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U.S. Supreme Court

Thompson v. Consolidated Gas Utilities Corp., 300 U.S. 55 (1937)

Thompson v. Consolidated Gas Utilities Corp.

No. 89

Argued November 18, 19, 1936

Decided February 1, 1937

300 U.S. 55


1. Under the common law of Texas (apart from statute), the owner of land has title to the natural gas in place, including that which migrates there from other lands of the gas field, and may produce all that will flow from his well, and may drill off-sets to get his full share from the common supply. P. 300 U. S. 68.

2. In support of administrative regulations purporting to be made under legal authority, there is a presumption of the existence of facts justifying the specific exercise. P. 300 U. S. 69.

3. Orders limiting and prorating the production of gas by the several owners of land in a gas field must be held invalid if shown to bear no reasonable relation either to the prevention of waste or to the protection of correlative rights, or if shown to be otherwise arbitrary. P. 300 U. S. 69.

4. Quaere whether c. 120, Texas Acts, 935, should be construed as attempting to authorize the State Railroad Commission to reduce the production of gas from wells owned by the owners of private pipelines, for the sole purpose of making them buy gas produced by others who lack pipeline connections. P. 300 U. S. 73.

5. This Court is reluctant to pass upon a seriously controverted question of the meaning of a state statute, because its decision,

Page 300 U. S. 56

although disposing of the particular case, cannot settle the proper construction of the statute. P. 300 U. S. 74.

6. In construing, on appeal, a state statute which has not been construed by the state courts, this Court is disposed to accept the construction given it by the lower federal court, particularly when that court is composed wholly of citizens of the State. P. 300 U. S. 74.

7. Where one party's case depends upon a construction of a state statute bringing it plainly in conflict with the Federal Constitution, and where the proper construction of the statute has not been settled by the state courts, but is gravely doubtful, this Court will rest its decision on the Constitution, and will not undertake to decide the question of construction, as to which it lacks the power to give a definitive answer. P. 300 U. S. 75.

8. One person's property may not be taken for the benefit of another private person, even though compensation be paid. Pp. 300 U. S. 77-79.

9. Some of the owners of wells in a Texas gas field had established contract light and fuel markets for their gas in distant places by means of their privately owned pipelines. The other owners of wells could not operate because there was no local light and fuel market for gas and they had no pipelines to transport it elsewhere, and because to employ it in the manufacture of natural gasoline and carbon black was forbidden by the State as wasteful. The Texas Railroad Commission, claiming authority under a statute (c. 120, Texas Acts, 1935), made an order purporting to limit the total daily production of the field and to prorate the allowed production among the several wells. Although the pipeline owners were operating their wells without waste and without injury to others, and although their supply was ample to supply their market needs, the order, if enforced, would have reduced their production so drastically that, to fulfill their contract obligations to their customers, they must purchase gas from the other well owners and must suffer other losses through curtailment of plant activity and through migration of gas underground away from their wells to other parts of the field where the pressure was lower. The purpose of the order, as plainly shown by evidence and court findings, was neither to prevent waste nor to prevent undue drainage from the reserves of other well owners, but was solely to compel the pipeline owners to furnish a market to those who had no pipeline connections. Held, the order is void under the Federal Constitution as a taking of private property for private benefit. Pp. 76-79.

Page 300 U. S. 57

10. A private party is not estopped to attack provisions of a statute that are harmful to his interests merely because he sought the enactment of other and separable provisions in it, beneficial to him in an incidental way, but neither relied on by him nor brought in question in the litigation. P. 300 U. S. 80.

14 F.Supp. 318 affirmed.

Appeal from decrees of the District Court of three judges which permanently enjoined the Railroad Commission of the Texas and the Attorney General from enforcing an order of the Commission limiting production of gas in the Panhandle Fields. The two cases were consolidated for purpose of appeal. See also 12 F.Supp. 462, a decision on motion for a preliminary injunction.

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