Wotton v. Bush

• Decision Date: 18 September 1953
• Citation: 41 Cal.2d 460,261 P.2d 256
• Court: California Supreme Court
• Parties: WOTTON et al. v. BUSH, State Oil and Gas Supervisor, et al. L. A. 22287.

Page 256

261 P.2d 256

41 Cal.2d 460

WOTTON et al. v. BUSH, State Oil and Gas Supervisor, et al.

L. A. 22287.

Supreme Court of California, in Bank.

Sept. 18, 1953.

Dolley, Knight, Woods & Hightower, Los Angeles, and James M. Hall, Redondo Beach, for appellants.

William Kinley, George E. Wise and Simpson & Wise, Long Beach, as amicicuriae on behalf of appellants.

Edmund G. Brown, Atty. Gen., and John F. Hassler, Deputy Atty. Gen., for respondents.

Pillsbury, Madison & Sutro, Turner H. McBaine and James L. Wanvig, San Francisco, as amici curiae on behalf of respondents.

SHENK, Justice.

This is an appeal from a judgment for the defendants in an action seeking declaratory relief. A determination is sought to establish that the plaintiffs' real property is located within the Rosecrans Oil Field in Los Angeles County and for that reason may be drilled and placed in production without first complying with the spacing provisions of Chapter 3, Division 3 of the Public Resources Code (Spacing of Wells and Community Leases). Section 3605 of that chapter provides: 'The provisions of this chapter do not apply to any field producing oil or gas on August 14, 1931.' The Rosecrans field was producing oil or gas on the designated date. However, the trial court found that the plaintiffs' property was not in the Rosecrans Oil Field but lay within a new field called the Howard Townsite Field; and that the plaintiffs must comply with the spacing provisions.

At the trial there was substantial evidence to the effect that the Rosecrans and the Howard Townsite areas were different fields; that they were separated by an economically unproductive area; that they were separated geologically by a fault; that there was no drainage across or over the fault; that the regulation of production in one area would have no effect on production in the other; and that since the first discovery well in the Howard Townsite area in 1947 it had been the administrative practice of the Division of Oil and Gas with regard to approximately twenty wells since drilled therein to treat that area as a new oil field. There was evidence to the effect that the two productive areas were merely parts of the overall Rosecrans Oil Field. In the face of this conflict the trial court found that the plaintiffs' property, comprising less than an acre in area, lay outside of the Rosecrans field and in a new field of production.

It is argued on appeal that the provision of Section 3605, set forth above, is unconstitutional for two reasons, both of which relate to the meaning of the term 'field' as used in that section. It is argued first that the section is void for uncertainty, and secondly that by leaving to an administrative body (the Division of Oil and Gas) the determination of what constitutes a 'field producing oil or gas' there has been an improper delegation of legislative power.

The Oil Well Spacing Act, as it is Known, was enacted in its present form in 1947, Stats.1947, p. 3200, Public Resources Code, §§ 3600 to 3608, incl. However, Sections 3600 through 3605 have existed in substantially the same language since 1931, Stats.1931, p. 1277. In general the act prohibits the drilling for or production of oil or gas on a parcel of land smaller than a certain minimal size (substantially one acre) in fields which were not producing on August 14, 1931. By the provisions of Section 3608 such a parcel of land 'shall, for oil and gas development purposes and to prevent waste and to protect the oil and gas rights of landowners, be deemed included' in a community lease with surrounding land to constitute a leasehold large enough to be drilled upon. Provision is made for the declaration of such a leasehold and pro rata shares in the community production. In Hunter v. Justice's Court, 1950, 36 Cal.2d 315, 223 P.2d 465, this court upheld the constitutionality of those portions of the act relating to the production of oil and gas in areas not producing in 1931 but did not find it necessary to consider the constitutional questions raised in the present case.

It is established that 'a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application violates the first essential of due process of law.' Connally v. General Construction Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322; see also Small Co. v. American Sugar Refining Co., 267 U.S. 233, 45 S.Ct. 295, 69 L.Ed. 589. In the present case the legislature has not defined the phrase 'field producing oil or gas.' The dictionary defines a 'field' as a 'natural area or section of land containing or yielding some particular, esp. mineral, resource; as * * * an oil field.' Webster's New International Dictionary, 2nd Ed., 1935, p. 941. The legislatures in other states have undertaken to define the terms used in connection with oil legislation. For example, the following is an excerpt from the General Laws of Mississippi, 1948, Chapter 256, Section 4: '* * * (e) 'Pool' shall mean an underground reservoir containing a common accumulation of oil or gas or both. Each zone of a general structure which is completely separted from any other zone in the structure is included in the term 'pool' as used herein. (f) 'Field' shall mean the general area which is underlaid or appears to be underlaid by at least one pool; and 'field' shall include the underground reservoir or reservoirs containing oil or gas or both. The words 'field' and 'pool' mean the same thing when only one underground reservoir is involved; however, 'field', unlike 'pool', may relate to two or more pools.'

In the light of legislative enactments elsewhere, general practices and understanding it is reasonable to conclude that the term 'field' has been given a meaning susceptible to proof by evidence of common usage in the industry. In this case an expert witness for the plaintiffs, Dr. Robin Willis, stated that a 'layman understands an oil field, as a general rule, to be all of a contiguous area, a general area, from which oil is produced. A technical man would be inclined to amplify that to say all of that area from which oil is, has been, or may in the future be produced from a single major causal geological feature.' Mr. John R. Pemberton, former Oil Umpire for the petroleum industry, stated: 'My understanding of an oil field is that it comprises a distinct and isolated structural uplift of the type in which oil will accumulate * * * it * * * may be all split up, broken by faults of all kinds * * *. An oil field, as such, is not entirely, but it is more or less, a geographical term. It refers to an area.'

On behalf of the defendants Dr. Luis E. Kemnitzer testified that in his estimation, 'the term 'oil field' should be governed by the economics of the situation'; that is should be considered as an area in which continuous and contiguous production is obtained, and 'that the limits of this oil field are those established by the dry holes or uneconomic production.' John H. Wents, Jr., stated: 'I define an oil field as simply the surface area used in exploitation of an underground pool or pools of oil. An oil field is bounded by an uneconomic production or dry holes.' Mr. E. H. Musser, Deputy State Oil and Gas Supervisor and one of the named defendants, stated that for 'the purpose of our work, however, we have taken an oil field to mean, in general, a producing area * * *.'

The plaintiffs contend that the concepts expressed by the witnesses show a lack of uniformity and are irreconcilable. But the record does not indicate that the definitions are necessarily inconsistent. Defendant Musser's 'producing area' is not inconsistent with the areas defined with reference to economic limits by the defendants' other experts. Nor is it materially different from the geographical 'area' of the plaintiffs' witness Mr. Pemberton, or the layman's concept of 'a contiguous area, a general area, from which oil is produced' according to the plaintiffs' witness, Dr. Willis. Nor is there anything in the record to show that the 'distinct and isolated structural uplift' described by Mr. Pemberton is inconsistent with the 'economic limits' depended upon by the defendants. Dr. Willis stated that 'a major causal geological feature', as he described a field, could relate to a productive area which was not always defined by economic limits. He referred to a situation where two distinct fields overlapped at different levels and productivity would therefore be continuous between the fields.

In general the disagreement in terminology between the parties was directed to the specific problem before the trial court the determination of whether the plaintiffs' property lay within the Rosecrans field. The parties agreed that this property was separated from the main Rosecrans field by an area of uneconomic production.

Under the circumstances of this case it is proper that the administrative construction given to Section 3605 since its enactment in 1931 be considered as an aid in determining the meaning of the statute. In Richfield Oil Corporation v. Crawford, 39 Cal.2d 729, 249 P.2d 600, 604, the interpretation of other terms in the Oil Well Spacing Act was before the court. It was held that 'The contemporaneous administrative construction of the enactment by those charged with its...