Texas Oil & Gas Corp. v. Hodel

• Citation: 654 F. Supp. 319
• Decision Date: 15 January 1987
• Docket Number: 80-0488.,Civ. A. No. 79-2976
• Parties: TEXAS OIL & GAS CORPORATION, Plaintiff, v. Donald HODEL, Defendant (Two Cases).
• Court: United States District Courts. United States District Court (Columbia)

654 F. Supp. 319

TEXAS OIL & GAS CORPORATION, Plaintiff, v. Donald HODEL, Defendant (Two Cases).^*

Civ. A. Nos. 79-2976, 80-0488.

United States District Court, District of Columbia.

January 15, 1987.

Andrew F. Walch, U.S. Dept. of Justice, Land and Natural Resources Div., Washington, D.C., for Hodel.

Jim Guy Tucker, Mitchell, Williams, Selig, Jackson & Tucker, Little Rock, Ark., and Alan S. Novins, Lee Ellen Helfrich, Lobel, Novins & Lamont, Washington, D.C., for Arkla Exploration Co.

Mary B. Stallcup, Deputy Atty. Gen., Little Rock, Ark., for State of Ark.

MEMORANDUM OPINION AND ORDER

JOYCE HENS GREEN, District Judge.

This matter comes before the court on plaintiff's motion to enforce judgment. For the reasons set forth below, that motion is denied.

On September 25, 1980, this court upheld a decision of the Secretary of the Interior ("Secretary") to cancel oil and gas leases issued to Texas Oil and Gas Corporation ("TXO") for parcels of land within the Fort Chaffee military reservation in Arkansas. Texas Oil & Gas Corp. v. Andrus, 498 F.Supp. 668 (D.D.C.1980) ("TXO I").¹TXO I² was not the first case before this court to raise issues involving oil and gas leases at Fort Chaffee. On September 21, 1979, approximately 39 days before the plaintiff filed its complaint in TXO I, Arkla Exploration Company ("Arkla") filed a suit challenging as arbitrary and capricious the Secretary's determination that the subject lease property was not within a "known geological structure of a producing oil or gas field" (hereinafter referred to as the "KGS" issue). Arkla Exploration Co. v. Andrus, No. 79-2501 (D.D.C. Oct. 10, 1980) ("Arkla I"). At the request of TXO counsel, the court agreed to address the procedural administrative law questions raised in TXO I before turning to the Arkla I KGS matter. Hearing Before the Court, TXO I, July 24, 1980, Tr. at 6-7. Fifteen days after the court rendered its judgment against the plaintiff in TXO I, the court ordered that Arkla I be "dismissed without prejudice, and with all rights preserved to each party ... in consideration of the uncertainty of the timing of appellate review." Arkla I. The plaintiff promptly filed an appeal in TXO I.

On June 11, 1982, the U.S. Court of Appeals for the District of Columbia reversed this court's decision in TXO I. The circuit court held that the Secretary had erred in cancelling the TXO oil leases and directed that the Fort Chaffee leases be reinstated:

The first consequence that flows from our decision is that the Fort Chaffee leases must be reinstated. We have rejected the Secretary's proffered rationale for cancellation; the leases were valid when issued.... Therefore the validity of the issued leases continues undiminished. In addition, we see no reason why TXO should not receive favorable action on its applications for drilling permits on two of the leased parcels at Fort Chaffee, which have been held in abeyance since September 20, 1979.

....

As matters stand, TXO must have its twenty Fort Chaffee leases....

Texas Oil & Gas Corp. v. Watt, 683 F.2d 427, 435 (D.C.Cir.1982) ("TXO II").

Approximately seven weeks later, on August 2, 1982, a certified copy of the judgment in TXO II was received by the Clerk of this court "in lieu of mandate." Letter of July 30, 1982, George A. Fisher, Clerk, to James F. Davey, Clerk. Before this court had an opportunity to remand the case to the Secretary³ (which was done on September 7, 1982), Arkla filed an action in the United States District Court for the Western District of Arkansas challenging the Secretary's decision on the "KGS" issue.⁴ The complaint filed in the Western District of Arkansas raised the same issues that had been dismissed without prejudice by this court prior to appeal in TXO I.

Shortly after the complaint was filed in Arkansas, the parties (including TXO) agreed not to take any action "to change the status of the case until September 30, 1982." Arkla Exploration Co. v. Watt, 548 F.Supp. 466, 469 (W.D.Ark.1982) ("Arkla II"). This agreement followed a decision by that court to deny a motion by TXO to transfer the case back to the United States District Court for the District of Columbia.

On September 20, 1982, the district court denied motions to dismiss, ruling that Arkla had standing to seek district court review and was not barred from suit by the doctrine of collateral estoppel or the applicable statute of limitations. Arkla II, 548 F.Supp. 466. Ten days later the district court entered a preliminary injunction restraining the Secretary from reinstating the Fort Chaffee leases to TXO. See Arkla II, 562 F.Supp. 1214 (W.D.Ark.1983).

On April 19, 1983, the Arkansas district court granted judgment for Arkla. The Court concluded that the Secretary's decision not to list the Fort Chaffee oil and gas fields as "known geological structures" was based on "arbitrary" procedures. Arkla II, 562 F.Supp. at 1226. The Court enjoined the Secretary "from issuing further leases of the Fort Chaffee mineral lands until a proper KGS determination is made by the United States Geological Survey." Id. at 1227.

TXO, which had been made a party to the Arkla II suit, appealed the April 19, 1983 decision to the United States Court of Appeals for the Eighth Circuit. The circuit court affirmed the district court's Arkla II decision on the merits. The court also concluded that the lower court's opinion was not inconsistent with TXO II:

The D.C. Circuit ... ruled only on the timeliness of TXO's lease applications under applicable federal statutes and has ordered only that TXO's leases be reinstated "as matters stand...." 683 F.2d at 435. That Court did not consider the KGS issue. Its ruling presupposes that the leases were issued in accordance with the applicable law and that the leased lands are not within a KGS. For our Court to require the Secretary to offer these lands for lease only after a lawful KGS determination does not conflict with the decision of the D.C. Circuit, to which this issue never has been presented. Because we hold these leases invalid notwithstanding the timeliness of TXO's application for them, our mandate necessarily supersedes that of the D.C. Circuit. The parties should not have any doubt that the instant decision now controls this matter.

Arkla Exploration Co. v. Texas Oil & Gas Corp., 734 F.2d 347, 353 (8th Cir.1984) ("Arkla III").

TXO thereafter filed a petition for a writ of certiorari with the Supreme Court, arguing that the 8th Circuit decision created a clear conflict with the District of Columbia Circuit's ruling in TXO II. TXO asserted in its petition that the District of Columbia Circuit had directed the Secretary to reinstate the Fort Chaffee leases, while the Eighth Circuit's decision in Arkla III had effectively invalidated the leases.

In its opposition to the petition for a writ of certiorari the Secretary argued that to the extent the Eighth Circuit's decision created an "apparent" conflict, the better practice would have been for the District Court for the Western District of Arkansas to transfer Arkla II back to the District Court for the District of Columbia. The Eighth Circuit's ruling, however, in the Secretary's view did not create "any actual conflict that warrants further review" (emphasis added):

The validity of the Secretary's non-KGS determinations was not at issue in the District of Columbia proceeding, and Arkla and the State of Arkansas were not parties to that action. It is reasonably apparent that the District of Columbia Circuit did not intend its judgment to preclude the Secretary from responding to successful third-party challenges to petitioner's leases on grounds distinct from those considered in the District of Columbia Circuit litigation. In the highly improbable event that the District of Columbia Circuit should subsequently determine that the Secretary must issue the leases to petitioner, notwithstanding third-party litigation, there will be time enough for this Court to review such an order. At present, however, the conflict between the two courts of appeals portrayed by petitioner is purely semantic.

Brief of the Secretary of Interior in Opposition to the Petition for a Writ of Certiorari at 11 (footnotes omitted).

In addition, the Secretary also pointed out that further review on the merits was not required:

The Secretary's non-KGS determinations had a rational basis and were correct as a legal matter. Indeed, because Congress specifically conferred upon the Secretary authority "to fix and determine the boundary of any structure, or oil or gas field, for the purposes of this chapter" (30 U.S.C. 189), the refusal of the courts below to accord substantial deference to the Secretary's non-KGS determinations was particularly inappropriate.

Nevertheless, the court of appeals' resolution of this issue does not merit further review. As the court of appeals observed (Pet. App. Exh. 6, at 31-32), following issuance of petitioner's leases, the Secretary has, of his own accord, initiated certain new procedures for making KGS determinations. The court of appeals seemingly indicated approval of these procedures. Ibid. In view of this apparent endorsement, it is unclear whether the court intended to impose any standards or requirements for making KGS determinations beyond those currently being employed by the Secretary. In any event, because a resolution of the KGS issue presented by the petition would necessitate a determination concerning the validity of KGS procedures which have since been superseded, a ruling on that issue here would have relatively little precedential value. Should the court of appeals' reasoning prove in the future to create a substantial impediment to the operation of the federal onshore oil and gas leasing program, this Court can address the matter in a subsequent case when the nature of any administrative difficulties stemming from the present opinion has become clear.

Brief of the Secretary of the Interior in Opposition...