Wildcat Coal v. Pacific Minerals

Court of Appeals for the Tenth Circuit·Decided July 28, 2026·No. 23-8073·Published

Opinion

Appellate Case: 23-8073 Document: 65-1 Date Filed: 07/28/2026 Page: 1 FILED United States Court of Appeals PUBLISH Tenth Circuit

UNITED STATES COURT OF APPEALS July 28, 2026 Christopher M. Wolpert FOR THE TENTH CIRCUIT Clerk of Court _________________________________

WILDCAT COAL LLC,

Plaintiff - Appellee,

v. No. 23-8073

PACIFIC MINERALS INC.; IDAHO ENERGY RESOURCES CO, doing business together as a joint venture under the trade name BRIDGER COAL COMPANY,

Defendants - Appellants. _________________________________

Appeal from the United States District Court for the District of Wyoming (D.C. No. 2:22-CV-00102-NDF) _________________________________

Nicole C. Hancock, Stoel Rives LLP, (Wade C. Foster, Stoel Rives LLP, Richard R. Hall, Dorsey Whitney LLP, and Timothy S. Bishop, Joshua D. Yount, Brett E. Legner, Mayer Brown LLP, with her on the briefs) for Appellant

Brian A. Glasser, Bailey & Glasser, LLP, (Benjamin Schwartzman, Jennifer Fahey, Leslie A. Brueckner, Bailey & Glasser, LLP, and Mistee E. Elliott, Holly L. Tysse, Crowley Fleck PLLP with him on the briefs) for Appellee _________________________________

Before TYMKOVICH, MORITZ, and CARSON, Circuit Judges. _________________________________

CARSON, Circuit Judge. _________________________________ Appellate Case: 23-8073 Document: 65-1 Date Filed: 07/28/2026 Page: 2

Under Wyoming law, courts interpret mineral leases according to general

contract principles, reading the contract as a whole and avoiding constructions that

make provisions meaningless. Wyoming courts follow the parties’ intent as shown

by a contract’s clear and unambiguous language.

For almost thirty years, the Bridger Coal Company (“Bridger”) paid

production royalties to the Rock Springs Royalty Company for the coal it mined from

a Wyoming mine. But in 2020, when Bridger sought to pay an advance royalty based

on production projections rather than a royalty based on actual coal mined, Wildcat

Coal, LLC (“Wildcat”), Bridger’s current lessor, objected. In response, Bridger

refused to pay production royalties and sought to recoup the almost three million

dollars it had paid in advance royalties. Wildcat sued, arguing that Bridger based its

royalty calculations on a faulty definition of the term “Adjoining Lands” in their

lease. The district court agreed and granted Wildcat summary judgment. In a

footnote, the district court sua sponte required Bridger to recalculate all royalties paid

since 1986. Bridger appealed.

Exercising jurisdiction under 28 U.S.C. § 1332(a)(1) and 28 U.S.C. § 1291, we

affirm in part, reverse in part, and remand for further proceedings consistent with this

opinion.

I.

In 1986, the Rock Springs Royalty Company (“Rock Springs”) leased a nine-

mile area in Sweetwater County, Wyoming (the “Nine Mile Lease”) to Bridger Coal

Company (“Bridger”) for coal mining. The Nine Mile Lease gave Bridger exclusive

2 Appellate Case: 23-8073 Document: 65-1 Date Filed: 07/28/2026 Page: 3

rights to “explore for, mine, store, prepare, ship, and dispose of the coal in, upon, and

under the Rock Springs Lands” and to build commensurate infrastructure.

In exchange, the Nine Mile Lease required Bridger mine from Rock Springs

Lands at least forty-five percent of the total coal mined every five years from both

Rock Springs Lands and their “Adjoining Lands.” Bridger was to pay “production

royalties” on the coal it mined: twelve-and-a-half percent of the sale price of the coal,

plus $2.50 per ton up to 5,814,000 tons, and then $2.25 per ton mined beyond

5,814,000 tons. If Bridger failed to meet its five-year, forty-five percent mining-

threshold requirements, the Nine Mile Lease required Bridger to pay Rock Springs an

“advance royalty”: twelve-and-a-half percent on forty-five percent of all estimated

coal mined from Rock Springs Lands and Adjoining Lands. The Nine Mile Lease

thus insulated Rock Springs from Bridger’s possible breach; either way, Rock

Springs got paid.

Between 1986 and 2020, Wildcat succeeded Rock Springs as lessor and

replaced Anadarko as lessor for unrelated land leases Bridger acquired from

Anadarko. 1 Bridger remained as lessee. Bridger also entered other contracts,

including one with Wildcat for a ten-mile area (the “Ten Mile Lease”), and one with

the Bureau of Land Management (the “BLM Lease”). The current dispute arose

between Bridger and Wildcat—the current lessor—under the Nine Mile Lease.

1 For clarity, we refer to Rock Springs, Anadarko, and Wildcat as just “Wildcat” where applicable. 3 Appellate Case: 23-8073 Document: 65-1 Date Filed: 07/28/2026 Page: 4

Bridger and Wildcat had no payment disputes under the Nine Mile Lease until

2020, when Bridger paid Wildcat its first advance royalty in lieu of a production

royalty. Bridger met its forty-five percent coal-production burden every five years

from 1986 until 2015 and accordingly paid Wildcat production royalties. In 2020,

however, anticipating failure to meet its forty-five percent production burden,

Bridger paid Wildcat an advance royalty of $2,923,309.80. Wildcat objected to

Bridger’s royalty calculation after receiving the payment. Bridger then reversed

course. It informed Wildcat that it did not owe an advance royalty for the 2016–2020

period. Bridger explained that under the Nine Mile Lease, any production in excess

of the forty-five percent production threshold from the beginning of the lease results

in a production royalty credit that Bridger can apply against any future failure to

meet its forty-five percent production burden. According to Bridger, it had accrued

excess “credit” by paying above the forty-five percent threshold from 1986–2015,

absolving it of any obligation to pay Wildcat an advance royalty for the 2016–2020

period. Bridger began withholding $2,923,309.80 in future production royalties from

Wildcat to recover what it viewed as an overpayment to Wildcat. Wildcat responded

that Bridger had used an incorrect definition of “Adjoining Lands” when making its

calculations and actually owed Wildcat $19,149,346.99.

Wildcat sued Bridger for breach of contract. The district court sided with

Wildcat on cross-motions for summary judgment. The district court found that

Bridger improperly defined “Adjoining Lands” and that the term included public and

private lands as well as surface and underground mining. The district court also

4 Appellate Case: 23-8073 Document: 65-1 Date Filed: 07/28/2026 Page: 5

found that “Adjoining Lands” included all the land described in the BLM Lease

regardless of geographic proximity. The district court further directed, in a footnote,

that Bridger recalculate all royalty payments since 1986 using the new “Adjoining

Lands” definition. Neither party had requested recalculation for the years 1986–

2015, nor had they otherwise presented the issue to the district court. Still, the

district court sua sponte required Bridger to recalculate royalties beginning in 1986.

Confronted with this new directive, Bridger moved under Federal Rule of Civil

Procedure 60(a) to correct what it perceived to be an error by the district court.

Bridger argued that the Nine Mile Lease’s thirty-six-month protest provision barred

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