Southern Ute Indian Tribe v. Amoco Production Co.

151 F.3d 1251, 139 Oil & Gas Rep. 1, 1998 Colo. J. C.A.R. 3952, 1998 U.S. App. LEXIS 16454
CourtCourt of Appeals for the Tenth Circuit
DecidedJuly 20, 1998
DocketNo. 94-1579
StatusPublished
Cited by15 cases

This text of 151 F.3d 1251 (Southern Ute Indian Tribe v. Amoco Production Co.) 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
Southern Ute Indian Tribe v. Amoco Production Co., 151 F.3d 1251, 139 Oil & Gas Rep. 1, 1998 Colo. J. C.A.R. 3952, 1998 U.S. App. LEXIS 16454 (10th Cir. 1998).

Opinions

SEYMOUR, Chief Judge.

OPINION ON REHEARING EN BANC

This case arose from the relatively recent development of technology that has made coal bed methane (CBM) commercially valuable. The Southern Ute Indian Tribe (the Tribe) appealed the district court’s grant of summary judgment to defendants Amoco Production Company and others on the Tribe’s claim to ownership of coal bed methane contained in coal acquired by the Tribe as successor in interest to a statutory reservation of coal to the United States. The Tribe also appealed the district court’s grant of summary judgment to the Secretary of the Interior, the Department of the Interior, and the Department of the Interior’s subordinate agencies (the federal defendants) on the Tribe’s claim of breach of fiduciary duty. A panel of this court reversed the district court on the issue of CBM ownership and remanded for further proceedings consistent with its decision. See Southern Ute Indian Tribe v. Amoco Prod. Co., 119 F.3d 816 (10th Cir.1997). Amoco requested rehearing en banc which we granted in part as set out below.

I.

In 1991, the Tribe brought suit against Amoco Production Company, other oil companies, and individual oil and gas lessees and lessors (the Amoco defendants) who asserted ownership interests in CBM contained in coal owned by the Tribe. In its First Amended Complaint, the Tribe claimed ownership of CBM and asserted that various Amoco defendants, by exploring for and extracting CBM under oil and gas leases, had among other things: 1) trespassed on Tribal lands; 2) trespassed on Tribal coal; 3) converted Tribal coal; 4) failed to pay severance tax to the Tribe; and 5) in collusion with State of Colorado officials, deprived the Tribe of federally guaranteed rights in violation of 42 U.S.C. § 1983. The Tribe sought a variety of remedies including: 1) a declaratory judgment vesting in the Tribe ownership of CBM and other substances contained in Tribal coal; 2) a declaratory judgment that Tribal consent is required for CBM extraction; 3) an order quieting title to CBM in the Tribe; 4) injunctive relief to prevent continued exploration and production of CBM without Tribal consent; 5) damages for present and future injuries to coal, for extraction of CBM, for conversion of coal, for civil rights violations, and for failure to pay severance taxes; 6) title to all exploration and production facilities on Tribal lands which, if removed, would interrupt production of CBM; and 7) costs and attorney’s fees.

The Tribe also sued the federal defendants in their capacities as trustees for the Tribe. The Tribe claimed that the federal defen[1255]*1255dants breached their fiduciary duties to the Tribe by allowing exploration and extraction of CBM under oil and gas leases. The Tribe sought a declaratory judgment on the breach of fiduciary duty issue, and sought injunctive relief to prevent the federal defendants from issujng permits to explore for and extract CBM under oil and gas leases or from otherwise acquiescing in the derogation of the Tribe’s alleged ownership interest in CBM.

Two issues were identified as fundamental to the resolution of all claims against the Amoco defendants: 1) the determination of CBM ownership, and 2) the existence of and applicability of defenses based on acts or omissions of the Tribe. Since resolution of either issue in favor of the Amoco defendants would settle all claims, the district court granted a joint motion by the Tribe and Amoco to bifurcate these issues. The parties then moved to certify “a defendant class comprised of all persons, except the Tribe and governmental entities, who claim an ownership interest in the coalbed methane” for the purposes of resolving the bifurcated issues. Aplt.’s App., vol. I at 214. Amoco was designated as representative of the class and, in that capacity, brought a motion for summary judgment on the bifurcated issues. Id., vol. II at 353.

The federal defendants supported the Amoco defendants’ claim of ownership of CBM and asserted accordingly that they had no fiduciary duty to manage an asset for the Tribe which it did not own. The federal defendants filed a motion for summary judgment based on the Tribe’s nonownership of the CBM. In the alternative, they moved to dismiss the Tribe’s action as time-barred. Id. at 365. The Tribe brought a cross-motion for summary judgment on the issue of CBM ownership.

The district court held that CBM ownership was vested unambiguously in the Amoco defendants. Southern Ute Indian Tribe v. Amoco Prod. Co., 874 F.Supp. 1142, 1160 (D.Colo.1995). Consequently, the court concluded it “need not address further the application of the common defenses to the ownership question,” id. at 1160, or reach the federal defendants’ claims that the Tribe’s action was barred by the statute of limitations, id. at 1161. It then granted summary judgment to the Amoco defendants on the issue of CBM ownership, and to the federal defendants on the “issue of breach of fiduciary duty for failure to manage the CBM gas,” leaving for later determination other issues concerning fiduciary duty. Id. The court denied the Tribe’s motion for summary judgment. Id.1

On appeal, the panel concluded in Part II A that the Coal Land Acts of 1909 and 1910, which reserved coal to the United States, do not by their plain language reveal congressional intent with respect to CBM. See Southern Ute, 119 F.3d at 821-22.’ The panel held in Part II B that the Acts, viewed in historical perspective, are ambiguous regarding Congress’ specific intent to include or exclude CBM in the reservation of coal. Id. at 822-24. Finally, in Part II C the panel addressed general congressional intent and was persuaded that Congress neither unambiguously included or excluded coal bed methane when it reserved the coal to the United States. In light of the Acts’ historical context'and the absence of a clear conveyance of CBM to-the surface patentees, coupled with the principle of statutory construction that resolves ambiguity in favor of the sovereign, the panel concluded that CBM was' reserved to the United States along with the coal. Id. at 826. In Part II D the panel addressed and rejected defendants’ contention that deference was due to a contrary opinion issued by the Solicitor of the Department of the Interior in 1981 entitled Ownership of and Right to Extract Coalbed Methane Gas in Federal Coal Deposits, 88 Interior Dec. 538 (1981). The panel held that deference was not appropriate under either Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), or Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944). See Southern Ute, 119 F.3d at 829-36. Finally, in Part III, the panel pointed out that, in light of its reversal, fbrther proceedings would be required on the resolution of important issues concerning the class action [1256]*1256defenses to the Tribe’s ownership of CBM which the district court held were mooted by its decision in favor of the Amoco defendants. Id. at 836.

Amoco petitioned for rehearing en banc.

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151 F.3d 1251, 139 Oil & Gas Rep. 1, 1998 Colo. J. C.A.R. 3952, 1998 U.S. App. LEXIS 16454, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-ute-indian-tribe-v-amoco-production-co-ca10-1998.