Marblehead Land Co. v. City of Los Angeles (47 F.2d 528, 1931)

WILBUR, Circuit Judge.

Appellants filed a bill in equity to enjoin the appellee from enforcing a zoning ordinance by the terms of which the oil well drilling operations of the appellants were declared illegal in the zone wherein the land owned by the appellant Marblehead Land Company is located. This land is leased by the appellant Standard Oil Company of California under a lease which provides for the sinking of oil •wells upon said property, and, if oil is found thereon, provides for the production of oil therefrom.

Appellants concede that, since the decision of the Supreme Court in Euclid v. Ambler Realty Co., 272 U. S. 365, 47 S. Ct. 114, 71 L. Ed. 303, 54 A. L. R. 1016, the appellee city has power to enact a zoning ordinance. The right of the city of Los Angeles so to do was recognized and upheld by the Supreme Court in Zahn v. Board of Public Works, 274 U. S. 325, 47 S. Ct, 594, 71 L. Ed. 1074. Appellants, however, contend that the situation as disclosed by the evidence shows that the attempted exercise of police power in the given instance is so unreasonable and arbitrary an exercise of that power that the ordinance should be declared void by the court as an infringement upon the constitutional rights of the appellants, in that their property is thus taken from them without due process of law. In support of their claim that the ordinance is unreasonable, appellants rely upon certain uncontroverted facts:

Appellants’ land lies about seven miles distant from the heart of the city of Los An-geles, at Seventh and Broadway. Appellant Marblehead Land Company’s property contains about 291 acres, and the Standard Oil Company lease covers approximately 396 acres, including the land of the Marblehead Land Company. This land has heretofore been used for farming operations, but it is now believed has possibilities as oil land. An oil derrick has been erected thereon for the purpose of determining and developing its possibilities as oil land. Several tracts of land in which the streets have been improved and upon which expensive residences have been and are being developed are in the vicinity of appellants’ land. Three golf courses abut on the land. The nearest dwelling house on one of the tracts of land to the drilling rig erected upon appellants’ land is 1,100 feet. Appellants’ land for residence purposes is worth about $10,000 per acre. If oil is discovered thereon, the value of the oil produced therefrom, according to the opinion of experts based upon oil-producing lands upon the same or similar geological structures, would be many millions of dollars. The Standard Oil Company paid the Marblehead Land Company $65,000 in cash for said oil lease, and in addition thereto has made expenditures in connection with the proposed drilling operations aggregating in all $136,-000. The lease was obtained and the operations begun after the enactment of an ordinance which will hereinafter be referred to, excluding a portion of the appellants’ lands from the residential district or zone. Upon the trial evidence was adduced as to the effect upon property in the neighborhood of the proposed drilling operations. This evidence consisted of photographs showing the condition of appellants’ property and of the surrounding areas devoted to residence purposes, the character of buildings erected thereon, and the effect upon the value of the property subdivided for reside-nee purposes, of the proposed drilling operations; and, in addition, certain evidence was offered to show the extent of the fire hazard resulting from such operations and the effect of releasing natural gases which was reasonably to be anticipated from successful drilling operations.

On the question of fire hazard, one of the appellants’ witnesses, R. H. Morrison, testified as follows: “* * * That there is a slight fire hazard in putting down a test well, but such hazard results from lack of foresight and carelessness on the part of the driller and that fire can be prevented by keeping the hole full of rotary mud and weighting the mud by chemical compounds, such as barytes, which prevents the escape of gas and prevents the ignition by sparks resulting from friction of the rotary, and also exercising the precaution of moving the boiler back from the well when nearing completion of the hole to prevent the ignition of a small amount of gas which may escape; that there is practically no danger from ignition resulting from the use of electricity about a derrick; that the Oil Company has had no fire around a derrick in the last two or three years.”

The witness L. Z. Johnson, called by the appellee, testified: “ * * * That danger of fire occurs in bringing in new wells, from fire under the boilers or high gas pressure in the well and friction of the rock running through the casing, causing sparks; that if the well should run wild, it would result in the destruction of the property, and that this does occur; that in drilling a given area of approximately five acres, one well to three acres would be sufficient; that considerable noise results from drilling test wells, and from the steam lowering and lifting tools; that it is customary to drill day and night, and that oil fumes result from such activities but that the fumes can be shut off by the operators if they are prepared for it; that dust results from the trucks running hack and forth to the well, and that it is customary in drilling near dwellings to oil such roads and that oil considerably prevents the raising of dust.”

The court made findings of fact upon the issues, and, with reference to the effect of drilling operations upon the surrounding property, found the facts to be as follows:

“ * * * That the said property of plaintiffs is already partially surrounded by residential developments, including some very high class and expensive residences located within the tracts or subdivisions nearby which have been highly improved with streets, curbs, sidewalks, lights and other utilities; that neither, plaintiffs’ said property nor any of the immediately adjacent property' is of an industrial character, nor devoted to such uses; that it is problematical whether or not there is any oil, gas or other hydrocarbon substances located beneath the surface of plaintiffs’ property in commercially paying quantities; that ho oil, gas or hydrocarbon wells have ever been developed, operated or maintained on plaintiffs’ said property.

“That the operation or maintenance of oil wells on plaintiffs’ said property or the drilling for or prospecting for oil on said property would cause the atmosphere in the said district surrounding plaintiffs’ said property ' to become contaminated and polluted with obnoxious fumes and odors; that these obnoxious odors would cause serious discomfort, damage and inconvenience- to the owners of the property surrounding plaintiffs’ said property and would make living conditions on said properties less desirable and would cause the value of the said surrounding property to greatly depreciate; that the maintenance or operation of oil wells on plaintiffs’ said property or the drilling or prospecting for oil, gas or other hydrocarbons on said property would produce noises which would be obnoxious to persons owning property near to or surrounding plaintiffs’ said property in that the said noises would make living conditions oh such surrounding or nearby property to be much less desirable and would greatly reduce the value of the said surrounding property; that the drilling for oil, gas or other hydrocarbon substances on plaintiffs’ said property or the maintenance of oil wells and the operation of the same on plaintiffs’ said property would create á fire hazard which would be imminent at all times during ■ the operation, maintenance or drilling of the said wells for the purpose of extracting oils, gas or other hydrocarbon substances, in that there would be great danger of such oil wells catching on fire during such drilling operation and that such imminent fire hazard would cause the property surrounding, nearby or adjacent to plaintiffs’ said property to become less desirable for residential purposes and would greatly depreciate the value of the said surrounding or adjacent property ; that the operation or maintenance of oil wells on the plaintiffs’ said property or the drilling of said oil wells on plaintiffs’ said property would constitute a nuisance and is not an enterprise or pursuit suitable to be carried on on the plaintiffs’ said property. That the plaintiffs’ said property and the property surrounding and adjacent thereto is rolling and contains attractive and beautiful inclines and declines which greatly add to the residential character of the plaintiffs’ said property and the surrounding property, and cause the same to be extremely suitable and adaptable for residential purposes and landscaping in connection therewith; that the location of oil derricks and oil tanks in the centeg of such a district would cause the attractive appearance of the said property to be destroyed and would cause the whole of the surrounding territory to become unsightly and ugly in appearance; that it is impossible to drill for oil and to operate oil wells on plaintiffs’ said property or to extract oils, gas or other hydrocarbon substances from plaintiffs’ said property without using in connection ¡therewith tall and unsightly oil derricks and without using in connection therewith power other than animal power; that the power necessary to be used in connection with all of these drilling operations or the maintenance "of the wells for the purposes hereinabove set forth would require apparatus for the generation of such power and that the amount oE power to he generated by each of such apparatus for the drilling of any oil well or wells for the purpose of extracting gases, oil or hydrocarbon substances would be greater than five horsepower.”

Appellants also introduced experts to sustain their contention that their land was oil-bearing land. The defendants introduced evidence of experts tending to show that it was not oil land, and in that connection showed that three oil wells had been'drilled in that neighborhood to a depth of over 4,000 feet each without striking oil. The ease, however, must be disposed of on the theory that appellants’ land is oil-bearing land, and that the ordinance preventing the appellants from drilling operations thereon has in effect destroyed the value of said property as oil land.

Assuming for the moment that the facts are correctly determined by the trial court, the- right of the appellee eity to pass the ordinance in question need not be confined to the more recently developed phase of police power involved in zoning ordinances which undertake in a measure to direct the future growth of the eity, but may also be predicated upon the power of the city to protect its inhabitants from fire hazard and from noxious gases; that is to say, the power exercised by the city authorities in enacting the ordinance may be based upon that branch of the police power which deals with the public safety. It cannot be doubted under the authorities that, if there is a menace to the health and property of its citizens from the proposed drilling operations, under the police power as long established and exercised the ordinance would be a valid exercise of such police power. See cases cited in Masonic Cemetery Ass’n v. Gamage (C. C. A.) 38 F.(2d) 950, 958.

The second branch of the police power upon which the ordinance in question may be based is that more recently developed phase of the police power which in the interests of the general welfare permits a city to so limit the class of structures which can be erected and the kind of business which can be maintained within various areas or zones as to regulate and control the future growth and