Dunn–mccampbell Royalty Interest Inc. v. Nat'l Park Serv.

• Decision Date: 07 January 2011
• Docket Number: No. 09–40187.,09–40187.
• Citation: 630 F.3d 431
• Parties: DUNN–MCCAMPBELL ROYALTY INTEREST, INC., a Texas Corporation; Dunn–Padre Corporation, a Texas Corporation; McCampbell Minerals, Inc., a Texas Corporation, Plaintiffs–Appellees,v.NATIONAL PARK SERVICE, an Agency of the United States Department of Interior; Joseph Escoto, in His Official Capacity as Superintendent of the Padre Island National Seashore, Defendants–Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

630 F.3d 431

DUNN–MCCAMPBELL ROYALTY INTEREST, INC., a Texas Corporation; Dunn–Padre Corporation, a Texas Corporation; McCampbell Minerals, Inc., a Texas Corporation, Plaintiffs–Appellees,

v.NATIONAL PARK SERVICE, an Agency of the United States Department of Interior; Joseph Escoto, in His Official Capacity as Superintendent of the Padre Island National Seashore, Defendants–Appellants.

No. 09–40187.

United States Court of Appeals, Fifth Circuit.

Jan. 7, 2011.

Joseph Gilbert Thompson, III (argued), Dick Watt, Watt, Beckworth, Thompson & Henneman, L.L.P., Houston, TX, for Plaintiffs–Appellees.Brian C. Toth (argued), U.S. Dept. of Justice, Environment & Natural Resources Div., Washington, DC, Charles William Wendlandt, Jr., Asst. U.S. Atty., Corpus Christi, TX, for Defendants–Appellants.Randall Louis Sarosdy, Austin, TX, for Patterson, Amicus Curiae.Appeal from the United States District Court for the Southern District of Texas.Before JOLLY and DENNIS, Circuit Judges, and BOYLE, District Judge. ^*E. GRADY JOLLY, Circuit Judge:

Before 1963, there was no Padre Island National Park off the coast of the State of Texas. It took a lot of maneuvering between the State of Texas and the United States to create the national park out of these coastal island lands, much belonging to the State of Texas, some belonging to private parties. The Texas Consent Statute, the deeds of conveyance, the federal Enabling Act of 1962, and the Oil and Gas Management Plan of 2001, as well as the Energy Policy Act of 2005, are all involved in this appeal.

Now, almost fifty years later, this appeal presents a conflict between the National Park Service (the “Service”)¹ and owners of certain mineral estates in the Padre Island National Seashore (the “Seashore”), with respect to those mineral owners' rights of ingress and egress over the Seashore's surface; such rights, if recognized, would allow the owners to exploit the subsurface minerals contained on the Island. The Service must manage the Seashore to preserve the environment for recreational use while respecting the legal rights of the mineral estate owners to extract oil and natural gas. In 2001, the Service attempted to strike this balance through its Oil and Gas Management Plan (the “Plan”). In this federal action, three related companies (collectively, “Dunn–McCampbell”) seek declaratory relief under the Administrative Procedure Act (“APA”), 5 U.S.C. § 1 et seq., arguing that the Plan exceeds the Service's regulatory power over the Seashore because it denies Dunn–McCampbell its rights of ingress and egress as provided by the special provisions of state and federal law that established the Seashore. The district court agreed and entered a declaratory judgment in Dunn–McCampbell's favor. The Service now appeals. Although we assume that the Service's normally broad regulatory authority over park lands is limited by the agreements between Texas and the Service that were made when the Seashore was established, we hold that these limitations do not provide the relief Dunn–McCampbell seeks today. We reverse, vacate, and remand.

I.

Padre Island is a narrow barrier island that stretches from Corpus Christi, Texas, nearly to the Mexican border. Long barren and inaccessible, the island began to draw interest from real estate developers after causeways were completed at either end. Developers and the federal government were not the only ones interested in the island. Oil companies had discovered the island's oil and gas resources, and by the time the Seashore was created, there was extensive mineral exploitation on the Island.

Congress authorized the Seashore's creation in 1962. See 16 U.S.C. §§ 459d–459d–7 (collectively, the “Enabling Act”). The Enabling Act provides that the Service is to administer the Seashore consistent with the law widely known as the National Park Service Organic Act (“Organic Act”), 16 U.S.C. §§ 1, 2–4, except as otherwise provided in the Enabling Act. Id. § 459d–4. Congress authorized the Service to acquire private property and interests in such property by purchase, condemnation, or otherwise, but provided that it could obtain state lands from Texas only with the state's “concurrence.” Id. § 459d–1(a).

Thereafter, on April 4, 1963, Texas's Legislature passed the “Consent Statute,” authorizing the federal government to acquire public and private lands within the State “subject to the limitations contained in this Act.” Tex. Rev. Civ. Stat. art. 6077t § 3.² Texas reserved its “entire mineral estate [with] the right of occupation and use of so much of the surface of the land or waters as may be required for all purposes reasonably incident to the mining, development, or removal of the minerals ....” Texas also concurred in the Service's acquisition of private land, “provided that the acquisition of lands in such area shall not deprive the grantor or successor in title the right of ingress and egress for the purpose of exploring for, developing, processing, storing and transporting minerals from beneath said lands and waters with the right of housing employees for such purposes.” Id. § 6.³

The Texas legislature directed the School Land Board to execute a deed incorporating the conditions set forth in the Consent Statute. Id. at § 3. The deed by which the State conveyed the State's land expressly provided that such conveyance of State lands was “subject to certain limitations, exceptions, and reservations set forth in the” Consent Statute, which, as we have just noted, addressed the acquisition of private lands as well. The Service, by virtue of this deed, acquired Texas's lands, and the Service separately acquired private lands. The Service acquired only surface, not mineral, estates.

In 1979, the Service implemented nationwide regulations concerning exploitation of mineral rights not owned by the Service within all national parks and seashores. 36 C.F.R. § 9.30, et seq. Dunn–McCampbell challenged those regulations in 1994, but the district court dismissed its suit as barred by the statute of limitations. Dunn McCampbell Royalty Interest, Inc. v. Nat'l Park Serv., 964 F.Supp. 1125, 1132–33 (S.D.Tex.1995), aff'd 112 F.3d 1283, 1287 (5th Cir.1997). Those regulations are not at issue here, although the Service argued below that the current suit should be barred under res judicata principles, an argument that the district court rejected, and that is not appealed.

The regulations at issue stem from the Service's 2001 Oil and Gas Management Plan (the “Plan”). The Plan designates certain areas of the Seashore as Sensitive Resource Areas (SRAs) that contain “particularly rare and/or vulnerable resources.” These areas cover 52.7 percent of the Seashore and carry with them various restrictions. The Plan notes that it “effectively close[s] surface use ... [for] drilling operations” in 7.6 percent of the Seashore. The Plan at 9.⁴ On the other hand, it projects that “all oil and gas would be accessible,” although there would likely be “increased costs for operators to design operations to avoid or reduce impacts to SRAs.” Id. at 121–22. Further, the Plan notes that these increased costs might discourage resource exploitation. Id.⁵

Dunn–McCampbell brought suit in the Southern District of Texas under the APA, seeking a declaratory judgment that the Plan unlawfully violates the Enabling Act by closing certain areas of the Seashore to oil and gas activities and otherwise impairing Dunn–McCampbell's rights of ingress and egress. Dunn–McCampbell and the Service filed cross-motions for summary judgment. In its motion for summary judgment, Dunn–McCampbell contended that its rights of ingress and egress are protected by two provisions in the Enabling Act and that the Plan prevented it from exercising those rights. Specifically, it argued that the Enabling Act incorporated the Texas Consent Statute into federal law, and that the Consent Statute requires the Service to recognize Dunn–McCampbell's rights of ingress and egress. Dunn–McCampbell further argued that its rights of ingress and egress are preserved by a provision of the Enabling Act that protects the right of surface access for those who remove minerals from “outside the [Seashore's] boundaries.” Finally, Dunn–McCampbell argued that the Energy Policy Act of 2005 demonstrates that Congress intended for the Enabling Act to preserve existing mineral interests. The Service argued that, under the Organic Act, it had the right to regulate easements, and, in doing so, to close certain lands to all drilling operations, and that the Enabling Act affords Dunn–McCampbell no special protection. It did not dispute Dunn–McCampbell's argument that the Plan is inconsistent with the rights of ingress and egress.

The district court held that the Consent Statute is assimilated into federal law, and thus is binding on the Service; that the Consent Statute protects Dunn–McCampbell's rights of ingress and egress;⁶ and that the designation of the Sensitive Resource Areas, and accompanying regulations, deprive Dunn–McCampbell of that right.⁷ The district court entered a declaratory judgment, declaring the Plan invalid insofar as it “close[s] certain areas of the [Seashore] or otherwise deprive[s] Dunn–McCampbell's rights of ingress and egress for the purpose of developing their oil and gas interests.” The district court, however, also held the Enabling Act does not otherwise protect Dunn–McCampbell, regardless of any provisions in the Energy Policy Act of 2005. The Service filed a motion for an amended judgment under Fed. R. Civ. P. 59(e), which the district court denied. The Service timely appealed to this court.⁸

II.

The overarching question presented by the Service's appeal is whether the trial court erred in granting summary judgment to Dunn–McCampbell on the grounds that the Plan, under the APA, 5 U.S.C. § 1, et seq, “transgressed the bounds fixed by Congress.” W. Coal Traffic League v. United States, 694 F.2d 378, 383 (5th Cir.1982...