Chance v. Zinke

263 F. Supp. 3d 1178
CourtDistrict Court, N.D. Oklahoma
DecidedApril 18, 2017
DocketCase No. 16-CV-549-JHP-PJC
StatusPublished

This text of 263 F. Supp. 3d 1178 (Chance v. Zinke) is published on Counsel Stack Legal Research, covering District Court, N.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chance v. Zinke, 263 F. Supp. 3d 1178 (N.D. Okla. 2017).

Opinion

[1183]*1183OPINION AND ORDER

James H. Payne, United States District Judge '

Now before the Court are a motion to dismiss (Dkt.# 25) of Ryan Zinke, in his official capacity as Secretary of the United States Department of the Interior (“Interi- or”); the United States Bureau of Indian Affairs (“BIA”); and Weldon Louderrriilk, in his official capacity as Director of the BIA (“Federal Defendants”),1 and a motion to dismiss (Dkt.# 21) filed by Great Southwestern Exploration, Inc. (“GSE”). Federal Defendants ask the Court to dismiss Plaintiffs amended complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction (Dkt.# 25). GSE moves to dismiss Plaintiffs amended complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim for which relief may be granted (Dkt.# 21).

BACKGROUND

This case arises from the BIA’s approval of a lease assignment and two drilling permits on the subsurface mineral estate underlying Plaintiffs lands, Plaintiff is the owner of surface land in Osage County, Oklahoma located in the Eastern half (E/2) of the Southeast Quarter (SE/4) of Section 1, Township 25 North, Range 3 East (Dkt.# 17 at ¶ 2). Pursuant to the Osage Allotment Act, the subsurface mineral estate in Osage County (“Osage Mineral Estate”) is held in trust by the United States on behalf of the Osage .Nation. Act of June 28, 1906, Pub. L. No. 59-321, § 3, 34 Stat. 539, 543-44, as amended (“1906 Act”); see also Osage Nation v. Irby, 597 F.3d 1117, 1120-21 (10th Cir. 2010). Under the 1906 Act, the Osage Nation is authorized to lease the. Osage Mineral Estate for oil and gas exploration and development “with the approval of the Secretary of the Interior, and under such rules and regulations as he may prescribe.” 1906 Act § 3. The Secretary has delegated this authority to the Superintendent of the Osage Agency. See 25 C.F.R. §§ 226.4, 226.5(b); see also 209 DM 8.1(A). The regulations governing leasing of the Osage Mineral Estate for. oil and gas mining are set forth in 25 C.F.R. Part 226.2

The Superintendent of the Osage Agency is authorized to approve oil and 'gas leases made by the- Osage Minerals Council involving the Osage Mineral Estate-Nee 25 C.F.R. § 226.2. Upon receipt of an approved lease, lessees have the right to use so much of the surface of the land within the Osage Mineral Estate as may be reasonable for operations and marketing. 25 C.F.R. § 226.19(a). However, except for the surveying and staking of a well, no operations of any kind shall commence until the lessee meets with the surface owner to discuss lease access and the settlement of surface damages. 25 C.F.R. § 226,18. Prior to commencing drilling operations on a leased tract, .a lessee must submit an application for a permit to drill (“APD”), obtain the Superintendent’s approval thereof, Id. at § 226.16(b), and pay the surface owner a commencement fee, Id. at § 226.18(b). In accordance with the National Environmental Policy Act of 1969 (“NEPA”), 42 U.S.C. § 4321 et seq., each oil and/or gas lease and the ■ associated activities and installations subject to the regulations in 25 C.F.R.. Part 226 must be assessed for its environmental affects prior [1184]*1184to approval by the Superintendent. 25 C.F.R. § 226.2©; Davis v. Morton, 469 F.2d 593, 596-97 (10th Cir. 1972).

On April 23, 1963, the Osage Tribe and Eason Oil Company (“Eason”) entered into an oil lease for the SE/4 of Section 1, Township 25 North, Range 3 East, Contract No. 14-20-406-1354 (“Chance Lease”) (Dkt.# 17 at ¶ 45; Dkt.# 17-3). The Superintendent of the BIA Osage Agency (“Superintendent”) approved the Chance Lease on June 3, 1963. Id. The Chance Lease was subsequently assigned and as of August 31, 1990, Buck Creek Associates held 100% right, title and interest therein. On February 25, 1991, Buck Creek Associates assigned the Chance Lease to .GSE (Dkt.# 17 at ¶ 51; Dkt. # 17-3). The Superintendent approved the assignment from Buck Creek Associates to its affiliate, GSE on April 23, 1991. Id. Plaintiff asserts that the BIA violated NEPA by failing to conduct an environmental analysis prior to approval of the Chance Lease assignment to GSE (Dkt.# 17 at ¶¶ 51-52).

On December 3,1990, the BIA approved an APD submitted by Buck Creek Associates for Well No. 3 on the Chance Lease (Dkt.# 17 at ¶ 48). Buck Creek Associates began drilling Well No. 3 on December 24, 1990, and finished drilling on January 8, 1991. Id. at ¶ 50; Dkt.# 17-1). On June 21, 1991, the BIA approved an APD submitted by Buck Creek Associates for Well No. 4 on the Chance Lease (Dkt.# 17 at ¶ 54; Dkt.# 17-4). Buck Creek Associates began drilling Well No. 4 on June 20, 1991, and finished drilling on July 1, 1991. Id. Plaintiff asserts that the BIA failed to comply with NEPA in its approval of the APDs for Wells No. 3 and 4, and that the BIA failed to provide Plaintiff or his predecessors-in-interest with notice that the APDs for either well had been approved (Dkt.# 17 at ¶¶ 48, 54). Plaintiff alleges that GSE drilled Wells No. 3 and 4 and constructed oil and gas related facilities on Plaintiffs property. Id. at ¶¶ 50, 54. Plaintiff asserts that GSE’s actions caused significant erosion and other environmental damage. Id. Plaintiff also alleges that the BIA has approved other unspecified or unknown “oil and gas related activity” on Plaintiffs property in violation of NEPA and without notice to Plaintiff or his predecessors-in-interest. Id. at ¶ 60.

On August 19, 2016, Plaintiff brought this suit against the Federal Defendants and GSE (Dkt.# 1). Plaintiff filed an amended complaint on October 26, 2016 (Dkt.# 17). Plaintiff brings his claims against the Federal Defendants under the Administrative Procedure Act, 5 U.S.C. § 551 et seq. (“APA”). Plaintiff asks that the Court enter declaratory judgment finding that the Superintendent’s approval of the Chance Lease assignment and APDs for Wells No. 3 and 4 violated NEPA and are therefore invalid (Dkt.# 17 at ¶¶ 67, 77, 87). Plaintiff also asks that the Court enter declaratory judgment finding that the Superintendent’s approval of any unknown leases, drilling or workover permits since January 1, 1970, violated NEPA and are void ab initio. Id. at ¶ 96.

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Bluebook (online)
263 F. Supp. 3d 1178, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chance-v-zinke-oknd-2017.