Leiter Minerals, Inc., v. United States

PETITIONER: Leiter Minerals, Inc.,
RESPONDENT: United States, The California Company, Allen L. Lobrano
LOCATION: Plaquemines Parish Courthouse

DOCKET NO.: 26
DECIDED BY: Warren Court (1956-1957)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 352 US 220 (1957)
ARGUED: Nov 06, 1956 / Nov 07, 1956
DECIDED: Jan 14, 1957
GRANTED: Feb 27, 1956

ADVOCATES:
Charles D. Marshall - for the respondent
Perry W. Morton - for the respondent
Samuel W. Plauche, Jr. - for the petitioner

Facts of the case

In December 1938, Thomas Leiter conveyed approximately 8,711 acres of land in Plaquemines Parish, Louisiana to the United States. The deed contained a mineral reservation under which Leiter retained the right to mine and remove all valuable minerals until April 1, 1945. The deed allowed for the extension of this reservation for an additional five years so long as operations were conducted profitably during the previous five years for an average of fifty days a year. If at the end of the original term or an additional extended term the operation had not carried on for fifty days a year, Leiter’s right to mine would terminate, and complete title would become vested in the United States. No mineral operations were conducted on the land in question during the original term.

On March 1, 1949, the United States conveyed the operating rights under lease to Frank J. and Albert Lobrano, who then conveyed those rights to The California Company. The California Company drilled and completed eighty wells, producing $3,500,000 in royalties for the United States. Leiter Minerals, Inc. then filed an action in state court against Allen L. Lobrano and The California Company based on a Louisiana law allegedly making a reservation of mineral rights to the United States “imprescriptible”. The United States was not a party to the suit. Leiter Minerals claimed that it was the fee simple owner of all the oil, gas and mineral rights in or on the land acquired by the United States from Thomas Leiter.

The United States then brought an action in district court; it sought to quiet Leiter Minerals’ title and rights and to enjoin Leiter Minerals from further asserting any claims in state court. The United States argued in part that irreparable injury in the form of lost royalties would result from any dispossession to its lessees. The district court granted the injunction, holding that the action could only be tried in federal court because the United States was not a party to the state court action.

Question

Did the district court err by enjoining the prosecution of a case brought in state court against a lessee of the United States?

Media for Leiter Minerals, Inc., v. United States

Audio Transcription for Oral Argument - November 07, 1956 in Leiter Minerals, Inc., v. United States

Audio Transcription for Oral Argument - November 06, 1956 in Leiter Minerals, Inc., v. United States

Earl Warren:

Number 26, the Leiter Minerals Incorporated, Petitioner, versus United States of America.

Mr. Plauche.

Samuel W. Plauche, Jr.:

May it please the Court.

Earl Warren:

Mr. Plauche, you may proceed.

Samuel W. Plauche, Jr.:

What the -- this is a review of an interlocutory order of injunction issued by the District Court below and affirmed by the Court of Appeals, Fifth Circuit.

The fundamental question presented is whether or not the District Court's order was authorized improper, despite the federal anti-injunction statute, and in the face of the rule of committee which prevents the District Court or prevented it as we say from interfering with previously acquired and subsisting in rem jurisdiction of petitioner's suit which was pending in a state court of Louisiana.

The brief history of the litigation is this.

In August of 1953, petitioner brought its petitory action in a state court of Louisiana in -- in for Plaquemines Parish.

The Court there was a court of general or plenary jurisdiction of the State.

It was a petitory action brought by petitioner claiming recognition of its right entitled to the mineral rights which underlay some 8700 acres of marsh land in Plaquemines Parish.

It was brought, as it was authorized to do and as it was expressly required by Louisiana practice to do against those parties in possession of the mineral rights, the California Company and a man named Lobrano, who, it was alleged by petitioner were wrongfully withholding the possession of petitioner's rights from petitioner and the possession was alleged to on behalf of petitioner to have been unlawful.

It is true that the claim by petitioner in the state court rested upon its claim of -- its right to recognition of its title to the minerals.

Promptly upon the suit having been brought in accordance -- strict accordance of the Court of Louisiana procedure, the defendants, California Company and Lobrano, undertook to remove the case to the federal court in and for the Eastern District of Louisiana.

Petitioner filed a motion to remand which was granted by Judge Wright who later issued the injunction which is under review here.

Judge Wright -- it was removed on the ostensible ground that there was a federal question presented by petitioner's state court complaint.

Judge Wright in remanding said, “There may be a federal question lurking in the background, but it is not sufficiently disclosed -- disclosed by petitioner's state court complaint and at present is not a substantial one.”

Upon the remand to the state court, the California Company and Lobrano who claimed under leases from the United States, joined the issue with petitioner.

They challenged the jurisdiction of the state court.

They claimed that United States which was in effect they say being sued was an indispensable party.

It had withheld its consent and couldn't be sued and also and finally, that the state court petition claiming the right to the possession of the minerals being wrongfully withheld, we say, disclosed no claim for legal relief.

In other words, that our suit, even if everything we said was true and all the documents that were attached were admitted as they read, we had no cause from a substantive stand point.

Those issues went before the District Judge in the state court, Judge Bruce Nunez.

They were exhaustively briefed and argued orally.

And ultimately, sometime later in March of 1954, he overruled all of the defendant's defenses and held in effect that petitioner's case was sound, both procedurally and substantively.

Six days before he ruled this present action in which this interlocutory order under review was issued, was commenced by the United States in the federal court for the Eastern District of Louisiana.

This is an action claiming on behalf of the United States, title to the same minerals, seeking to erase and cancel petitioner's muniments of title which are of record and asking, and this is what is at issue here, and praying for a temporary injunction against petitioner's prosecution of its state court action.

Immediately upon Judge Nunez's order, a ruling in the state court coming down six days after the suit commenced.

The United States prayed for and obtained a temporary restraining order restraining any further prosecution that without notice of the state court action.

Petitioner met this federal court action for the injunctive relief by a motion based on three grounds, the motion to dismiss or rebate.

First, on the ground that it was argued prohibited by the federal anti-injunction statute.