Jicarilla Apache Tribe v. Supron Energy Corp., s. 81-1680

• Decision Date: 23 January 1986
• Docket Number: 81-1871,81-1860,Nos. 81-1680,s. 81-1680
• Citation: 782 F.2d 855
• Parties: JICARILLA APACHE TRIBE, Plaintiff, Appellant, Cross-Appellee, v. SUPRON ENERGY CORPORATION, Southland Royalty Company, Donald P. Hodel, Secretary of the Interior, Gas Company of New Mexico, Defendants, Appellees, Cross-Appellants, Exxon Corporation, Defendant, Cross-Claimant, Appellee, Cross-Appellant, State of New Mexico, Applicant in Intervention and Appellant in 81-1680. to 81-1874 and 81-1939.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 855

782 F.2d 855

JICARILLA APACHE TRIBE, Plaintiff, Appellant, Cross-Appellee, v. SUPRON ENERGY CORPORATION, Southland Royalty Company, Donald

P. Hodel, Secretary of the Interior, Gas Company

of New Mexico, Defendants, Appellees,

Cross-Appellants,

Exxon Corporation, Defendant, Cross-Claimant, Appellee,

Cross-Appellant,

State of New Mexico, Applicant in Intervention and Appellant

in 81-1680.

Nos. 81-1680, 81-1860, 81-1871 to 81-1874 and 81-1939.

United States Court of Appeals, Tenth Circuit.

Jan. 23, 1986.

Robert J. Nordhaus and B. Reid Haltom of Nordhaus, Haltom & Taylor, Albuquerque, N.M., for plaintiff, appellant, cross-appellee Jicarilla Apache Tribe.

Maria A. Iizuka, Atty. (F. Henry Habicht II, Asst. Atty. Gen., and Anne S. Almy, Atty., Dept. of Justice, Washington, D.C.; William L. Lutz, U.S. Atty. and Raymond Hamilton, Asst. U.S. Atty., Albuquerque, N.M., with her on brief), for appellee, cross-appellant Donald P. Hodel, Secretary of the Interior.

John R. Cooney (Peter J. Adang and Susan R. Stockstill with him on brief) of Modrall, Sperling, Roehl, Harris & Sisk, P.A., Albuquerque, N.M., for appellee, cross-appellant Southland Royalty Co.

Mark F. Sheridan (Seth D. Montgomery, Gary R. Kilpatric and Wesley B. Howard, Jr., with him on brief) of Montgomery & Andrews, P.A., Santa Fe, N.M., for cross-appellant Gas Co. of New Mexico.

Bruce D. Black of Campbell & Black, P.A., Santa Fe, N.M., filed a brief for Unicon Producing Co., formerly Supron Energy Corp., defendant, appellee, cross-appellant.

Harold L. Hensley, Jr. of Hinkle, Cox, Eaton, Coffield & Hensley, Roswell, N.M., filed a brief for defendant, cross-appellant Exxon Corp.

Paul Bardacke, Atty. Gen. and Bruce Thompson, Asst. Atty. Gen., Santa Fe, N.M., filed a brief for State of New Mexico, applicant in intervention and appellant in 81-1680.

Kenneth J. Guido, Jr. of Sonosky, Chambers, Sachse & Guido, Washington, D.C., and Thomas Acevedo of Fredericks & Pelcyger, Boulder, Colo., filed a brief for amici curiae Shoshone and Arapahoe Indian Tribes.

Ernest J. Altgelt III, Houston, Tex. (John K. Dubiel and Thomas H. Burton, Houston, Tex., Jason Kellahin of Kellahin & Kellahin, Santa Fe, N.M. and Houston G. Williams of Williams, Porter, Day & Neville, Casper, Wyo., appearing of counsel on brief), for amicus curiae Conoco Inc.

Before HOLLOWAY, Chief Judge, SETH, McWILLIAMS, BARRETT, DOYLE, ^* McKAY, LOGAN and SEYMOUR, Circuit Judges.

PER CURIAM.

These cases are before the court for rehearing en banc. The majority of the court adopts the prior dissenting opinion of Judge Seymour, reported at 728 F.2d 1555, 1563 (10th Cir.1984), with the exceptions and additions set out below.

As Judge Seymour noted in dissent, whether the New Mexico Natural Gas Pricing Act (NMNGPA), N.M.Stat.Ann. Sec. 62-7-1 et seq. (1982), applies to sales by non-Indian producers to non-Indian buyers of gas produced on the reservation is an issue that need not be decided in this case and we specifically do not decide it. We adopt the view that under the NMNGPA, value for royalty purposes can exceed sales prices and thus can exceed the price ceilings. Given this construction, the Act creates no possible conflict with federal law, so we need not decide the preemption issue addressed in the dissent.

There is one issue not reached in the dissent which must now be decided. The trial judge held that the Tribe had stipulated away part of its claim against defendant Southland Royalty Company. The court said that "[a]cknowledging the inconsistency of this result, I state only that plaintiff is bound by the stipulation of counsel." 479 F.Supp. 536, 552 (D.N.M.1979). The Tribe argues that the court's construction of its stipulation is not logical. Given the context in which the stipulation was made, we agree.

Prior to trial, the court granted partial summary judgment in favor of defendants on the issue of "value" for royalty purposes, holding that defendants had paid royalties on the "value" of minerals produced from the leased lands by basing royalties on the actual price received for sale of gas at the wellhead. Although the court ultimately reversed itself on this issue, its decision was the law of the case throughout the trial. The Tribe argues persuasively that when it stipulated, in the middle of the trial, that Southland had paid royalties at the appropriate rate on the consideration Southland had received, the stipulation only applied to the situation where the sale price had been held by the court to be conclusive evidence of value. On appeal, Southland has provided no reason why the Tribe would drop its claim against Southland and not against other defendants. We thus conclude that the trial court misconstrued the stipulation.

We have considered the other arguments of the various defendants and conclude that they are without merit. Accordingly, the district court is affirmed in all respects except for its limitation on the Tribe's recovery against Southland. In this regard, the cause is reversed and remanded to the district court for computation of the additional amount owing from Southland to the Tribe.

SETH, Circuit Judge, dissenting:

I must dissent from the majority opinion.

The panel opinion in this appeal noted that there was no finding that the Secretary had acted in an arbitrary or capricious manner in reaching and continuing his construction of the regulations and the lease as to royalty payments. This is mentioned because this finding has unusual implications in this case. Thus it has to be assumed that the Secretary had performed all his functions as a public official, and had considered his duties to carry out national energy policies; to exercise his discretion as to the subject matter under the regulations; to consider the impact on public land leases generally; to carry out contractual obligations; and his duties to the parties with direct concern--the Indian lessors and the lessees. These considerations were of both the short and long range implications of his action. Again, since the Secretary did not act in an arbitrary or capricious way, he included an evaluation of his position as to the lessors. There is nothing whatever shown to the contrary. The duty to the Tribe, however it may be characterized, was thus among the elements considered. His general broad discretion under the statutes, regulations, and the leases was, of course, an element in his evaluation.

The Secretary in the execution of his duties gave what he considered appropriate weight to each element. The majority of the panel which first heard the case concluded that he had acted within his duties and functions and thus held it was not for the trial judge to redo the Secretary's actions and assume his functions.

The trial court had substituted its own views as to the weight and consideration to be given to the several elements. The trial court thus overturned completely the construction of the regulations and the leases established by the Secretary for 20 or 25 years. This it did by considering only one element in the mix and excluding all others. Thus the court held that the only factor or consideration was to "maximize" the immediate royalty revenues to the Jicarilla Apache Tribe. There was in its view nothing else to be considered. Thus, although the Secretary had evaluated all the elements and given weight to them (including a duty to the Tribe), he had in the court's view breached his fiduciary duty. This, again, because the Secretary's only duty was to "maximize" revenues and to do nothing else. If he did anything else it constituted a breach of "fiduciary duty." Under this view, of course, the Secretary had no discretion whatever under the regulations or leases, and no duty to the national energy policy, nor to public land policies, conservation or anything else. The only duty and function of the Secretary of the Interior was to "maximize" tribal revenues regardless. If this is his function he is not the Secretary of the Interior but a functionary for but one interest.

On the en banc consideration the Tribe again advances this only duty of the Secretary, but it fails to identify the extent, nature or the source of such a duty. It would not seem enough to pick up quotations from a variety of cases, and to apply them in this case regardless of context. There is no overall, all pervading "fiduciary duty" to the Tribe. It has to have its origin in some statute relating to the subject matter and applicable to the particular situation. This is what United States v. Mitchell, 445 U.S. 535, 100 S.Ct. 1349, 63 L.Ed.2d 607, and United States v. Mitchell, 463 U.S. 206, 103 S.Ct. 2961, 77 L.Ed.2d 580, teach. That is, there must be a statutory basis for the duty and a clear one. The particular statutes were brought forth in Mitchell II.

Congress has plenary power over the Indian tribes and their lands. A consideration of the relationships must start with this basic proposition. Congress has this complete authority and when it places with a public official the authority to perform a function and the power to control and to administer Indian property the grant must be clear and specific as to the particular property before a fiduciary duty arises. This is what Mitchell I and II hold. There is only a "fiduciary duty" when a statutory basis exists and the nature and scope of such duty is therefrom clear. As the Court said, the statute defines the "contours" of a duty. Again, there is no amorphous all-inclusive "fiduciary duty" out there.

The Tribe itself entered into the leases as lessor. It has the authority that any lessor has under an oil and gas lease to enforce its terms and conditions and to so manage the property. The Tribe has engaged attorneys to provide advice. Its revenues from oil and gas royalties have been large as this record demonstrates. In Mitchell I the Court stated that Congress intended that the Indians were to manage their lands rather than the United States. This...