, Oklahoma City, Okl., for defendants-appellants Maxwell Darks and Marvin Olivo.

Gary P. Snow, Holdenville, Okl., for defendant-appellant Agnes Lucas now Wesley.

Before McWILLIAMS, BARRETT and DOYLE, Circuit Judges.

WILLIAM E. DOYLE, Circuit Judge.

The appellee Transok Pipeline Company brought this condemnation suit against Marvin Olivo, Maxwell Darks and Agnes Lucas now Wesley, and a number of others. The purpose of the action was to condemn an easement for the underground storage of natural gas, pursuant to an Oklahoma statute, 52 O.S. § 36.3 et seq. Federal jurisdiction is said to arise under 25 U.S.C. § 357, which authorizes the condemnation of lands allotted in severalty to Indians in the same manner as lands owned in fee. Jurisdiction as to appellants Darks and Olivo, who are not Indians, rests on the fact that a number of restricted Indians, including the appellant here, Lucas now Wesley, and the United States government, the fee holder in trust of Indian lands, are all named as defendants. Darks' cotenant in one tract and the mineral owners in his and Olivo's property are restricted Indians. This presents a somewhat tenuous problem with respect to pendent jurisdiction over state claims against persons other than the defendants on the federal claim, where a common nucleus of fact is present in both the federal claims and the state claim.

The Indian defendants were represented by the United States Attorney for the Eastern District of Oklahoma. On August 22, 1975, the Assistant United States Attorney representing the Indian defendants and the attorney for Transok entered into a stipulation that there was no issue to be submitted to a jury. Judgment was entered in accordance with a stipulation as to the amount, and it was directed that this be distributed among the individual defendants. The appellant Lucas (now Wesley) signed a stipulation which she received in the mail and accepted the check that accompanied it. Now she claims that she did not fully understand the stipulation and had no contact with the attorney who represented her. On August 23, 1976, her effort with three other restricted Indian defendants to set aside the judgment was denied.

The Olivo and Darks cases were submitted to the jury on August 25, 1975, and verdicts were returned which the trial court held, on motion for new trial, to be excessive. A new trial was granted and at the second trial the awards were much less.

Darks was the owner of a one-half surface interest in 80 acres which was in tract 1. He owned the entire surface interest in the 80 acres of tract 2.

Olivo was the owner of a surface interest in tract 6, which was 160 acres. The mineral rights as to the Darks and Olivo tracts were owned by restricted Indians (so Darks and Olivo were seeking compensation for the diminution of their surface rights).

The evidence disclosed that the Darks' property here considered was part of a larger cattle ranch. The evidence also showed the land to be primarily suitable for farming and ranching. However, there was a somewhat wooded area and a lake on the property. There was at least a contention that some of the area around the lake was suitable for residential development. Also, on the property was an abandoned oil and gas well and tract 2 was subject to an oil and gas lease.

The Olivo property was also primarily used for range and agriculture, and there was at least some possibility of residential development in the wooded parts of it. The Olivo property was also subject to oil and gas leases and had a pipeline across it. Olivo's testimony was that the new easement, the subject of the present litigation, would increase the pressure in the pipeline and that it might cause some danger.

The first jury award was for Darks, tract 1, $12,000; Darks, tract 2, $32,000; Olivo, tract 6, $48,000. As we have said, these verdicts were vacated and a new trial was granted to Transok. The court held that the verdicts were excessive when considered in the light of the fact that a full range of uses remained to the owners. The motion for new trial of Darks with respect to certain damage issues was denied.

The second jury verdict which was rendered May 21, 1976, made the following awards: Darks, tract 1, $1,000; Darks, tract 2, $2,000; Olivo, tract 6, $5,600.

The appeal of Darks and Olivo seeks review of the court's action in vacating the first verdict and seeks to set aside the second verdict. However, the main thrust of the appeal is that the trial court erred in granting Transok's motion for new trial following the first awards, and that the court erred in certain of its rulings on evidence and discovery in both trials.

Wesley seeks review of the order denying the motion to set aside the judgment which was entered as a result of her acceptance of the check. She claims that she did not understand it and that the court lacked jurisdiction as to her and the other Indian defendants.

Specifically, Olivo seeks reversal on the following grounds:

1. That there is no federal jurisdiction as to him.

2. That the Oklahoma substantive and procedural law applied by the trial court as to the taking of property by eminent domain violated the Constitution of the United States.

3. That the trial court erred in granting a new trial on account of excessiveness of damages and overruling Darks' motion for a new trial.

4. That there was error on the part of the trial court in refusing to permit the presentation of evidence on damages including the value before and after the taking of Olivo's portion of the gas storage formation, and (b) value before and after taking of Olivo's wells and casing to the subsurface formation.

The specific contentions of the defendant-appellant Darks are the same as those raised by Olivo and, in addition, he argues other points such as lack of necessity for the taking under Oklahoma law. He also makes detailed arguments with respect to the trial court's refusal to allow at the second trial evidence as to severance damage and trespass damages to Darks' land prior to the date of taking.

I.

We first consider the argument that the district court did not have jurisdiction over the Indian defendants because the Secretary of the Interior was not served and was an indispensable party. For this proposition some language contained in United States v. Oklahoma Gas & Elec. Co., 127 F.2d 349, 354-55 (10th Cir. 1942), aff'd, 318 U.S. 206, 63 S.Ct. 534, 87 L.Ed. 716 (1943), is relied on. The court in that case did say by way of dicta that the Secretary is an indispensable party. It cited Minnesota v. United States, 305 U.S. 382, 59 S.Ct. 292, 83 L.Ed. 235 (1939), which contains a statement that the United States is an indispensable party to such an action. The Supreme Court did not refer to this issue in affirming the Oklahoma Gas decision. In a later case, Town of Okemah v. United States, 140 F.2d 963 (10th Cir. 1944), this court referred to the United States as an indispensable party and did not mention the Secretary as being an indispensable party. In accord is Semple, Oklahoma Indian Land Titles Annot. § 802 at 546 (1952). It is to be concluded that that one statement in Oklahoma Gas is not authority for the proposition that the Secretary is indispensable.

The appellants also rely on the Act of May 27, 1908, § 6, 35 Stat. 312, which authorizes representatives of the Secretary to counsel and advise all allottees of restricted lands and to take such steps as are necessary to protect them or assist said allottees in acquiring and retaining possession of their restricted lands. Another statute, that of August 4, 61 Stat. 731, authorizes the attorneys provided for by the Act to represent Oklahoma Indians before state courts of Oklahoma. This provision does not purport to deal with representation of Indians in federal court and does not state that Indians must be represented by these attorneys.

The further statutory provision relied on is § 3(c) of the Act of August 4, 1947, 61 Stat. 732, which states that no proceeding in which members of the Five Civilized Tribes are parties may be removed to a federal court except upon the recommendation of the Secretary. This, however, falls short of requiring the Secretary to be a party.

We conclude that all necessary parties were served and that the Indian defendants were properly represented. On this issue the trial court found that the government vigorously represented the Indian interests. Appellant Wesley (or Lucas) has not claimed otherwise.

Nor do we agree with counsel for the appellants that the approval of the Secretary was a prerequisite to condemnation. There is one statute, Section 11, Act of August 4, 1947, 61 Stat. 734, which provides that no order of the Corporation Commission under the "oil and gas conservation laws of Oklahoma," affecting restricted Indian land shall be valid until submitted to and approved by the Secretary of the Interior. In this case it does not appear that the Secretary refused to approve the order nor does it appear that § 11, supra makes approval by the Secretary necessary to this condemnation action.

Certification by the Corporation Commission under the "oil and gas conservation laws," 52 O.S. §§ 81-287.15, is designed to regulate the oil and gas industry. While a certificate is also required for condemnation of underground storage facilities under a different chapter, 52 O.S. § 36.4, formal condemnation proceedings in federal court are necessary before it can have any...