Oil and Gas.—A state may prohibit conduct that leads to the waste of natural resources without violating due process.285 Thus, for instance, where there is a limited market for natural gas acquired attendant to oil production or where the pumping of oil and gas from one location may limit the ability of others to recover oil from a large reserve, a state may require that production of oil be limited or prorated among producers.286 Generally, whether a system of proration is fair is a question for administrative and not judicial judgment.287 On the other hand, where the evidence showed that an order prorating allowed production among several wells was actually intended to compel pipeline owners to furnish a market to those who had no pipeline connections, the order was held void as a taking of private property for private benefit.288
285 Cities Service Co. v. Peerless Co., 340 U.S. 179 (1950) (sustaining orders of the Oklahoma Corporation Commission fixing a minimum price for gas and requiring one producer to buy gas from another producer in the same field at a dictated price, based on a finding that low field prices for natural gas were resulting in economic and physical waste); Phillips Petroleum Co. v. Oklahoma, 340 U.S. 190 (1950).
286 This can be done regardless of whether the benefit is to the owners of oil and gas in a common reservoir or because of the public interests involved. Thompson v. Consolidated Gas Co., 300 U.S. 55, 76-77 (1937) (citing Ohio Oil Co. v. Indiana (No. 1), 177 U.S. 190 (1900)); Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61 (1911); Oklahoma v. Kansas Natural Gas Co., 221 U.S. 229 (1911). Thus, the Court upheld against due process challenge a statute which defined waste as including, in addition to its ordinary meaning, economic waste, surface waste, and production in excess of transportation or marketing facilities or reasonable market demands, and which limited each producer's share to a prorated portion of the total production that can be taken from the common source without waste. Champlin Ref. Co. v. Corporation Comm'n, 286 U.S. 210 (1932).
287 Railroad Comm'n v. Rowan & Nichols Oil Co., 310 U.S. 573 (1940) (evaluating whether proration based on hourly potential is as fair as one based upon estimated recoverable reserves or some other combination of factors). See also Railroad Comm'n v. Rowan & Nichols Oil Co., 311 U.S. 570 (1941); Railroad Comm'n v. Humble Oil & Ref. Co., 311 U.S. 578 (1941).
288 Thompson v. Consolidated Gas Co., 300 U.S. 55 (1937).
A state may act to conserve resources even if it works to the economic detriment of the producer. Thus, a State may forbid certain uses of natural gas, such as the production of carbon black, where the gas is burned without fully utilizing the heat therein for other manufacturing or domestic purposes. Such regulations were sustained even where the carbon black was more valuable than the gas from which it was extracted, and notwithstanding the fact that the producer had made significant investment in a plant for the manufacture of carbon black.289 Likewise, for the purpose of regulating and adjusting coexisting rights of surface owners to underlying oil and gas, it is within the power of a State to prohibit the operators of wells from allowing natural gas, not conveniently necessary for other purposes, to come to the surface unless its lifting power was utilized to produce the greatest proportional quantity of oil.290
289 Walls v. Midland Carbon Co., 254 U.S. 300 (1920). See also Henderson Co. v. Thompson, 300 U.S. 258 (1937).
290 Bandini Co. v. Superior Court, 284 U.S. 8 (1931).
Protection of Property and Agricultural Crops.—Special precautions may be required to avoid or compensate for harm caused by extraction of natural resources. Thus, a state may require the filing of a bond to secure payment for damages to any persons or property resulting from an oil and gas drilling or production operation.291 On the other hand, in Pennsylvania Coal Co. v. Mahon,292 a Pennsylvania statute which forbade the mining of coal under private dwellings or streets of cities by a grantor that had reserved the right to mine was viewed as too restrictive on the use of private property and hence a denial of due process and a "taking" without compensation.293 Years later, however, a quite similar Pennsylvania statute was upheld, the Court finding that the new law no longer involved merely a balancing of private economic interests, but instead promoted such "important public interests" as conservation, protection of water supplies, and preservation of land values for taxation.294
A statute requiring the destruction of cedar trees within two miles of apple orchards in order to prevent damage to the orchards caused by cedar rust was upheld as not unreasonable even in the absence of compensation. Apple growing being one of the principal agricultural pursuits in Virginia and the value of cedar trees throughout the State being small as compared with that of apple orchards, the State was constitutionally competent to require the destruction of one class of property in order to save another which, in the judgment of its legislature, was of greater value to the public.295 Similarly, Florida was held to possess constitutional authority to protect the reputation of one of its major industries by penalizing the delivery for shipment in interstate commerce of citrus fruits so immature as to be unfit for consumption.296
291 Gant v. Oklahoma City, 289 U.S. 98 (1933) (statute requiring bond of $200,000 per well-head, such bond to be executed, not by personal sureties, but by authorized bonding company).
292 260 U.S. 393 (1922).
293 The "taking" jurisprudence that has stemmed from the Pennsylvania Coal Co. v. Mahon is discussed, supra, at "Regulatory Takings," under the Fifth Amendment .
294 Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 488 (1987). The Court in Pennsylvania Coal had viewed that case as relating to a "a single private house." 260 U.S. at 413.
Also distinguished from Pennsylvania Coal was a challenge to an ordinance prohibiting sand and gravel excavation near the water table and imposing a duty to refill any existing excavation below that level. The ordinance was upheld; the fact that it prohibited a business that had been conducted for over 30 years did not give rise to a taking in the absence of proof that the land could not be used for other legitimate purposes. Goldblatt v. Town of Hempstead, 369 U.S. 590 (1962).
295 Miller v. Schoene, 276 U.S. 272, 277, 279 (1928).
296 Sligh v. Kirkwood, 237 U.S. 52 (1915).
Water, Fish and Game.—A statute making it unlawful for a riparian owner to divert water into another State was held not to deprive the property owner of due process. "The constitutional power of the State to insist that its natural advantages shall remain unimpaired by its citizens is not dependent upon any nice estimate of the extent of present use or speculation as to future needs… What it has it may keep and give no one a reason for its will."297 This holding has since been disapproved, but on interstate commerce rather than due process grounds.298 States may, however, enact and enforce a variety of conservation measures for the protection of watersheds.299
Similarly, a State has sufficient control over fish and wild game found within its boundaries300 so that it may regulate or prohibit fishing and hunting.301 For the effective enforcement of such restrictions, a state may also forbid the possession within its borders of special instruments of violations, such as nets, traps, and seines, regardless of the time of acquisition or the protestations of lawful intentions on the part of a particular possessor.302 The Court has also upheld a state law restricting a commercial reduction plant from accepting more fish than it could process without spoilage in order to conserve fish found within its waters, even allowing the application of such restriction to fish imported into the State from adjacent international waters.303
The Court's early decisions rested on the legal fiction that the states owned the fish and wild game within their borders, and thus could reserve these possessions for use by their own citizens. The Court soon backed away from the ownership fiction,304 and in Hughes v. Oklahoma305 it formally overruled prior case law, indicating that state conservation measures discriminating against outof-state persons were to be measured under the commerce clause. Although a state's "concerns for conservation and protection of wild animals" were still a "legitimate" basis for regulation, these concerns could not justify disproportionate burdens on interstate commerce.306
297 Hudson Water Co. v. McCarter, 209 U.S. 349, 356-57 (1908).
298 Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941 (1982). See also City of Altus v. Carr, 255 F. Supp. 828 (W.D. Tex.), aff'd per curiam, 385 U.S. 35 (1966).
299 See, e.g., Perley v. North Carolina, 249 U.S. 510 (1919) (upholding law requiring the removal of timber refuse from the vicinity of a watershed to prevent the spread of fire and consequent damage to such watershed).
300 Bayside Fish Co. v. Gentry, 297 U.S. 422, 426 (1936).
301 Manchester v. Massachusetts, 139 U.S. 240 (1891); Geer v. Connecticut, 161 U.S. 519 (1896).
302 Miller v. McLaughlin, 281 U.S. 261, 264 (1930).
303 Bayside Fish Co. v. Gentry, 297 U.S. 422 (1936). See also New York ex rel. Silz v. Hesterberg, 211 U.S. 31 (1908) (upholding law proscribing possession during the closed season of game imported from abroad).
304 See, e.g., Foster-Fountain Packing Co. v. Haydel, 278 U.S. 1 (1928) (invalidating Louisiana statute prohibiting transportation outside the state of shrimp taken in state waters, unless the head and shell had first been removed); Toomer v. Witsell, 334 U.S. 385 (1948) (invalidating law discriminating against out-of-state commercial fishermen); Douglas v. Seacoast Products, 431 U.S. 265, 284 (1977) (state could not discriminate in favor of its residents against out-of-state fishermen in federally licensed ships).
305 441 U.S. 322 (1979) (formally overruling Geer).
306 441 U.S. at 336, 338-39.
More recently still, in the context of recreational rather than commercial activity, the Court reached a result more deferential to state authority, holding that access to recreational big game hunting is not within the category of rights protected by the Privileges or Immunities Clause, and that consequently a state could charge out-of-staters significantly more than in-staters for a hunting license.307 Suffice it to say that similar cases involving a state's efforts to reserve its fish and game for its own inhabitants are likely to be challenged under commerce or privileges and immunities principles, rather than under substantive due process.
307 Baldwin v. Montana Fish and Game Comm'n, 436 U.S. 371 (1978).
Last modified: June 9, 2014