Ricks Exploration Co. v. Oklahoma Water Resources Bd., s. 58350
| Citation | 1984 OK 73,695 P.2d 498 |
| Decision Date | 16 October 1984 |
| Docket Number | 59172,Nos. 58350,s. 58350 |
| Parties | RICKS EXPLORATION COMPANY, Plaintiff-appellant, v. OKLAHOMA WATER RESOURCES BOARD, Defendant-appellee, and RICKS EXPLORATION COMPANY, Plaintiff-appellant, v. OKLAHOMA WATER RESOURCES BOARD, Defendant-appellee. |
| Court | Supreme Court of Oklahoma |
Sheryl L. Stevens, Musser & Bunch, Oklahoma City, for plaintiff-appellant.
R. Thomas Lay, Dean A. Couch, Oklahoma City, for defendant-appellee.
The first-impression question presented for review is: Does a mineral lessee have standing before the Oklahoma Water Resources Board to seek a nondomestic groundwater use permit under the Oklahoma Groundwater Law, 82 O.S. 1981 §§ 1020.1 et seq.? We answer in the affirmative.
Ricks Exploration Company [Ricks], mineral lessee from a severed mineral estateholder applied to the Oklahoma Water Resources Board [Board] for both a provisional temporary permit and a special permit to withdraw fresh groundwater from the land subject to its lease for use in its oil-and-gas operations. Both permits were denied. These rulings were affirmed by the district court. Ricks brought separate appeals from the two judgments.
PROCEDURAL FRAMEWORK
Ricks sought a provisional temporary permit for groundwater use which, under the Board's rules, 1 its Executive Director [Director] may issue, without a hearing, absent a protest. This type of permit differs from all others. It may be granted by the director on a purely discretionary basis and in an ex parte proceeding. If a protest is lodged by an interested party, permits of this genre cannot issue ex parte. In a response to Ricks' application, the Board's general counsel explained in a letter that its request could not be acted upon ex parte because a protest had been lodged by surface owners. He added that "due process" considerations necessitated that a hearing be afforded upon the issues raised. In addition to explaining the director's discretionary authority, the general counsel further noted that Ricks, in effect, did not have standing to apply for a permit because § 1020.11(D) of the groundwater law 2--as interpreted by the Board's rules 3--limited the class of applicants to surface owners or those having a valid permit or consent from the surface owner to withdraw groundwater from the underlying basin or subbasin. The general counsel then suggested that Ricks apply for one of the other three permits, 4 approval of which is a matter for consideration by the Board, after hearings and a determination that the applicant meets statutory conditions. 5 Upon receipt of the letter, Ricks appealed to the district court from the director's ruling.
The district court dismissed the appeal without prejudice to Rick's efforts to obtain another permit under the groundwater law. Its decision was based upon a construction of § 1020.11(D) which accorded with that of the Board's. Ricks then brought its first appeal [58,350].
The first appeal is fraught with a patent procedural infirmity. Firstly, the district court was without jurisdiction to review the director's ex parte ruling, because this decision did not amount to an appealable order. The applicant remained entirely free to press the Board for an adversary hearing on its application for a groundwater permit and for a consideration of the issues in conformity with the minimum standards of due process. The action of the director did not preclude the applicant from proceeding further before the Board; nor did the director's letter amount to a final disposition of an individual proceeding within the meaning of 75 O.S. 1981 § 318(1). 6 Because by law the Board's authority to regulate groundwater use and to issue permits allowing its withdrawal is exclusive, the district court is without original cognizance over these matters. The district court's jurisdiction, which is appellate only, stands confined by statute to review of final agency orders. 7 When an appeal is lodged from some interlocutory agency action, the district court must dismiss the proceeding for want of subject-matter jurisdiction. Should it fail to do so, this court will on appeal direct that a dismissal be effected. 8 Secondly, the journal entry of judgment reflects that the issues adjudicated by the trial judge in the first appeal were broader than those raised by the record. The validity of the Board's rules was not raised as an issue before the agency and the letter from the general counsel to Ricks could not make it an issue. In an individual proceeding issues are formed by the instruments filed by the parties or by the evidence adduced. When issues adjudicated in a § 318 appeal are broader than those presented to the agency, the district court's action operates to invade the forbidden arena of the Board's original cognizance. 9 Thirdly, the cause was not brought before the district court as an original declaratory suit to review the validity of the Board's rules under the provisions of 75 O.S. 1981 § 306. 10 Declaratory relief may not be invoked as a substitute for an appeal by one who has been aggrieved by an adverse agency ruling. 11
Parties to an action cannot by agreement so frame the issues as to extend them beyond the jurisdiction of the tribunal. 12 This court cannot affirm a district court decision which--based on the issues raised--would give the district court a sweep of cognizance broader than that sanctioned by law. 13 We must hence notice sua sponte the jurisdictional defect 14 and direct that, upon remand, the district court modify its decision by effecting a dismissal of the case for want of jurisdiction. In this manner the proceeding will stand terminated by a decision dehors the merits of the case.
After the denial of his first application, Ricks then sought a special permit from the Board. The Board denied the second application following a hearing. In its order, the Board expressed the view that Ricks did not have standing qua landowner to seek a groundwater permit and found that Ricks had not obtained permission of the surface owners to withdraw and use fresh groundwater. Rick's second appeal to the district court was brought from a final Board determination under 75 O.S. 1981 § 318(a). 15 The district court held adversely to Rick's position, adopting as a basis for its decision the reasoning upon which the first Rick's appeal was rested. The second appeal [59,172] to this court followed.
Ricks contends that it qualifies as a landowner within the meaning of § 1020.11(D) and that it has a right of reasonable use of the groundwater in connection with its oil-and-gas operations. The Board argues that the statute prohibits the issuance of any permit to an applicant who is neither the surface owner nor someone with the surface owner's consent to withdraw the groundwater.
The controversy centers on the Board's interpretation of the groundwater law and on the nature of the mineral lessee's claim to the use of the water. Our analysis of this public/private law dichotomy requires that we first determine whether a mineral lessee has a private-law right to the use of groundwater and, if so, to what extent that right may have been affected by the groundwater law.
The ownership of oil-and-gas carries with it by implication the means of enjoying the mineral estate. 16 It is well established that the owner of oil-and-gas interest has the right to enter upon and make reasonable use of the surface in exploring for and extracting the mineral deposits. 17 Any limitation upon the right of entry or the right to extract minerals is in derogation of this common-law interest. While it is clear that the owner of the surface estate also owns the underlying fresh groundwater (60 O.S. 1981 § 60), 18 his proprietary interest in the water is limited by the mineral owner's right to use reasonable amounts of the water for production of minerals. 19 A grant of these common-law interests is included within the cluster of rights created by an oil-and-gas leasehold estate. 20
The sole object of the groundwater law, enacted in 1972, appears to be the regulation and control of nondomestic use of groundwater. The Act provides for the allocation of water to each acre of land overlying fresh water basins or subbasins. Before a permit may be issued, the Board must first make the allocation and then determine whether the applicant meets the statutory requirements for a groundwater permit. 21 At issue here is whether Ricks meets the "ownership" requirement of § 1020.11(D). 22 That section provides in pertinent part:
By interpreting this section to exclude owners of interest other than surface from the allowable class of applicants, the Board in effect has placed the mineral owner in the position of having to bargain with the surface owner for what is recognized as his common-law right of free access to reasonable use of groundwater for oil and gas purposes. In order to reach the result sought by the Board, we would have to conclude that the Act operates to alter private commonlaw rights of the mineral owner. We cannot so hold.
A mineral owner's claim to groundwater use is a "vested right" created by common law. 23 Once created, it becomes absolute, and is protected from legislative invasion by Art. 5 §§ 52 and 54, Okl. Const. 24 A vested interest will not be deemed abrogated or impaired except by explicit legislative extinguishment effective prospectively. 25 Laws depriving a party of private rights should be strictly construed. 26
Section 1020.11(D) does not manifest legislative intent to...
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