United States District Court, N.D. Oklahoma
OPINION AND ORDER
before the Court are a motion to dismiss (Dkt.# 25) of Ryan
Zinke, in his official capacity as Secretary of the United
States Department of the Interior (“Interior”);
the United States Bureau of Indian Affairs
(“BIA”); and Weldon Loudermilk, in his official
capacity as Director of the BIA (“Federal
Defendants”),  and a motion to dismiss (Dkt.# 21) filed
by Great Southwestern Exploration, Inc. (“GSE”).
Federal Defendants ask the Court to dismiss Plaintiff's
amended complaint under Federal Rule of Civil Procedure
12(b)(1) for lack of subject matter jurisdiction (Dkt.# 25).
GSE moves to dismiss Plaintiff's amended complaint under
Federal Rule of Civil Procedure 12(b)(6) for failure to state
a claim for which relief may be granted (Dkt.# 21).
case arises from the BIA's approval of a lease assignment
and two drilling permits on the subsurface mineral estate
underlying Plaintiff's lands. Plaintiff is the owner of
surface land in Osage County, Oklahoma located in the Eastern
half (E/2) of the Southeast Quarter (SE/4) of Section 1,
Township 25 North, Range 3 East (Dkt.# 17 at ¶ 2).
Pursuant to the Osage Allotment Act, the subsurface mineral
estate in Osage County (“Osage Mineral Estate”)
is held in trust by the United States on behalf of the Osage
Nation. Act of June 28, 1906, Pub. L. No. 59-321, § 3,
34 Stat. 539, 543-44, as amended (“1906 Act”);
see also Osage Nation v. Irby, 597 F.3d 1117,
1120-21 (10th Cir. 2010). Under the 1906 Act, the Osage
Nation is authorized to lease the Osage Mineral Estate for
oil and gas exploration and development “with the
approval of the Secretary of the Interior, and under such
rules and regulations as he may prescribe.” 1906 Act
§ 3. The Secretary has delegated this authority to the
Superintendent of the Osage Agency. See 25 C.F.R
§§ 226.4, 226.5(b); see also 209 DM
8.1(A). The regulations governing leasing of the Osage
Mineral Estate for oil and gas mining are set forth in 25
C.F.R. Part 226.
Superintendent of the Osage Agency is authorized to approve
oil and gas leases made by the Osage Minerals Council
involving the Osage Mineral Estate. See 25 C.F.R.
§ 226.2. Upon receipt of an approved lease, lessees have
the right to use so much of the surface of the land within
the Osage Mineral Estate as may be reasonable for operations
and marketing. 25 C.F.R. § 226.19(a). However, except
for the surveying and staking of a well, no operations of any
kind shall commence until the lessee meets with the surface
owner to discuss lease access and the settlement of surface
damages. 25 C.F.R. § 226.18. Prior to commencing
drilling operations on a leased tract, a lessee must submit
an application for a permit to drill (“APD”),
obtain the Superintendent's approval thereof,
Id. at § 226.16(b), and pay the surface owner a
commencement fee, Id. at § 226.18(b). In
accordance with the National Environmental Policy Act of 1969
(“NEPA”), 42 U.S.C. § 4321, et
seq., each oil and/or gas lease and the associated
activities and installations subject to the regulations in 25
C.F.R. Part 226 must be assessed for its environmental
affects prior to approval by the Superintendent. 25 C.F.R.
§ 226.2©; Davis v. Morton, 469 F.2d 593,
596-97 (10th Cir. 1972).
April 23, 1963, the Osage Tribe and Eason Oil Company
(“Eason”) entered into an oil lease for the SE/4
of Section 1, Township 25 North, Range 3 East, Contract No.
14-20-406-1354 (“Chance Lease”) (Dkt.# 17 at
¶ 45; Dkt.# 17-3). The Superintendent of the BIA Osage
Agency (“Superintendent”) approved the Chance
Lease on June 3, 1963. Id. The Chance Lease was
subsequently assigned and as of August 31, 1990, Buck Creek
Associates held 100% right, title and interest therein. On
February 25, 1991, Buck Creek Associates assigned the Chance
Lease to GSE (Dkt.# 17 at ¶ 51; Dkt.# 17-3). The
Superintendent approved the assignment from Buck Creek
Associates to its affiliate, GSE on April 23, 1991.
Id. Plaintiff asserts that the BIA violated NEPA by
failing to conduct an environmental analysis prior to
approval of the Chance Lease assignment to GSE (Dkt.# 17 at
December 3, 1990, the BIA approved an APD submitted by Buck
Creek Associates for Well No. 3 on the Chance Lease (Dkt.# 17
at ¶ 48). Buck Creek Associates began drilling Well No.
3 on December 24, 1990, and finished drilling on January 8,
1991. Id. at ¶ 50; Dkt.# 17-1). On June 21,
1991, the BIA approved an APD submitted by Buck Creek
Associates for Well No. 4 on the Chance Lease (Dkt.# 17 at
¶ 54; Dkt.# 17-4). Buck Creek Associates began drilling
Well No. 4 on June 20, 1991, and finished drilling on July 1,
1991. Id. Plaintiff asserts that the BIA failed to
comply with NEPA in its approval of the APDs for Wells No. 3
and 4, and that the BIA failed to provide Plaintiff or his
predecessors-in-interest with notice that the APDs for either
well had been approved (Dkt.# 17 at ¶¶ 48, 54).
Plaintiff alleges that GSE drilled Wells No. 3 and 4 and
constructed oil and gas related facilities on Plaintiff's
property. Id. at ¶¶ 50, 54. Plaintiff
asserts that GSE's actions caused significant erosion and
other environmental damage. Id. Plaintiff also
alleges that the BIA has approved other unspecified or
unknown “oil and gas related activity” on
Plaintiff's property in violation of NEPA and without
notice to Plaintiff or his predecessors-in-interest.
Id. at ¶ 60.
August 19, 2016, Plaintiff brought this suit against the
Federal Defendants and GSE (Dkt.# 1). Plaintiff filed an
amended complaint on October 26, 2016 (Dkt.# 17). Plaintiff
brings his claims against the Federal Defendants under the
Administrative Procedure Act, 5 U.S.C. § 551, et
seq. (“APA”). Plaintiff asks that the Court
enter declaratory judgment finding that the
Superintendent's approval of the Chance Lease assignment
and APDs for Wells No. 3 and 4 violated NEPA and are
therefore invalid (Dkt.# 17 at ¶¶ 67, 77, 87).
Plaintiff also asks that the Court enter declaratory judgment
finding that the Superintendent's approval of any unknown
leases, drilling or workover permits since January 1, 1970,
violated NEPA and are void ab initio. Id. at ¶
96. In addition to the foregoing, Plaintiff also asserts that
GSE's entry onto his property constitutes trespass
because GSE's lease and drilling permits are inoperative,
and asks the Court to enjoin GSE from entry upon his land
without a valid oil and gas lease or permit. Id. at
¶ 106. Finally, Plaintiff alleges that he is entitled to
rent payments under Oklahoma law for GSE's occupation of
his land for the six years preceding the filing of the
complaint. Id. at ¶¶ 108-110. The Federal
Defendants now move for dismissal of Plaintiff's claims
against them for lack of subject matter jurisdiction, Dkt.#25
at 1, and GSE moves for dismissal for failure to state a
claim upon which relief may be granted on the claims against
it, Dkt.# 21 at 1.
MOTIONS TO DISMISS
Motion of Federal Defendants
Defendants argue that Plaintiff's claims are barred by
the statute of limitations, that Plaintiff has failed to
establish a waiver of sovereign immunity, that Plaintiff has
failed to exhaust his administrative remedies, that Plaintiff
has failed to identify any final agency action with respect
to his claim regarding unknown leases and permits, and that
Plaintiff's claims are moot (Dkt.# 25).
courts are courts of limited jurisdiction . . ., possessing
only that power that [is] authorized by Constitution and
statute.” Kokkonen v. Guardian Life Ins. Co. of
Am., 511 U.S. 375, 377 (1994). When considering a motion
under Fed.R.Civ.P. 12(b)(1), the burden of establishing the
court's subject-matter jurisdiction resides with the
party seeking to invoke it, and that party has the burden of
establishing jurisdiction by a preponderance of the evidence.
McNutt v. Gen. Motors Acceptance Corp. of Ind., 298
U.S. 178, 189 (1936). Federal subject-matter jurisdiction
“cannot be consented to or waived, and its presence
must be established in every cause under review in the
federal courts.” Firstenberg v. City of Santa Fe,
N.M., 696 F.3d 1018, 1022 (10th Cir. 2012). If the
Court, at any time, determines that it lacks subject-matter
jurisdiction, the case should be dismissed. Fed.R.Civ.P.
12(b)(1) motions can take one of two forms: “(1) a
facial attack on the sufficiency of the complaint's
allegations as to subject-matter jurisdiction; or (2) a
challenge to the actual facts upon which subject matter
jurisdiction is based.” Ruiz v. McDonnell, 299
F.3d 1173, 1180 (10th Cir. 2002). Federal Defendants'
motion presents both a facial attack and a factual attack.
Plaintiff's claims are barred by the six-year statute of
limitations set forth in 28 U.S.C. § 2401(a)
Plaintiff's challenges to the lease and two drilling
permits are untimely
civil action commenced against the United States shall be
barred unless the complaint is filed within six years after
the right of action first accrues.” 28 U.S.C. §
2401(a). Claims brought pursuant to the APA, such as
Plaintiff's claims in the instant case, are subject to
the six-year statute of limitations period set forth in 28
U.S.C. § 2401(a). Impact Energy Res., LLC v.
Salazar, 693 F.3d 1239, 1245-46 (10th Cir. 2012);
Nagahi v. Immigration & Naturalization Serv.,
219 F.3d 1166, 1171 (10th Cir. 2000). “Unlike an
ordinary statute of limitations, [28 U.S.C.] § 2401(a)
is a jurisdictional condition attached to the
government's waiver of sovereign immunity . . . .”
Spannus v. U.S. Dep't of Justice, 824 F.2d 52,
55 (D.C. Cir. 1987); see also Ute Distrib. Corp. v.
Sec'y of Interior, 584 F.3d 1275, 1282 (10th Cir.
2009), cert. denied, 560 U.S. 905 (2010) (suggesting
that section 2401(a) is jurisdictional).
of the accrual date of an action is critical for purposes of
applying 28 U.S.C. § 2401(a). Id. “A
claim against the United States first accrues on the date
when all events have occurred which fix the liability of the
Government and entitle the claimant to institute an
action.” Wild Horse Observers Ass'n, Inc. v.
Jewell, 550 F.Appx. 638, 641 (10th Cir. 2012) (citing
Ute Distrib. Corp., 584 F.3d at 1282); see also
Phillips Petroleum Co. v. Lujan, 4 F.3d 858, 861 (10th
Cir. 1993). A plaintiff need not know the full extent of his
injuries before the statute of limitations begins to run.
Indus. Constructors Corp. v. U.S. Bureau of