Opinion ID: 1389475
Heading Depth: 1
Heading Rank: 3

Heading: the commission's exclusive jurisdiction over election-related issues

Text: The first issue before the district court was whether Tenneco did timely communicate to El Paso its intention to participate in the well. Because the pooling order was silent as to the manner of communicating an election, resolution of that issue called for the district court (a) to supply the missing terms in the pooling order and (b) to determine Tenneco's compliance with the terms (those expressly shown and those supplied) of the Commission order and its policies. The district court is explicitly prohibited by statute from entertaining suits for declaration of rights acquired under an order of the Corporation Commission. [5] Our fundamental law, Art. 9 § 20, Okl. Const., denies with equal clarity to all courts, except the Supreme Court, the power to review Commission orders. [6] Lastly, Commission orders made pursuant to the oil-and-gas conservation statutes may be reviewed only in the Supreme Court. [7] Cognizance to interpret and construe pooling orders is withdrawn from the district courts. Most recent jurisprudence from this court limits district court power over Commission orders to ascertaining whether the order is facially void. [8] Extant decisions that prohibit varying forms of collateral attack on Commission orders are in accord with this statutory and constitutional demarcation of jurisdiction. [9] The conclusion to be drawn from case law is that when a pooling order is facially void for want of notice, a district court may declare it ineffective, [10] but if the working interest owner, deprived of participation option by want of notice, seeks an opportunity to elect, the Commission constitutes the sole tribunal with power to grant relief. [11] Because El Paso sought to invalidate Tenneco's election not on the basis of facial invalidity but because of Tenneco's alleged noncompliance with the terms of the Commission's pooling order, subject-matter cognizance of the dispute resided solely in the Commission. When the Legislature placed the pooling order under the charge of the Commission, it did so with the directive that it should be made after notice and hearing and upon such terms as are just and reasonable to insure each pooled owner his just and fair share of the oil and gas. [12] Under this delegation, the Commission fashions pooling orders and prescribes their special terms. These include the so-called election to participate which operates to bar participation on one's failure timely to elect under the provisions of an order. [13] In short, the so-called election is the progeny of the statutorily-created pooling order and a regulatory device of the Commission. It is hence clear the first issue in this case was outside the district court's jurisdiction. The second issue presented to the district court was couched in terms of a private contractual dispute. The district court held the contract superseded and modified the terms of the pooling order. Implicit in the resolution of the second issue below  that the critical pooling order provisions stood modified and superseded by the Tenneco/El Paso operating agreement  is the trial court's clearly erroneous assumption that an election right may be altered by less than all of its holders acting without approval of the Commission. An option to convert one's interest is made available in the exercise of the state's nondelegable police power as an instrument of governmental policy. It may be viewed neither as a private playhouse nor as a product of contract law. Because the state cannot surrender or share its police power with any private party, that power cannot be bargained away to anyone, either directly or obliquely. [14] Just as Commission approval is required to change an operator, so is Commission imprimatur necessary to modify the pooling order's provision for conversion of mineral interests to participation rights. [15] In sum, the question whether an option holder did timely and effectively exercise his right of election under a pooling order is to be gauged not by the familiar offer-and-acceptance test of the contract law but rather by the holder's compliance with the terms provided in the source by which the right was conferred. That source  the pooling order  is plainly beyond the district court's reach either for construction or clarification. [16] Private parties are not legally free to take greater liberties with a Commission order than may the district court. If a claim is rooted in an option afforded by the pooling order, it stems from the Commission's exercise of its regulatory power. It cannot be transformed into a private contract interest by the magic of a subsequent operating agreement. An election right [17] cannot be conferred by private contract. It must have its genesis in the Commission order. Although by contract the parties may vary a pooling order's election provision, [18] they must do so on due notice to all other interested parties and upon a hearing before, and approval of, the Corporation Commission. A contrary rule would enable the operator to discriminate in favor of or against some bearers of the Commission-conferred election rights. The district court may not  under the guise of its private-law authority to enforce contracts  alter the legal effect of core provisions in a Commission order. Just as the election dispute tendered by the first issue lies within the Commission's exclusive cognizance, so the Commission-imposed result of an election or non-election under the pooling order may not be negated, modified or abridged by the district court's unwarranted assumption of adjudicative authority over a disguised private contract issue. [19] Commission orders may not be circumvented by resort to collateral agreements posing as private contracts. Such agreements do not embody purely private arrangements but are mere extensions of the statutorily created and regulated interest. In short, the Commission is the proper tribunal to resolve election-related contests. Deference to the Commission's special zone of authority will not create any diminution of judicial power. The judiciary will continue to assert its cognizance over those issues that are properly within the sphere of its history-shaped functions. [20] The Commission's exclusive jurisdictional authority includes enforcement, interpretation and clarification of its orders. [21] Such authority prohibits district courts from enjoining, reversing or interfering with administrative actions of the Commission. [22] Oklahoma is long overdue for a bright and consistent boundary line separating district court cognizance from that of the Commission over disputed claims in the aftermath of a pooling order. Election-related controversies must belong on the same side of the line as those which tender for adjudication rights to drill additional wells in the drilling and spacing unit or to determine additional development costs under a pooling order. [23] We do not further public interest when the line drawn places beyond the Commission's reach those post-pooling-order claims which are vital to the enforcement scheme of its regulatory power. I would reverse the trial court's judgment with directions to dismiss the action for want of subject-matter jurisdiction.