Arkansas Louisiana Gas Co. v. Latham

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Arkansas Louisiana Gas Co. v. Latham
1982 OK 50
650 P.2d 49
Case Number: 52126
Decided: 04/06/1982
Supreme Court of Oklahoma

ARKANSAS LOUISIANA GAS COMPANY, APPELLEE,
v.
ZACK L. LATHAM, ET AL., APPELLANTS.

Appeal from the Corporation Commission.

Certiorari to the Court of Appeals, Division No. 1.

¶0 Appeal from an order of the Corporation Commission, which certified a reservoir underlying Pontotoc County as being suitable for gas storage purposes. Appellants contend that the Commission's determination of the volume of native gas remaining in the subject reservoir invades appellants' constitutional right to have the amount and value of their native gas determined by condemnation procedures pursuant to Article 2, Sec. 24 of the Oklahoma Constitution. Court of Appeals, Division No. 1 affirmed the order of the Corporation Commission and denied appellants petition for rehearing.

CERTIORARI GRANTED: OPINION OF COURT OF APPEALS WITHDRAWN ORDER OF THE CORPORATION COMMISSION MODIFIED.

Robert J. Emery, James M. Gaitis, Oklahoma City, for appellee,

George W. Braly, Braly & Braly, Stonewall, Charles B. Grethen, Purcell, for appellants.

BARNES, Vice Chief Justice.

¶1 Appellants appealed an order of the Corporation Commission which certified a reservoir underlying Pontotoc County as being suitable for gas storage purposes. In an unpublished opinion the Court of Appeals affirmed the order. Appellants filed a petition for certiorari, which we hereby grant.

¶2 The foundation of this appeal is appellee's attempt to condemn underground gas storage rights currently owned by the appellants. The procedure for this type of action is found in 52 O.S. §§ 36.1-36.7 . In capsule form, the important portions include the requirement that the Corporation Commission certify that the benefits of the recoverable native gas is smaller than the public benefit of using the underground area as a storage unit. This certificate must be obtained by the party seeking condemnation before filing his eminent domain proceeding in district court.

¶3 In this case, Arkla has secured by the subject order the Commission certificate and is ready to proceed in district court through eminent domain proceedings. Appellants contend, however, that the Corporation Commission incorrectly refused in its certificate order to limit the effect of its finding that no recoverable native gas in place remained in the subject reservoir. Appellants contend such finding cannot be used to preclude the rights of landowners to have the amount and value of their native gas condemned under the procedure set out [650 P.2d 50] in Article 2, Sec. 24 of the Oklahoma Constitution.

¶4 All that appellants ask is that the Commission's order be limited by a suitable restriction to clearly indicate that the finding to the effect that "there is no recoverable native gas in the reservoir" is for the purpose of the proceedings before the Commission and is not to be used in derogation of the landowners' rights to seek compensation for an amount and value of native gas under the provisions of Article 2, Sec. 24 of the Oklahoma Constitution.

¶5 We agree with the appellants' contention. The Oklahoma Constitution specifically requires that compensation for property taken for public purposes will be determined by a jury if timely demand is made therefore.

¶6 Appellee contends that the Commission findings only determine volume of gas and not value of gas and thus do not violate the Constitution. This argument ignores the practical effect of such a finding. While it may be that the Commission was only concerned with the volume involved, the finding that there was no recoverable gas would eliminate any damages if such finding was followed in the district court condemnation proceedings.

¶7 We conclude that the Commission order and findings granting a certificate pursuant to 52 O.S. §§ 36.1 et seq. are limited to the certificate proceeding only and will not be effective collaterally in the condemnation proceedings in district court. Both parties may present their evidence to a jury regarding amounts of gas remaining and value thereof.

¶8 Appellants' second issue involves discovery procedures before the Commission. They admit in their brief that this issue is important only if the first argument is resolved unfavorably. Accordingly, we do not reach this issue.

¶9 The opinion of the Court of Appeals is vacated and the Commission order reversed, with direction to modify it by limiting its effect to the initial certification procedure.

¶10 REVERSED.

¶11 IRWIN, C.J., and LAVENDER, SIMMS, DOOLIN, HARGRAVE, OPALA and WILSON, JJ., concur.

Footnotes:

1 Article 2, Sec. 24 of the Oklahoma Constitution provides in part that: "Private Property shall not be taken or damaged for public use without just compensation . . . such compensation . . . shall be ascertained by a board of commissioners of not less than three freeholders."

2 Wright v. State ex rel. Dept. of Highways, 204 Okl. 380, 230 P.2d 462 (1951).