Wallis v. Pan American Petroleum Corporation

PETITIONER: Wallis
RESPONDENT: Pan American Petroleum Corporation
LOCATION: United States Department of Justice

DOCKET NO.: 341
DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 384 US 63 (1966)
ARGUED: Feb 23, 1966 / Feb 24, 1966
DECIDED: Apr 25, 1966

Facts of the case

Question

Media for Wallis v. Pan American Petroleum Corporation

Audio Transcription for Oral Argument - February 24, 1966 in Wallis v. Pan American Petroleum Corporation

Audio Transcription for Oral Argument - February 23, 1966 in Wallis v. Pan American Petroleum Corporation

Earl Warren:

Number 341, Floyd A. Wallis, Petitioner, versus Pan American Petroleum Corporation, et al.

Mr. Henican.

C. Ellis Henican:

Mr. Chief Justice and may it please the Court.

These two cases consolidated below are before this Court on a writ of certiorari granted to review a decision of the Fifth Circuit Court of Appeal.

The Court of Appeals decision was by a divided court, a two-to-one decision which reversed the decision of the then District Judge J. Skelly Wright.

The basic question presented by this review is this, “What law shall control local or overriding federal law as to all issues in these suits including the appropriate remedy where the suits involved only a dispute between private individuals and the U.S. is not a party.

Suits over the ownership of a federal oil and gas lease acknowledge by all parties to have validly issued by the United States to petitioner Wallis.”

The suits are based upon two separate written contracts with Wallis executed long prior to his application for the federal lease in question.

However, these suits were filed after the United States had issued the lease to Wallis.

While the question was not raised in the trial court, that court considered the question of which law should control and then concluded that local law should be applied to these private contracts.

Accordingly, local law was applied particularly the statute of frauds, and the parole evidence rule since both plaintiffs were trying to enlarge upon their written agreements by the use of parole or extrinsic evidence.

Judge Wright ruled that this could not be done and he further held that the written agreements did not encompass the lease that is in question whereupon he rejected the demands of both respondents.

In reversing Judge Wright, the majority of the Court of Appeal held that federal law should have been applied and it remanded the case for further trial on all issues in accordance with federal law.

It did this since it concluded that the United States had an interest under the Mineral Leasing Act of 1920.

And that uniformity in a decision of these matters is required.

And that while there is no expressed applicable provision of the Mineral Leasing Act, nevertheless, this is a case where federal courts should fill the antithesis of the Act and fashion applicable federal law.

In addition to this basic question, the further specific question is immediately presented and that is that since Section 32 of the Act of 1920 grants to the Secretary of Interior administrative and regulatory powers and the further authority to do any and all things necessary to carry out and accomplish the purposes of the Act, how then is any interstitial authority vested in the courts in view of this all inclusive grant of authority to the Secretary of the Interior.

Now, after this case was decided in the Fifth Circuit and writs were granted to Wallis, this Court decided the Yazell case which in our opinion is decisive of this case.

In the Yazell case, Your Honors noted that there were no decisions by this Court in which federal law had been fashioned to override state law with respect to issues arising from a negotiated contract particularly the issue of competency vel non to contract.

Here, in the Wallis cases, the question is whether or not there are competent contracts.

Having reached this conclusion, Your Honors specifically examined the question of whether or not there was some federal interest which might require you to give to the United States the advantage that it would have had if the Texas law of coverture have not been applied.

Strangely enough, we find that Your Honors discovered the existence of at least one federal interest in the Yazell case but nevertheless, Your Honors refused to allow the United States to protect its federal interest at all costs when the right which the United States sought to assert was “not provided by statute or specific agency regulation.”

Your Honors, therefore, stated that you would not in the absence of specific congressional action override the Texas law of coverture merely to protect a federal interest that was admittedly present and Your Honors concluded by saying that the state interests that were involved in Yazell should be overwritten by the federal courts only where clear and substantial interest of the national government which cannot be served consistently with respect to such state interests will suffer major damage if the state law is applied.

Now, notwithstanding the existence of a federal interest in Yazell, Your Honors did not find that by following the Texas law, there would result major damage to a clear and substantial federal interest.

Consequently, this Court refused to override the Texas law, even though in that case, the United States Government was directly involved.

The respondents in this case have not demonstrated where the application of state law will affect a clear and substantial federal interest nor have they shown that such clear and substantial federal interest will suffer major damage by applying local law.

Not only did the respondents have failed to demonstrate these vital things, but we submit that the Circuit Court likewise failed to do so.

The Circuit Court apparently used the generalities of the paramountcy of the federal interest doctrine which Your Honors said in Yazell do not lead inevitably to the application of federal law and you said this even where the United States was a party.

Now, we say to you that there is not only an absence of the clear and substantial federal interest in these cases, but that there is actually no federal interest in these cases.

The Court will recall that the Solicitor General was invited to express the views of United States with respect to the matters under review.