Western Oil and Gas Association v. Kenneth Cory

The California State Lands Commission (“Commission”) and its members appeal from the district court’s grant of summary judgment in favor of plaintiffs, eight oil companies and their trade association, the Western Oil and Gas Association. The court below overturned as unconstitutional the regulations promulgated by the Commission that compute “rent” for the leasing of state-owned tidelands and submerged lands based on the volume of oil in interstate and foreign commerce passing over the leased property. We agree that the regulations violate both the Commerce Clause and the Import-Export Clause of the United States Constitution and affirm.

I. BACKGROUND

In 1953 Congress enacted the Submerged Lands Act, 43 U.S.C. §§ 1301-1315 . The Act conveyed to the States title to the land underlying the nation’s harbors and seas from the high tide mark to the three-mile limit. In California, the State Lands Commission administers the tidelands and submerged lands and is authorized to lease property upon terms it deems to be in the best interest of the State. Cal.Pub.Res. Code §§ 6216, 6301, 6501-6509.

Plaintiffs own and operate several refineries on the California coast adjacent to the State…