Wallis v. Pan American Petroleum Corporation, No. 341

CourtUnited States Supreme Court
Writing for the CourtHARLAN
Citation86 S.Ct. 1301,16 L.Ed.2d 369,384 U.S. 63
Decision Date25 April 1966
Docket NumberNo. 341
PartiesFloyd A. WALLIS, Petitioner, v. PAN AMERICAN PETROLEUM CORPORATION et al

384 U.S. 63
86 S.Ct. 1301
16 L.Ed.2d 369
Floyd A. WALLIS, Petitioner,

v.

PAN AMERICAN PETROLEUM CORPORATION et al.

No. 341.
Argued Feb. 23 and 24, 1966.
Decided April 25, 1966.

Page 64

C. Ellis Henican, New Orleans, La., for petitioner.

E. L. Brunini, Jackson, Miss., and Lloyd J. Cobb, New Orleans, La., for respondents.

Mr. Justice HARLAN delivered the opinion of the Court.

This case presents a question concerning 'federal common law' best explained after a summary of the facts and the legal proceedings involved.

At stake in the litigation are rights in several tracts, aggregating 827 acres, of oil-rich 'mud lumps' or islands owned by the United States and located in a mouth of the Mississippi River near Burrwood, Louisiana.1 In

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1954 petitioner, Floyd Wallis, filed with the Secretary of the Interior applications for a lease to exploit oil and gas deposits in the tracts. Because the tracts were deemed by Wallis to be 'acquired lands' of the United States rather than 'public domain lands,' these applications were filed under the Mineral Leasing Act for Acquired Lands, which governs the former, instead of the Mineral Leasing Act of 1920, which controls the latter.2 Subsequently, Wallis entered into a written joint venture agreement with respondent .patrick McKenna giving McKenna a one-third interest in the pending applications and any lease issued under those applications. Then Wallis, who had exclusive management of the property under his agreement with McKenna, sold respondent Pan American Petroleum Corporation an option to acquire any lease Wallis might obtain under the applications then on file with the Secretary.

In 1956, fearing that the tracts might prove to be public domain land, Wallis filed new applications for the same tracts under the Mineral Leasing Act of 1920.3 Thereafter the tracts were ruled to be public domain land, the conflicting applications of one or more competitors were rejected, and in 1958 the Secretary issued a lease of the tracts to Wallis under the 1920 Act. See Morgan v. Udall, 113 U.S.App.D.C. 192, 306 F.2d 799. After the lease was issued to Wallis, McKenna brought a diversity action against him

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in Federal District Court in Louisiana seeking to be declared a one-third owner of the lease by virtue of the original joint venture agreement. Pan American also brought a diversity action in the same court to oblige Wallis to perform the option agreement by transferring the lease to Pan American.

The actions were consolidated, and following a nonjury trial the District Court held that neither McKenna nor Pan American was entitled to any interest in the disputed lease. 200 F.Supp. 468. The trial judge ruled that Louisiana law governed the rights of the parties and required a written agreement to create or transfer any interest in a mineral lease, thus excluding oral agreements as a basis for relief in this case. The judge then decided that the written agreements available to McKenna and Pan American contemplated they would share only in leases obtained by Wallis under the Mineral Leasing Act for Acquired Lands and not in any leases granted him under any other law. The court's judgment in favor of Wallis on the question of lease ownership reserved to McKenna and Pan American whatever rights they might have to damages, restitution, or like remedies based on oral agreements or other conduct.

Over a dissent, the Court of Appeals for the Fifth Circuit reversed, filing an initial opinion, 344 F.2d 432, and after petitions for rehearing, a further opinion adhering to its earlier result, 344 F.2d 439. The court decided only that the trial judge had erred in applying Louisiana law to the controversy and it remanded for a new trial in which 'applicable principles of federal law' would control the issues. 344 F.2d, at 437, 442. In its latter opinion the Court of Appeals reasoned that the Mineral Leasing Act of 1920 imposed pervasive federal regulation and that the Act's policies and the federal interest would be impaired if Louisiana law were to thwart the transfer of these federally granted leases. The opinion acknowl-

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edged an apparent conflict with the Tenth Circuit's decision in Blackner v. McDermott, 176 F.2d 498.4 We granted certiorari and invited the views of the United States, 382 U.S. 810, 86 S.Ct. 80, 15 L.Ed.2d 59, which filed a brief amicus curiae. We now reverse the Court of Appeals.

The question before us is whether in general federal or state law should govern the dealings of private parties in an oil and gas lease validly issued under the Mineral Leasing Act of 1920.5 Several related matters in the case should be distinguished and laid aside at the outset.

First, we are not concerned with whether under Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, the Federal District Court might have diverged from state practice on the relevant issues of statute of frauds, parol evidence, estoppel, trust remedies, and so forth, on the ground that they were no more than 'procedural' rules or fell under some similar rubric. See generally Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8. Respondents do not argue that these rules are merely 'housekeeping' matters on which state and federal courts may ordinarily differ but rather that the federal interest in government-granted mineral leases requires supplanting Louisiana law, in which event the federal rule would normally govern any such case whether in state or federal court. See Dice v. Akron, C. & Y.R. Co., 342 U.S. 359, 72 S.Ct. 312, 96 L.Ed. 398. Second, apart from a pre-empting federal interest, we do not consider suggestions that some

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law other than Louisiana's should govern because the land at issue may be outside the legal boundaries of the State and transactions between the parties may have occurred elsewhere. The District Court sitting in Louisiana obviously assumed that the State as a choice of law matter would apply its own law to the questions. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477. If any challenge was offered on this point below, it has not yet been passed on by the Court of Appeals. Third, whether on the merits the trial court correctly interpreted and implemented Louisiana law is not before us; presumably that issue was presented to the Court of Appeals but not resolved...

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240 practice notes
  • Calhoun v. Yamaha Motor Corp., U.S.A., No. 93-1736
    • United States
    • U.S. Court of Appeals — Third Circuit
    • December 7, 1994
    ...state and federal law in large part turns on Page 630 the interpretation of federal statutes. See Wallis v. Pan American Petroleum Corp., 384 U.S. 63, 68, 86 S.Ct. 1301, 1304, 16 L.Ed.2d 369 (1966) ("Whether latent federal power should be exercised to displace state law is primarily a decis......
  • Waterloov Gutter Protection v. Absolute Gutter, Civil Action No. 97-2554.
    • United States
    • United States State Supreme Court (New Jersey)
    • September 28, 1999
    ...System 780-81 (Richard H. Fallon, Daniel J. Meltzer & David L. Shapiro eds., 4th ed.1996) (citing Wallis v. Pan American Petroleum Corp., 384 U.S. 63, 86 S.Ct. 1301, 16 L.Ed.2d 369 (1966)). Moreover, this construction of Mikohn Gaming Corp. is consistent with Hunter Douglas, Inc. v. Harmoni......
  • F.D.I.C. v. Oldenburg, Nos. 91-4093
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • September 8, 1994
    ...& Myers v. FDIC, --- U.S. ----, ---- - ----, 114 S.Ct. 2048, 2055, 129 L.Ed.2d 67 (1994) (quoting Wallis v. Pan Am. Petroleum Corp., 384 U.S. 63, 68, 86 S.Ct. 1301, 1304, 16 L.Ed.2d 369 (1966)); see also FDIC v. Palermo, 815 F.2d 1329, 1334-35 (10th Cir.1987); FDIC v. Braemoor Assocs., 686 ......
  • Bd. of Cnty. Comm'rs of Boulder Cnty. v. Suncor Energy (U.S.) Inc., 19-1330
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • February 8, 2022
    ...necessary, in a 'few and restricted' instances, to develop federal common law." Id. at 313 (first quoting Wallis v. Pan Am. Petrol. Corp., 384 U.S. 63, 68 (1966); and then quoting Wheeldin v. Wheeler, 373 U.S. 647, 651 (1963)). This exercise is only "a 'necessary expedient, '" however, "and......
  • Request a trial to view additional results
240 cases
  • Calhoun v. Yamaha Motor Corp., U.S.A., No. 93-1736
    • United States
    • U.S. Court of Appeals — Third Circuit
    • December 7, 1994
    ...state and federal law in large part turns on Page 630 the interpretation of federal statutes. See Wallis v. Pan American Petroleum Corp., 384 U.S. 63, 68, 86 S.Ct. 1301, 1304, 16 L.Ed.2d 369 (1966) ("Whether latent federal power should be exercised to displace state law is primarily a decis......
  • Waterloov Gutter Protection v. Absolute Gutter, Civil Action No. 97-2554.
    • United States
    • United States State Supreme Court (New Jersey)
    • September 28, 1999
    ...System 780-81 (Richard H. Fallon, Daniel J. Meltzer & David L. Shapiro eds., 4th ed.1996) (citing Wallis v. Pan American Petroleum Corp., 384 U.S. 63, 86 S.Ct. 1301, 16 L.Ed.2d 369 (1966)). Moreover, this construction of Mikohn Gaming Corp. is consistent with Hunter Douglas, Inc. v. Harmoni......
  • F.D.I.C. v. Oldenburg, Nos. 91-4093
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • September 8, 1994
    ...& Myers v. FDIC, --- U.S. ----, ---- - ----, 114 S.Ct. 2048, 2055, 129 L.Ed.2d 67 (1994) (quoting Wallis v. Pan Am. Petroleum Corp., 384 U.S. 63, 68, 86 S.Ct. 1301, 1304, 16 L.Ed.2d 369 (1966)); see also FDIC v. Palermo, 815 F.2d 1329, 1334-35 (10th Cir.1987); FDIC v. Braemoor Assocs., 686 ......
  • Bd. of Cnty. Comm'rs of Boulder Cnty. v. Suncor Energy (U.S.) Inc., 19-1330
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • February 8, 2022
    ...necessary, in a 'few and restricted' instances, to develop federal common law." Id. at 313 (first quoting Wallis v. Pan Am. Petrol. Corp., 384 U.S. 63, 68 (1966); and then quoting Wheeldin v. Wheeler, 373 U.S. 647, 651 (1963)). This exercise is only "a 'necessary expedient, '" however, "and......
  • Request a trial to view additional results

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