Assiniboine and Sioux Tribes v. Calvert Exploration Co.

• Decision Date: 27 November 1963
• Docket Number: Civ. No. 2367.
• Parties: ASSINIBOINE AND SIOUX TRIBES OF THE FORT PECK INDIAN RESERVATION, MONTANA, William Youpee, a Member of the Assiniboine and Sioux Tribes of the Fort Peck Reservation on Behalf of Himself and All Members of the Tribes, Plaintiffs, v. CALVERT EXPLORATION COMPANY, G. W. Yoder, Chairman, Ted Hawley, Vice Chairman, E. L. Anderson, Member, Allen Zimmerman, Member, Winston L. Cox, Member of the Oil and Gas Conservation Commission of the State of Montana, Defendants.
• Court: U.S. District Court — District of Montana

223 F. Supp. 909

ASSINIBOINE AND SIOUX TRIBES OF THE FORT PECK INDIAN RESERVATION, MONTANA, William Youpee, a Member of the Assiniboine and Sioux Tribes of the Fort Peck Reservation on Behalf of Himself and All Members of the Tribes, Plaintiffs, v. CALVERT EXPLORATION COMPANY, G. W. Yoder, Chairman, Ted Hawley, Vice Chairman, E. L. Anderson, Member, Allen Zimmerman, Member, Winston L. Cox, Member of the Oil and Gas Conservation Commission of the State of Montana, Defendants.

Civ. No. 2367.

United States District Court D. Montana, Havre-Glasgow Division.

November 27, 1963.

Marvin J. Sonosky, and John S. White, Washington, D. C., and Wiggenhorn, Hutton, Schiltz & Sheehy, Billings, Mont., for plaintiffs.

Forrest H. Anderson, Atty. Gen., of Montana, and John H. Risken, Commission Atty., Helena, Mont., for defendant members of the Montana Oil and Gas Conservation Commission.

JAMESON, District Judge.

This is an action by two Indian tribes to enjoin Calvert Exploration Company from proceeding under an order of the Montana Oil and Gas Conservation Commission insofar as the order affects two tribal oil and gas leases and the oil and gas underlying those leases, and to enjoin the individual members of the Commission from enforcing the Commission's order or any other order affecting the tribal leases. The facts are stipulated in a pretrial order, and both sides have moved for summary judgment.

Jurisdiction of this court is invoked under 28 U.S.C. § 1331, which requires that the matter in controversy exceed "the sum or value of $10,000" and that the action arise "under the Constitution, laws, or treaties of the United States".

Calvert is the holder of the lessee's interest in 160 acres consisting of two contiguous 80 acre tracts. One tract is owned by the tribes, and the second tract is owned by others. In a prior order the Commission had designated the area in which the two tracts lie as the Benrud Field and had specified spacing units of 160 acres.

Calvert sought voluntary approval of the landowners for a pooling arrangement to meet the 160 acre spacing requirement, thereby allowing Calvert to drill on the land. Failing to obtain this approval, Calvert applied to the Montana Oil and Gas Conservation Commission for an order under Section 60-130, R.C.M. 1947,¹ pooling all interests within the 160 acre unit. The tribes moved to dismiss Calvert's application on the ground that the Commission was without jurisdiction over the tribes or the oil and gas.

The Commission entered an order denying the tribes' motion to dismiss, assuming jurisdiction, granting the application of Calvert, and ordering that the production of oil and gas from the 160 acres "be and the same are hereby pooled, integrated and unitized" as of December 6, 1962, the date the order was entered.

This action was commenced on January 10, 1963. On that date Calvert was drilling an oil and gas well at a depth of 7400 feet on the 80 acre tract owned by the tribes. Shortly thereafter the well was plugged and abandoned as a dry hole at a depth of 7651 feet.

Plaintiff contends that the Commission order is void in that (1) it constituted an alienation of tribal property in violation of 25 U.S.C. § 177;² (2) even if alienation of tribal property were authorized, the United States would be an indispensable party, and it was not a party nor had it consented to be a party to the proceedings before the Commission; (3) Congress has vested the power to unitize or communitize tribal oil and gas exclusively in the Secretary of the Interior (25 U.S.C. § 396d)³ whose regulations call for prior approval of any unit or cooperative agreement by the Secretary and by the Indian tribe affected (25 CFR 171.21(b));⁴ and (4) on January 10, 1961, there was a well 7400 feet deep being drilled on the tribes' land and on its face this establishes a value in excess of $10,000, exclusive of interest and costs.

Defendants contend that the Commission is an administrative agency of the State of Montana whose function is to supervise and regulate the oil and gas industry in Montana insofar as that business is concerned with discovery and production of oil and gas; that the Commission's principal duty is to prevent waste of these two types of energy; that the Commission delineated Benrud Field embracing the subject land, as an oil field and ordered development on the basis of one well per 160 acre spacing unit; that one such unit embraced the 160 acres in suit; that on application of Calvert, the Commission pursuant to a hearing held, after notice, entered its order pooling all interests within the unit embracing the subject 160 acres; that a well was drilled; that no oil was recovered in commercial quantities and the well was plugged and abandoned; that there is no amount in controversy; and that the court has no jurisdiction.

The jurisdictional amount must be tested as of the date the jurisdiction of the court was invoked, and "the sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal." St. Paul Mercury Indemnity Co. v. Red Cab Co., 1938, 303 U.S. 283, 288, 58 S.Ct. 586, 590, 82 L.Ed. 845.⁵ The plaintiffviewpoint rule for determining the amount in controversy for jurisdictional purposes has been applied in actions seeking equitable relief, including injunction actions. See 1 Moore's Federal Practice 0.95 and 0.96(1), (2), pp. 862-870.

On the date the complaint was filed Calvert Exploration Company was still drilling for oil and gas on the tribal lands. The well had been drilled to a depth of 7400 feet. This would indicate value of the leasehold substantially in excess of $10,000.⁶ It is immaterial that thereafter the well was abandoned as a dry hole.

It is stipulated that the tribal lands in suit are located on the Fort Peck Indian Reservation.⁷ Apparently there is no contention that the matter in controversy does not arise under the laws of the United States. 25 U.S.C. § 177 (footnote 2) prohibits the disposition or alienation of tribal land except as authorized by Congress. Federal Power Commission v. Tuscarora Indian Nation, 1960, 362 U.S. 99, 118-119, 80 S.Ct. 543, 4 L.Ed.2d 584.

It is well settled also that "inclusion within a State of lands of the United States does not take from Congress the power to control their occupancy and use, to protect them from trespass and injury and to prescribe the conditions upon which others may obtain rights in them, even though this may involve the exercise in some measure of what commonly is known as the police power". Utah Power & Light Co. v. United States, 1917, 243 U.S. 389, 37 S.Ct. 387, 61 L.Ed. 791, 816.

There is little, if any, dispute regarding the rules of law here applicable. Defendants concede that 25 U.S.C. § 396d (footnote 3) requires the consent of the Secretary and the Indian tribes before tribal land may be included in a "unit agreement" or "unit operating agreement". They contend, however, that there is a distinction between these agreements and the "spacing unit" or "well...