« ForrigeFortsett »
egress into or from a State, have for their direct and necessary effect an interference with the performance of duties which it is incumbent upon the United States to discharge, as illustrated in the Crandall Case, supra.
MR. JUSTICE CLARKE dissents.
WALLS, ATTORNEY GENERAL OF THE STATE OF WYOMING, ET AL. v. MIDLAND CARBON COMPANY ET AL.
APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE DISTRICT OF WYOMING.
No. 219. Argued October 13, 1920.-Decided December 13, 1920.
1. As applied to the facts of this case, the statute of Wyoming which prohibits, as wasteful, the burning and consumption of natural gas for its products without fully and actually applying and utilizing its heat for other manufacturing or domestic purposes, and which forbids owners or lessees of gas wells to sell or dispose of such gas for the manufacture of carbon or other resultant products in the making of which its heat is not so utilized for other manufacturing or domestic purposes, and which limits the prohibition to cases where the gas wells or sources of supply are within ten miles of any incorporated town or industrial plant, and penalizes infractions as misdemeanors,—is a legitimate exercise of the police power, and is not constitutionally objectionable as taking property without due process or as an unreasonable or arbitrary discrimination. Pp. 313 et seq. 2. So held, where it was objected that enforcement of the statute would destroy a heavy investment in a plant for the manufacture of carbon black, a substance of great utility, the value of which, with that of the gasoline also produced in the process, was claimed to exceed any other value obtainable from a like quantity of gas, and the manufacture of which, it was claimed, would be impracticable if the heat from the gas must be utilized as the statute prescribed. Id. 3. The statute seeks merely to prevent the selection of products the
Argument for Appellees.
production of which will tend to the rapid exhaustion of the gas supply; and it is not to be construed as demanding that the heat be utilized further than natural laws and existing instrumentalities allow. P. 325.
4. Owing to the fact that natural gas has no fixed situs in the earth but moves from place to place, possession of land is not possession of the gas within it, and the landowner does not gain an absolute property in the gas until he has captured it. P. 316.
5. From this also it results that a State may interpose its police power to prevent a waste or disproportionate use of the gas by a particular landowner in order to protect the equal right of other owners and to conserve the gas as a resource of the State. Pp. 316-319, 323. Ohio Oil Co. v. Indiana, 177 U. S. 190.
6. In confining its application to cases where the source of the gas is within ten miles of an incorporated town or industrial plant, the Wyoming statute is within the limits of classification permissible under the equal protection clause of the Fourteenth Amendment. Pp. 314, 324. Bacon v. Walker, 204 U. S. 311.
7. The validity of the regulation cannot depend upon the relative values or importance of the industries favorably and unfavorably affected by it, or their relations to the welfare of the State, these being matters for the judgment of the state legislature. P. 322. 8. The fact that plaintiffs' products-carbon black and gasoline-may be sold for more than the gas consumed in making them would bring for fuel purposes, is not a ground for denying the State the power to prevent the disproportionate use and rapid depletion of the natural gas supply involved in the process. Id.
THE case is stated in the opinion.
Mr. Henry E. Lutz, with whom Mr. William L. Walls, Attorney General of the State of Wyoming, was on the brief, for appellants:
Mr. John W. Lacey and Mr. Reid L. Carr, with whom Mr. Herbert V. Lacey was on the brief, for appellees:
It is noteworthy that appellants did not, by affidavit or otherwise, controvert any of the following matters: (1) That appellees had, prior to the enactment of the statute, made an investment in the business of manu
Argument for Appellees.
facturing carbon black of nearly seven hundred thousand dollars; (2) that the factory of the appellees is most efficient and economical, and yields the largest amount of merchantable black that can be produced by any known method; (3) that the market price and value of the products, gasoline and carbon black, exceed the market price and value for any other purpose of the natural gas consumed to make them; (4) that carbon black made from natural gas is not only useful but indispensable for the manufacture of the printing inks required by the highspeed presses now in use, and its place can be supplied by no substitute; (5) that it is further a necessity for various manufactures of rubber, for carbon papers, typewriter ribbons, phonograph records and many manufactured articles of universal daily use; (6) that it is impossible so to use gas in manufacturing carbon black that the heat contained in the gas shall be "fully and actually used for other manufacturing purposes or domestic purposes;" (7) that the manufacturing operations of the appellees are so conducted as to cause no injury to the health, morals or comfort of anybody; (8) that the inevitable effect of the statute is not only to require the Midland Company to cease operating said factory, but to render it impossible to sell or use any gas derived from the wells of the Occidental Company for the manufacture of carbon black at any time or place; (9) nor is there the slightest attempt to prove that anyone of the "incorporated towns" or "industrial plants" owns any interest whatever in the gas wells or gas lands located within a radius of ten miles outside their boundaries. In other words, the showing is that the statute, instead of conserving gas for the reasonable use of all the collective owners of the lands under which it lies, seeks to appropriate the gas-or what appellants term a "paramount right" thereto for the benefit of certain communities and industries in the vicinity of the gas wells, and to deprive the owners of these gas lands and wells of
Argument for Appellees.
the right to use or sell the gas they reduce to possession in the manner that will produce the best return to the owners and the greatest benefit to the public at large, viz, for the manufacture of carbon black.
In Bacon v. Walker, 204 U. S. 311, a statute was examined which limited the herding and grazing of sheep on the public domain within two miles of the dwellings of others than the sheep-owners. As will clearly appear from the case, and especially from the two Idaho cases cited in the opinion, one ground of sustaining the statute was that herding sheep close to the habitation of a settler is a nuisance. In Sweet v. Ballentine, 8 Idaho, 431 (cited in the opinion of this court) it was further emphasized that the plaintiff was not the owner of the lands affected and that "these statutes were not intended to prevent owners from grazing sheep upon their own lands, although situated within two miles of the dwelling of another."
Not one of the cases cited by appellants furnishes either authority or example upholding the right to take away property without price from any individual merely for the financial benefit of another person or any number of persons, although such seems to be the deduction made from those cases.
Not one gives countenance to the claim that natural gas, when reduced by the landowner to possession, is in any sense public property. Not one asserts the power of the legislature to deprive the owner of natural gas lands of the right to sell in the best market, or to put to a use beneficial and necessary to society, such gas as naturally arises in his wells, merely in order that he may thereby be compelled to keep his gas till certain neighboring towns or factories desire it. Each is within well-known principles governing the exercise of police power, and any general language used must be read in the light of the facts involved.
It does not follow that by calling the act a "conserva
Argument for Appellees.
tion" measure, or by declaring the manufacture of carbon black from natural gas to be "wasteful" or "extravagant,' the legislature has foreclosed judicial consideration of the subject. Bunting v. Oregon, 243 U. S. 426, 435; Coppage v. Kansas, 236 U. S. 1; Passenger Cases, 7 How. 283. The principles governing inquiry into the propriety of the purported exercise of police power were formulated long ago in Lawton v. Steele, 152 U. S. 133. In the recent case of Mountain Timber Co. v. Washington, 243 U. S. 219, this court indicated the tests.
The authorities quoted, as well as those cited below, fully establish not only that the true purpose and effect of the act as distinguished from its ostensible purpose, but also the reasonableness of the restrictions sought to be imposed, and the truth of the accusation of waste are all fully open to judicial review.
The business of manufacturing carbon black is a longestablished, necessary and legitimate one, neither noisome nor a nuisance, nor a detriment to "public health, morals or safety." The statute does not attempt to prescribe any limitation as to the place where carbon-black factories shall be located or maintained; does not attempt to deal with the escape of natural gas into the air; does not seek to prescribe for all landowners alike a limit as to the measure or proportion of the productive capacity of each well that shall be withdrawn or marketed; does not regulate the right of proportionate acquisition, nor restrain any of the collective owners from appropriating an undue or excessive quantity through the use of pumps or other artificial means of accelerating the natural flow.
What it does is, after the natural gas has been reduced to possession and has thus become a commodity of commerce, to divest it of one of the attributes of property, namely the right of disposal for an essential commercial purpose. Concretely stated, it deprives the appellees altogether of the right to dispose of or use a single cubic foot of