Morgan v. Oklahoma Corp. Commission
2012 OK CIV APP 31
| Okla. Civ. App. | 2011Background
- Morgans own land in Stephens County, Oklahoma; Chevron operates the Velma Sims Sand (Vess) Unit there.
- Morgans allege nuisance and trespass due to Chevron's surface use; Chevron allegedly used more surface than reasonably necessary and did not maintain wells.
- Chevron initiated an OCC proceeding for a plan of remediation and to determine compliance with OCC rules and whether operations posed no threat to health, safety, and welfare.
- ALJ recommended remediation plan; Chevron later sought a finding that its surface use was reasonable.
- OCC issued final order August 17, 2010 finding Chevron’s surface use reasonable, which Morgans challenged as beyond OCC jurisdiction; Morgans did not appeal initial/supplemental reports.
- Court must decide whether OCC exceeded its jurisdiction by determining private surface-use reasonableness rather than public rights or district court jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OCC had jurisdiction to decide reasonableness of surface use | Morgans: private-rights issue; OCC lacks jurisdiction | Chevron: OCC has exclusive jurisdiction over surface use for oil/gas operations | OCC exceeded its jurisdiction; private-rights dispute belongs in district court |
| Whether Morgans exhausted administrative remedies | Morgans challenged jurisdiction; exhaustion not required | Chevron: failure to appeal ALJ reports requires affirmance | Premature review allowed; exhaustion rule did not justify affirmance |
| Impact of OCC's order on private rights vs public rights | OCC cannot decide private rights; order should be vacated | OCC can determine reasonable use within public-rights framework | Paragraphs asserting reasonableness vacated; other portions affirmed |
Key Cases Cited
- Meinders v. Johnson, 134 P.3d 858 (2006 OK CIV APP 35) (limitations of OCC; private rights and public rights distinction)
- Tenneco Oil Co. v. El Paso Nat. Gas Co., 687 P.2d 1049 (1984 OK 52) (OCC jurisdiction over public rights and conservation)
- Grayhorse Energy, LLC v. Crawley Pet. Corp., 245 P.3d 1249 (2010 OK CIV APP 145) (OCC lacks jurisdiction over private-rights disputes not involving public rights)
- Samson Resources Co. v. Corporation Comm'n, 702 P.2d 19 (1985 OK 31) (public rights; OCC authority to protect correlative rights when public interest involved)
- Lierly v. Tidewater Pet. Corp., 139 P.3d 897 (2006 OK 47) (implied covenant to reasonable surface use; private rights context)
- Davis Oil Co. v. Cloud, 766 P.2d 1347 (1986 OK 73) (reasonable use of surface as part of lease obligations)
- Leck v. Continental Oil Co., 800 P.2d 224 (1989 OK 173) (private rights within leasehold context; OCC limits)