Chance v. Zinke

898 F.3d 1025
CourtCourt of Appeals for the Tenth Circuit
DecidedAugust 6, 2018
Docket17-5057
StatusPublished
Cited by37 cases

This text of 898 F.3d 1025 (Chance v. Zinke) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chance v. Zinke, 898 F.3d 1025 (10th Cir. 2018).

Opinion

MORITZ, Circuit Judge.

*1027 Merrill Chance, a landowner in Osage County, Oklahoma, sued the government 1 to void a lease and various permits that allow Great Southwestern Exploration, Inc. (GSE) to drill for oil and gas beneath his property. He also seeks damages from GSE for trespassing on his property. The district court ruled that Chance's claims against the government were untimely under 28 U.S.C. § 2401 (a) ; thus, it reasoned, it lacked subject-matter jurisdiction to hear these claims and therefore dismissed them. It also dismissed Chance's claims against GSE.

We agree with the district court that Chance's claims against the government are untimely. But the Supreme Court has warned us to beware of "profligate use of the term 'jurisdiction.' " Sebelius v. Auburn Reg'l Med. Ctr ., 568 U.S. 145 , 153, 133 S.Ct. 817 , 184 L.Ed.2d 627 (2013). Today we heed that warning and hold that the district court wrongly concluded it lacked subject-matter jurisdiction over Chance's claims against the government.

Therefore, we reverse the district court's order dismissing Chance's claims against the government for lack of subject-matter jurisdiction and instruct the district court to dismiss those claims for failure to state a claim. We affirm the district court's judgment over Chance's claims against GSE because, to the extent Chance's claims against the government fail, the district court properly declined to exercise supplemental jurisdiction over Chance's claims against GSE.

Background

The controversy surrounding Chance's property stems from the government's unusual presence in Osage County. Before the turn of the twentieth century, Osage County was a tribal reservation belonging to the Osage Nation. See Osage Nation v. Irby , 597 F.3d 1117 , 1120 (10th Cir. 2010). But Congress disestablished the reservation in 1906 upon Oklahoma's induction into the union. See id. At the same time, Congress severed the surface estate from its subterranean mineral estate. Id. It divided the surface estate and distributed most of the parcels to tribal members. Id. at 1120-21 . But importantly, the government retained the subterranean estate in trust for the Osage Nation's benefit. See id. at 1120 .

Today, Department of Interior regulations task the Osage Agency of the BIA with managing this trust. See 25 C.F.R. §§ 226.1 - 226.46. These regulations give the Osage Agency authority to lease tracts of the subterranean estate, with the Osage Tribal Council's permission. § 226.2(b). The Osage Agency exercises significant oversight over these leases. Among other responsibilities, it must approve all new oil leases, id. ; assignments of existing leases, § 226.15(b); and drilling permits, § 226.16(b).

Chance is the surface owner of a tract of land in Osage County. In 1963, the Osage Agency granted the Eason Oil Company (Eason) an oil lease for deposits underlying Chance's property. Eason drilled two wells in 1964 that remain in operation today. With the BIA's approval, Eason assigned its lease to GSE in 1991. The BIA

*1028 granted GSE permits to drill three new wells that same year. Two of these wells remain in operation. Chance maintains that the construction and operation of these wells has damaged his surface property in various ways over the years.

In October 2016-25 years after Eason assigned its lease to GSE and the BIA granted GSE permits to drill new wells on the lease-Chance filed this lawsuit. He argued that 42 U.S.C. § 4332 (c), part of the National Environmental Policy Act (NEPA) of 1969, required the Osage Agency to conduct site-specific environmental-impact assessments before approving Eason's assignment to GSE and GSE's new drilling permits. And he alleged that the Osage Agency never conducted these assessments. Chance also asserted that the Osage Agency failed to notify his predecessors-in-interest that it approved the new permits. Further, he contended that the Osage Agency improperly took various other unknown actions related to his property without conducting site-specific environmental-impact assessments or notifying him or his predecessors-in-interest.

Additionally, Chance asserted that the Osage Agency's failure to comply with NEPA reflects systemic problems. He alleged that for decades, the Osage Agency had been relying only on an assessment it conducted in 1979 that evaluated the general impact of the Osage County drilling program rather than conducting site-specific environmental-impact assessments, as Chance argued NEPA requires. Chance further alleged that the Osage Agency attempted to conceal its noncompliance with NEPA.

The government moved to dismiss Chance's claims against it for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), and GSE moved to dismiss Chance's claims against it for failure to state a claim under Rule 12(b)(6). The district court granted both motions.

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898 F.3d 1025, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chance-v-zinke-ca10-2018.