Chase v. Andeavor Logistics, L.P.

• Citation: 12 F.4th 864
• Decision Date: 13 September 2021
• Docket Number: No. 20-1747,20-1747
• Parties: JoAnn CHASE, et al., Plaintiffs - Appellants v. ANDEAVOR LOGISTICS, L.P., et al., Defendants - Appellees
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

12 F.4th 864

JoAnn CHASE, et al., Plaintiffs - Appellants

v.ANDEAVOR LOGISTICS, L.P., et al., Defendants - Appellees

No. 20-1747

United States Court of Appeals, Eighth Circuit.

Submitted: February 18, 2021

Filed: September 13, 2021

Stephen Matthew Anstey, Kilpatrick & Stockton, Washington, DC, Dustin T. Greene, Kilpatrick & Townsend, Winston-Salem, NC, Jason P. Steed, Kilpatrick & Townsend, Dallas, TX, for Plaintiffs-Appellants.

Robert D. Comer, Norton & Rose, Denver, CO, Matthew Alexander Dekovich, Norton & Rose, Houston, TX, Jeffrey A. Webb, Norton & Rose, San Antonio, TX, for Defendants-Appellees.

Before LOKEN, BENTON, and KELLY, Circuit Judges.

LOKEN, Circuit Judge.

Andeavor Logistics L.P. and its co-defendants (collectively, "Andeavor") own and operate the High Plains Pipeline System, a 500-mile oil pipeline that transports oil from North Dakota's oil-rich Bakken region to a refinery in Mandan, North Dakota. In 1953, Andeavor's predecessor-in-interest obtained a twenty-year right-of-way from the Department of the Interior allowing the pipeline to cross lands on the Fort Berthold Indian Reservation. The right-of-way was renewed for successive twenty-year terms in 1973 and 1995 before expiring in 2013. Despite expiration, Andeavor continues to operate the pipeline across a mixture of tribal lands and individually-owned allotments, all held in trust by the United States. In 2017, Andeavor agreed with the Mandan, Hidatsa, and Arikara Nation, known as the Three Affiliated Tribes (the "Tribe"), to renew the right-of-way over tribal lands, and to pay trespass damages for continued operation of the pipeline after expiration. Andeavor then began renewal negotiations with individual Indian landowners. Some did not agree to renewal and the talks stalled.

In October 2018, certain landowners (the "Allottees") filed this putative class action against Andeavor in the United States District Court for the Western District of Texas, seeking compensatory and punitive damages for ongoing trespass and injunctive relief requiring Andeavor to dismantle the pipeline. The case was transferred to the District of North Dakota. The district court granted Andeavor's motion to dismiss, concluding the Allottees failed to exhaust administrative remedies with the Bureau of Indian Affairs ("BIA"). The Allottees appeal. The parties raise numerous complex issues regarding the right of individual Indians to obtain trespass relief in federal court. We conclude that the case turns on issues sufficiently within the primary jurisdiction of the BIA to warrant stay, rather than dismissal, to give the BIA opportunity to take further action.

I. Background Facts and Procedural History

Part of Andeavor's High Plains Pipeline System crosses the Fort Berthold reservation in western North Dakota, home to the Three Affiliated Tribes. Within reservation boundaries, the pipeline crosses tracts of Tribal land, individually-owned Indian lands, and jointly-owned lands, all held in trust by the BIA. The Indian Right-of-Way Act of 1948 authorizes the Secretary of the Interior to "grant rights-of-way for all purposes, subject to such conditions as he may prescribe, over and across any lands now or hereafter held in trust by the United States for individual Indians or Indian tribes." Act of Feb. 5, 1948, Pub. L. No. 80-407, 62 Stat. 17, codified at 25 U.S.C. §§ 323 - 38. The Secretary may not grant a right-of-way on tribal lands without the tribe's consent but may grant a right-of-way on individual trust allotments without the landowner's consent if certain criteria apply. 25 U.S.C. § 324. The pipeline began operating in 1953 after the BIA (to which the Secretary has delegated this authority) granted Andeavor's predecessor a twenty-year right-of-way. In 1973, the agency renewed the right-of-way for another twenty years. The right-of-way expired in 1993, but in 1995, the BIA retroactively renewed it back to 1993. In June 2013, the right-of-way again expired. Andeavor has continued to operate the pipeline, presumptively trespassing on Indian lands.

Andeavor set out to negotiate right-of-way renewals to resolve its continuing trespass. At the Tribe's insistence, Andeavor refrained from negotiating with individual landowners until it completed negotiations with the Tribe. In February 2017, the Tribe and Andeavor agreed to renew the right-of-way and settle past trespass damages for Tribal land for roughly $2 million per acre. On January 30, 2018, the BIA sent Andeavor a 10-Day Show-Cause Letter stating the pipeline had been trespassing on individually-owned Indian lands since the right-of-way expired in 2013. On February 7, Andeavor informed the BIA that it was currently negotiating with individual landowners to obtain their consent for renewal. On April 10, the BIA asked the landowners to confirm that good-faith negotiations were in progress. Many did. Counsel for the Allottees requested that the BIA take no action to recover possession or seek trespass remedies while negotiations continued.

The negotiations did not bear fruit. In October 2018, the Allottees commenced this action in the Western District of Texas. The Amended Complaint alleged continuing trespass under federal common law, breach of the easement agreement, and unjust enrichment. They sought various forms of relief including compensatory and punitive damages, an accounting of profits, disgorgement, and an injunction requiring Andeavor to cease operations, remove the pipeline, and restore lands to their original conditions, as the easement agreement and federal regulations require.

After transfer to the District of North Dakota, Andeavor moved to dismiss on numerous grounds. The district court granted the motion based on the Allottees failure to exhaust administrative remedies under the BIA regulations. Alternatively, the court held that it would require the Allottees to seek administrative remedies before obtaining judicial review even if the regulations did not require exhaustion. The court did not address Andeavor's remaining grounds for dismissal.

The Allottees raise a host of issues in challenging the district court's dismissal of their Amended Complaint. Andeavor defends the judgment on numerous grounds. We review de novo the grant of a Rule 12 motion to dismiss, assuming all factual allegations in the pleadings are true and viewing them in the light most favorable to the nonmoving party. Wolfchild v. Redwood Cnty., 824 F.3d 761, 767 (8th Cir.), cert. denied, ––– U.S. ––––, 137 S. Ct. 447, 196 L.Ed.2d 329 (2016) (citations omitted). Dismissal is appropriate when the moving party is entitled to judgment as a matter of law. Id. (citations omitted).

II. Failure to Exhaust Administrative Remedies

In general, the well-established doctrine of administrative exhaustion requires a party to follow prescribed procedures for obtaining administrative remedies before seeking judicial relief. See Klaudt v. United States Dep't of Interior, 990 F.2d 409, 411 (8th Cir. 1993). Pursuant to explicit rule-making authority, see 25 U.S.C. § 328, the Secretary promulgated rules governing rights-of-way over Indian lands and authorized the BIA to administer the regime. See 25 C.F.R. pt. 169. Indian land includes land held in trust by the United States for a tribe ("Tribal land") and land owned by individual Indians in trust or restricted status ("individually owned Indian land"). § 169.2.

Part 169 applies to rights-of-way for oil and gas pipelines crossing Indian land. § 169.5(a)(8).¹ Non-owners applying for a pipeline right-of-way must receive the BIA's approval and "the consent of the owners of the majority interest in the land, and the tribe for tribal land." § 169.4(a). Applicants are responsible for negotiating with tribes and individual Indian landowners. If the right-of-way crosses Tribal land, the tribe can impose conditions or restrictions as it sees fit. § 169.107(a). Tribes generally may negotiate for any amount of compensation without interference from the BIA; the agency will provide a valuation analysis upon the tribe's request. § 169.110. For rights-of-way across individually-owned Indian land, an applicant must receive consent from the owners of the majority interest in each affected tract unless the BIA grants a right-of-way without individual landowner consent because specific criteria apply. § 169.107(b)(1)(i)-(iv); see 25 U.S.C. § 324. Upon request, the BIA will identify owners subject to the proposed right-of-way and may assist in contacting owners and facilitating negotiations. 25 C.F.R. § 169.106. Payments to individual landowners generally must be at least fair market value, as determined by a mandatory valuation. § 169.112.

Part 169 provides procedures for grantee violations of a right-of-way, continued use after it expires, and use of Indian land without approval. 25 C.F.R. pt. 169, subpt. F. Unauthorized use includes "accidental, willful, and/or incidental trespass." § 169.401. Trespass is not defined. Section 169.410 specifically addresses grantee holdover situations:

If a grantee remains in possession after the expiration, termination, or cancellation of a right-of-way, and is not accessing the land to perform reclamation or other remaining grant obligations, [BIA] may treat the unauthorized possession as a trespass under applicable law and will communicate with the Indian landowners in making the determination whether to treat the unauthorized possession as a trespass. Unless the parties have notified [BIA] in writing that they are engaged in good faith negotiations to renew or obtain a new right-of-way, [BIA] may take action to recover possession on behalf of the Indian landowners, and pursue any additional remedies available under applicable law, such as a forcible entry and detainer action. The holdover time will be charged against the new term.

The district court noted that in Klaudt, which involved nonpayment of tribal taxes for cattle grazing, we held that the "clearly detailed administrative...