Kodiak Oil & Gas (USA) Inc. v. Burr

• Decision Date: 22 March 2018
• Docket Number: Case No. 4:14–cv–085, Case No. 4:14–cv–087
• Citation: 303 F.Supp.3d 964
• Court: U.S. District Court — District of North Dakota
• Parties: KODIAK OIL & GAS (USA) INC., now known as Whiting Resources Corporation and HRC Operating, LLC, Plaintiffs, v. Jolene BURR, Ted Lone Fight, Georgianna Danks, Edward S. Danks, and Mary Seaworth, in her capacity as Acting Chief Judge of the Fort Berthold District Court, Defendants. EOG Resources, Inc., Plaintiff, v. Mary Seaworth, in her capacity as Acting Chief Judge of the Three Affiliated Tribes District Court of the Forth Berthold Indian Reservation, Yvette Falcon, in her capacity as Court Clerk/Consultant of the Three Affiliated Tribes District Court of the Fort Berthold Indian Reservation, Jolene Burr, Ted Lone Fight, Georgianna Danks, and Edward S. Danks, Defendants.

303 F.Supp.3d 964

KODIAK OIL & GAS (USA) INC., now known as Whiting Resources Corporation and HRC Operating, LLC, Plaintiffs,

v.Jolene BURR, Ted Lone Fight, Georgianna Danks, Edward S. Danks, and Mary Seaworth, in her capacity as Acting Chief Judge of the Fort Berthold District Court, Defendants.

EOG Resources, Inc., Plaintiff,

v.Mary Seaworth, in her capacity as Acting Chief Judge of the Three Affiliated Tribes District Court of the Forth Berthold Indian Reservation, Yvette Falcon, in her capacity as Court Clerk/Consultant of the Three Affiliated Tribes District Court of the Fort Berthold Indian Reservation, Jolene Burr, Ted Lone Fight, Georgianna Danks, and Edward S. Danks, Defendants.

Case No. 4:14–cv–085

Case No. 4:14–cv–087

United States District Court, D. North Dakota.

Signed March 22, 2018

Patrick B. McRorie, Lathrop & Gage LLP, Denver, CO, Michael J. Abrams, Lathrop & Gage, LLP, Kansas City, MO, for Plaintiff Kodiak Oil & Gas (USA) Inc.

Lawrence Bender, Fredrikson & Byron, PA, Bismarck, ND, Jeffrey M. Lippa, Robert S. Thompson, III, Pro Hac Vice, Robert S. Thompson, IV, Pro Hac Vice, Greenberg Traurig, LLP, Denver, CO, for Plaintiff EOG Resources, Inc.

Reed Alan Soderstrom, Pringle & Herigstad PC, Minot, ND, for Defendants Jolene Burr, Ted Lone Fight, Georgianna Danks, and Edward S. Danks.

John Fredericks, III, Fredericks Peebles & Morgan LLP, Mandan, ND, Jeffrey S. Rasmussen, Fredericks, Peebles & Morgan, LLP, Louisville, CO, for Defendants, Mary Seaworth and Yvette Falcon.

ORDER GRANTING PLAINTIFFS' MOTIONS FOR PRELIMINARY INJUNCTION AND DENYING DEFENDANTS' MOTIONS TO DISMISS

Daniel L. Hovland, District Judge

Before the Court are three separate motions for preliminary injunctive relief filed by Kodiak Oil & Gas (USA), Inc., now known as Whiting Resources Corporation, HRC Operating, LLC, and EOG Resources, Inc. See Docket Nos. 29, 58, (Case No. 4:14–cv–085) and 26 (Case No. 4:14–cv–087).¹ The motions have been fully briefed by the parties and a hearing on the motions was held on March 13, 2018, in Bismarck, North Dakota. See Docket No. 67. Also before the Court are several motions to dismiss the complaints of Kodiak Oil, HRC Operating, and EOG Resources ("Plaintiffs"). See Docket Nos. 44, 52 (Case No. 4:14–cv–085) and 31 (Case No. 4:14–cv–087). For the reasons set forth below, the Plaintiffs' motions for preliminary injunction (Docket Nos. 29 & 58 (Case No. 4:14–cv–085) and 26 (Case No. 4:14–cv–087) ) are granted and the motions to dismiss the Plaintiffs' complaints (Docket Nos. 44, 52 (Case No. 4:14–cv–085) and 31 (Case No. 4:14–cv–087) ) are denied.

I. BACKGROUND

On July 29, 2014, Kodiak Oil & Gas (USA), Inc., now known as Whiting Resources Corporation ("Kodiak Oil"), filed a complaint against Defendants Jolene Burr, Ted Lone Fight, Georgianna Danks, Edward S. Danks, and Judge Diane Johnson, in her capacity as the Chief Judge of the Fort Berthold District Court, seeking a declaration that the Fort Berthold Tribal Court ("Tribal Court") lacks jurisdiction over a suit filed by Defendants Jolene Burr, Ted Lone Fight, as well as Georgianna Danks and Edward S. Danks² in Tribal Court against Kodiak Oil and others.³ In the underlying Tribal Court action, the Tribal Court Plaintiffs seek to recover royalties pursuant to an Oil & Gas Mining Lease for Kodiak and others' improper flaring of natural gas associated with oil wells. Specifically, the Tribal Court Plaintiffs allege they are enrolled members of the Three Affiliated Tribe, owning mineral interests "within the exterior boundaries" of the Fort Berthold Indian Reservation. See Docket No. 27–1 (Case No. 4:14–cv–087). In their second amended complaint, the Tribal Court Plaintiffs allege they entered into a mineral lease—"OIL AND GAS MINING LEASE—ALLOTTED INDIAN LANDS"—with Kodiak Oil and others, and Kodiak and other oil and gas producers breached paragraph 3(f) of the mineral lease. See id. On May 4, 2015, Magistrate Judge Charles S. Miller, Jr. ordered the federal court action brought by Kodiak Oil stayed upon agreement of the parties, "pending further action by the tribal court."See Docket No. 25.

EOG Resources, Inc. ("EOG Resources") also filed a complaint in this Court against Jolene Burr, Ted Lone Fight, Georgianna Danks, Edward S. Danks, and Judge Diane Johnson, in her capacity as the Chief Judge of the Fort Berthold District Court, as well as Yvette Falcon,⁴ in her capacity as the Court Clerk/Consultant of the Three Affiliated Tribes District Court of the Fort Berthold Indian Reservation, on August 29, 2014. See Docket No. 6 (Case No. 4:14–cv–087). As a named defendant in the same tribal court action brought against Kodiak Oil, EOG Resources similarly seeks a declaration the Tribal Court lacks jurisdiction over the suit filed by the Tribal Court Plaintiffs in Tribal Court. On May 1, 2015, EOG Resources requested a stay of the federal court action due to its pending motion to dismiss for lack of jurisdiction in the tribal court matter. See Docket No. 18. Consequently, this Court ordered the federal action stayed "pending a ruling from the Three Affiliated Tribes District Court and a possible appeal from the tribal court decision." See Docket No. 19.

While both federal court actions were stayed, the matter proceeded in the Tribal Court, with Kodiak Oil and others filing motions to dismiss the tribal court action for lack of jurisdiction. See Docket No. 17–3. A hearing on the motions to dismiss was held in Tribal Court on November 18, 2015. See Docket No. 29–1, p. 2. On May 12, 2016, the Tribal Court issued a "Memorandum Opinion" in which the Tribal Court denied the motions to dismiss, concluding the Tribal Court has jurisdiction over the "straight-forward contract action." See Docket No. 27–2, p. 17 (Case No. 4:14–cv–087). Kodiak Oil and others then appealed the decision of the Fort Berthold District Court to the MHA Nation Supreme Court. See Docket No. 27–3(Case No. 4:14–cr–087).

On appeal, the MHA Nation Supreme Court affirmed in part and reversed in part the order of the Fort Berthold District Court. See Docket No. 27–3 (Case No. 4:14–cv–087). The MHA Nation Supreme Court ultimately determined Kodiak Oil, EOG Resources, HRC Operating and other defendants are subject to MHA Nation's "legislative, executive and judicial jurisdiction" because they operate businesses and conduct business activities within the Fort Berthold Reservation. See Docket No. 27–3, p. 2 (Case No. 4:14–cv–087). The MHA Nation Supreme Court first decided " Montana's rule and exceptions do not apply here, where the challenged non-Indian Petitioner's activities were all taken on Indian allotments held in trust." Id. at 5. Essentially, the MHA Nation Supreme Court construed Montana v. United States , 450 U.S. 544, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981) narrowly to apply to lands within a reservation not owned by the Tribe or its members. Id. at 3–5. However, the MHA Nation Supreme Court continued, and determined if Montana applies, the Tribal Court has jurisdiction over the matter based upon the ‘consensual relationship’ exception to the Montana rule, evinced "by the oil and gas leases executed by and between oil and gas companies and the individual Indian allotees." See Docket No. 27–3, p. 6. The MHA Nation Supreme Court also concluded the federal regulatory scheme of oil and gas leases for allotted lands does not preclude the Fort Berthold District Court from exercising its jurisdiction over the matter. Nonetheless, the MHA National Supreme Court ultimately determined "judicial review is premature at this juncture because [the Tribal Court Plaintiffs] have not exhausted their administrative remedies."Id. at 20. After the MHA Nation Supreme Court issued its order, the Tribal Court Plaintiffs filed a motion for class certification. See Docket No. 29–10 (Case No. 4:14–cv–085).

Shortly after the MHA Nation Supreme Court issued its order finding the Fort Berthold District Court has jurisdiction over the matter, Kodiak and EOG Resources filed motions for a preliminary injunction with this Court. In their motions, Kodiak and EOG request the Court issue a preliminary injunction preventing the Defendants from proceeding further with the underlying Tribal Court action. Defendants Mary Seaworth, in her capacity as Acting Chief Judge of the Fort Berthold District Court, and Yvette Falcon, in her capacity as Court Clerk/Consultant of the Three Affiliated Tribes District Court of the Fort Berthold Indian Reservation ("Tribal Court Defendants"), then filed motions to dismiss Kodiak Oil and EOG Resources' complaints.⁵ See Docket Nos. 44 (Case No. 4:14–cv–085) and 31 (Case No. 4:14–cv–087). In their motions to dismiss, the Tribal Court Defendant contend the actions filed in this Court should be dismissed because the Court lacks jurisdiction over them.

During the time period to brief the motions for preliminary injunction and motions to dismiss, HRC Operating, LLC ("HRC Operating") filed a motion to intervene in the matter because of its status as a defendant in the Tribal Court action. See Docket No. 36 (Case No. 4:14–cv–085). On February 26, 2018, the Court granted HRC Operating's motion to intervene. See Docket No. 56. That same day, HRC Operating filed its complaint against Defendants Jolene Burr, Ted Lone Fight, Georgianna Danks, Edward S. Danks, and Judge Mary Seaworth, in her capacity as Acting Chief Judge of the Fort Berthold District Court, as well as a motion for preliminary injunctive relief. See Docket Nos. 57 and 58. On February 27, 2018, the Court consolidated Kodiak Oil & Gas (USA), Inc., et al. v. Burr, et al. , Case No. 4:14–cv–085, with EOG Resources Inc. v. Seaworth, et al. , Case No. 4:14–cv–087. See Docket No. 60.

II. LEGAL DISCUSSION

Before the Court may grant a preliminary injunction, the Court must be satisfied it has jurisdiction over the matter. Consequently, the Court first addresses the jurisdictional concerns raised by the Tribal Court Defendants in their motions to dismiss.

A. ...