William F. West Ranch, LLC v. Tyrrell

• Decision Date: 07 May 2009
• Docket Number: No. S-08-0162.,No. S-08-0161.,S-08-0161.,S-08-0162.
• Citation: 2009 WY 62,206 P.3d 722
• Parties: WILLIAM F. WEST RANCH, LLC, L.J. Turner, Karen Turner, Wendy Turner, Jennifer Turner, and Michael Turner, Appellants (Plaintiffs), v. Patrick TYRRELL, Wyoming State Engineer and The Wyoming Board of Control, Appellees (Defendants). Pennaco Energy Inc. and Devon Energy Production Company, L.P., Appellants (Intervenors/Defendants), v. William F. West Ranch, LLC, L.J. Turner, Karen Turner, Wendy Turner, Jennifer Turner, and Michael Turner, Appellees (Plaintiffs) and Patrick Tyrrell, Wyoming State Engineer and The Wyoming Board of Control, Appellees (Defendants).
• Court: Wyoming Supreme Court

206 P.3d 722

2009 WY 62

WILLIAM F. WEST RANCH, LLC, L.J. Turner, Karen Turner, Wendy Turner, Jennifer Turner, and Michael Turner, Appellants (Plaintiffs), v. Patrick TYRRELL, Wyoming State Engineer and The Wyoming Board of Control, Appellees (Defendants).

Pennaco Energy Inc. and Devon Energy Production Company, L.P., Appellants (Intervenors/Defendants), v. William F. West Ranch, LLC, L.J. Turner, Karen Turner, Wendy Turner, Jennifer Turner, and Michael Turner, Appellees (Plaintiffs) and Patrick Tyrrell, Wyoming State Engineer and The Wyoming Board of Control, Appellees (Defendants).

No. S-08-0161.

No. S-08-0162.

Supreme Court of Wyoming.

May 7, 2009.

Representing Appellants Case No. S-08-0161 and Appellees Case No. S-08-0162: Kate M. Fox and J. Mark Stewart of Davis & Cannon, LLP, Cheyenne, Wyoming; Sarah Klahn of White & Jankowski, Denver, Colorado. Argument by Ms. Fox.

Representing Appellants Case No. S-08-0162: Brent R. Kunz of Hathaway & Kunz, P.C., Cheyenne, Wyoming; John C. Martin of Patton Boggs LLP, Washington, D.C.; Scott P. Klosterman and Margo Harlan-Sabec of Williams, Porter, Day & Neville, P.C., Casper, Wyoming. Argument by Mr. Martin.

Representing Appellees Case Nos. S-08-0161 and S-08-0162: Bruce A. Salzburg, Wyoming Attorney General; Jay Jerde, Deputy Attorney General; Peter K. Michael, Senior Assistant Attorney General; Marion Yoder, Senior Assistant Attorney General. Argument by Ms. Yoder.

Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

KITE, Justice.

[¶ 1] William F. West Ranch, LLC (West) and the Turners (Turner) appeal the district court's determination that it did not have jurisdiction over their declaratory judgment action challenging the Wyoming State Engineer's and Wyoming Board of Control's (hereinafter referred to collectively as "the State") administration of underground water produced and stored as part of the process of extracting coal bed methane (CBM). The district court concluded that the plaintiffs had not presented a justiciable controversy because the issues were currently being considered by the legislative and executive branches of state government.

[¶ 2] We affirm the district court's ruling on the motion to dismiss, although on different grounds. In order for a controversy to be justiciable, the plaintiffs must allege a sufficient tangible interest and that the judicial decision they request will have a practical effect on that interest. A justiciable controversy does not exist under the Declaratory Judgments Act if the plaintiffs are asking for a declaration to remedy someone else's problem or a potential future problem that is not certain to occur. West and Turner have failed to allege a connection between a specific constitutional or statutory obligation with which the State has failed to comply and a particular harm they, as individuals, have suffered or will certainly suffer in the future. As such, they have not shown that a judicial declaration requiring the State to undertake a particular function will have a practical effect on them. In addition, a declaratory judgment is not available when the questions should initially be decided by an administrative agency. West and Turner have not utilized available administrative processes to resolve many of their concerns.

[¶ 3] CBM producers Pennaco Energy, Inc. (Pennaco) and Devon Energy Production Company, L.P. (Devon) contest the district court's ruling that only conditionally allowed them to intervene in the declaratory judgment action. Given our affirmance of the district court's dismissal of this case, Pennaco's and Devon's appellate arguments regarding their right to intervene are moot and need not be considered.

ISSUE

[¶ 4] The parties state various issues on appeal. However, the following issue is dispositive:

Have the plaintiffs sufficiently articulated any justiciable claim under Wyoming's Declaratory Judgments Act?

FACTS

[¶ 5] The Powder River Basin in northeastern Wyoming has, in recent years, been a rich source of CBM production. In order to extract CBM, the producer must remove underground water from the coal seam, resulting in the production of large quantities of water. Producers must obtain a groundwater well permit from the State Engineer before they may drill a well to dewater the coal. In addition, if they are going to store the produced water in a reservoir, producers must obtain a reservoir permit from the State Engineer.

[¶ 6] West and Turner own property affected by CBM water production. On June 14, 2007, they filed a complaint and petition for declaratory judgment in the district court, which they later amended. The plaintiffs broadly claimed the State is not regulating CBM water production in compliance with Wyoming's constitution or statutes and that their property has been damaged by CBM water.¹ The State filed a motion to dismiss the complaint arguing West and Turner "intend this to be a public interest lawsuit" and they had not alleged individual harms that would be remedied by their requested relief. The State also maintained that a judicial decision in accordance with the plaintiffs' declaratory judgment complaint would invade the provinces of the legislative and executive branches of government and thereby violate the separation of powers doctrine.

[¶ 7] Pennaco and Devon filed motions to intervene in the action, claiming a judicial decision in the plaintiffs' favor would impair their rights because they own CBM leases in Wyoming and hold many water well and reservoir permits issued by the State. The district court conditionally granted their motions to intervene, allowing intervention in the event it denied the State's motion to dismiss.

[¶ 8] Concluding there was no justiciable controversy because the legislative and executive branches were currently working on the regulation of CBM water, the district court granted the State's motion to dismiss. West and Turner appealed from the dismissal order in Case No. S-08-161, and Pennaco and Devon appealed from the court's conditional intervention order in Case No. S-08-162.

STANDARD OF REVIEW

[¶ 9] We review the threshold question of jurisdiction de novo. Heilig v. Wyo. Game and Fish Comm'n, 2003 WY 27, ¶ 8, 64 P.3d 734, 737 (Wyo.2003). When determining jurisdiction in a declaratory judgment action, "we examine the policies underlying both the Uniform Declaratory Judgments Act and the doctrine of justiciability to determine if this is a proper case for judicial action." Reiman Corp. v. City of Cheyenne, 838 P.2d 1182, 1185 (Wyo. 1992). In reviewing dismissal of a complaint for want of jurisdiction, "we focus on the allegations contained in the complaint and liberally construe them in the light most favorable to the plaintiff." Cox v. City of Cheyenne, 2003 WY 146, ¶ 7, 79 P.3d 500, 504-05 (Wyo.2003). Consistent with the concept of "notice pleading" incorporated in W.R.C.P. 8, if the allegations contained in the complaint "admit of any possibility that they may be the `proper subject of relief,'" we will not deprive the plaintiff of the opportunity to litigate its claims on the merits. Martinez v. Associates Financial Servs. Co., 891 P.2d 785, 788 (Wyo.1995). However, liberal construction of the pleadings does not "`excuse omission of that which is material and necessary in order to entitle [one to] relief.'" Id. at 790, quoting Sump v. City of Sheridan, 358 P.2d 637, 642 (Wyo.1961).

DISCUSSION

1. Jurisdiction

a. Uniform Declaratory Judgments Act

[¶ 10] Our starting place for determining jurisdiction is the Uniform Declaratory Judgments Act, Wyo. Stat. Ann. §§ 1-37-101 through 1-37-115 (LexisNexis 2007). Section 1-37-102 establishes the scope of the act: "Courts of record within their respective jurisdictions may declare rights, status and other legal relations whether or not further relief is or could be claimed." Section 1-37-114 emphasizes the remedial purposes of the act:

The Uniform Declaratory Judgments Act is remedial. Its purpose is to settle and to afford relief from uncertainty and insecurity with respect to legal relations, and is to be liberally construed and administered.

[¶ 11] The Declaratory Judgments Act does not, however, extend the jurisdiction of the courts. Reiman, 838 P.2d at 1185-86. Section 1-37-103 defines the rights which may be subject to declaration under the act and the parties who may seek a declaration of their rights:

Any person interested under a deed, will, written contract or other writings constituting a contract, or whose rights, status or other legal relations are affected by the Wyoming constitution or by a statute, municipal ordinance, contract or franchise, may have any question of construction or validity arising under the instrument determined and obtain a declaration of rights, status or other legal relations.

See also, Barber v. City of Douglas, 931 P.2d 948, 951 (Wyo.1997). Thus, under the relevant statutes, in order for a court to have jurisdiction over a declaratory judgment action, the "right" to be declared must fall within the scope of the act and the plaintiff must be an "interested" person. Cox, ¶ 8, 79 P.3d at 505.

The "requirement of an `interest' captures the basic doctrine that there must be a justiciable controversy before relief will be granted." Barber v. City of Douglas, 931 P.2d 948, 951 (Wyo.1997). Generically, a justiciable controversy is defined as a controversy fit for judicial resolution. Reiman Corp. v. City or Cheyenne, 838 P.2d 1182, 1186 (Wyo.1992). Many doctrines are encompassed within the concept of justiciability including standing, ripeness, and mootness. Id.

Id., ¶ 9, 79 P.3d at 505.

[¶ 12] In Brimmer v. Thomson, 521 P.2d 574, 578 (Wyo.1974), we adopted a four-part test for determining whether a party presents a justiciable controversy to maintain a declaratory judgment action in Wyoming.²

1. The parties have existing and genuine, as distinguished from theoretical, rights or interests.

2. The controversy must be one upon...