Court Opinion

ID: 9793742
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:52:15.839992+00
Date Added: 2024-06-11T08:06:43.262700
License: Public Domain

HARGRAVE, Justice,
dissenting.
Whether the statutes examined here are prospective or retrospective, and whether the Corporation Commission rules correctly impliment the statutes, are not dispositive of the issues presented here.
The Commission states, in the preamble of the rules implimenting these statutes, that private contractual rights are subject to modification under the police power of the state to protect correlative rights. Patterson v. Stanolind Oil & Gas Co., 182 Okl. 155, 77 P.2d 83 (1938). As said therein, it is well established that the police power of the state extends to protecting the correlative rights of owners in a common source of supply. The lawful exercise of the state’s power to protect the correlative rights of owners in a common source of oil and gas is not violative of state or federal due process guarantees when the subject of this restriction is a valid exercise of the state police power upon subjects within its scope.
The dispositive issue here is whether or not 52 O.S.1983 §§ 540-547 is a valid exercise of the state’s police power. Do these statutes protect correlative rights? If so, the established law affirms such action is a valid exercise of the police power of the state.
In the recent case of Samson Resources Co. v. Corporation Com’n., 702 P.2d 19 (Okl.1985), this Court referred to Kingwood Oil Co. v. Corporation Commission, 396 P.2d 1008, 1010 (Okl.1964), for a definition of correlative rights.
“The term ‘correlative rights’ has been defined as a convenient method of ‘indicating that each owner of land in a com*299mon source of supply of oil and gas has legal privileges as against their owners of land therein to take oil and gas therefrom by lawful operations conducted on his own land, limited, however, by duties to other owners not to injure the source of supply and by duties not to take an undue proportion of the oil and gas’. Summers, Oil and Gas, Yol. 1, Sec. 63.”
Immediately following that definition the Court referred to United Petroleum Exploration, Inc. v. Premier Resources, Ltd., 511 F.Supp. 127 (W.D.Okl.1980), for a refinement of the term correlative rights which this Court has accepted in Tenneco Oil Co. v. El Paso Natural Gas Co., 687 P.2d 1049 (Okl.1984).
“From this it can be seen that correlative rights are those rights which one owner possesses in a common source of supply in relation to those rights possessed by other owners in the same common source of supply. At this point, it must be emphasized that a common source of supply in which the owners of mineral interests possess correlative rights is the underlying geological strata from which the oil and gas is produced, rather than the well through which the oil and gas is reduced to possession. See, 52 Okla. Stat. 1971 § 86.1(c).”
It is clearly established that this Court is committed to the tenet that correlative rights refers to the mutual obligations of the separate owners of a common source of supply. Our definition of the term expressly negates the premise that correlative rights refers to the mutual obligation of owners of a single wellhole. Samson, supra, states:
“The relief requested by Tenneco in this case, the replacement of an operator designated under a voluntary pooling agreement in order to protect ‘correlative rights’, is clearly beyond the Commission’s conferred jurisdiction, as it concerns a dispute between private parties in which the public interest in correlative rights is not involved....”
The police power is the power to enact laws, to promote order safety, health, and general welfare of society. A legislative police power enactment is not conclusive of an asserted public interest or general welfare. This is a matter that is always open to judicial inquiry, and a determination of what is a proper exercise of the police power is always subject to supervision of the court. Gates v. Easter, 354 P.2d 438 (Okl.1960). The public interest required to be present before private property may be subject to public regulation must amount to something more than a desire to regulate conceived out of personal concern as to future events, convenience or covetous use of another’s property. It does not mean anything so narrow as mere curiosity, or the interests of particular localities which may be affected by the matters in question. Oklahoma Natural Gas Co. v. Choctaw Gas Co., 205 Okl. 255, 236 P.2d 970 (1951).
As discussed, correlative rights refers to mutual duties and obligations of owners of a common source of supply. Regulation of the allocation of benefit derived from production from a single well is not an act designed to protect correlative rights, but is instead an attempt to legislate relationships established by private contractual agreements. Such legislation does not protect correlative rights as argued by the Commission, nor is it a valid exercise of the police power. Such regulations are not designed to promote the general public welfare, but, to regulate private contractual rights for the benefit of certain parties owning an interest in a single wellhole. As such the regulations here examined are found not to be a valid exercise of the police power. In its effect these regulations stand on the same theoretical footing as that struck down in Thompson v. Consolidated Gas Utilities Corp., 300 U.S. 55, 57 S.Ct. 364, 81 L.Ed. 510 (1937). Thompson was referred to in Oklahoma Natural Gas Co. v. Choctaw Gas Co., supra. Thompson states:
“But the sole purpose of the limitation which the order imposes upon the plaintiffs’ production is to compel those who may legally produce, because they have market outlets for permitted uses, to *300purchase gas from potential producers whom the statute prohibits from producing because they lack such a market for their possible product. Plaintiffs' operations are neither causing nor threatening any overground or underground waste. Every well owner in the field is free to produce the gas, provided he does not do so wastefully. He is legally and, so far as' appears, physically free to provide himself with a market and with transportation and marketing facilities.
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[T]he purpose of the Commission underlying these orders was, upon a theory of protecting correlative rights, to coerce complainant and other [others] similarly situated to buy gas from, and thus to share their private marketing contracts and commitments and the use of their pipe lines and other facilities for transmitting their gas to market with the owners of wells not now connected to pipe lines, who have not contributed in money, services, negotiations, skill, forethought or otherwise to the development of such markets and the construction of such pipe lines and other facilities. In short to compel complainants to afford markets to those having none.”
The act examined in this case has substantially the same effect as that examined in Thompson, supra. The statutory scheme established by the act simply rearranges the contractual obligations of private individuals for the benefit of a subclass of well owners not having a contract to sell their product. As such it is not a proper exercise of the state’s police power, for the law benefits one subclass of well owners at the expense of others and is thus not designed to benefit the general welfare of the people of the state. Nor can the act be said to prevent waste or protect correlative rights. The Corporation Commission has attempted to ameliorate the obvious constitutional flaws with the act by enacting rules which, in effect, emasculate the act. Statutes should be construed so as to uphold their constitutionality, but in this instance it is obvious that the construction given the act is not supportable by a plain reading of it. The construction given the act by the Commission’s rules is an attempt to rewrite the act, not interpret it.