Lenker v. Haugrud, Case No. 16-CV-0532-CVE-PJC

• Decision Date: 09 February 2017
• Docket Number: Case No. 16-CV-0532-CVE-PJC
• Parties: LYMAN GILBERT LENKER, Trustee of the Virginia Lenker Irrevocable Trust, Plaintiff, v. KEVIN HAUGRUD, in his official capacity as Acting Secretary of the United States Department of Interior, UNITED STATES BUREAU OF INDIAN AFFAIRS, MICHAEL BLACK, in his official capacity as Director of the United States Bureau of Indian Affairs, and CEJA CORPORATION, Defendants.
• Court: U.S. District Court — Northern District of Oklahoma

LYMAN GILBERT LENKER, Trustee of theVirginia Lenker Irrevocable Trust, Plaintiff, v. KEVIN HAUGRUD¹, in his official capacity asActing Secretary of the United StatesDepartment of Interior, UNITED STATESBUREAU OF INDIAN AFFAIRS, MICHAELBLACK, in his official capacity as Director ofthe United States Bureau of Indian Affairs,and CEJA CORPORATION, Defendants.

Case No. 16-CV-0532-CVE-PJC

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA

February 9, 2017

OPINION AND ORDER

Now before the Court are a motion to dismiss (Dkt. # 39) of Kevin Haugrud in his official capacity as Acting Secretary of the United States Department of the Interior, the United States Bureau of Indian Affairs (BIA), and Michael Black in his official capacity as Director of the BIA (federal defendants), and a summary judgment motion filed by Ceja Corporation (Ceja) (Dkt. # 13). The federal defendants ask the Court to dismiss plaintiff's claims against them under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. Dkt. # 39. Ceja moves for summary judgment on the grounds that the claims against it are barred by the statute of limitations and by the doctrine of consent. Dkt. # 13.

I.

This case arises from the BIA's approval of an oil lease and two drilling permits on the subsurface mineral estate underlying plaintiff's lands. In the Osage Allotment Act, Congress established a subsurface mineral estate trust held by the United States on behalf of the Osage Nation. Act of June 28, 1906, ch. 3572, 34 Stat. 539; see also Osage Nation v. Irby, 597 F.3d 1117, 1120-21 (10th Cir. 2010). The Superintendent of the Osage Agency is authorized to approve oil and gas leases made by the Osage Tribal Council involving the Osage mineral estate. See 25 C.F.R. § 226.2. Once a lease has been approved, the lessee must submit a separate application and obtain the Superintendent's approval before drilling. Id. at § 226.16(b). The National Environmental Policy Act, 42 U.S.C. § 4321 et seq. (NEPA), requires the BIA to conduct an environmental impact study before the Superintendent may approve a lease or drilling permit. See 42 U.S.C. § 4332(2)(C); Davis v. Morton, 469 F.2d 593, 597 (10th Cir. 1972).

On August 2, 1978, the Superintendent approved a lease between the Osage Nation and Ceja that included land plaintiff owns. Dkt. # 17, at 17. Plaintiff alleges that the BIA violated NEPA by failing to conduct any environmental analysis prior to approval of the lease. Id. Plaintiff also alleges that no notice of the lease approval was sent to plaintiff's predecessors-in-interest. Id. Plaintiff asserts that Ceja submitted an application to the BIA to drill well 7 on plaintiff's property, which the Superintendent approved on February 16, 2010. Id. Plaintiff alleges that the Superintendent also approved Ceja's application to drill well 6H on plaintiff's property.² Id. at 19. Plaintiff asserts thatthe BIA failed to comply with NEPA prior to approval of both well 7 and well 6H, and that the BIA failed to send plaintiff or his predecessors-in-interest notice that either well had been approved. Id. at 18-19. Plaintiff alleges that Ceja drilled wells 7 and 6H and constructed oil and gas related facilities on plaintiff's property. Id. at 19. Plaintiff asserts that Ceja's actions caused significant erosion and other environmental damage. Id. Plaintiff also alleges that the BIA has approved other "oil and gas related activity" on plaintiff's property in violation of NEPA and without notice to plaintiff or his predecessors-in-interest. Id. at 20.

On August 12, 2016, plaintiff brought this suit against the federal defendants and Ceja. Dkt. # 2. Plaintiff filed an amended complaint (Dkt. # 17) on October 7, 2016. Plaintiff brings his claims against the federal defendants under the Administrative Procedure Act, 5 U.S.C. § 701 et seq. (APA). Plaintiff asks that the Court enter declaratory judgment finding that the Superintendent's approval of the lease, well 7, well 6H, and any unknown leases, drilling permits, or workover permits approved since January 1, 1970 concerning plaintiff's land, violated NEPA and are legally inoperative. Dkt. # 17, at 20-27. Plaintiff also asserts that Ceja's entry onto his property constitutes trespass because Ceja's lease and drilling permits are inoperative, and asks the Court to enjoin Ceja from entry upon his land without a valid oil and gas lease or permit. Id. at 27. Finally, plaintiff alleges that he is entitled to rent payments under Oklahoma law for Ceja's occupation of his land for the six years preceding the filing of the complaint. Id. at 28. The federal defendants now move for dismissal of plaintiff's claims against them for lack of subject matter jurisdiction, Dkt. # 39, at 1, and Ceja moves for summary judgment on the claims against it, Dkt. # 13, at 1.

II.

The Court first considers the federal defendants' motion to dismiss (Dkt. # 39). The federal defendants argue that plaintiff's claims are barred by the statute of limitations, that plaintiff has failed to establish a waiver of sovereign immunity, that plaintiff has failed to exhaust his administrative remedies, that plaintiff has failed to identify any final agency action with respect to his claim regarding unknown leases and permits, and that plaintiff's claims are moot. Dkt. # 39.

A.

In considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), the Court must determine whether the plaintiff can establish that the Court has subject matter jurisdiction over the defendant. "The burden of establishing subject matter jurisdiction is on the party asserting jurisdiction." Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002) (citing Kokkonen v. Guardian Life Ins. Co. Of Am., 511 U.S. 375, 377 (1994)). Rule 12(b)(1) motions can take the form of a facial attack, whereby "the movant merely challenges the sufficiency of the complaint, requiring the district court to accept the allegations in the complaint as true," or the form of a factual attack, whereby "the movant goes beyond the allegations in the complaint and challenges the facts upon which subject matter jurisdiction depends." Paper, Allied-Indus., Chem. and Energy Workers Int'l Union v. Cont'l Carbon Co., 428 F.3d 1285, 1292 (10th Cir. 2005) (citation omitted). The federal defendants' motion presents both a facial attack and a factual attack. Dkt. # 39, at 7.

B.

The federal defendants argue that plaintiff has failed to identify a final agency action reviewable under the APA because plaintiff has failed to exhaust his administrative remedies. Dkt. # 39, at 19-21. Plaintiff does not allege that he appealed the Superintendent's decisions, but insteadargues that he was not required to exhaust administrative remedies because the Superintendent's approvals of the lease and drilling permits are final agency actions not subject to administrative appeal. Dkt. # 41, at 24. Under the APA, final agency actions for which there are no other adequate remedies in a court are subject to judicial review. 5 U.S.C. § 704. The actions of BIA officials are not final unless administrative remedies have been exhausted. See 43 C.F.R. § 4.314; 25 C.F.R. § 2.6; see also Coosewood v. Meridian Oil Co., 25 F.3d 920 , 924-25 (10th Cir. 1994). Under the BIA regulations, any decision or order issued by the Superintendent related to governing the leasing of Osage reservation lands for oil and gas mining may be appealed pursuant to 25 C.F.R. part 2.³ See 25 C.F.R. § 226.44. The exhaustion requirement "recognizes the notion, grounded in deference to Congress' delegation of authority to coordinate branches of Government, that agencies, not the courts, ought to have primary responsibility for the programs that Congress has charged them to administer." United Tribe of Shawnee Indians v. United States, 253 F.3d 543, 550 (10th Cir. 2001) (quoting McCarthy v. Madigan, 503 U.S. 140, 145 (1992)). Plaintiff argues that he was not required to exhaust his administrative remedies for two reasons: (1) neither plaintiff nor his predecessors-in-interest received a notice of appeal rights, and (2) the approvals were effectively decisions of the Assistant Secretary, which are final unless the decision provides otherwise. Dkt. # 43, at 24.

Plaintiff alleges that the BIA failed to notify him or his predecessors-in-interest when the Superintendent approved the lease and drilling permits. However, even if the BIA failed to give any notice of the Superintendent's decisions, plaintiff is not excused from exhausting his administrative remedies. A BIA official making a decision "shall give all interested parties known to thedecisionmaker written notice of the decision by personal delivery or mail." 25 C.F.R. § 2.7(a). Written notice must include a statement that the decision may be appealed and detail the appeal procedures. Id. § 2.7(c). "Failure to give such notice shall not affect the validity of the decision or action but the time to file a notice of appeal regarding such a decision shall not begin to run until notice has been given." Id. § 2.7(b). Thus, if the BIA fails to properly notify an interested party, the time to appeal the decision is extended, but plaintiff's obligation to pursue an administrative appeal before filing suit in federal court is unchanged. See Begay v. Pub. Serv. Co. of N.M., 710 F. Supp. 2d 1161, 1205 (D.N.M. 2010) ("Failure of the BIA to provide a notice does not necessarily cancel the administrative-remedy process. Instead, failure of the agency to give notice of the initial agency action simply extends the time in which the plaintiff can appeal that action.") (citing Cheyenne-Arapaho Tribes Okla. v. United States, 966 F.2d 583, 588 (10th Cir. 1992)); Nulankeyutmonen Nkihtaqmikon v. Impson, 573 F. Supp. 2d 311, 321-22 (D. Me. 2008) ("Although § 2.7 can extend the time limits for filing a notice of appeal, it does not eliminate the obligation to exhaust administrative remedies by proceeding with an appeal once...