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hvTLeuax.. J., dissentme- 354 U.S.
this respect.= Not until the Fourteenth Amendment was ratified, nearly eight decades later, was one introduced.
The Fourteenth Amendment was not designed to nullify state power to create institutions of property in accord with loeaJ needs and policies. Whether or not it was intended to secure substantive individual rights as well as procedural ones* it was not a strait jacket immobilizing state power to change or alter institutions of property in the public interest.3 Almost innumerable decisions have demonstrated this, even though the Amendment has been effective to create substantial limitations upon the methods by which the changes deemed necessary may be made.
The basic question here is really one of substantive due process. It relates primarily to whether Oklahoma can curtail the unqualified right of capture which appellant conceives it acquired by virtue of and as an unalterable incident to its acquisition of surface rights including the right to drill for gas. For, in denying that the state
"* The nearest approximations perhaps were in the prohibitions against (state legislation impairing the obligation of contracts and against ex post facto legislation before the latter was limited to criminal and penal consequences. Colder v. Bull, 3 Dall. 386. See Hale, The Supreme Court and the Contract Clause, 57 Harv. L. Rev. 512, 621,852.
"See Mk. Justice Black dissenting in McCart v. Indianapolis Water Co., 302 U. 8. 419, 423; Boudin, Truth and Fiction about the Fourteenth Amendment, 16 N. Y. U. L. Q. Rev. 19.
** It is precisely in cases where the Amendment has been made thus effective, often by giving expansive scope to the idea of "property," that iU interpretations have failed to withstand the test of time. Omipara Hibnik v. McBride, 277 U. S. 350, with OUen v. Nebraska, 313 C. S 236; Adair v. United States, 208 U. S. 161, and Coppage v. Kansas, 236 U. 8. 1, with Phelps Dodge Corp. v. Labor Board, 313 I?. H. 177, 1S7; Lochner v. New York, 198 U. S. 45, and Adkins v. Children's Hospital, 261 U. S. 525, with West Coast Hotel Co. v. I'urrish,m U.S.379.
62 Rvtuedge. J . disrating.
can enforce the only feasible method of limitation consistent with production by Peerless. Republic in effect is saying that the state cannot restrict its right to take all gas in the common reservoir, including all that can be drained from beneath Peerless' lease and the lands of other owners similarly situated. This is. for the particular circumstances, a denial of the state's power to protect correlative rights in the field or to regulate appellant's taking in the interest of others having equal rights proportionate to their surface holdings. For. though Republic concedes it is bound by Oklahoma's statutory requirement of pro rata production, that requirement becomes merely a time factor affecting the rate and length of the period of Republic's drainage, not the total quantity eventually to be taken, if Republic can defy the commission's order and thus leave Peerless in its present helpless condition.
The contention is bold and far reaching, more especially when account is taken of the nature of the industry. Natural gas in place is volatile and fugitive, once a single outlet is opened. When extracted it cannot be stored in quantity, but must be marketed ultimately at burner tips in the time necessary for conveyance to them from the well mouth. The competitive struggle for the industry's rewards is particularly intense in the initial stage of developing a field. By the industry's very nature large outlays of capital are required for successful continuing production and marketing. All those factors however tend toward monopoly once success has been achieved in a particular field.
These peculiar qualities, moreover, have been reflected in the legal rights relating to the ownership of gas in place, as well as its extraction. They have been adapted to its nature and to that of the competitive struggle regarding it. Only a specialist in this branch of the law, which varies from state to state, can undertake to say
Rutledge, J., dissenting. 334U.S.
with any reliable degree of precision what rights may be in particular situations. These difficulties, intensified by the competitive struggle for the product and the inadequacy of common-law ideas to control it, have forced both the states and the federal government to adopt extensive regulatory measures in recent years. This has been necessary both to conserve the public interest in this rapidly depleting natural resource " and to secure fair adjustment of private rights in the industry. Rather than being a sacred, untouchable enclave of the common law, the field by its very nature lends itself especially to governmental intervention for such purposes. In this respect it is hardly comparable to situations comprehending only conventional manufacturers and merchants of consumable goods.
In accordance with Oklahoma's law, appellant does not assert title to the gas in place. It asserts only the right to capture what it can produce. But that right, unqualified, would include the right to take gas from beneath others' lands. So taken, it defies their rights to a proportionate share and the state's power to secure them, if for reasons rendering marketing through their own facilities unfeasible they cannot join in the unrestrained competitive draining.
So far as the federal Constitution is concerned, there is no such unrestricted fee simple in the right to drain gas from beneath an adjacent owner's land. It is far too late, if it ever was otherwise, to urge that the states are impotent to restrict this unfettered race or to put it upon terms of proportionate equality by whatever measures may be reasonably necessary to that end. Indeed our constitutional history is replete with instances where the states have altered and restricted schemes of property
MCf. Power Comm'n v. Hope Gas Co., 320 U. S. 591, dissenting opinion of Mr. Justice Jackson at 628.
62 Rutledge, J., dissenting.
rights in response to the public interest and the states' local needs. In some cases this has gone to the extent of abolishing basic common-law conceptions entirely and substituting new ones indigenous to their areas and the problems they present. Perhaps the most extensive and obvious illustrations are to be found in the systems developed in our arid and mountainous western states for governing rights in the waters of flowing streams and mining rights in respect to precious metals.25 Others are not lacking."
It hardly can be maintained that the creation and control of rights respecting the ownership, extraction and marketing of natural gas are less broadly subject to state control than those relating to waters for irrigation and other uses or to the extraction of precious metals in the regions where those matters have called into play the states' authority to act in the manner best suited to local conditions and the needs of their inhabitants. The similarities of the situations and the problems, for purposes of constitutionality in the exercise of those powers, are so obvious they do not need to be specified.
Historically, the states' freedom to exercise broad powers in defining and regulating rights of ownership and production of natural gas has been recognized almost as long and quite as completely as their similar freedoms to act in relation to water rights and mining rights. In
25 See Clark v. Nash, 198 U. S. 361; Fallbrook Irrigation District v. Bradley, 164 U. S. 112; Kansas v. Colorado, 206 U. S. 46, 93-94; United States v. Rio Grande Dam & Irrigation Co., 174 U. S. 690, 702-703; Strickley v. Highland Boy Gold Mining Co., 200 U. S. 527; Parley's Park Silver Mining Co. v. Kerr, 130 U. S. 256; Butte City Water Co. v. Baker, 196 U. S. 119; Kendall v. San Juan Silver Mining Co., 144 U. S. 658; Clason v. Matko, 223 U. S. 646.
MHead v. Amoskeag Mfg. Co., 113 U. S. 9; Wurts v. Hoagland, 114 U. S. 606; Bacon v. Walker, 204 U. S. 311; cf. Ferry v. Spokane, P. & S. R. Co., 258 U. S. 314; Campbell v. California, 200 U. S. 87.
RUTLEDGE, J., dissenting. 334 U. S.
a line of cases beginning a half century ago with Ohio Oil Co. v. Indiana, 177 U. S. 190, this Court has upheld various types of state regulatory schemes designed to prevent waste and to protect the “coequal rights” of the several owners of a common source of supply.” These cases clearly recognize that the state regulation may be justified on alternative grounds, either to prevent waste or to adjust private correlative rights.” It is true, as appellant points out, that none of those cases presented the specific issue of whether the state may adjust correlative rights independently of a conservation program. But it is not true that this power is merely incidental to the fundamental right of the state to preserve its natural resources. In fact, if one power were incidental to the other, the Ohio Oil case would support the view that waste prevention is justifiable because it serves “the purpose of protecting all the collective owners . . . .” 177 U. S. at 210.” Moreover, it is significant that the opinion in Bandini Petroleum Co. v. Superior Court specifically states that the California reg
* Ohio Oil Co. v. Indiana, 177 U. S. 190; Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61; Walls v. Midland Carbon Co., 254 U. S. 300; Bandini Petroleum Co. v. Superior Court, 284 U. S. 8; Champlin Refining Co. v. Corporation Commission, 286 U. S. 210; Hunter Co. v. McHugh, 320 U.S. 222.
* See Hardwicke, The Rule of Capture, 13 Tex. L. Rev. 391, 414– 422; Marshall and Meyers, Legal Planning of Petroleum Production, 41 Yale L. J. 33, 48–52; Ely, The Conservation of Oil, 51 Harv. L. Rev. 1209, 1222–1225; Ford, Controlling the Production of Oil, 30 Mich. L. Rev. 1170, 1181,1192.
* Independently of any statute, several states have granted equitable relief against waste in order to protect the correlative rights of common owners of a reservoir of gas or oil. Louisville Gas Co. v. Kentucky Heating Co., 117 Ky. 71; Manufacturers Gas and Oil Co. v. Indiana Natural Gas and Oil Co., 155 Ind. 461, 474–475; Ross v. Damm, 278 Mich. 388; Higgins Oil & Fuel Co. v. Guaranty Oil Co., 145 La. 233; Atkinson v. Virginia Oil & Gas Co., 72 W. Va. 707.