Union Oil Co. of California v. State, Department of Natural Resources

526 P.2d 1357, 50 Oil & Gas Rep. 1, 1974 Alas. LEXIS 269
CourtAlaska Supreme Court
DecidedOctober 4, 1974
Docket2025
StatusPublished
Cited by11 cases

This text of 526 P.2d 1357 (Union Oil Co. of California v. State, Department of Natural Resources) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Union Oil Co. of California v. State, Department of Natural Resources, 526 P.2d 1357, 50 Oil & Gas Rep. 1, 1974 Alas. LEXIS 269 (Ala. 1974).

Opinion

OPINION

CONNOR, Justice.

This is an appeal from an administrative determination. The questions for review concern the procedure for administrative and judicial review of a decision by the Division of Lands, Department of Natural Resources, which denied a discovery well certification to the holders of an oil and gas lease.

Under a lease granted in 1962 appellants drilled a well known as Grayling No. 1-A Well. On October 24, 1965, a showing of hydrocarbons was encountered. Appellants established priority as to the date of discovery under applicable regulations. On November 15, 1965, they applied for a discovery royalty certification on Grayling No. 1-A Well. 1

By a letter of January 21, 1966, the Alaska Oil and Gas Conservation Committee 2 transmitted its findings to the Director, Division of Lands, stating that there was insufficinet subsurface information to determine whether the Grayling No. 1-A Well was on a geologic structure previously uncertified. By a letter of January 26, 1966, the Director denied appellants’ application. On February 14, 1966, appellants filed a document entitled “Petition for Reconsideration and Interpretation” of the decision. No action was taken by the Director on this petition. Under our Administrative Procedure Act, the failure to take action on the petition within 30 days *1359 after the delivery or mailing of the decision to appellants would amount to a denial of the petition. AS 44.62.540(a). 3 Under the act, considered alone, the appellants would then have had an additional 30 days within which to seek judicial review, of the Director’s decision. AS 44.62.560(a) 4 They did not seek review within that time.

The central question in this appeal is whether the combination of further events and applicable law preserved appellants’ rights to seek judicial review at some later time.

On October 31, 1968, the Commissioner, Department of Natural Resources, directed a written decision to appellants in which he granted appellants 60 days within which to supply supporting information and to schedule a hearing upon their petition for reconsideration. It is not clear from the record how Union’s petition got to the Commissioner, since it was submitted to the Director. Nor is it clear why over two and one-half years elapsed before the Commissioner’s response. But it is apparent that the Commissioner still regarded the case as open. Appellants submitted the supporting information on December 30, 1968, and requested a hearing. On February 26, 1970, the Commissioner granted a hearing which was held on April 17, 1970. In a written decision of October 7, 1970, the Commissioner determined that the original findings of the Oil and Gas Conservation Committee were correct, that the Director’s original decision was correct, and that “the application for discovery well certification on the Grayling No. 1-A Well is therefore denied.” He also stated:

“This decision represents final departmental action regarding all matters raised in your application for reconsideration.”

On November 2, 1970, appellants filed in the superior court a petition for judicial review of the decision of the Commissioner of October 7, 1970. The principal question presented was whether the Commissioner should have limited himself to the evidence available to the Oil and Gas Conservation Committee and the Director in February 1966, or whether he should have considered evidence discovered and submitted later. The Commissioner’s decision of October 7, 1970, recites that he limited himself to determining whether the original decision of the Director was correct on the basis of the information then available to the Director.

A hearing was held in superior court on December 7, 1971. After hearing argument, the court entered an order remanding the case “to the Commissioner of Natural Resources and/or Director of Division of Lands and/or The Oil and Gas Conservation Committee” with directions (1) to determine whether Union’s petition for reconsideration was properly granted by the Commissioner’s October 1968 decision; (2) if it was properly granted, then to explain the meaning of the term “supporting information” used in the decision; (3) to determine whether the information Union supplied pursuant to the decision qualified as “supporting information”; (4) if the petition was properly granted and if the “supporting information” supplied by Union was pertinent to the inquiry, then to re *1360 view and consider the same and make “appropriate findings”; and (5) if the petition was “improperly allowed,” to make “specific findings to the effect” and to state “the reasons therefor”. In conclusion the order stated:

“In all events a new decision on the application for discovery well certification as to oil and gas lease No. ADL 17594 should be made setting forth the basis upon which the application is either granted or denied.”

In response to the remand, the Commissioner issued a decision dated February 17, 1972, stating: (1) that the “petition for reconsideration” was properly granted; (2) that the Commissioner properly limited his review “to a determination of whether [the Oil and Gas Committee and the Director] had considered all the evidence timely filed pursuant to AAC 505.744”; (3) “[supporting information is defined by this Department as information which explains and supports the position of the applicants and which is based on data filed by the applicants within 90 days after the date of their potential test under AAC 505.743 held on November 7, 1965data filed after this 90 day-period is “additional information,” not “supporting information”; (4) the Oil and Gas Conservation Committee considered all Union’s “supporting information” and properly did not consider Union’s “additional information”; and (5) “[t]he application for discovery well certification ... is denied for the reason that insufficient information was submitted by the applicants during the 90-day period ... to permit a finding by the Alaska Oil and Gas Conservation Committee as to the existence of a separate geologic structure.”

Union filed a second petition for judicial review on April 12, 1972, of this new decision by the Commissioner. Union’s position throughout was that in their original petition of February 14, 1966, they requested and, in the October 1968 Commissioner’s decision, were properly granted the right to submit new evidence as to the separateness of the geologic structures as that evidence was discovered and developed after the 90-day period. Union argued that its petition was not really an appeal from the Director’s decision, but rather a request for a stay, a request to keep the case open. Union contended that AS 44.62.-520(a) 5 permits the Commissioner or the Director to continue, i. e., stay, their jurisdiction over a matter for a particular purpose so long as that purpose is not to postpone judicial review.

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Bluebook (online)
526 P.2d 1357, 50 Oil & Gas Rep. 1, 1974 Alas. LEXIS 269, Counsel Stack Legal Research, https://law.counselstack.com/opinion/union-oil-co-of-california-v-state-department-of-natural-resources-alaska-1974.