Court Opinion

ID: 8878441
Source: CourtListenerOpinion
Date Created: 2022-11-26 19:48:39.531431+00
Date Added: 2024-06-11T17:06:30.092771
License: Public Domain

RIVES, Circuit Judge
(dissenting):
Upon further consideration, I am convinced that the Legislature of the State of Louisiana has never given “consent” for the acquisition by the United States of the oil and gas underlying the Barks-dale Air Force Base or of the right to reduce that oil and gas to possession free from the State’s severance tax.
Only by “consent” of the State could the federal government acquire ownership of the gas and oil or the unfettered right to reduce them to possession. Without the State’s consent, the United States has power to purchase or condemn the land for public use. Kohl, et al. v. United States, 1875, 91 U.S. 367, 371, 372, 23 L.Ed. 449. In that event, however, its possession is simply that of an ordinary-proprietor, and it does not have exclusive jurisdiction or the power to exercise exclusive legislation provided by Art. 1, § 8, cl. 17 of the United States Constitution. Paul v. United States, 1963, 371 U.S. 245, 264, 83 S.Ct. 426, 9 L.Ed.2d 292. Humble Pipe Line Co. v. Waggonner, 1964, 376 U.S. 369, 84 S.Ct. 857, 11 L.Ed. 2d 782, held invalid the State’s ad valor-em tax on pipelines and equipment. It did not decide the question of whether the State’s “consent” extended so far as to permit acquisition by the United States of the oil and gas or of the unfettered right to reduce them to possession. The critical question present in this case is the extent of the State’s “consent.”
The “consent” of the Louisiana Legislature was for the United States to acquire the “land” and to “have the right of exclusive jurisdiction over the property so acquired.” La.Acts 1892, No. 12, §§ 1, 2; Acts 1942, No. 31, § 1; La. Rev.Stat.1950, Tit. 52, § 1. In Louisiana, acquisition of the “land” does not pass title to the oil and gas underneath the surface. In 1930, when this land was acquired by the United States, that principle was well established. As was said by the learned district judge in the present case:
“It is too well settled in the law of Louisiana to permit of argument that the oil and gas beneath the soil is not subject to ownership until it has been reduced to possession. See FrostJohnson Lumber Company v. Salling’s Heirs, 150 La. 756, 91 So. 207 (1922) and cases cited therein. While plaintiff argues strenuously that several cases both before and after Frost-Johnson establish the fact that the owner of the land also owns the oil and gas beneath it, its argument is not persuasive. Plaintiff apparently confuses the ownership of the oil and gas *37with the landowner’s right to reduce the oil and gas to possession. This latter right does not confer ownership of the oil and gas prior to its severance from the land.”
Mississippi River Fuel Corp. v. Cocre-ham, E.D.La.1965, 247 F.Supp. 819, 822.
After discussing each of the cases relied on by plaintiff, the district judge re-stated the same principle of law:
“In line with these well settled principles of Louisiana law, by which, under Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), this Court is bound, it is now once again held that ownership of the land itself does not carry with it ownership of the minerals thereunder but merely confers upon the landowner the right to reduce those minerals to possession. In other words, the minerals are not owned until they are reduced to possession.” 247 F.Supp. at 823.
The oil and gas were simply not a part of the property “purchased by consent of the legislature of the state” within the meaning of those words as used in Art. 1, § 8, cl. 17 of the Constitution.
The State Constitution, Art. 4, § 12 gave the Legislature and the State agencies and political corporations power to donate the land to the United States. The same Constitution, Art. X, § 21, as pointed out by the district judge (247 F.Supp. at 821), provided for a severance tax on gas and oil as follows:
“ ‘Taxes may be levied on natural resources severed from the soil or water, to be paid proportionately by the owners thereof at the time of severance; * * * Such natural resources may be classified for the purpose of taxation and such taxes may be predicated upon either the quantity or value of the products at the time and place of severance. No severance tax shall be levied by any Parish or other local subdivision of the State.
“ ‘No further or additional tax or license shall be levied or imposed upon oil, gas or sulphur leases * * *.’ ”
The severance tax so authorized by the constitution has been levied by the Legislature continuously, both before and since 1930 when the United States acquired the land. La.Acts 1922, No. 140; Acts 1932, No. 72, § 1; Acts 1935, 2nd Ex.Sess., No. 24, § 1; Acts 1940, No. 145; La.Rev.Stat.1950, Tit. 47, §§ 631-677.
Oil and gas are part of the natural resources of the State of Louisiana from which it derives a large part of its State revenue. The State has never consented for the United States to acquire ownership of the oil and gas underlying the Barksdale Base, nor has it given the federal government the unfettered right to reduce to possession that oil and gas, nor, a fortiori, oil and gas which may be drained from underneath adjacent lands.
It cannot be disputed that if the Legislature of Louisiana had expressly reserved to the State all rights to and jurisdiction of oil and gas as a part of its natural resources, that reservation would not have operated to deprive the United States of the enjoyment of the land for the purposes for which it was acquired but would have been a valid and effective reservation. James v. Dravo Contracting Co., 1937, 302 U.S. 134, 146, 58 S.Ct. 208, 82 L.Ed. 155. Both the State and the United States dealt with full knowledge of the law of Louisiana. That law with respect to oil and gas in place underneath the surface of the ground, and to the State’s right to levy a charge on their severance from the soil resulted in such a reservation just as clearly as if it had been expressed by the Legislature at the time it gave its consent for the United States to acquire the land.
The conduct of the parties seems to recognize that the State did not part with its right to levy a tax on the severance of oil and gas from the soil. The United States acquired the land included in the Barksdale Base by acts or deeds of donation from three donors, viz., the City of Shreveport, the Board of Commissioners of the Bossier Levee District, and the State of Louisiana. Each deed conveyed title to different parts of the *3822,000 acres of land included in the Barksdale Base.
Comparing the descriptions in the respective deeds with the descriptions in the oil and gas leases to the two appellants, it would seem that the oil and gas wells involved in this case are located mostly or entirely on land donated by the City of Shreveport or the Bossier Levee District. Neither of these political subdivisions had the power to donate the State’s right to levy a severance tax on gas and oil for, as has been noted, that is a right of the State from which its political subdivisions are specifically excluded by Article X, Sec. 21 of the State Constitution. Further, it is particularly clear that the City of Shreveport had no intention to donate, or attempt to donate, any such right for its Act of Donation was amended before it was accepted by the United States by adding the following reservation: “There is hereby reserved to the grantor herein the royalties that may be produced from the oil and gas leases on said property until June 30, 1932, at which time this reservation shall ipso facto cease and determine.” Presumptively, the State’s severance tax was being, and continued to be, levied on that oil and gas. There was no effort to terminate the State’s right to levy such a severance tax.
The State’s Act of Donation was executed pursuant to Act No. 4 of the Legislature of Louisiana for the year 1930, which authorized the lands to be conveyed to the United States for the following purposes: “for an air port, flying field, landing field, military post and for military purposes.” For the State to retain residual jurisdiction over the oil and gas underlying the Barksdale Base would not conflict with the purposes for which the Base was acquired.
Further, the oil and gas leases executed by the United States and by the appellants do not conflict with the State’s retained jurisdiction, for each of those leases imposes the duty on the lessee “to pay when due, all taxes lawfully assessed and levied under the laws of the State or the United States upon improvements, oil and gas produced from the lands hereunder, or other rights, property, or assets of the lessee.”
I have commented on Louisiana’s peculiar concepts of oil and gas in place underneath the surface of the ground in two related respects: (1) Acquisition of the land does not pass title to the oil and gas; and (2) Article X, § 21 of Louisiana Constitution declares oil and gas to be “natural resources” upon which the State may levy taxes at the time and place of their severance from the soil or water. It seems to me, however, that, while those peculiarities of the Louisiana law make clear that the State did not part with its right to levy a severance tax, the same result should be reached in any other State when the State consents for the United States to acquire land for purposes foreign to the drilling of oil and gas wells. In such cases, I submit, the State does not consent to any non-taxed exhaustion of its oil and gas reserves.
For the foregoing reasons, it seems clear to me that the Louisiana law and the intention and conduct of all of the parties involved are in accord to the effect that the United States did not acquire the oil and gas underlying the Barksdale Base, nor did it acquire the right to reduce that oil and gas to possession free from the State’s severance tax. It now seems to me that our decision in Mississippi River Fuel Corporation v. Fontenot, 5 Cir. 1956, 234 F.2d 898, was sound and has not been disapproved or overruled by Humble Pipe Line Co. v. Waggonner, 1964, 376 U.S. 369, 84 S.Ct. 857, 11 L.Ed.2d 782. I would therefore grant rehearing in both of these cases and respectfully dissent.