Supplemental Petition — Phillips Petroleum Co. v. Shutts

— eesen

“IN THE

Supreme Court of thy United States

Octroner Terai, 1977

No. 77-856

Pamurs Perrocerm Company, Petitioner,

Ve

Intl. Suvurrs, as Executor of the Estate of Althea

Shutts, Individually, and as representative of all that

class of gas royalty owners under Phillips Petroleum

Company oil and gas leases in the Hagoton- Anadarko

area, Respondents.

SUPPLEMENT TO THE PETITION

Crank M. Enron

Carson M. Grass

Ropert A, ALTMAN

JOHN G. CALENDER

Crom, Giass, McTLwatrn

& FINNEY

815 Connecticut Ave.

Washington. D.C. 20006

JoserH W. KENNEDY

Morris, Laisa, Evans, Brock

& KENNEDY

Suite 430, 200 West Douglas

Wiehita, Kansas 67202

KENNETH IIa

C. J. Roberts

T. L. Cuprace II

— —

Pagss or Braon S. Abans Pixx d, INc., Wasnineton, D. C.

IN THE

Supreme Court of the United States

OctoBer TERM, 1977

No. 77-856

Puiuirs PeTroLeUM Company, Petitioner,

V.

Int SHutts, as Executor of the Estate of Althea

Shutts, Individually, and as representative of all that

class of gas royalty owners under Phillips Petroleum

Company oil and gas leases in the Hugoton-Anadarko

area, Respondents.

SUPPLEMENT TO THE PETITION

Pursuant to Rule 24(5) of the Rules of the Supreme

Court of the United States, Petitioner Phillips Petro-

leum Company (‘‘Phillips’’) submits this supplement

to the petition to call attention to an intervening mat-

ter not available at the time of the filing of the peti-

tion.

On February 1, 1978, the Texas Supreme Court in

Phillips Petroleum Company v. Stahl Petroleum Com-

pany,’ No. B-6813 (Tex. Sup.) granted Phillips’ Ap-

* The case being reviewed is reported below in Stahl Petroleum

Company v. Phillips Petroleum Company, 550 S. W. 2d 360 (Tex.

Civ. App.— Amarillo, 1977).

2

plication for Writ of Error for the purpose of review-

ing the question of whether the award of interest on

additional royalty payments for the period during

which the ascertainment of the amount due was de-

layed by operation of federal law is contrary to Texas

Law. (See Letter from Clerk, Texas Supreme Court,

Feb. 1, 1978 at App. la-2a) The Stahl case, like the in-

stant case, arises out of the Hugoton-Anadarko rate

making area and the issuance of Federal Power Com-

mission Opinion No. 586.

The Kansas Supreme Court specifically relied on

federal cases applying Texas law and on the Stahl

ease in holding against Phillips in the instant case.’

The recent granting of the Application for Writ of

Error in the Stahl case indicates, however, that the

law in Texas, upon which the federal decisions are

grounded, is by no means settled as respondents argue

* As the Kansas Supreme Court stated :

In ing we also note a long line of federal cases have con-

cluded Texas law permits—and equity requires—the award of

interest on suspense royalties under similar circumstances.

(Phillips Petroleum Company v. Adams, 513 F.2d 355, 365 (5th

Cir. 1975], cert. denied, 423 U.S. 930, 46 L.Ed.2d 259, 96 S.Ct.

281; First Nat. Bank of Borger v. Phillips Petroleum Co., 513

F.2d 371 [5th Cir. 1975], cert. denied, 423 U.S, 930, 46 L.Ed.

2d 259, 96 S.Ct. 281; Phillips Petroleum Co. v. Riverview Gas

Compression Company, 513 F.2d 374 [5th Cir. 1975], cert.

denied, 423 U.S. 930, 46 L.Ed.2d 259, 96 S.Ct. 281; Phillé

Petroleum Co. v. Hazlewood, 534 F.2d 61 [5th Cir. 1976];

Fuller v. Phillips Petroleum Co., 408 F.Supp. 643 [N. D. Tex.

1976]; and Phillips Petroleum Co. v. Hazlewood, F. Supp.

1193 [N.D. Tex. 1975].)

In addition, the Texas Civil Court of Appeals recently

awarded interest on suspended royalties in Stahl Petroleum

Co. v. Phillips Petroleum Co., 550 S.W.2d 360 (Tex. Civ. App.

No. 8762, filed April 6, 1977.) This case also arises out of the

Hugoton-Anadarko area and the issuance of FPC Opinion No.

586. (Appendix to Petition for Certiorari at 56a)

3

and as the Kansas Supreme Court believes. Indeed, in

two of the cases cited by the Kansas Supreme Court

in support of its position, Phillips Petroleum Com-

pany v. Hazlewood, 534 F.2d 61 (5th Cir. 1976), pend-

ing on motion for rehearing, No. 76-1290, and Fuller

v. Phillips Petroleum Company, 408 F. Supp. 643

(N.D. Tex. 1976), appeal pending, No. 76-2179 (5th

Cir.), the United States Court of Appeals for the Fifth

Circuit has stayed further consideration pending reso-

lution of the interest issue by the Texas Supreme

Court. (See Letter from Clerk, United States Court of

Appeals for Fifth Circuit at App. 3a)

The recent action of the Texas Supreme Court, and

the reliance by federal covrts and the Kansas Supreme

Court on what they may have mistakenly believed to

be Texas law, illustrates the need for Supreme Court

guidance on the important issue of whether the award

of interest for the period when the final payment of

additional royalties was delayed by operation of fed-

eral law so offends notions of fairness as to be violative

of the Due Process Clause.

Respectfully submitted,

4

CLARK M. CLIFFORD

Carson M. Grass

Rospert A. ALTMAN

JOHN G. CALENDER

CLiFForD, GLASS, McILwatn

& FINNEY

815 Connecticut Ave.

Washington, D.C. 20006

JosePH W. KENNEDY

Morris, Laine, Evans, Brock

& KENNEDY

Suite 430, 200 West Douglas

Wichita, Kansas 67202

KENNETH HEapy

C. J. Ropers

T. L. Cuspace II

Phillips Petroleum Com

Bartlesville, Oklahoma 74004

APPENDIX

la

APPENDIX

THE SUPREME COURT OF TEXAS

P. O. Box 12248 CAPITOL STATION

AUSTIN, TEXAS

February 1, 1978

CHIEF JUSTICE CLERK

JOE R. GREENHILL GARSON R. JACKSON

JUSTICES EXEC. ADMINISTRATIVE Ass’T.

ZOLLIE STEAKLEY WILLIAM L. WILLIS

— ADMINISTRATIVE ASS’T.

MOSES MARY ANN DEFIBAUGH

JAMES d. DENTON

PRICE DANIEL

SAM D. JOHNSON

CHARLES W. BARROW

T. C. CHADWICK

Mr. Lloyd Lochridge, Atty

McGinnis, Lochridge & Kilgore

Fifth Floor, Texas State Bank Bldg.

900 Congress Ave

Austin, Texas 78701

Mr. Kenneth Heady,

Mr. C. J. Roberts, Attys

Phillips Petroleum Company

Corporate Legal Staff

Bartlesville, Oklahoma 74004

Mr. Jack Ritchie, Atty

Mr. T. L. Cubbage II, Atty

Mr. David B. McCall, Atty

Phillips Petroleum Company

Corporate Legal Staff

Amarillo, Texas 79120

2a

Mr. John C. Chambers, Atty

Stone, Stone & Chambers

1701 American National Bank Bldg.

Amarillo, Texas 79101

RE: B-6813: Pamurs Perrorzum Company v. SraglL Pe-

TROLEUM COMPANY

Seventh Court of Civil Appeals No. 8762

108th District Court of Potter County No.

55741

Gentlemen:

Today, the Supreme Court of Texas granted the above

referenced application for writ of error on points 1, 5 and

8.

This cause has been set for submission and oral argument

for Wednesday, February 22, 1978 at 9:00 a.m.

Please indicate on the enclosed form which attorney/s will

present oral argument, (see Texas Rules of Civil Proce-

dure No. 498), and return the form to the Clerk’s Office

at your earliest convenience.

Also enclosed is a cost bill for the petitioner.

Very truly yours,

Ganson R. Jackson, Clerk

/8/ by Mansy M. Waxeritp

Mary M. Wakefield, Deputy

Encl: argument form

cost bill-petitioner

3a

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

OFFICE OF THE CLERK

June 13, 1977

Epwarp W. WapsworTH

OLERK

To Aut CounseL or Recorp

No. 76-1290—Phillips Petroleum Co. vs. Grady

Hazlewood; Alstar Production Corp.

No. 76-2144—Phillips Petroleum Co. vs. Riverview

Gas Compression Co., Etc., Et Al.

No. 76-2179—R. P. Fuller, Et Al vs. Phillips

Petroleum Company.

No. 76-2535—Van Norman Oil Co. vs. Phillips

Petroleum Co. vs. American Petrofina

Company of Texas.

Dear Counsel:

The Court has asked me to advise you that it will withhold

action in the above matters until the adjournment of the

Supreme Court of Texas this summer, in hopes that ac-

tion on the applications for writ of error will by that time

have been accomplished.

Very truly yours,

Epwarp W. WapswortH

CLERK

/s/ By GAR F. Ganvongau

Gilbert F. Ganucheau

Chief Deputy Clerk