Mosser v. Denbury Resources, Inc.

112 F. Supp. 3d 906, 2015 U.S. Dist. LEXIS 82019, 2015 WL 3892013
CourtDistrict Court, D. North Dakota
DecidedJune 24, 2015
DocketCase No. 1:13-cv-148
StatusPublished
Cited by6 cases

This text of 112 F. Supp. 3d 906 (Mosser v. Denbury Resources, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. North Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mosser v. Denbury Resources, Inc., 112 F. Supp. 3d 906, 2015 U.S. Dist. LEXIS 82019, 2015 WL 3892013 (D.N.D. 2015).

Opinion

[909]*909ORDER DENYING MOTIONS FOR SUMMARY JUDGMENT

CHARLES S. MILLER, JR., United States Magistrate Judge.

In this action, plaintiffs allege that defendants (collectively “Denbury”) have tor-tiously and unlawfully invaded the subsurface of their property by using it as a permanént site for disposing of salt water generated from oil and gas drilling operations without their permission. 'In addition to seeking damages for the affront of the claimed trespass and for nuisance, plaintiffs also seek statutory compensation under North Dakota’s surface owner protection law for' the loss of the economic opportunity to lease their 'subsurface property to Denbury or others for the disposal of salt water and other oil field wastes or, possibly, the storage of natural gas or C02.

Denbury denies it has committed trespass. It contends the production of salt water is a necessary incident of oil and gas production ahd that it has the right' to dispose of the salt water not only because it is an implied right of the dominant mineral estate but also because it has been authorized by a- lease executed by plaintiffs’ predecessors-in-interest. As for the claim of nuisance, Denbury contehds that deep-earth disposal of salt water is a practical and environmentally-sound solution for disposing of this waste stream and, more importantly, it has been authorized and approved by the governing regulatory agency. Finally, Denbury contends that plaintiffs have no right to monetary compensation because, according to it, the surface owner protection law does not extend to the subsurface disposal of salt water and that, in any event, plaintiffs have suffered no demonstrable damage.

Before the court is Denbury’s motion for summary judgment of dismissal and plaintiffs’ motion for partial summary judgment on the question of liability. Unless otherwise indicated,, the facts relied upon by the court in resolving the motions are either undisputed or have not been sufficiently controverted.

I. BACKGROUND

A. Plaintiffs’ interests as burdened by the Mosser Lease

Plaintiffs are the owners of the surface estate only in the following described tract of land located in Billings County, North Dakota:

Township HI North, Range 101 West
Section 26: NW1/4

When plaintiffs acquired their interest, it was already burdened by an oil and gas lease dated November 28, 1977 (“Mosser Lease”) granted by plaintiffs’ predecessors-in-title, who, at the time, owned both the surface and the minerals in the following property included in the Lease:,

Township HI North, Range 101 West
Section 17: All
Section 20: S1/2N1/2, SE1/4
Section 21: Sl/2
Section 22: Sl/2
Section 25: All
Section 26: All
Section 27: All

(Doc. No. 64-2). The Mosser Lease remains in effect because of continuous production of oil and gas from wells located on the leased acreage.

B. The unitization Of the lessee’s rights in the Mosser Lease with other interests

By Order No. 9410 dated May 16, 2003, the North Dakota Industrial Commission (“NDIC”) authorized the creation of the T.R.-Madison Unit (“Unit”) by approving a plan for unitization for the following lands in Billings County:

Township HI North, Range 101 West
Section 10: All
Section 11: All
Section 12: All
[910]*910Section 13: Wl/2, NW1/4NE1/4
Section 14: All
Section 15: All
Section 16: All
Section 21: All
Section 22: All
Section 23: All
Section 24: NW1/4NW1/4
Section 25: Wl/2
Section 26: All
Section 27: All

(Doc. No. 6-2, p. 9). Denbury is the current operator of the Unit.

C. The Mosser Well

Pripr to the creatipn of. the Unit, the Mosser Well, was spud as an oil and gas well on what is now plaintiffs’ surface acreage in the NW1/4 of Section 26. It produced oil and gas from January 1979 through June 2006. (Doc. No. 64).

On March 12, 2008, the prior Unit operator, Encore Operating, L.P. (“Encore”), submitted an application the North Dakota Industrial Commission (“NDIC”) to convert the Mosser Well into an injection well for the disposal of salt water. As part of the application, Encore submitted an affidavit certifying that it had notified the surface owners. Plaintiffs acknowledge that at. least Doug Mosser received the notice. (Doc. No. 6-5, p. 16).

On April 11, 2008, the NDIC approved Encore’s application to use the Mosser Well for the injection of salt water into the “Dakota Group,” which is a formation that lies above the formation unitized by the NDIC’s order creating the T.R.-Madison Unit. (Doc. No. 6-5). By ‘administrative rule, the permit automatically expired if the conversion to a saltwater disposal well was not commenced within one year of its issuance. N.D.A.C. § 43-02-05-04(10). This same limitation was also reflected in the permit.

Encore did not begin the conversion within the one-year time period. However, on March 8, 2009, and prior to the permit expiring, Encore requested a one-year extension, which was approved by the NDIC on April 9, 2009. (Doc. No. 71-6). Later, on March 8, 2010, Encore requested á second extension, which was similarly approved by the NDIC on March 15, 2010. (Doc. No. 71-7).

On April 8, 2011, Denbury, which, had now become .the Unit Operator and owner of the Mosser Well, requested a third extension, which was approved by the NDIC on April 11, 2011. (Doc. No. 71-8). Following this extension and almost three and one half years after the application for conversion of the well was first submitted by Encore, Denbury completed the conversion of the well for saltwater disposal on September 26, 2011, and the first saltwater injection took place on September 30, 2011. (Doc. No. 6-7).

. Other than .the first notice that went out to one or more' plaintiffs when Encore made its initial application to convert the Mosser Well for saltwater disposal in March 2008, the record is devoid of any notice being given of the NDIC’s approval of that request, much less any- of the three follow-on requests for extensions and NDIC .approvals. As will be addressed in more detail later, Denbury argues that the notice given to one or more, plaintiffs in March 2008 was sufficient to put plaintiffs on notice that they needed to be diligent about protecting their rights, but the court is skeptical of that given the permit automatically expired if the conversion was not commenced in one year, the lack of any follow-on notice of extensions being applied for and granted, and the long period of inaction.

II. DISCUSSION

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Bang, et al. v. Continental Resources
2025 ND 131 (North Dakota Supreme Court, 2025)
Northwest Landowners Association v. State
2022 ND 150 (North Dakota Supreme Court, 2022)
ASBURY v. EQT CORPORATION
W.D. Pennsylvania, 2021
Mosser v. Denbury Resources, Inc.
2017 ND 169 (North Dakota Supreme Court, 2017)

Cite This Page — Counsel Stack

Bluebook (online)
112 F. Supp. 3d 906, 2015 U.S. Dist. LEXIS 82019, 2015 WL 3892013, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mosser-v-denbury-resources-inc-ndd-2015.