Minard Run Oil Company v. U.S. Forest Service

Sep 26: In the U.S. Court of Appeals, Third Circuit, Case No. 12-4160. Appealed from the United States District Court for the Western District of Pennsylvania. In this non-precedential opinions, The Appeals Court explains that the Allegheny Defense Project and Sierra Club (collectively Appellants) appealed from the District Court's order granting summary judgment for the Minard Run Oil Company and Pennsylvania Independent Oil and Gas Association (collectively Appellees), essentially converting a preliminary injunction into a declaratory judgment. "The issue raised on appeal is whether the District Court properly applied the law of the case doctrine to preclude arguments raised by Appellants in their cross-motion for summary judgment. . . we will affirm the District Court's order."

 

    This case arises from a dispute over the split-estate property rights of the Federal surface owner and private mineral rights owners in the Allegheny National Forest (ANF). The United States acquired the surface estates that now constitute the ANF pursuant to the Weeks Act of 1911. While the U.S. Forest Service manages the surface of the ANF, the mineral rights in most of the ANF are privately owned. From 1980 until recently, the Service and private mineral rights owners utilized a cooperative process to manage access to and use of the surface to drill for oil and gas.

 

    Under the "cooperative process," sixty days prior to any planned drilling, mineral rights owners would provide notice to the Service, and the Service would then issue a Notice to Proceed (NTP), acknowledging receipt of the owners' notice and memorializing any agreements relating to the planned drilling. In 2008, a number of environmental groups, including the Sierra Club, filed a lawsuit against the Service, stating that its policy of issuing NTPs constituted a "major federal action[" significantly affecting the quality of the human environment," under the National Environmental Policy Act of 1969 (NEPA), and therefore an NTP could not lawfully be issued before the appropriate environmental analysis under NEPA was conducted. In 2009, the parties to that litigation entered into a Settlement Agreement, requiring that the Service conduct the appropriate NEPA analysis prior to issuing further NTPs. Subsequently, the Service issued a statement to oil and gas companies operating in the forest, stating that no new drilling would be authorized until the forest-wide EIS was completed.

 

    Appellees, filed a complaint in the District Court arguing that the de facto ban on drilling in the ANF exceeded the authority of the Service because a NEPA analysis was not required as a matter of law. The District Court granted their motion for a preliminary injunction, and on appeal, the Third Circuit affirmed in a precedential opinion. Thereafter, the mineral rights owners moved for summary judgment in the case before the District Court, requesting entry of judgment in their favor, conversion of the preliminary injunction order into a final declaratory judgment, and a permanent injunction against the Service. Appellants filed a cross-motion for summary judgment seeking vacation of the preliminary injunction order and judgment in their favor. The District Court granted the mineral rights owners' motion in part (it denied the request for a permanent injunction). The Court vacated the Settlement Agreement, and converted its preliminary injunction order into a final declaratory judgment on the merits. It is this order that is challenged on appeal.

    In its concluding comments the Appeals Court said, "We may revisit a legal question which has already been resolved where any of the following 'extraordinary circumstances' exist: '(1) there has been an intervening change in the law; (2) new evidence has become available; or (3) reconsideration is necessary to prevent clear error or a manifest injustice.' Mukasey, 534 F.3d at 188 (quoting Council of Alternative Political Parties v. Hooks, 179 F.3d 64, 69 (3d Cir. 1999)). Appellants contend that the third exception to the application of the law of the case is implicated here. They state that this Court's ruling that Section 9 of the Weeks Act provides that reserved mineral rights are subject only to regulations in the instrument of conveyance, was clearly erroneous. In Minard Run III, however, Judge Roth provided ample reasoning for the Court's statutory interpretation, which Judge McLaughlin quoted at length in Minard Run IV. See Minard Run IV, 894 F. Supp. 2d at 657-58 (quoting Minard Run III, 670 F.3d at 251-52). To the extent that Appellants simply disagree with the conclusion reached, they could have sought en banc review. This panel will not disturb the well-reasoned legal conclusion reached by the prior panel."

    Access the complete opinion (click here). [#Energy, #Land, #CA3]