Rocky Mountain Helium, LLC v. United States

123 Fed. Cl. 551, 2015 U.S. Claims LEXIS 1266, 2015 WL 5730672
CourtUnited States Court of Federal Claims
DecidedSeptember 30, 2015
Docket15-336 C
StatusPublished
Cited by2 cases

This text of 123 Fed. Cl. 551 (Rocky Mountain Helium, LLC v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rocky Mountain Helium, LLC v. United States, 123 Fed. Cl. 551, 2015 U.S. Claims LEXIS 1266, 2015 WL 5730672 (uscfc 2015).

Opinion

*553 Jurisdiction, 28 U.S.C. § 1346; Motion To Dismiss, RCFC 12(b)(1), RCFC 12(b)(6); Tucker Act, 28 U.S.C. § 1346(a)(2), 28 U.S.C. § 1491.

MEMORANDUM OPINION AND FINAL ORDER

BRADEN, Judge.

I. RELEVANT FACTUAL BACKGROUND. 1

On June 24, 1994, Rocky Mountain Helium, LLC (“Rocky Mountain”) and the United States Department of Interior’s Bureau of Land Management (“Interior”), entered into Federal Helium Contract No. FLL 94-001 (“Helium Contract”) to “conserve and extract the helium component of the gas stream produced from oil and gas wells” on 21,522.44 acres in western Colorado. Compl. ¶¶ 11-14.

Pursuant to the Helium Contract, Rocky Mountain was required to pay an annual rent of either one dollar per acre or royalties of equal or greater. Gov’t App. A3-5; Compl. ¶ 14. The minimum annual rent was $21,522.44. Compl. ¶ 14. In the event that Helium Contract was terminated by Interior, Rocky Mountain nevertheless had preferential rights for one year, if Interior decided to enter into a new agreement. Gov’t. App. A5.

During August 1, 1994 through July 31, 1995, Rocky Mountain paid Interior $500.00 plus the first annual rent payment of $21,522.44, pursuant to the Helium Contract. Compl. ¶ 16. Sometime in 1994 and through 2009, Rocky Mountain also attempted to negotiate a contract to extract helium from properties held by other federal oil and gas lessees. Compl. ¶ 20. According to Rocky Mountain, Interior never assisted or cooperated in that effort. Compl. ¶ 22. As a result, Rocky Mountain never made any rent payments after July 31, 1995 and was in default on August 31, 1996. Gov’t App. A3.

On June 5, 2003, however, Rocky Mountain and Interior entered into a Fust Administra-five Modification of the Helium Contract 2 authorizing Rocky Mountain to extract helium on nearly one million additional acres in western Colorado and eastern Utah. Court Exhibit A; Compl. ¶24. But, the June 5, 2003 First Administrative Modification provided that it would not be effective unless Rocky Mountain made “payment in full of all accrued rentals, penalties and interest within 90 days of the date both parties have executed these modifications[.]” Court Exhibit A at 2. Rocky Mountain, however, never made any payments to Interior under the First Amendment Modification Compl. ¶22. As such, the First Administrative Modification became ineffective.

On December 29, 2004, Interior notified Rocky Mountain that it cancelled the Helium Contract for non-payment. Gov’t App. A12. In January 2005, Rocky Mountain filed an administrative appeal of that notice with the Civilian Board of Contract Appeals (“CBCA”). Compl. ¶ 26; Gov’t App. A12.

On August 29, 2008, Rocky Mountain and Interior entered into a Settlement Agreement, whereby, within 30 days after execution, Interior was required to provide Rocky Mountain with data about the composition of gases, including helium, located on specified land of the federal oil and gas lessees. Gov’t App. A12-21. The requested data would reveal whether enough helium existed to justify building a helium recovery unit. Compl. ¶¶ 27-28; Gov’t App. A13. Upon receipt of this data and after it “confirmed that it had received sufficient data,” Rocky Mountain was required to pay $116,579.90 in accrued rental payments, fees, penalties, and interest. Compl. ¶ 29; Gov’t App. A13. After payment and confirmation from Rocky Mountain that it intended to proceed, Interior would reinstate the Helium Contract. Gov’t App. A13. Upon reinstatement, Rocky Mountain was obligated to resume annual rental/royalty payments to Interior. Gov’t App. A13. If the Settlement Agreement was executed and he *554 lium production commenced, the parties would then sign a Second Administrative Modification that would authorize Rocky Mountain to extract helium from the lands identified in the June 5, 2003 First Administrative Modification. Gov’t App. A22. If Rocky Mountain failed to make the requested payment, within 90 days after delivery of the data, a Sunset Provision would be triggered requiring Rocky Mountain.to release all claims, rights, and/or interest in or arising from the Helium Contract. Gov’t App. A13-16.

According to Rocky Mountain, however, Interior “failed to provide [Rocky Mountain] with a sufficient and complete set of data[.]” Compl. ¶ 30. For this reason, Rocky Mountain did not pay the required rental payment. Compl. ¶ 31.

On April 21, 2009, Interior invoked the Sunset Provision of the Settlement Agreement and informed Rocky Mountain that it “fully, finally and permanently terminated” the June 24, 1994 Helium Contract. Compl. ¶32; Gov’t App. A25. Thereafter, Interior entered into a contract with another party to extract helium from the land. Compl. ¶ 33.

II. PROCEDURAL HISTORY.

On April 1, 2015, Rocky Mountain (“Plaintiff’) filed a Complaint in the United States Court of Federal Claims alleging breaeh of the Settlement Agreement by failing to provide sufficient data, breach of the Helium Contract’s preferential rights provision, and breach of the covenant of good faith and fair dealing. Compl. ¶¶ 36; 43; 45-47.

On May 19,. 2015 and June 22, 2015, Defendant (“the Government”) filed Motions For Extensions Of Time To Respond to the April 1, 2015 Complaint that the court granted.

On July 13, 2015, the Government filed a Motion To Dismiss (“Gov’t Mot.”), pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the United States Court of Federal Claims (“RCFC”). On August 7, 2015, Plaintiff filed a Response (“PI. Resp.”). On September 8, 2015, the Government filed a Reply (“Gov’t Reply”).

On September 18, 2015, Plaintiff e-mailed to the court a copy of the June 5, 2015 First Administrative Modification that was unsigned by the Government. On September 22, 2015, the Government e-mailed a copy of the June 5, 2015 First Administrative Modification that was signed by both parties.

III. DISCUSSION.

A. Jurisdiction.

The United States Court of Federal Claims has “jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). The Tucker Act, however, is “'only a jurisdictional statute; it does not create any substantive right enforceable against the United States for money damages.’ ” United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 63 L.Ed.2d 607 (1980) (quoting United States v. Testan, 424 U.S.

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123 Fed. Cl. 551, 2015 U.S. Claims LEXIS 1266, 2015 WL 5730672, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rocky-mountain-helium-llc-v-united-states-uscfc-2015.