Snyder Oil Corp. v. Samedan Oil Corp.

• Decision Date: 13 April 2000
• Docket Number: No. 99-30354,99-30354
• Citation: 208 F.3d 521
• Parties: (5th Cir. 2000) Snyder Oil Corporation, Plaintiff-Appellant, v. Samedan Oil Corporation, Defendant-Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

Page 521

208 F.3d 521 (5th Cir. 2000)

Snyder Oil Corporation, Plaintiff-Appellant, v. Samedan Oil Corporation, Defendant-Appellee.

No. 99-30354

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

April 13, 2000

Appeal from the United States District Court for the Western District of Louisiana

Before DAVIS, CYNTHIA HOLCOMB HALL, ^* and SMITH, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Snyder Oil Corporation ("Snyder") appeals an order granting transfer to the Southern District of Alabama pursuant to 28 U.S.C. 1404(a). We affirm.

I.

Snyder ¹ and Samedan Oil Corporation ("Samedan") entered into a joint operating agreement ("JOA") for the development of a federal oil and gas lease granted by the United States Department of Interior Minerals Management Service ("MMS"). The lease covered "Block 261, Main Pass Area, South and East Addition," which is located on the Outer Continental Shelf ("OCS"). The property is commonly referred to as "Main Pass 261" or "Block 261."

Snyder sued in the Western District of Louisiana, seeking a declaratory judgment regarding the rights of the parties under the JOA. Samedan subsequently sued, asserting claims in the Southern District of Alabama, then moved to dismiss or transfer the Louisiana suit. The court denied the motion to dismiss but transferred pursuant to 28 U.S.C. 1404(a), based on a finding that Alabama law will govern and that Alabama therefore has the most interest in the outcome of the litigation. The court then certified an interlocutory appeal under 28 U.S.C. 1292(b), and we granted leave to appeal.

The order of transfer was based on a choice of law determination, and because Block 261 is located in federal waters on the OCS, the controlling law is found in the Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. 1331-1356, which vests the United States with jurisdiction over the soil and seabed of the oceans and artificial islands and fixed structures located thereon, and grants to the United States the mineral resources that are part of the OCS. Section 1333(a)(2)(A) of that Act provides:

To the extent that they are applicable . . . the civil and criminal laws of each adjacent State . . . are hereby declared to be the law of the United States for that portion of the subsoil and seabed of the outer Continental Shelf, and artificial islands and fixed structures erected thereon, which would be within the area of the State if its boundaries were extended seaward to the outer margin of the outer Continental Shelf, and the President shall determine and publish in the Federal Register such projected lines extending seaward and defining each such area.

This Congressionally mandated choice of law provision trumps any contrary contractual provisions. See Union Tex. Petroleum Corp. v. PLT Eng'g, Inc., 895 F.2d 1043, 1050 (5th Cir. 1990).

The parties agree that 1333(a)(2)(A) is controlling, but Snyder contests the court's application of that section. Because the President has not published the "projected lines" required by 1333(a)(2)(A), the courts must adjudicate adjacency in private disputes governed by OCSLA. We conducted the required "adjacency determination" in Reeves v. B & S Welding, Inc., 897 F.2d 178 (5th Cir. 1990), and the district court and both parties recognize Reeves as the controlling precedent.

The issue is whether the district court's application of Reeves is correct as a matter of law. The court found Block 261 to be "adjacent" to Alabama for purposes of 1333(a)(2)(A) and therefore held that Alabama law governs the dispute.

II.

In Reeves, we held that a platform located in the High Island Field in the Gulf of Mexico was "adjacent" to Texas within the meaning of 1333(a)(2)(A). We considered, inter alia, the following evidence:

Testimony and exhibits before the district court showed that [the subject platform] is closer to the Texas coast than to the Louisiana coast. Charts submitted by Exxon also indicated that the High Island Field is considered to be "adjacent" to Texas, rather than Louisiana, by the United States Department of Interior Bureau of Land Management, the United States Department of Interior Mineral Management Service, the National Oceanic & Atmospheric Administration, and the Coast Guard.

Reeves, 897 F.2d at 179.

We also considered that other courts had construed platforms located in the High Island Field to be adjacent to Texas under OCSLA, specifically citing two Louisiana district court opinions. See id. at 179-80. Lastly, we discussed four proposed "boundary projections," two of which would locate the platform in Texas waters and two of which would locate it in Louisiana waters. See id. at 180. In other words, if these lines were promulgated by the President pursuant to OCSLA, two of them would result in the platform's being "adjacent" to Texas, and two would result in its being "adjacent" to Louisiana.

We rejected the appellant's projected lines as unsupported but considered both of the appellee's projected lines to be plausible, the latter two being "fully consistent with the existing Texas/Louisiana boundary established by the Supreme Court." Id. We therefore determined that "[f]or purposes of this case, we need not decide which of appellees [sic] proposed boundaries is the proper one," because under either boundary projection the platform was "adjacent" to Texas. Id.

In considering these projected lines, we noted that

[i]t would not be proper in this case to adjudicate the boundary itself. That would call for more thorough production of evidence and consideration by the court. It is also a matter of significant concern to the two states themselves, and they should be heard if that issue were to be litigated.

Id. Therefore, while Reeves instructs that proposed boundary projections are relevant to a private dispute, it would be improper for a court to hold that a given boundary projection was conclusively established for purposes of 1333(a)(2)(A).

Reeves concludes as follows:

It is enough that the record evidence before the district court confirms that [the subject platform] is closer to the Texas coast than the Louisiana coast, that the relevant federal agencies consider [the subject platform] to be off the Texas coast, that other courts have considered other High Island platforms to be adjacent to Texas, and that the boundary between Texas and Louisiana projected out into the Gulf in its original direction from the shore, places [the subject platform] within Texas waters. So also does a line projected directly southward from the Texas three league territorial boundary. We conclude, therefore, that the district court did not err in holding that [the subject platform] is "adjacent" to Texas for purposes of the OCSLA.

Id. While we did not articulate a specific test, we therefore considered four types of evidence in the "adjacency" analysis: (1) geographic proximity; (2) which coast federal agencies consider the subject platform to be "off of"; (3) prior court determinations; and (4) projected boundaries.

III.

The President has failed to publish the boundary projections required by OCSLA, and the responsible federal agency, the MMS, refused the parties' request to make an adjacency determination. Therefore, the district court applied the multi-factored Reeves analysis.

While both parties recognize Reeves as controlling, Snyder requests that we "clarify" Reeves to hold that in the absence of an express determination of "adjacency" pursuant to 1333(a)(2)(A) by an authorized federal agency, geographic proximity is determinative. ² To label this request a "clarification," Snyder cites a related section of OCSLA and a district court case stressing proximity, rejects as irrelevant all federal agency determinations not specific to this statutory section, claims Reeves's consideration of other court opinions was merely a recitation of comity and stare decisis, and urges that all discussion of projected boundaries in Reeves was needless dictum. An analysis of these assertions demonstrates the errors in Snyder's contentions.

Snyder cites Pittencrieff Resources, Inc. v. Firstland Offshore Exploration Co., 942 F. Supp. 271 (E.D. La. 1996), for the proposition that geographic proximity is determinative. Pittencrieff held that the subject property was "adjacent" to Alabama for purposes of OCSLA because it was nearer to the Alabama coast than to the Louisiana coast.

As an initial matter, a district court's interpretation of Reeves would not alter that holding. Further, Pittencrieff determined "adjacency" on the sole ground of geographic proximity, because "[n]o party to this action has disputed that Alabama is the closest state geographically, and no party has provided any reason why Louisiana or Florida should be considered the adjacent state." Id. at 277. This is entirely consistent with the Reeves multi-factored analysis; if the parties present evidence on only one factor, that factor is controlling.

Snyder also cites 43 U.S.C. 1333(c), which states that

[f]or the purposes of the National Labor Relations Act . . . any unfair labor practice . . . occurring upon any artificial island . . . referred to in [ 1333(a)] shall be deemed to have occurred within the judicial district of the State, the laws of which apply to such artificial island . . . pursuant to [ 1333(a)], except that until the President determines the areas within which such State laws are applicable, the judicial district shall be that of the State nearest the place of location of such artificial island.

If proximity were controlling for purposes of 1333(a)(2)(A) as a statutory matter because of inclusion of 1333(c), we would not have considered other evidence in Reeves: That other evidence would have been irrelevant, regardless of whether it was consistent or inconsistent with this "controlling" factor. Reeves rejects Snyder's proposed interpretation. The presence of 1333(c) demonstrates that Congress was aware of the desirability of "defau...