Sun Oil Co. v. Burford

SUN OIL CO. et al. v. BURFORD et al.

No. 9962. Appeals,

Circuit Court of Fifth Circuit.

July 11, 1942.

Rehearing Aug. 12, Denied term.2 at this cisions rendered this court this case mandate in Although the why down, no reason there is

been sent during by the court not be recalled injustice.3 prevent same term recalling the opposition our In considering a second mandate and cited four appellees have rehearing, Court, some of decisions indicating that contain language which A power do so.4 we do not have the reveals of these cases careful examination to the effort in none them was recalled, second or a have mandate considered, brought petition rehearing This of the court. up at the same term distinction, is the because it is a vital full control general have rule that courts during the judgments over their orders rendered, they with at which were term which are exceptions, none of certain v. Carbondale applicable here. Henderson 40, 25, Co., 11 U.S. S.Ct. Coal & Coke 140 691, Therefore, avoid 332. 35 L.Ed. any conflict our injustice one a from decisions, the mandate we ordered recalled, proceed to a considera-' and shall rehearing petition for a the second tion of its merits. on rendered in this was decision case Selby 29, 1941. The case on December Company Railroad Commis- Gas v. Oil opinion, see 124 F.2d 467. For former by this supra, decided sion of meantime, 13, May 1942. In the on court Rauhut, B. and A. both Robertson J. J. Texas held that Supreme Court Tex., Mar- Austin, and T. L. Foster and an might exercise of that state the courts Dallas, Tex., appel- Row, tin A. both of validity of upon the independent judgment lants. oil-proration orders’ of the Railroad Com- Simmons, and Hart, Roy Ed. P. James circumstances, Texas. In these mission Austin, Tex., for all of Kuykendall, F. L. even handed make sure than order' appellees. cases, we have in both justice will be done McCORD, Cir- HOLMES Before this grant a determined DAWKINS, District Judges, one, it for retrial cuit to remand Selby retry case. In Judge. that is to court necessary restate it we deem doing, so case, as follows: of the governing law HOLMES, Judge. Circuit juris court has When a federal ground controversy on the cohtemplate of a Our do not rules diction power citizenship, it has the diversity of rehearing,1 but this of second arising therein under issues of an decide all was allowed to be filed because one with in accordance circuit of de- the laws of alleged conflict within the 597, City Green, Cir., 353, 61 Ann.Cas. 1 L.Ed. 91 37 S.Ct. of Stuart 5 v. 1917D, F.2d 113 A.L.R. 560. 4 McArthur, 2 7 Cir., Wheat. Burford, 124 F. v. 5 Browder Sun Oil Co. v. L.Ed; States, Selby 467; v. United Sibbald Railroad 5 397 & Gas Co. 2d Oil Cir., v. San Commission, Peck 12 Pet. 9 L.Ed. 128 5 F.2d derson, 3 ,of Wil How. United States Rule Rules Conger, Appeals 131 U.S. for the Fifth liams v. Court Circuit Circuit; Cayser, L.Ed. 201. Thomsen v. U.S. state; the statutes and decisions reasonable fact, basis in it is not violative juris- Amendment; rule obtains where federal the Fourteenth if valid diction solely by attaches reason of a under amendment, said be invalid question. law, under local in which case the federal court down; should decline to strike it In Railroad Commission of Texas but, if doubtful, the local law the federal Co., et al. Rowan & Nichols Oil stay should hand until the matter 1368; Id., 60 S.Ct. has been decided the state court.6 U.S. Id., L.Ed. 390 When the Rowan & Nichols cases (followed by this court in our decided, were law did clearly reported Supreme in 124 467), F.2d appear from state Recently, decisions. Court did not abrogate engraft either however, in Railroad Commission et al. v. exception upon the well-settled doctrine Shell Inc., Oil 161 S.W.2d properly when a federal court once decided March Court equitable jurisdiction takes controversy of spoken of Texas authority upon with any ground may on questions all decide subject. We now legal know the necessary complete of law and fact for a requisites regulations of orders and disposition of In denying the case. the the Railroad Commission under the con 614, (311 motion for a U.S. 61 servation They laws of gov Texas. are S.Ct. 390), Supreme 85 L.Ed. the Court by erned principles the same con of withdrew announcing its first statement struction generally applied as are con in contrary except a juris doctrine where struing state They statutes. must contain upon diversity rests citizenship. diction of guide applicable or standard alike to all decisions, supra, The Rowan & Nichols situated, individuals similarly any so that are determinative of the rule one may federal in interested determine his own equity applicable rights now in injunctive exemptions suits for or thereunder. The against relief agency orders the of Texas Rail- administrative may not exercise an road Commission so far as attack thereon unbridled discretion to enforce them against is based on the “vague contours of the some and refuse to them enforce due-process against though clause” of the Fourteenth others. Even fair on its face, regulation Amendment. if an What was done in those order or is ad cases, pointed eye as was dissenting out the ministered with evil and an un therein,5 hand, opinions radically change equal was it is invalid. application equitable principles the of The Texas Railroad Commis enjoin regulations suits to administrative authority sion did not exhaust its under under the conservation laws of state. by adopting the conservation laws the provisions general may Rule gist of of 37. It the law on the sub it, understood, change exceptions rule or make ject, presently that as is that may provide not promulgating regulations such but one rule for a the State specific person or and performing delegated legis Commission is class a different rule functions, class, or lative federal for another there the courts unless person judgment should not reasonable for mak substitute their is some factual basis that the A respect margin of Commission with the distinction. reasonable ing judgment and fair of economy what is wise in the error must be allowed the of At by the state. the the courts of Texas. The the federal Commission time court, respect accepted jurisdiction, may it has the demarca enjoin if must courts powe judicial legislative the enforcement of void order in a tion between suit trespass upon by any injuriously r,7 legis by one the affected If it. arbitrary, the order is not of Commission in de- but lative discretion rest? gee opinion 5 dissenting of 85 Mr. L.Ed. Justice 61 S.Ct. U.S. by Roberts, Texas concurred Chief Justice of et v. Railroad Commission al. Hughes McReynolds, Company 312 Justice U.S. Mr. Pullman citing Thompson Gas Consolidated S.Ct. L.Ed. 971. II, Corp., of the Texas Utilities See Art. See. Con 57 S.Ct. Ann.St., stitution, dividing L.Ed. Vernon’s government legislative, powers of Railroad Commission of into the Texas et al. executive, judicial, providing Nichols, Rowan & 310 U.S. Id., persons person or collection of S.Ct. 84 L.Ed. no one 311 U.S. any department power Id., exercise shall termining validity of state statutes of termining the wisdom or reasonableness due-process under the the Federal clause of rule, order, regulation. or Whether Thus, cases Constitution.8 one of or not evidence the Commission heard upon by of immaterial; Supreme relied take Court required is is not Four Texas is interpreting a decision testimony findings fact before or make Amendment, procedure by teenth the United decided promulgating orders. Such Hop Court, Supreme Yick Wo v. States foreign although to the laws kins, 356, 6 118 U.S. If customary under federal statutes. facts existence when the order made, before as later shown evidence exemplifies This Mr. the statement of minds court, were such that reasonable Frankfurter in Railroad Commis- Justice ar- could not have reached the conclusion sion v. Rowan Oil & Nichols Commission, if at rived 390, that order agency power, exceeded its then the standard reasonable basis under compe- by any set aside should be range opened up the same statute the valid- jurisdiction. tent To determine due- under the inquiry as was asserted order, ity wheth- question is not process the Fourteenth Amend- clause evidence, agency actually er heard but Hence crucial ment. words time such order was en- whether at the' opinion, but which are not dictum there then existed agency tered case, ratio decidendi very justify same. sufficient facts by the to be done ought not what due-process is in- when clause courts Examining further attempted them to be ought voked in the above Court of Texas stat- enforcing a state guise under the case, we standard of reason find ute.9 law, up the set ableness under Texas not Mr. Frankfurter was determining in the the Commission Justice jurisdic question validity regulations, discussing a of federal its orders and is of the of discussing in de- tion. He was discretion ordinarily with that used identical general evidence, others, properly and without the rules of attached to either of the regard except expressly it had theretofore to whether been in the instances therein agency. Magnolia permitted. introduced the before Legislature New Process Production has seen fit to Petroleum Co. Co., “Since the authority judg- Tex. 104 S.W.2d to vest the exercise sound Mag particular of Texas v. Commission mat- Railroad ment discretion the and in Co., S. agency, nolia Petroleum 130 Tex. in administrative courts ter the usurp powers of Lone Star Gas Co. State undertake the W.2d will not to agency, Texas, 279] Tex. S.W.2d 681.” [137 committed the and exercise Commission, agency’s judgment et al. Oil Railroad v. Shell the discretion for contesting Co., al., Tex.Sup., example, Inc., S.W.2d For in an order it. fixing tax March a court a decided of commissioners’ any “But, event, rate, as in we read the an of a board con- or order school cases, management cerning schools, standard reasonable the of the the of opens up put position statute in basis’ under court will not itself respondent range inquiry agency pur- of as the of the administrative for the determining pose to exist his or in effect asserted claims whether not in of * * * the Due Process Clause. These under was wise.- action Texas, contesting claims we have found all latter untenable. “In trials by ought regulation validity order, rule, not to be done What of an of agency, Due is in- courts when the Process Clause administrative the trial not an is by ought attempted purpose determining not to of voked these for the whether actually guise enforcing agency of under a heard sufficient evi- courts respondent support orders, Whether its but state statute. dence whether remedy by a in the time such order was entered still have state at the agency is courts there then existed sufficient facts courts for the Texas to deter- justify agency mine, same. Whether the is not to. foreclosed the de- grounds indicated, nial, is sufficient evidence not on the we have heard material. extraordinary injunc- agency fact, In heard relief an evidence of of upon per se is admissible the trial the federal courts.” Railroad tion in is the district court. Whether it admissi- Texas et v. Rowan & Commission al. ble trial in the district court Nichols Oil 66, depend upon must its own under merits Later cit- followed and suit in a equity attempting arose in a to accommo- chancellor in a federal state juris- concededly conflicting private has an oil where court date cases diction. interests the field with regard of the issuance due its conservation The matter is, policies; injunction when extraordinary still more this true writ is been, the a always juris- historically by equity one discretion afforded prudence comity cannot discretion.10 We is exercised as exercise emphasize sound a matter of in none of so as strongly that to avoid friction in and federal too state oil-proration did the relations under these cases our dual form of state juris- question governments. of federal national Court refer to the did hold diction. the In none them ac agree We do not that this jurisdiction. did federal court suits, tion contains two a “constitutional say go none them We further and suit”, due-process clause, and a under equitable did the hold that federal court “statutory suit”, civil under the statutes.of n jurisdiction What it did did not exist. majori as stated this in the court that, although the federal court hold ty supra. May We jurisdiction one of an had and the case was only equit have here suit. one It nature, that, equitable were such the facts nature, able is called a action civil equity jurisdiction, in the of its exercise under the of Civil Pro Federal Rules by equitable principles was bound plaintiff In it cedure. seeks to have the issuance of deny regulatory court declare order of a void extraordinary injunction. Follow- writ enjoin drilling agency state and to decision, that is what the ing the above only well oil under it. This is the re case, at in this the same court below did sought’. alleged grounds lief of its The jurisdic- holding it had expressly time invalidity are that it violates both tion. due-process .local of the law and the clause elementary Fourteenth Amendment. It is A federal court hot im does that question no court should decide constitutional pugn jurisdiction' when the exercise is necessary' unless its decision discretionary thereof it denies a' writ. disposition the case. Especially is this true when federal court equity jurisdiction uncertainty exercises its in deciding under the Texas that there has been no' violation decisions as to whether or not the local Constitution, may of independent action the Féderal and courts exercise an judg question remains a doubtful of ment on what there law state is reasonable under the Texas depending upon having the construction of statute been removed the above- , ultimately only state statute that. can be mentioned recent the decision of. .authoritatively by Texas, think, upon decided More the state courts.11 Court of we a retrial of case, when, especially is this in this true these the District Court should first circumstances, equity a federal court with determine whether the order is in con - formity discretionary writ holds because the laws of and Constitution of perplexities not, geological economic and If the state.12 that ends the matter ease, many variegated - & applica in the second Rowan ed Nichols been and as .as supple-principle 311 U.S. 61 L.Ed. S.Ct. 85 tions of this as situa the brought play.” . tions that have it into 10 equitable powers “This of use is a Railroad Commission of Texas et al. v. furthering Company al., contribution of the courts in Pullman et 312 U.S. (cid:127) 643, 645, harmonious state the relation between 61 S.Ct. 85 L.Ed. 971. authority 12 and federal without the need of “If there no warrant in state .was rigorous congressional assumption restriction of those law for the Commission’s of powers. Compare authority litiga 37 Stat. 28 U.S. there is an of end the Code, 24(1), tion; § Judicial as the constitutional issue not § C.A. amended, does 41(1), appears 28 U.S.C. of § U.S.C. arise. The law Texas fur easy ample 41(1); Stat. A. 29 U.S.C. nish for § means determin §§ 101-115, ing authority. Rail U.S.C.A. 101-115.” §§ the Commission’s Article gives of et road Commission Pull al. v. 6453 of the Texas Civil Statutes Company 496, 501, man 312 U.S. of such in review order state the n 643, 645, Or, L.Ed. 971. if there are difficulties in the courts. history equity jurisdiction way procedure “The of is this of of which have we history regard- public apprised, the of conse not been the issue law state employing extraordinary quences may appropriate in the settled be action on remedy injunction. part of the There the State to enforce obedience the rules, orders, conservation laws of Texas any unnecessary determination and renders promulgated regulations or If Constitution. under the Federal jurisdic thereunder. confers local This statute held under order should valid be Texas; tion on it does the courts of duty the court law, it would then be jurisdiction extend the District pass upon constitutional federal The latter to Courts of United States. though it is difficult question presented, juris given power courts are receive held reasonable could be see how order Constitution; only diction by the Federal unreasonable under the local statute jurisdiction solely this is clause, conferred vice due-process or under said Congress A States. United versa, of reasonableness the standard since rights that the federal statute create is each instance. protect; courts enlarge or it cannot will enforce order, rule, We have seen equitable jurisdic restrict or presumed under regulation to be valid or is tion of the This was federal courts.14 regulatory and that law of equity true suits before even testimony body required to hear Federal Rules of Civil Procedure were adopted; and, Therefore, question it. support of Conformity now that m case is not the District Court this Act, repealed 28 U.S.C.A. has been § substantia] be evidence there was whether rules,15 superseded by is true new order, support the Commission to fore the of all civil federal actions courts legal is in form and (1) but whether except provided by as otherwise is, face, and, (2) if it whether on its valid statutes or Federal Rules of Civil Proc promulgation of its there at the time merging equit edure.16 legal fair and rea that warranted existed facts procedure in able new federal had rules arriving at the conclusion sonable minds ho legal rights, effect substantive necessary proper and the order was that to confiscation of apply princi equitable the courts still must public prevent the waste of resources or equitable rights ples legal principles property. private rights.17 legal We should not overestimate statute, 8 of Section said how remedy provided importance ever, purely judicial does that no illustrate validity testing the state statute13 for 106, 11 L.Ed. 140 U.S. Pusey Pacific R. Beal v. Missouri to the order. Hanssen, & Jones Co. v. 61 S.Ct [312 Co. U.S. 577], supra; 6476,- 43 S.Ct. Texas Civil Article any showing Procedure, page 662. Dobie on Federal In the absence Statutes. securing Inc., 312 Sibbach v. Wilson & these methods obvious ruling 85 L.Ed. 479. cannot definitive the state courts pursued protection provides: shall Rule 82 “These rules with full claim, to extend or be construed limit court the district constitutional jurisdiction by district of the courts of the its wise discretion should exercise Thompson Compare staying or of United States venue actions its hands. following 478, Magnolia therein.” 28 U.S.C.A. section Petroleum 309 U.S. particular provided 628, As 723c. by to remedies Railroad 84 L.Ed. 876.” laws, 4(d) (2) 64, (7), v. Pullman state see Rules of Texas et al. Commission 496, 501, Company, and 69 of Rules Civil 61 S. the Federal of Pro 312 U.S. 1874, 1, 200, 643, 645, cedure. Cf. Act of June c. 85 L.Ed. 971. Ct. 728; 50, 6049c, 8, § Stat. 28 U.S.C.A. Sections Art. Vernon’s Sec. Annotat 722, 919, 915, Statutes, 933 of Revised and Statutes Civil which ed Texas is refer 729, States, 726, by majority opin §§ of United 28 U.S.C.A. this court in the red to Practice, May 13, 1942, In supra, Moore’s Federal as ion of the basis ,Federal 1, p. “statutory “jurisdic Vol. “The said: suit” of a wherein independent diversity citizenship” Rules of course establish an of in tion rested on practice procedure and for in all actions to “the contradistinction what is called due-process the federal courts heretofore denominated suit” constitutional under the legal equitable, and and therefore no state of Fourteenth Amendment. clause affecting practice procedure parte statute McNiel, and 20 L. 14 Ex courts, Will, 624; will have effect in the federal ex Case of Broderick’s Ed. cept in so far as the Rules themselves 88 U.S. Wall. specifically adopt statutory Reynolds Bank, state law.” v. Crawfordsville U. 723b, 48 Stat. 28 U.S.C.A. S. §§ 723c; Practice, Shattuck, Moore’s Federal Vol. Whitehead pp. Neely, 208-213. Scott v. powers Texas which is in were conferred conflict with the first by conservation handed in very Railroad Commission down this I case. much and, Texas; laws the doubt that we right of as construed after lapse Supreme Court, time, great of a length it shows that such after may an in- the writ filing petition that exercise time allowed courts of dependent state for for a judgment expired, reopen reason- as what is certiorari has to to grant and preventing able in waste. Said Section case a new trial as has been done If, however, jurisdiction on the Texas timely also conferred here. this motion is legally granted, courts of construe conservation statutes the two cases can on a state, done the new trial conformity which been be determined in with highest Supreme the above the court of that So in decision state Court of deals with case.18 far as decision the conflict that now exists in statute,19 opinions rights may it is our two substantive under the be obliterated. courts; but it is on the federal binding Republic On Motion of National Bank of wholly the discretion ineffective control Dallas for Leave File Petition in In- exercising equitable of a chancellor federal tervention in the Nature of a Petition jurisdiction. In some instances this discre- Rehearing. for absolutely tion is controlled restricting prohibiting statutes HOLMES, Judge. Circuit granting injunctive specified relief Less petition than month a after the first cases, disputes, particularly against in labor denied, rehearing in this case was taxes, against the collection down, Republic mandate sent Na- 2 of the rate orders. Under Rule Federal tional Bank Dallas made a loan to A. O. Rules of Civil Procedure there is but one Phillips secured a deed of trust on some procedures civil at law'and action lieu of place, production oil from are af- equity; rights substantive controversy. which is bank here The Federal and decisions de- fected. statutes now asks leave to intervene in this suit so when, facts, under the extra- termine ordinary may petition nature file injunction granted writ shall be petition rehearing, and such obtain by the federal courts.20 just. be it is relief as While incon- herein, judgment this The dated gruous rehearing behalf of to seek a on aside, December will set party prior hear- one who was not reversed, appealed judgment and this from motion, the bank’s ing, have considered we Court for cause remanded District on its merits. with proceedings not inconsistent further At the time bank its loan made opinion. this neither the term of court nor the time al grant expired, lowed to it certiorari had McCORD, Judge Circuit (specially con- right rely finality had no on the of our curring) . decision; did, but, if it it has not been original opinion The in which prejudiced by we af- the setting first, aside of our firmed second, the District Court entry in this was and of our judgment. case handed down on December merely upheld affirmance judgment on court, denied jurisdiction the district wherein its February Since time the sustained, prayer been had junction for an in denied, Court of plaintiffs Texas has clarified' and the relegat questions the of State law upon involved here. state courts all ed to the issues other et Railroad Commission al. v. Shell Oil those under federal than the constitution. Co., Inc., Tex.Sup., 11, et 1942, appellants’ March petition On second for rehear- term, 161 S.W.2d 1022. Moreover in during the same we ing, case of the set the- aside Selby Oil & Gas Co. v. Railroad Commis- and judgment affirmance remanded the Cir., sion, 334, opinion 5 128 F.2d in an the district cause to court for a new entire Judge trial, merely restating greater Hutcheson we rendered a at length decision 18 Will, Railroad Commission et al. v. 21 Shell diction. Broderick’s Wall. Co., Inc., al., Tex.Sup., Green, Oil 161 SAY. 22 L.Ed. Richardson v. 9 Cir., decided March 2d 1942. 61 F. certiorari denied 159 U.S. statutory authority bring Sawyer to State may right White, Cir., be a substantive suit that the F. 223. pp. Practice, 20 1 courts will if case in Moore’s Federal federal enforce 202- juris- volving right such is within their 208. part change uphold appellees’ contention no it. To the case. We withdrew law of the part ju- part deprive of its except that would this court opinion of our former pe- risdiction, since, granting the state the second relegated to which state issues qual- during same term ruling rehearing was tition for the courts, prior that even court, ex- jurisdiction the of ified, and until we held that such “Unless as follows: prevent injustice.4 has decided isted to the State court of last resort of rea- judgment’ as to ‘independent that an was our first decision The effect the be exercised sonableness should ques the federal constitutional to decide courts.” [state] state arising under relegate tion and issues supervening decision the The courts; present our deci state law to the state courts holding that Court of be the court those issues to sion remands judgment, independent might such exercise ; go back to and, case had to since low sec- hold in our necessary to it for us made retrial, thought it we for the district court might courts opinion that ond entirety. in its anew best to let trial be laws arising under the such issues decide so with its loan did the bank made When that reason for This was of the state. might court knowledge state particu- we deemed prior to that time interests to which adversely those to decide decisions, and by Texas point lar unsettled effect of advancing credit. The it was law on the state to the in doubt as were remanding “the rehearing and granting the subject.2 upon their merits open leave case was to No loan, pleadings. presented its if it was re- When the bank made all issues right to have affirmance, acquire property it was lying judgment on our one than court rather presumed state judgment to know that the tried in the a cause plaintiffs left district court in this federal court. case in the pursue in the courts whatever free to file leave to the bank motion of rights the state statutes afforded them.3 petition is overruled. waiving objections their to Without intervene, McCORD, Judge motion of the bank for leave to (dissenting). Circuit thereto, reply appellants filed a have opinions elaborating I concurred some, claiming with- traversing principles applied of law to be other, parts knowledge thereof. We out involving in cases federal courts orders that, bank agree appellants with even if the regulations of Railroad acquired, claims owns the interest it Burford, Sun Oil Co. v. Commission. Cir., subject voluntarily took opinion Appel- 124 F.2d on suit, apparently of this outcome July Petition for Rehearing, lants’ Second rely upon appellees present satisfied to However, my special concur- acquired. affecting the interest so issues opinion July rence to the I ex- appellees have The bank not claim that does pressed right court had doubt interest, remaining and does not seek to no reopen grant new trial the case any party. place Com- be substituted lapse great length of such a “after the grounds rehearing as- parison of the time, filing peti- allowed for after the time merely shows that it has by the bank serted expired.” a writ of certiorari has tion for appel- grounds asserted adopted expressed. I reiterate the doubt there am I lees. appellants’ second too late and should came may acquire a vested inter No one granted. have been elapsed time has until in a decision est respectfully jurisdiction I dissent. which implies rule which See our that a F.2d 1 124 during may, al. mandate once issued of Texas et Railroad Commission term, prevent injustice; he recalled to al- & Nichols Oil Rowan implies Id., that, so our rule which after twenty-one days judgment, from date of U.S. may, during Id., by special term, presented leave of Railroad Commission Tex- Company judges. of one of Pullman al. v. as et Transcript Record, p.

Case Details

Case Name: Sun Oil Co. v. Burford

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Jul 11, 1942

Citation: 130 F.2d 10

Docket Number: 9962

Court Abbreviation: 5th Cir.