898 F.3d 1025 (10th Cir. 2018), 17-5057, Chance v. Zinke
| Docket Nº: | 17-5057 |
| Citation: | 898 F.3d 1025 |
| Opinion Judge: | MORITZ, Circuit Judge. |
| Party Name: | Merrill CHANCE, Plaintiff-Appellant, v. Ryan ZINKE, in his official capacity as Secretary of the United States Department of Interior; United States Bureau of Indian Affairs, an agency within the United States Department of Interior; Darryl LaCounte, in his official capacity as Director of the United States Bureau of Indian Affairs; Great ... |
| Attorney: | Donald A. Lepp (Gentner F. Drummond, Garry M. Gaskins, II, and Logan L. James with him on the briefs), Drummond Law, PLLC, Tulsa, Oklahoma, for Merrill Chance, Plaintiff-Appellant. Tamara N. Rountree, Environmental & Natural Resources Division, United States Department of Justice, Washington, D.C... |
| Judge Panel: | Before LUCERO, PHILLIPS, and MORITZ, Circuit Judges. |
| Case Date: | August 06, 2018 |
| Court: | United States Courts of Appeals, Court of Appeals for the Tenth Circuit |
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Appeal from the United States District Court for the Northern District of Oklahoma (D.C. No. 4:16-CV-00549-JHP-FHM)
Donald A. Lepp (Gentner F. Drummond, Garry M. Gaskins, II, and Logan L. James with him on the briefs), Drummond Law, PLLC, Tulsa, Oklahoma, for Merrill Chance, Plaintiff-Appellant.
Tamara N. Rountree, Environmental & Natural Resources Division, United States Department of Justice, Washington, D.C. (Jeffrey H. Wood, Eric Grant, Mark R. Haag, and Jody H. Schwarz, Environmental & Natural Resources Division, United States Department of Justice, Washington, D.C., and Charles R. Babst, Jr., Kristen D. Kokinos, and Stephen L. Simpson, Office of the Solicitor, United States Department of the Interior, Washington, D.C., with her on the brief), for Ryan Zinke, Darryl LaCounte, and United States Bureau of Indian Affairs, Defendants-Appellees.
James D. Sicking, Jr., Tulsa, Oklahoma (Thomas Mortensen, Tulsa, Oklahoma, with him on the brief), for Great Southwestern Exploration, Inc., Defendant-Appellee.
Michael S. Freeman, Earthjustice, Denver, Colorado (Yuting Chi, Earthjustice, Denver, Colorado, and Don Mason, Attorney General, Pawnee Nation of Oklahoma, Pawnee, Oklahoma, with him on the brief) for the Pawnee Nation of Oklahoma and Walter R. Echo-Hawk, Amici Curiae.
Before LUCERO, PHILLIPS, and MORITZ, Circuit Judges.
OPINION
MORITZ, Circuit Judge.
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Merrill Chance, a landowner in Osage County, Oklahoma, sued the government1 to void a lease and various permits that allow Great Southwestern Exploration, Inc. (GSE) to drill for oil and gas beneath his property. He also seeks damages from GSE for trespassing on his property. The district court ruled that Chances claims against the government were untimely under 28 U.S.C. § 2401(a); thus, it reasoned, it lacked subject-matter jurisdiction to hear these claims and therefore dismissed them. It also dismissed Chances claims against GSE.
We agree with the district court that Chances claims against the government are untimely. But the Supreme Court has warned us to beware of "profligate use of the term jurisdiction. " Sebelius v. Auburn Regl Med. Ctr., 568 U.S. 145, 153, 133 S.Ct. 817, 184 L.Ed.2d 627 (2013). Today we heed that warning and hold that the district court wrongly concluded it lacked subject-matter jurisdiction over Chances claims against the government.
Therefore, we reverse the district courts order dismissing Chances claims against the government for lack of subject-matter jurisdiction and instruct the district court to dismiss those claims for failure to state a claim. We affirm the district courts judgment over Chances claims against GSE because, to the extent Chances claims against the government fail, the district court properly declined to exercise supplemental jurisdiction over Chances claims against GSE.
Background
The controversy surrounding Chances property stems from the governments unusual presence in Osage County. Before the turn of the twentieth century, Osage County was a tribal reservation belonging to the Osage Nation. See
Osage Nation v. Irby, 597 F.3d 1117, 1120 (10th Cir. 2010). But Congress disestablished the reservation in 1906 upon Oklahomas induction into the union. See
id. At the same time, Congress severed the surface estate from its subterranean mineral estate. Id. It divided the surface estate and distributed most of the parcels to tribal members. Id. at 1120-21. But importantly, the government retained the subterranean estate in trust for the Osage Nations benefit. See id. at 1120.
Today, Department of Interior regulations task the Osage Agency of the BIA with managing this trust. See 25 C.F.R. § § 226.1-226.46. These regulations give the Osage Agency authority to lease tracts of the subterranean estate, with the Osage Tribal Councils permission. § 226.2(b). The Osage Agency exercises significant oversight over these leases. Among other responsibilities, it must approve all new oil leases, id. ; assignments of existing leases, § 226.15(b); and drilling permits, § 226.16(b).
Chance is the surface owner of a tract of land in Osage County. In 1963, the Osage Agency granted the Eason Oil Company (Eason) an oil lease for deposits underlying Chances property. Eason drilled two wells in 1964 that remain in operation today. With the BIAs approval, Eason assigned its lease to GSE in 1991. The BIA
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granted GSE permits to drill three new wells that same year. Two of these wells remain in operation. Chance maintains that the construction and operation of these wells has damaged his surface property in various ways over the years.
In October 2016— 25 years after Eason assigned its lease to GSE and the BIA granted GSE permits to drill new wells on the lease— Chance filed this lawsuit. He argued that 42 U.S.C. § 4332(c), part of the National Environmental Policy Act (NEPA) of 1969, required the Osage Agency to conduct site-specific environmental-impact assessments before approving Easons assignment to GSE and GSEs new drilling permits. And he alleged that the Osage Agency never conducted these assessments. Chance also asserted that the Osage Agency failed to notify his predecessors-in-interest that it approved the new permits. Further, he contended that the Osage Agency improperly took various other unknown actions related to his property without conducting site-specific environmental-impact assessments or notifying him or his predecessors-in-interest.
Additionally, Chance asserted that the Osage Agencys failure to comply with NEPA reflects systemic problems. He alleged that for decades, the Osage Agency had been relying only on an assessment it conducted in 1979 that evaluated the general impact of the Osage County drilling program rather than conducting site-specific environmental-impact assessments, as Chance argued NEPA requires. Chance further alleged that the Osage Agency attempted to conceal its noncompliance with NEPA.
The government moved to dismiss Chances claims against it for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), and GSE moved to dismiss Chances claims against it for failure to state a claim under Rule 12(b)(6). The district court granted both motions. It first ruled that Chances claims against the government were untimely under § 2401(a), which establishes a six-year statute of limitations for nontort claims against the government. Chance urged the district court to equitably toll § 2401(a)s limitations period. But the district court determined that § 2401(a) is a jurisdictional bar and thus not subject to equitable tolling. Alternatively, it ruled that Chance wasnt entitled to equitable tolling under the facts of this case. The district court further ruled that Chance failed to exhaust his administrative remedies. And it denied Chances motion for jurisdictional discovery.
The district court then concluded that Chances claims against GSE necessarily relied on his claims against the government, so it granted GSEs Rule 12(b)(6) motion. It alternatively declined to exercise supplemental jurisdiction over Chances claims against GSE and dismissed for lack of subject-matter jurisdiction. Chance appeals the order granting both defendants motions and denying his motion for jurisdictional discovery.
Analysis
I. Chances Claims Against the Government
A. Subject-Matter Jurisdiction
Chance appeals the district courts order granting the governments Rule 12(b)(1) motion. We review the district courts ruling on this motion de novo, see Butler v. Kempthorne, 532 F.3d 1108, 1110 (10th Cir. 2008), and conclude that the court erred by treating § 2401(a) as a limit on its jurisdiction.
At the outset, the government invites us to bypass this jurisdictional question by (1) assuming the district court erred by treating § 2401(a) as jurisdictional but (2) nevertheless
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affirming because Chance fails to state a claim on which relief can be granted. We must decline this invitation. The Supreme Court has made clear that courts may not exercise "hypothetical jurisdiction" to reach the merits of a case, even if proceeding in such a manner might offer a more straightforward path to its resolution...
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