Montanore Minerals Corp. v. Easements & Rights of Way
| Decision Date | 01 July 2020 |
| Docket Number | CV 13-133-M-DLC |
| Parties | MONTANORE MINERALS CORP., Plaintiff, v. Easements and Rights of Way under, through and across those certain unpatented lode mining claims located in the NE1/4 and the NW1/4 of Section 15, Township 27 North, Range 31 West, Lincoln County, Montana, and identified as POPS 12, POPS 13, POPS 14 and POPS 15; ESTATE OF ARNOLD BAKIE; OPTIMA, INC.; FRANK DUVAL; UNKNOWN OWNERS; and all other persons, unknown, claiming or who might claim any right, title, estate, or interest in or lien or encumbrance the unpatented lode mining claims described above or any cloud upon title thereto, whether such claim or possible claim be present or contingent, Defendants. |
| Court | U.S. District Court — District of Montana |
Before the Court is Defendants' Renewed Rule 54 Motion for Attorneys' Fees and Costs. (Doc. 290.) Plaintiff Montanore Minerals Corp. ("Montanore") opposes the renewed motion as it did in 2017 when Defendants Estate of Arnold Bakie,1 Optima, Inc., and Frank Duval (collectively, "Defendants") filed their original motion (see Docs. 259; 260; 263). (Doc. 295.) Because the instant motion comes before the Court on a unique procedural footing, the Court heard argument on June 12, 2020 to clarify the issues presented. For the following reasons, the motion is denied.
Although it has been recited ad nauseum throughout this dispute's seven-year tenure in federal court and its twelve-year parallel journey through Montana's courts, the Court will lay the factual and procedural landscape again as necessary to put this ruling in context.
In 2007, Montanore2 sued Defendants in state court, challenging the validity of several unpatented mining claims (the "Subject Claims") near the boundary of the Cabinet Mountain Wilderness. Mines Mgmt., Inc. v. Fus, 453 P.3d 371, 373 (Mont. 2019). By invalidating Defendants' purported interest in the Subject Claims, Montanore sought unencumbered access to its patented mining claims on the Montanore Project, "a multibillion-dollar copper and silver deposit within theboundary of the Cabinet Mountain Wilderness." Id. at 373. Defendants counterclaimed, seeking a declaration of claim validity and superiority and alleging that Montanore trespassed across the Subject Claims. Id. at 375. In March 2013, the state trial court granted Defendants' motion for partial summary judgment and ruled, inter alia, that the Subject Claims were valid. Id. at 375. Because the ruling was not a final order, Montanore did not immediately appeal to the Montana Supreme Court. Montanore Minerals Corp. v. Bakie, 867 F.3d 1160, 1164 (9th Cir. 2017).
Then, with the state action still pending and the adverse interlocutory order in tow, Montanore filed the present case in federal court in June 2013. (Doc. 1.) Pursuant to Federal Rule of Civil Procedure 71.1, Montanore sought to condemn easements and rights of way through the Subject Claims to reach the Montanore Project. Mines Mgmt., Inc., 453 P.3d at 373. To that end, Montanore eventually moved this Court to determine the validity of the Subject Claims. (Doc. 32.) In other words, Montanore asked this Court to make a finding directly contrary to the ruling previously made by the state court.
Defendants moved the Court to dismiss or stay the federal proceedings while the state court action remained pending. (Docs. 23; 24.) Although the Court agreed that abstention principles counseled in favor of denying Montanore's motion regarding claim validity, it rejected Defendants' argument that the sameabstention principles required the Court to stay the federal action in its entirety. (Doc. 46 at 18-23.) Instead, it granted Montanore's motion for a preliminary condemnation order (Doc. 46), and, pursuant to Federal Rule of Civil Procedure 71.1(h)(2), appointed three commissioners to determine the compensation due to Defendants as condemnees (Doc. 71). After a three-day hearing in 2015, the commissioners issued a report outlining their determination that "the just compensation for the taking is $0." (Doc. 226 at 4.) The Court adopted the report, granted judgment as a matter of law in favor of Montanore, and issued a final order of condemnation on September 8, 2015. (Docs. 240; 246.)
On appeal to the Ninth Circuit, Defendants' argument that abstention principles applied to the case in its entirety won the day. Specifically, the court determined that Colorado River3 abstention applied to Montanore's federal case, and concluded that this Court abused its discretion when it denied Defendants' motion to stay in deference to the state court proceedings. Montanore Minerals Corp., 867 F.3d at 1163-64. Without addressing the merits of the condemnation action, the court "[reversed] the district court's condemnation order and [] for the district court to stay the federal proceedings."4 Id. at 1171.
On the heels of the Ninth Circuit decision, Defendants filed their first motion for attorneys' fees and costs in August 2017. (Doc. 259.) Based on the Ninth Circuit's reversal, Defendants characterized themselves as the "prevailing condemnee," because the "court [did] not allow condemnation." (Id. at 2.) The Court denied the motion, pointing to the Ninth Circuit's instructions to enter a stay rather than a dismissal.5 (Doc. 275.) The Court explained that Defendants' motion was "subject to refiling should the state forum turn out to be inadequate." (Id. at 2.)
So, the state case proceeded unfettered by the parallel federal action. In 2018, after two days of trial testimony, the state district court advised the parties that damages remained the only issue for the jury to consider and instructed the jury that Montanore was liable for trespass. Mines Mgmt., Inc., 453 P.3d at 376. The jury awarded damages in favor of Defendants of more than three million dollars. Id.
But, in November 2019, the Montana Supreme Court upended the jury's verdict, ruling that the trial court erred at the outset by granting summary judgment to Defendants on the issue of the Subject Claims' validity. Id. at 378. For the same reason, then, the court erred when it instructed the jury on Montanore's trespass liability. Id. Accordingly, the Court reversed and remanded, instructingthe trial court to vacate its 2013 order and grant Montanore's motion to find the Subject Claims invalid. Id.
On March 19, 2020, pursuant to the Montana Supreme Court's instructions, the state trial court vacated its 2013 order and entered judgment in favor of Montanore on all claims. Amended Judgment, Mines Mgmt., Inc. v. Fus, No. DV-07-248 (19th Dist. Ct. Lincoln Cty., Mont. 2020). The court also awarded Montanore costs. Id.
After the state court action terminated with judgment in favor of Montanore, Defendants returned to this Court. Because the parallel state action had resolved all pending issues, Defendants moved to dismiss the federal action with prejudice. (Doc. 289.) Montanore did not oppose the motion, and the Court granted it. (Docs. 289; 294.) Then, Defendants filed the instant motion, renewing their 2017 request for fees and costs, again insisting that they prevailed. (Docs. 290; 291.) Montanore opposes the motion. (Doc. 295.)
Defendants move for costs6 and attorney's fees pursuant to Federal Rule of Civil Procedure 54(d)(2). (Doc. 290.) Rule 54(d)(2) "creates a procedure but not a right" to recover an award of attorney's fees and "related nontaxable expenses." MRO Comms., Inc. v. Am. Tel. & Tel. Co., 197 F.3d 1276, 1281 (9th Cir. 1999); Fed. R. Civ. P. 54(d)(2)(A). "[T]he rule does not provide a rule of decision[.]Rather, it and the accompanying advisory committee comment recognize that there must be another source of authority for such an award." MRO Comms., Inc., 197 F.3d at 1281 (quoting Abrams v. Lightolier Inc., 50 F.3d 1204, 1224 (3d Cir. 1995)). Where, as here, a federal court "exercis[es] its subject matter jurisdiction over a state law claim, so long as 'state law does not run counter to a valid federal statute or rule of court[,] . . . state law denying the right to attorney's fees or giving a right thereto, which reflects a substantial policy of the state, should be followed.'" Id. (quoting Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 259 n.31 (1975)).
In this diversity action, the parties agree that that Montana Code Annotated § 70-30-305(2) ("the Statute") provides the source of authority for the award of fees and expenses Defendants seek, but Montanore challenges Defendants' characterization of themselves as the prevailing party. (Docs. 291 at 6; 295 at 9.) The Statute governs "[t]he determination of who is the prevailing party in a condemnation case," and provides that, "[i]n the event of litigation, and when the condemnee prevails [] by the court not allowing condemnation[,] . . . the court shall award necessary expenses of litigation to condemnee." Wohl v. City of Missoula, 339 P.3d 58, 62 (Mont. 2014).
Because this case terminated without an order of condemnation, Defendants argue that they are the prevailing condemnee under the Statute's plain language.However, a question that is usually straightforward and readily defined by law is complicated by the tangled procedural path this thirteen-year, multi-court dispute took to resolution. For example, and as already noted, see supra note 6, the unique procedural footing of this case presents a potential choice of law problem as it relates to Defendants' costs request. But, because the Court reaches the same conclusion under state and federal law on the preliminary prevailing party question, infra, it declines to dive down an unbriefed, premature, and advisory rabbit hole.7
The question presented here, as already stated, is whether Defendants prevailed. By Defendants' estimation, two courts have "not allow[ed]" condemnation pursuant to the Statute, thereby rendering them the prevailing party and entitling them to necessary expenses of litigation. First, when the Ninth Circuit reversed this...
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