Southwestern Glass Co. v. Arkansas Oklahoma Gas Corp.

SOUTHWESTERN GLASS COMPANY, Inc. and Waelder
Oil & Gas, Inc. v. ARKANSAS OKLAHOMA GAS,
CORPORATION

95-1177                                            ___ S.W.2d ___

                    Supreme Court of Arkansas
                 Opinion delivered July 15, 1996


1.   Public Service Commission -- authority of -- jurisdiction
     properly in circuit court. -- The Public Service Commission is
     vested with the authority to adjudicate individual disputes
     involving public rights that the Commission is charged by law
     to administer; public rights that the Commission may
     adjudicate are those arising from the public utility statutes
     enacted by the General Assembly, and the lawful rules,
     regulations, and orders entered by the Commission in the
     execution of the statutes; because the issues here surrounded
     the enjoining of appellant's private use of the public rights-
     of-way and not a public right arising from the public utility
     statutes, jurisdiction was properly in chancery court. 

2.   Injunctions -- granting or denial of -- when reversed. -- The
     granting or denying of an injunction is a matter falling
     within the sound discretion of the trial court, and its
     decision will not be reversed on appeal unless it is clearly
     erroneous.  

3.   Injunction -- injunction erroneously granted -- case reversed
     and remanded. -- Where the record revealed that gas pipelines
     already in place paralleled and crossed one another in the
     areas inside and outside of the city, that the twelve-to-
     eighteen-inch distance at which the appellant's line would
     cross under appellee's line was in conformity with both the
     United States Department of Transportation's Pipeline Safety
     Regulations and the Arkansas Gas Pipeline Code, that the
     Public Service Commission had authority to regulate safety
     concerns accompanying construction and maintenance of
     appellant's proposed gas line, as evidenced by Ark. Code Ann.
      23-15-201 -214 (1987 and Supp. 1995), and finally, where no
     evidence was introduced to illustrate that appellee's line
     must be moved to accommodate appellant's line or that
     appellant's line would block or alter appellee's line in any
     way, appellee failed to show how appellant's proposed pipeline
     would be in conflict or inconsistent with the city's public
     use of the dedicated easement and right-of-way; the chancellor
     was in error in enjoining the construction of appellant's
     line; the case was reversed and remanded. 


     Appeal from Crawford Chancery Court; Jim Spears, Chancellor;
reversed and remanded.
     Harper, Young, Smith & Maurras, by:  S. Walton Maurras, for
appellant Southwestern Glass Co.
     Warner, Smith, & Harris, PLC, by:  Joel D. Johnson, for
appellant Waelder Oil & Gas, Inc..
     Daily, West Core, Coffman & Canfield, by:  Jerry Lee Canfield,
for appellee.
     Barrett & Deacon, by: J. C. Deacon and D. P. Marshall, Jr.,
amicus curiae.


     Tom Glaze, Justice. *ADVREP*SC9*






SOUTHWESTERN GLASS COMPANY,
INC. and WAELDER OIL & GAS,
INC.,
                    APPELLANTS,

V.

ARKANSAS OKLAHOMA GAS
CORPORATION,
                    APPELLEE.



95-1177

Opinion Delivered:  7-15-96

APPEAL FROM THE CHANCERY COURT
OF CRAWFORD COUNTY, NO. E-95-
448 (III), HONORABLE JIM
SPEARS, CHANCELLOR 





REVERSED AND REMANDED


                  TOM GLAZE, Associate Justice

     Southwestern Glass Company, Inc., operates a manufacturing
facility within the city limits of Van Buren, Arkansas.  It entered
into a contract with Waelder Oil & Gas, Inc., for the sale of
natural gas and the construction of a natural gas pipeline from
Waelder's gas well to Southwestern's facility.  Waelder agreed to
deliver its natural gas exclusively to Southwestern.  Gaines
Construction Co., Inc., was engaged to do the actual construction
of the pipeline, which included crossing under a public street and
within close proximity of an already existing natural gas pipeline
owned by Arkansas Oklahoma Gas Corporation (AOG).  AOG is a public
utility that possesses a non-exclusive franchise entitling it to
use the public rights-of-way in Van Buren.
     In its effort to prevent construction of Southwestern's
pipeline, AOG filed a complaint in chancery court requesting the
defendants Southwestern, Waelder, and Gaines be enjoined from
laying the pipeline because there was insufficient space for its
safe installation, operation and maintenance.  The chancellor
granted a temporary restraining order on June 27, 1995, but set a
hearing date for July 11, 1995, to determine whether the order
should be dissolved or made permanent.
     On the day of the scheduled hearing, AOG filed an amended
complaint raising six new grounds for relief, and Southwestern
again moved to dismiss.  The court offered either to proceed with
the hearing on all issues or to adjourn to give the defendants
Southwestern, Waelder, and Gaines more time to prepare.  The
defendants chose to proceed.  The hearing resulted in the court
enjoining defendants from completing the gas line, and from that
decision, Southwestern, Waelder, and Gaines (hereinafter
defendants) bring this appeal.
     First, we address the defendants' argument that AOG should
have filed its action with the Public Service Commission (PSC), not
in chancery court.  We disagree.  The PSC is vested with the
authority to adjudicate individual disputes involving public rights
which the Commission is charged by law to administer.  Public
rights which the Commission may adjudicate are those arising from
the public utility statutes enacted by the General Assembly, and
the lawful rules, regulations, and orders entered by the Commission
in the execution of the statutes.  Ozarks Elec. Coop. Corp. v.
Harrelson, 301 Ark. 123, 782 S.W.2d 570 (1990).  Because in the
present case the issues surrounded the enjoining of Southwestern's
private use of the public rights-of-way and not a public right
arising from the public utility statutes, jurisdiction was properly
in chancery court.  
     We now turn to Southwestern's arguments that (1) AOG had no
standing to request an injunction against Southwestern's private
use of the city's right-of-way, and (2) even if AOG had standing,
the chancellor was wrong in holding Southwestern could not
construct its pipeline in the city's right-of-way.  Because we find
merit to the substantive portion of Southwestern's argument, we
need not discuss the standing issue.
     First, we point out that the chancellor's order enjoined
Southwestern from boring its pipeline which would have crossed
under an AOG line already located under South 28th Street.  That
street is bordered on the west by Southwestern's property and on
the east by property owned by Dillmeier-Houle Land Co.  In other
words, Southwestern's and Dillmeier's common boundary line is
located on the center line of South 28th Street.
     Southwestern submits that South 28th Street and South 28th
Circle were created by the dedication of an easement, and as an
abutting property owner, Southwestern owned the fee underlying the
street and could make use of that fee so long as it was not
inconsistent with the city's easement.  Cases cited by Southwestern
support its contention.  For example, this court in Freeze,
Mayor v. Jones & Harvel, 260 Ark. 193, 539 S.W.2d 425 (1976),
considered the validity of a Ft. Smith ordinance vacating and
abandoning a block of Bernie Avenue, and in discussing the city's
rights in dedicating easements, stated that the ownership of the
fee in the Bernie Avenue right-of-way remained in the abutting
owners together with all rights not inconsistent with the public
use to which the property was dedicated.  See also Lincoln Hotel
Co. v. McGehee, 181 Ark. 1117, 29 S.W.2d 668 (1930).  In the
present situation, Southwestern says its pipeline is to pass under
the area used by the city for street purposes and also in no way
interferes with AOG's line.  Thus, because Southwestern's private
pipeline is consistent with the city's use of its right-of-way, the
chancellor's injunction infringed on Southwestern's rights as fee
simple owners. 
     AOG counters Southwestern's argument by urging Southwestern's
proposed private gas line is in direct conflict with the city's
dedicated use of its right-of-way.  AOG relates that it is a public
utility which provides natural gas service in Van Buren under a
non-exclusive franchise issued by the city.  It points out that it
has a four-inch, high-pressure pipeline located within the right-
of-way of South 28th Street and Southwestern's proposed pipeline
would have to physically cross AOG's pipeline in order to reach its
intended destination at Southwestern's facility.  AOG argues
Southwestern has to locate AOG's line, expose it and bore some
twelve-to-eighteen inches above or below the line in order to
construct Southwestern's line.  In sum, AOG contends Southwestern's
conflict with the public use to which the property was dedicated is
evident because Southwestern's proposed pipeline (1) has already
necessitated AOG's locating its own line, (2) would require AOG to
uncover its line to accommodate safe construction of the proposed
private line, and (3) would result in the city and utility
companies operating in the future within twelve-to-eighteen inches
of a pressurized gas line.
     Our review of the record reveals gas pipelines presently
parallel and cross one another in the areas inside and outside of
the city.  The evidence also shows that the twelve-to-eighteen-inch
distance at which the Southwestern line would cross under AOG's
line is in conformity with both the U. S. Department of
Transportation's Pipeline Safety Regulations and the Arkansas Gas
Pipeline Code.  We note, too, that the PSC has authority to
regulate safety concerns accompanying construction and maintenance
of Southwestern's proposed gas line, as is evidenced by Ark. Code
Ann.  23-15-201 -214 (1987 and Supp. 1995).  And finally, no
evidence was introduced to illustrate AOG's line must be moved to
accommodate Southwestern's line or that Southwestern's line would
block or alter AOG's line in any way.  Cf. Langford v. Griffin, 179
Ark. 574, 175 S.W.2d 296 (1929); City of Osceola v. Haynie, 147
Ark. 290, 227 S.W. 407 (1921).  
     The granting or denying of an injunction is a matter falling
within the sound discretion of the trial court and its decision
will not be reversed on appeal unless it is clearly erroneous. 
Southeast Arkansas Landfill, Inc. v. State, 313 Ark. 669, 858 S.W.2d 665 (1993).  Because AOG failed to show how Southwestern's
proposed pipeline would be in conflict or inconsistent with the
city's public use of the dedicated easement and right-of-way, the
chancellor was in error in enjoining the construction of
Southwestern's line.
     Accordingly, we reverse and remand for the reasons stated
hereinabove. 
     Special Chief Justice Judy Simmons Henry joins in this
opinion.
     Jesson, C.J., and Dudley, J., not participating.