[00:00:00] Speaker 00: True Oil versus BLM 23-8082. [00:00:07] Speaker 00: Would counsel for appellant make your appearance and proceed, please? [00:00:12] Speaker 00: I'm sorry, Your Honor? [00:00:13] Speaker 00: Would you make your appearance and proceed, please? [00:00:17] Speaker 04: May it please the Court, Mr. McCardell, Chief Judge Holmes. [00:00:22] Speaker 04: I'm Patrick Murphy from Casper, Wyoming, on behalf of Appellants True Ranches LLC and True Oil LLC. [00:00:30] Speaker 04: And the district court got some things right, but erred as a matter of law with its most important ruling. [00:00:39] Speaker 04: The district court correctly ruled that the BLM's requirement that petitioners file for a federal APD is, quote, final agency action, unquote, because it was a property rights determination. [00:00:54] Speaker 04: Judge Rankin correctly observed that [00:00:57] Speaker 04: Once the BLM required petitioners to file for a federal APD, that position was enforced on outside parties and final for purposes of judicial review under the APA. [00:01:12] Speaker 04: The BLM's action is final because it regulates the rights of true oil and true ranches and places additional legal obligations on the property owner. [00:01:24] Speaker 04: Judge Rankin correctly observed, quote, [00:01:27] Speaker 04: The BLM's unilateral determination altered the balance of the property interests of the parties, and he reasoned this way. [00:01:37] Speaker 04: If property rights are akin to a bundle of sticks, the respondents have taken a stick and added to their pile the petitioners argue belong in theirs. [00:01:50] Speaker 00: Irrespective of whether it's final and if there is a property rights determination and specifically related to the scope of the reservation under the SRHA, then why isn't this a quiet title action? [00:02:04] Speaker 00: I mean, why isn't this covered there? [00:02:05] Speaker 00: I mean, irrespective of whether it's final, it seems to me that that's a problem. [00:02:10] Speaker 04: Great question, Your Honor. [00:02:12] Speaker 04: And we all know that they argued the quiet title action for the first time on appeal. [00:02:18] Speaker 04: But even if we overlook that problem, on the merits, to answer your question, true oil and true ranches do not claim title or rights to any of the federal minerals. [00:02:33] Speaker 04: The BLM does not dispute that true ranches is the owner of the surface and true oil is the owner of their minerals. [00:02:43] Speaker 04: And there is no conflict or dispute as to the title. [00:02:48] Speaker 04: The government owns what it owns. [00:02:51] Speaker 04: True oil and true ranches own what they own. [00:02:55] Speaker 04: Only if there is a dispute as to the title, would that be a federal title question act. [00:03:03] Speaker 00: And this is the point. [00:03:04] Speaker 00: I mean, I didn't read the cases as being caught up with the term title and whether what we're talking about is title as much as the allocation of interest related to certain property. [00:03:16] Speaker 00: if True Ranches has the surface ownership of that land and if their dispute, if the dispute is what we can do as a surface owner with our land vis-a-vis the BLM. [00:03:35] Speaker 00: The BLM says there are certain things that you need a permit to do. [00:03:39] Speaker 00: True Ranches says, no, we don't need a permit to do those things because we're a surface owner. [00:03:43] Speaker 00: And it's included, as you refer to the district court decision, in our bundle of sticks. [00:03:50] Speaker 00: Well, why isn't that, at its essence, a dispute over property? [00:03:55] Speaker 00: Who has the right to control that property? [00:03:59] Speaker 00: And if that's the case, then it seems to be de facto, if not in spirit anyway, a title dispute. [00:04:08] Speaker 04: I just have to respectfully disagree. [00:04:11] Speaker 04: The title is not in dispute. [00:04:13] Speaker 04: The question is, what are the rights connected to the title? [00:04:19] Speaker 04: And that is where we have the interplay on the split of state law in Wyoming and other states and why the BLM and our interactions with the BLM, that's what governs here. [00:04:32] Speaker 04: This is an administrative proceeding. [00:04:34] Speaker 00: I am grateful for the opportunity to hear your view and so I'm grateful for the respectful disagreement. [00:04:41] Speaker 00: What I would like to know is with that view that you've adopted, what is the best case that you have that specifically deals with this issue that we're talking about now? [00:04:51] Speaker 00: And to put a fine point on it, the distinction between the ability to control the property that, you know, you've received this surface ownership, right, of the true ranches has, their ability to [00:05:09] Speaker 00: the scope of what they can do as a surface owner with their property, the distinction between that and a dispute that actually focuses on whether there is a transfer of title. [00:05:24] Speaker 00: Because as I understand it, and correct me if I'm wrong, what you're saying is the quiet title action really, well, it means what it says. [00:05:32] Speaker 00: If you're not disputing the actual title of property, [00:05:36] Speaker 00: then the Quiet Title Act does not apply. [00:05:40] Speaker 00: Do I understand that correctly? [00:05:42] Speaker 00: Well then, if I understand that correctly, give me what you deem to be your best case that says, that's the rule, and it would exclude any dispute over how one controls their interest in land. [00:05:59] Speaker 04: I'm just looking for it in my notes right now, but I think it's the Cyber Guigui case. [00:06:05] Speaker 04: And I'll find it probably right after the argument gets over. [00:06:09] Speaker 00: But that's... Okay, and I don't want to occupy all your time on this. [00:06:13] Speaker 00: If you think that's the case, if it turns out not to be the case, just send us a 28-J to clarify. [00:06:19] Speaker 04: But that's in your brief, as I recall. [00:06:22] Speaker 04: Oh, it is, Your Honor. [00:06:23] Speaker 04: I've just forgotten the name of the case right now. [00:06:25] Speaker 00: All right. [00:06:26] Speaker 04: Apologize. [00:06:28] Speaker 04: Anyway, Judge Rankin got it right on [00:06:31] Speaker 04: This is reviewable under the APA. [00:06:34] Speaker 04: It's final agency action. [00:06:36] Speaker 04: It was a final decision. [00:06:37] Speaker 04: And under the Seba Guige case that I just mentioned, it said that the BLM's agency decision is not separable from the agency's enforcement decision. [00:06:50] Speaker 04: And so it is a final agency action. [00:06:54] Speaker 04: But this is where we got off the track. [00:06:58] Speaker 04: The most fundamental flaw in the district court's ruling [00:07:01] Speaker 04: was it's holding that, quote, requiring an APD for a traversing well that passes through but does not develop or produce from federal minerals does not exceed the BLM's statutory authority, unquote. [00:07:22] Speaker 04: The agency order we submit to your honors does exceed the BLM's statutory authority because, first, [00:07:32] Speaker 04: There is no rule or regulation under the Mineral Leasing Act that requires true oil and true ranches to file a federal APD for a non-producing traversing well. [00:07:47] Speaker 04: Second, private oil and gas producers [00:07:51] Speaker 04: are precluded from filing a federal APD. [00:07:55] Speaker 04: We don't even have the ability under the MLA to do what the BLM wanted us to do. [00:08:02] Speaker 04: And third, without a federal lease, without a federal leaseholder, without the intent to produce those federal minerals [00:08:13] Speaker 04: a federal APD is not applicable or required. [00:08:19] Speaker 03: So I'm intrigued with your second of those points. [00:08:24] Speaker 03: I didn't see anything that would prohibit the Bureau of Land Management from adopting a well-known mechanism of an APD for other purposes. [00:08:42] Speaker 03: And sure, the ABD application would give them a lot of information. [00:08:50] Speaker 03: And I look at the Mineral Leasing Act. [00:08:52] Speaker 03: that says the Secretary not only can prescribe rules and regulations, and I agree there's no rule and regulation on this, but it says and it in addition can do all things necessary to carry out its purposes under this chapter. [00:09:09] Speaker 03: And it seems to me that one of the things is that they have certain rights and they can do all things necessary to protect them. [00:09:18] Speaker 03: So I don't see why [00:09:21] Speaker 03: why it is wrong for the BLM to say, you all are familiar with APDs. [00:09:27] Speaker 03: We've used them for drilling permits. [00:09:29] Speaker 03: It gives us lots of useful information. [00:09:31] Speaker 03: We're going to require that in order to see if we can regulate this transverse occupation of some of our land interest. [00:09:42] Speaker 04: I think, Judge Ebell, you have hit to the heart of the case. [00:09:47] Speaker 04: We all agree, and Judge Rankin agreed, [00:09:50] Speaker 04: that the BLM did not have any rule or regulation in this area of traversing wells. [00:09:58] Speaker 04: So the BLM thought, and I think Judge Rankin agreed with them, so they must have some kind of general authority to do it. [00:10:08] Speaker 04: But here's the problem with that. [00:10:10] Speaker 04: The Constitution, we start there, here's what it says in relevant part. [00:10:15] Speaker 04: It says, the Congress shall have the power [00:10:20] Speaker 04: to dispose of and to make all needful rules and regulations respecting the territory or other property of the United States. [00:10:30] Speaker 04: They have that power. [00:10:32] Speaker 04: They then enacted in 1916 during World War I the Mineral Leasing Act, and it's been amended since then. [00:10:40] Speaker 04: But the Mineral Leasing Act only legislates [00:10:46] Speaker 04: over the development, production, and the leasing of federal minerals. [00:10:54] Speaker 04: We don't have any of that here. [00:10:57] Speaker 04: We have a pass-through pipe going through the federal minerals, and we're not producing, developing, or leasing it. [00:11:05] Speaker 03: You're not. [00:11:06] Speaker 03: You're not. [00:11:07] Speaker 03: But the BLM would like to protect its development rights in that property. [00:11:15] Speaker 03: And so they're saying, [00:11:16] Speaker 03: It all does turn on development, the very thing we're authorized by Congress to do. [00:11:20] Speaker 03: Not your development, but our development. [00:11:25] Speaker 03: And to protect that development of our right, we have to prevent trans-passing horizontal wells. [00:11:36] Speaker 03: So it seems to me that it does fit within their rights. [00:11:40] Speaker 03: Although, as I started off, I agree that there is, and then [00:11:46] Speaker 03: I agree that they're not an operator. [00:11:48] Speaker 03: I mean, certainly, True Oil is not an operator, but it seems to me what they're saying is [00:11:55] Speaker 03: that we're protecting the development of our rights, and we are choosing to use an APD as a mechanism for regulating that. [00:12:09] Speaker 03: In other words, the statutes say we don't have to have a regulation on that. [00:12:17] Speaker 04: That's what they say. [00:12:19] Speaker 00: And to follow up on Judge Ebell's point, I mean, there is that general language at the end that Congress put in there to allow for the BLM ultimately to effectuate the purposes of the Mineral Leasing Act. [00:12:35] Speaker 00: And if one of those purposes is to prophylactically [00:12:40] Speaker 00: protect its interests. [00:12:42] Speaker 00: And note, it's not stopping you from doing anything. [00:12:45] Speaker 00: It's saying you gotta get a permit so that we can evaluate and make sure our interests are protected. [00:12:52] Speaker 00: I mean, it's one thing to say that there is no regulation that allows you to do it, but the question is really, is there anything that stops them from doing that? [00:13:00] Speaker 00: Is there anything in the statute, given that they have general language that allows them to effectuate the purposes of that statute. [00:13:08] Speaker 00: Why is it that the right way lends through which to look at this? [00:13:13] Speaker 03: And just to add on, but I agree completely with the way the Chief is asking that question, but if the BLM had said, okay, we're trying to protect our property, we need to know what you want to do, how you're going to do it, [00:13:28] Speaker 03: Can it be done safely with the ways we want to develop and protect our property? [00:13:33] Speaker 03: File a new document. [00:13:35] Speaker 03: We're going to give it a brand new name. [00:13:38] Speaker 03: File some 10-page document that talks about transgressing upon future development by other people of this property. [00:13:47] Speaker 03: But you know what? [00:13:49] Speaker 03: We're used to APDs. [00:13:51] Speaker 03: It's got good information in there. [00:13:53] Speaker 03: So we'll call it an APD. [00:13:55] Speaker 03: We're going to adapt a second [00:13:57] Speaker 03: purpose for an APD. [00:13:58] Speaker 03: We'll just use that form because it's got a good way for us to get a hook on you. [00:14:03] Speaker 04: I agree with your honors that the BLM would have the power from Congress to do that. [00:14:10] Speaker 04: They've known about traversing wells for 30 years. [00:14:14] Speaker 04: They've not gone through any real rulemaking. [00:14:16] Speaker 04: We don't have any public comments. [00:14:18] Speaker 04: We don't have any criteria for any of the APDs for a non-producing well. [00:14:24] Speaker 04: We do have. [00:14:25] Speaker 04: you know, requirements that are well known with respect to producing wells, nothing on traversing wells. [00:14:32] Speaker 04: If they were to have gone through the process and given the public and the operators in the oil and gas world what the rules of the land are with respect to these kind of non-producing traversing wells, [00:14:46] Speaker 04: That's one thing. [00:14:47] Speaker 03: They've not done that. [00:14:48] Speaker 03: That's why we wanted to incorporate the APD. [00:14:50] Speaker 03: There's plenty of rules of the land on an APD. [00:14:55] Speaker 03: And so I think what they are saying is that's a mechanism that we've already cleared through the regulatory process. [00:15:02] Speaker 03: We'll use that one. [00:15:04] Speaker 00: But we've already got an APD from the state of Wyoming. [00:15:08] Speaker 00: And you raised that in your brief. [00:15:10] Speaker 00: And I guess, as arrogant as the federal government may be accused of being sometimes, if I were the federal government, I'd say, fine, you've got this from Wyoming, but that doesn't mean anything to me. [00:15:23] Speaker 00: I want my own mechanism to collect the information that I need. [00:15:27] Speaker 00: Whatever Wyoming did, good for Wyoming, but I want my own to protect my own interests. [00:15:34] Speaker 00: And there's a subtext in what you're saying that I want to make sure I understand you correctly. [00:15:40] Speaker 00: Are you saying that the agency had to enact a regulation? [00:15:46] Speaker 00: In other words, it could not act [00:15:48] Speaker 00: based upon the general prophylactic power that that language at the end of the statute gives it and say, because see, you're on a hook, but you say this is a final decision. [00:15:59] Speaker 00: Okay, well, the APA's, I mean, they've made a final decision here to protect their interests, to prophylactically do this. [00:16:07] Speaker 00: And note, [00:16:08] Speaker 00: If they had done a memo, let's go right out of the APD context. [00:16:13] Speaker 00: If they'd said, give me a memo to tell me what you're doing, because we believe we like Wyoming, but we want to protect our own interests. [00:16:21] Speaker 00: Could they do that? [00:16:24] Speaker 04: Under the Mineral Leasing Act, [00:16:26] Speaker 04: They can do all of these things when you're talking about the development, production of a producing well and producing federal minerals. [00:16:35] Speaker 04: They do not have that statutory authority from Congress to do that on non-producing wells like this. [00:16:43] Speaker 03: So you're saying development and production has to be here and now immediate development and immediate production, rather than we are taking steps to protect our [00:16:54] Speaker 03: development and production of this land down the road. [00:16:59] Speaker 03: You're saying until the risk is immediate, you can't do anything. [00:17:04] Speaker 03: And isn't that a very, it's hard to believe Congress would want to buy off on that because there are long lead times for oil and gas development. [00:17:12] Speaker 03: We all know that. [00:17:13] Speaker 03: And you've got to, by the time they're getting around to try to protect it, barn door's already open. [00:17:21] Speaker 04: I'm not saying they had all those lead times. [00:17:23] Speaker 04: I'm saying that they have had 30 years to have rulemaking and comments on this kind of situation where you're just having a pass-through without production on a traversing well. [00:17:36] Speaker 04: They have not acted in any new way. [00:17:39] Speaker 04: Congress has not acted to give them that power to legislate in that area. [00:17:43] Speaker 04: And they've not formed rules. [00:17:45] Speaker 04: But now what they did in this case, Your Honor, [00:17:47] Speaker 04: is they just imposed this federal APD requirement on us without any authority at all. [00:17:56] Speaker 00: And that's what I want to clarify. [00:17:58] Speaker 00: Why would they have to have a rule? [00:18:00] Speaker 00: What's your precedent that says they had to have a rule in order to impose this requirement, which you put forward as being a final determination? [00:18:11] Speaker 00: Why did they have to have a rule to do that? [00:18:13] Speaker 04: You can't act beyond your statutory authority. [00:18:18] Speaker 03: Statutory authority is totally different from an administrative rule. [00:18:22] Speaker 03: So you're not responding to Chief Judgment's question. [00:18:25] Speaker 04: I'm agreeing with you that the BLM could have, if it chose, have rules and regulations in this particular area, but they haven't. [00:18:33] Speaker 03: You're saying they can only act by rules. [00:18:34] Speaker 03: They cannot act if they don't have a rule. [00:18:37] Speaker 03: And that's the question that the chief and I are both asking. [00:18:41] Speaker 00: And what's your answer to that? [00:18:43] Speaker 00: Plain question. [00:18:44] Speaker 00: Absent a rule, are you saying they had no authority to do anything to protect their mineral interests in that land, federal minerals? [00:18:56] Speaker 04: If it is true, as it is here, that it does not involve the development or the production from those federal minerals, that is correct. [00:19:09] Speaker 03: So speculative. [00:19:12] Speaker 04: I think that's just so speculative. [00:19:14] Speaker 04: If I could just conclude, I see my time is up. [00:19:19] Speaker 04: Three things. [00:19:20] Speaker 04: We're asking the court to respectfully reverse the district court's holding that the BLM acted within its scope and authority under the MLA, [00:19:31] Speaker 04: We're asking you to find that the BLM does not have the requisite statutory authority under the MLA to require the petitioners to file a federal APD and to find, finally, that the Stock Raising Homestead Act [00:19:48] Speaker 04: and the Property Clause of the Constitution, without any agency rulemaking, do not allow the BLM to condition petitioners' right to drill through, but not produce from, federal minerals with its traversing well. [00:20:08] Speaker 04: I thank the Court very much. [00:20:09] Speaker 00: Appreciate it. [00:20:25] Speaker 02: Good morning and may it please the court. [00:20:26] Speaker 02: Kevin McCardell on behalf of the United States. [00:20:29] Speaker 02: I'd just like to try to present an initial summary that I hope will sort of synthesize some of the points we heard in the initial presentation. [00:20:38] Speaker 02: BLM's objective here is not to prevent True Oil from drilling the proposed traversing well. [00:20:44] Speaker 02: Quite the contrary, its objective is to accommodate True Oil's request while also ensuring that the public's mineral estate and the lessee's rights [00:20:54] Speaker 02: are adequately protected. [00:20:56] Speaker 02: This well would traverse the productive zone of a least federal mineral tract, the Codel Formation, and that's evident from the Joint Appendix Volume 3, pages 1 through 3, 54 and 70. [00:21:10] Speaker 02: It would also penetrate and occupy a range of mineral materials that belong to the public, including mudstone, sandstone, shale, chalk, [00:21:20] Speaker 03: Marl and limestone. [00:21:22] Speaker 03: So your argument here is it's not just oil and gas? [00:21:26] Speaker 03: Absolutely not. [00:21:28] Speaker 03: That's where I understood. [00:21:29] Speaker 03: I just wanted to make it... No, it's far broader and that's why... So it's actually, it may not be penetrating an oil cap, but it is penetrating certainly some of the other minerals. [00:21:41] Speaker 03: No doubt about that. [00:21:42] Speaker 03: And indirectly may be affecting the accessibility and development of the oil. [00:21:47] Speaker 02: Correct. [00:21:47] Speaker 02: Those two arguments. [00:21:48] Speaker 02: Those two are true, and also there may be at least some unknown quantity of oil and gas lost as the traversing well drills through the codel formation. [00:21:59] Speaker 02: The quantity is unclear, but even the plaintiffs recognize that oil and gas could be incidentally encountered during the drilling process. [00:22:07] Speaker 02: So all three facets are implicated by this well. [00:22:11] Speaker 02: And like any other property owner, [00:22:13] Speaker 02: BLM, as the statutory guardian of the public's lands and mineral resources, has the right to review and approve any proposed use of public property. [00:22:23] Speaker 00: You spoke about the mudstone, sandstone, shale, et cetera, that could be penetrated. [00:22:29] Speaker 00: Would the BLM's protective authority relative to those things be encompassed within their protective authority under the Mineral Leasing Act? [00:22:40] Speaker 00: I mean, because this is not, they aren't, going back to what Judge Ebell was saying, these aren't federal minerals, are they? [00:22:49] Speaker 02: At least some of them qualify as federal minerals within the meaning of the Mineral Leasing Act. [00:22:53] Speaker 02: I think there's a good summary of those materials, a list at page 159 of volume 2 of the appendix. [00:23:00] Speaker 02: There's a thoughtful analysis there of some of these issues. [00:23:03] Speaker 03: Where does that list come from? [00:23:05] Speaker 03: Is that just a litigation list from your briefs or is there some list in an official document? [00:23:12] Speaker 02: Well, the list I just mentioned comes from the Joint Appendix Volume 2, page 159. [00:23:18] Speaker 02: But what is that appendix? [00:23:20] Speaker 02: Where does that come from? [00:23:23] Speaker 02: That I'm not sure. [00:23:24] Speaker 02: I do vaguely remember. [00:23:26] Speaker 02: coming across a regulation or statute that sort of mirrored the definition of minerals. [00:23:31] Speaker 00: Okay, so you said some of the things that you were taking off would qualify as minerals, some being the word. [00:23:38] Speaker 00: Well, the ones that wouldn't, I guess, as it relates to what I understood to be the protective authority [00:23:46] Speaker 00: that the BLM was seeking to exercise relative to those non-minerals, where would the authority for that come from? [00:23:53] Speaker 00: Would it be encompassed within the MLA authority, or would that authority come from someplace else? [00:23:59] Speaker 02: Well, assuming for the sake of argument that the minerals within the meaning of the SRHA and minerals within the meaning of the MLA are not coextensive, assuming for the sake of argument there's some difference and that this case would implicate some of the non-overlapping substances, then [00:24:16] Speaker 02: potentially the authority would come from the Federal Land Policy and Management Act, which gives BLM broad authority to require permits for any use of public lands that's not specifically covered by another authorization. [00:24:32] Speaker 02: So it's a catch-all for precisely the situation we're sort of describing here. [00:24:37] Speaker 02: And that's an important point, because if the plaintiffs were right, and we don't think they are, but if the MLA doesn't apply, the only [00:24:45] Speaker 02: and we can't use the APD process, the only party to this case that would be injured by that is True Oil, because it just takes off the table an established and efficient process that the parties can use to accommodate both sides' legitimate interests. [00:25:02] Speaker 02: It wouldn't give them a right to drill through federal property. [00:25:05] Speaker 02: They'd have to go get another form of permission, either a FLIPMA land use authorization or a memorandum, something from the federal government that says, yes, [00:25:14] Speaker 02: You can take your well out. [00:25:15] Speaker 02: You can drill through our sandstone and occupy public land. [00:25:19] Speaker 02: But because it's public land, we have a right to review and approve any use of it. [00:25:26] Speaker 01: But you're saying that the mineral estate constitutes public land? [00:25:31] Speaker 02: Absolutely, yes, within the meaning of FLIPMA. [00:25:36] Speaker 00: And you're saying more than, well, the mineral estate, including things that aren't minerals, right? [00:25:44] Speaker 00: In other words, you've got the underline, you've got this split situation and the mineral estate, let's use that phrase, is what is reserved to the federal government. [00:25:56] Speaker 00: Within that, [00:25:57] Speaker 00: if this is federal land, if you will, and as it relates to that, even if they aren't things that would technically fit under a definition of minerals, which is what I'm trying to get at, your premise, as I understand it from FLIPMA, would be it's still public land. [00:26:15] Speaker 00: And you can't drill through that without some sort of mechanism for us to ensure that that land is protected. [00:26:24] Speaker 02: Yes. [00:26:25] Speaker 02: I think that's an accurate calculation. [00:26:27] Speaker 03: But that does require just a broad definition of what minerals mean. [00:26:34] Speaker 02: Yes, but the definition under the SRHA in Western nuclear, it's hard to imagine it being any broader. [00:26:41] Speaker 02: It covers any inorganic substance that can be removed from the soil that could have potential commercial value, and that Congress would not have envisioned belonged to the owner of a limited surface estate [00:26:55] Speaker 02: designed for agricultural use. [00:26:57] Speaker 02: I'm familiar with it. [00:26:58] Speaker 02: I mean, I've heard that phrase. [00:27:00] Speaker 02: But just tell me which statute that's in again. [00:27:04] Speaker 02: That test is in the Supreme Court's Western nuclear decision. [00:27:08] Speaker 02: Is it in a statute? [00:27:10] Speaker 02: Where did the Supreme Court get that? [00:27:12] Speaker 02: Where did that come from? [00:27:13] Speaker 02: It was interpreting the SRHA, that divides the estates here between the surface estate and the mineral estate. [00:27:22] Speaker 02: And the Supreme Court was asked to review [00:27:25] Speaker 02: whether the government's mineral estate included grappa. [00:27:29] Speaker 02: And the court held that, yes, it did because the mineral estate's expansive and it includes any materials that satisfy that test I briefly outlined, which I'm just paraphrasing, but that's the test. [00:27:40] Speaker 02: And the court also said any doubts about whether a substance belongs to the government or to the surface owner are resolved in the government's favor. [00:27:49] Speaker 02: And in looking at a particular subsurface substance, also, you need to look at [00:27:54] Speaker 02: whether Congress would have envisioned the surface estate owner, who's engaged in agricultural uses, to have owned this sub-surface material. [00:28:04] Speaker 02: And so that's going to be a very small, if any, amount of material other than soil. [00:28:10] Speaker 00: So under this broad definition of minerals, if I take it your position would be whether it is through this permitting process or in some way in order for them to penetrate this mineral estate, broadly defined, they're going to need something, you know, to allow them to do that. [00:28:34] Speaker 00: some sort of permit from the federal government, right? [00:28:37] Speaker 04: Right. [00:28:38] Speaker 00: Okay. [00:28:40] Speaker 00: And if for whatever reason, the broad definition that you've sketched out related to the surface, the SRHA, or the Mineral Leasing Act didn't apply, you still have the backup of FLIPMA, right? [00:28:54] Speaker 00: Right. [00:28:55] Speaker 00: Okay. [00:28:56] Speaker 00: Let me shift then to the question of the Quiet Title Act. [00:29:03] Speaker 00: And if you would address the question in part that I raised to Council, is are we only talking about what would in effect be a transfer of some title, or are we talking about the notion that if there is a dispute relative to what a surface owner can do with its estate, [00:29:26] Speaker 00: And, you know, the federal government says, you know, we've got a mineral estate that allows us to require a permit for you to penetrate this land. [00:29:34] Speaker 00: Surface owner says, no, I'm a surface owner and I can authorize this transversing well. [00:29:40] Speaker 00: Is that dispute covered by the Quiet Title Act or does there actually have to be something that one could literally view as being a transfer of title in dispute? [00:29:53] Speaker 02: It's absolutely covered by the Quiet Title Act. [00:29:55] Speaker 02: Here's the Supreme Court's most recent pronouncement of the scope of the Quiet Title Act. [00:30:00] Speaker 02: This is from the Patchett case. [00:30:02] Speaker 02: The QTA, quote, authorizes and so waives the government sovereign immunity from a particular type of action known as a quiet title suit, a suit by a plaintiff asserting a right title or interest in real property that conflicts with the right title or interest that the United States claims. [00:30:20] Speaker 02: That's exactly what we have here. [00:30:22] Speaker 01: So in a quiet title action, a court would then be called upon to determine who has the rights associated with each component of the land. [00:30:34] Speaker 01: The sludge, the shale, the minerals, the oil, and gas. [00:30:38] Speaker 01: There's no dispute about that. [00:30:40] Speaker 01: The only question, arguably, is an administrative question, and that is, [00:30:46] Speaker 01: Knowing without dispute who owns what is the traversing of the minerals that are indisputably owned by the federal government controlled by BLM. [00:31:01] Speaker 01: Do those administratively trigger [00:31:04] Speaker 01: the requirement for an APD under the Mineral Leasing Act. [00:31:08] Speaker 01: So in a Quiet Title action, wouldn't the ultimate question, even with this broad reading of the authority under the Quiet Title Act, ultimately devolve into, okay, well, in applying the Mineral Leasing Act, do they need an APD or not? [00:31:27] Speaker 01: That's the question. [00:31:28] Speaker 01: It's not whether or not who owns [00:31:31] Speaker 01: who has what rights to this oil and gas? [00:31:35] Speaker 01: Nobody questions that. [00:31:38] Speaker 02: Well, I'm not sure if that's right. [00:31:39] Speaker 02: Let's take it from the reverse. [00:31:41] Speaker 02: Suppose the court were to say the MLA doesn't apply to traversing wells. [00:31:47] Speaker 02: Doesn't apply. [00:31:48] Speaker 02: We do. [00:31:48] Speaker 02: I can get into that. [00:31:50] Speaker 02: The language is incredibly broad, what authority it grants to BLM. [00:31:54] Speaker 02: But if the MLA doesn't apply, what follows from that? [00:31:57] Speaker 02: You win. [00:32:00] Speaker 02: Yes. [00:32:01] Speaker 02: No, no. [00:32:01] Speaker 02: If it doesn't apply, the plaintiffs don't benefit. [00:32:06] Speaker 02: They lose one established avenue of securing our permission to drill through our mineral estate. [00:32:12] Speaker 02: But if it doesn't apply, it doesn't mean that they can now drill through without our approval. [00:32:16] Speaker 02: They need to get some other form of approval to drill through public property. [00:32:20] Speaker 00: And see, at least as I understood their position, [00:32:24] Speaker 00: They didn't need your approval, which is where it seems to me the Quiet Title Act, at least I want to wrap my brain around, seems to come into play because if we're talking about interests, you know, not as you point out disjunctively, right title or interests, then the question is we don't need your approval government to do this. [00:32:43] Speaker 00: We can do this because we're subsurface owners. [00:32:46] Speaker 00: I mean, we're surface owners. [00:32:47] Speaker 00: And the government says, no, I've got a mineral estate and you need our approval. [00:32:51] Speaker 00: Isn't that what we're talking about? [00:32:52] Speaker 02: Exactly. [00:32:53] Speaker 02: That's why the essence and heart of this dispute is over the scope, not the nominal name of each party's title, but the scope of the title and the rights that it provides to each party. [00:33:04] Speaker 02: That's why they pled the claim, as they did. [00:33:06] Speaker 02: The claim on the amended complaint, page one, and the wherefore clause, it doesn't even seek to have an agency action set aside. [00:33:15] Speaker 02: It seeks a resolution of the party's competing property rights. [00:33:21] Speaker 03: almost out of breath about the... [00:33:24] Speaker 03: scope that you're asserting for title actions. [00:33:29] Speaker 03: It seems to me nobody really is quarreling with the title, e.g. [00:33:33] Speaker 03: who owns these various estates. [00:33:36] Speaker 03: That title is clear. [00:33:38] Speaker 03: What is really clear is what you can do with them. [00:33:42] Speaker 03: And I would just analyze the surface. [00:33:44] Speaker 03: Let's say there's two lots next to each other. [00:33:47] Speaker 03: And one lot decides, middle of the night, they would like to have their marching band practicing out on their front yard. [00:33:54] Speaker 03: And they do and keep everybody awake. [00:33:57] Speaker 03: And so the neighbor says, hey, you can't do that because it's infringing on my rights to sleep. [00:34:06] Speaker 03: It's a nuisance. [00:34:07] Speaker 03: It doesn't fit anything else. [00:34:11] Speaker 03: And the first guy says, oh, no, no, no, no. [00:34:13] Speaker 03: You can't bring a lawsuit of nuisance or anything else. [00:34:17] Speaker 03: You've got to bring a quiet title action. [00:34:19] Speaker 03: Because I'm trying to use my title in a certain way, my case, and if you are trying to restrict my use of this land, it's got to be a quiet title action. [00:34:30] Speaker 03: Well, of course it doesn't. [00:34:31] Speaker 03: And it seems to me the same analysis is applied here. [00:34:34] Speaker 03: Nobody is challenging the title or any of the title real estate accoutrements. [00:34:41] Speaker 03: They are challenging a right to do something. [00:34:47] Speaker 03: I just don't see how [00:34:49] Speaker 03: a quiet title action, that broader view would convert quiet title actions to accomplishing every single kind of police power enforcement and regulation and zoning and everything else. [00:35:06] Speaker 03: That simply would [00:35:08] Speaker 03: It's not what quite title actions are. [00:35:10] Speaker 00: Well, Judge Ebell's hypothetical is a good one, and certainly you're going to have an opportunity to respond to that, although your time is completed. [00:35:18] Speaker 00: So please do respond. [00:35:20] Speaker 00: Why isn't that what his hypothetical analogous to what we have going on here? [00:35:26] Speaker 02: I think the hypothetical is predicated on the notion that there's no dispute that the well would traverse federal mineral materials owned by the United States. [00:35:34] Speaker 02: I don't read their complaint as stipulating or agreeing to that. [00:35:38] Speaker 02: It says in the reply brief that it would traverse non-mineral materials. [00:35:43] Speaker 02: And it also seems to allege that even to the extent that the well would traverse federal materials, the surface owner nevertheless has a property right to drill the subsurface well. [00:35:58] Speaker 02: And if the source of that alleged right to drill through at least some federal material is supposedly a property right, then we are back [00:36:06] Speaker 02: the quiet title context. [00:36:08] Speaker 02: And if they're disputing... They're just saying it's a property right. [00:36:13] Speaker 02: Right, but I do want to say if they agree that we own the materials, that the well is going to traverse, then it probably is not. [00:36:23] Speaker 02: And that it's not a question of property law, it's just [00:36:26] Speaker 02: you know, whether the MLA applies and they agree. [00:36:30] Speaker 03: Is what rights you have under the MLA and the FLPM? [00:36:36] Speaker 00: Let me make sure I understand. [00:36:38] Speaker 00: You said if they agree what? [00:36:40] Speaker 02: If they agree that we own all of the subsurface materials that the well would traverse, then it probably isn't a quiet title act. [00:36:48] Speaker 02: As long as they're not alleging that notwithstanding our ownership, we still have a property right [00:36:54] Speaker 02: under that Texas case. [00:36:57] Speaker 00: But I thought that is what they're saying. [00:36:59] Speaker 02: That was their second. [00:36:59] Speaker 03: I didn't get that they were arguing that they have the right to the clay and the sand and the rock. [00:37:05] Speaker 03: So I don't think they were claiming that. [00:37:07] Speaker 02: Well, I read their complaint as saying they own the materials, number one, that the well would traverse. [00:37:12] Speaker 02: And to the extent they don't, they still have the right as the surface owner under policy reasons in that Texas case. [00:37:19] Speaker 03: Just like the guy who says, I've got a right to [00:37:21] Speaker 03: make as much noise on my land at two in the morning as I want. [00:37:26] Speaker 03: I mean, it simply is not a quiet title action. [00:37:29] Speaker 03: It's a nuisance for a police action or a regulatory action or a zoning ordinance or something else, but it's not a quiet title action. [00:37:35] Speaker 02: Well, if there's no dispute over ownership of the subsurface materials, if they agree with our position that we own it, and there's no claim that they have a property right to drill without our approval, then it wouldn't be a quiet title action. [00:37:49] Speaker 02: They would just lose. [00:37:50] Speaker 02: Because we own the materials, [00:37:52] Speaker 02: And therefore, we have the right to approve whatever they want to do with public property. [00:37:58] Speaker 02: You can't just drill through public property without the government's approval. [00:38:01] Speaker 02: Either we try to accommodate them with extending the APD process to this. [00:38:08] Speaker 02: Well, if it doesn't apply, it just deprives them of one avenue to get our permission. [00:38:12] Speaker 01: Is the question somewhat narrower that if a true oil acknowledges that the horizontal traversing wells would traverse [00:38:22] Speaker 01: minerals that are owned by BLM, even if the horizontal wells traverse other, say, shale, you know, other items that might or might not be owned by the federal government, might or might not constitute minerals. [00:38:37] Speaker 01: But if they acknowledge that the traversing wells would traverse minerals that are owned by BLM, then you would agree that there's no quiet title action requirement. [00:38:46] Speaker 02: As long as, I'm sorry to belabor this, but as long as they're not also claiming that notwithstanding our ownership, they still have a property right based on policy and common law to drill a traversing well through our materials, even if it would go right through our materials. [00:39:03] Speaker 02: And I did read their complaint to sort of suggest that. [00:39:06] Speaker 02: Even if there'd be incidental removal, they still have a property right. [00:39:10] Speaker 02: And if that's the claim, it's still the quiet time lag. [00:39:12] Speaker 02: I see no amount of time. [00:39:13] Speaker 02: Thank you very much for the opportunity to appear. [00:39:20] Speaker 00: Would you like an opportunity to respond? [00:39:25] Speaker 00: I'd like to hear from you, Appellant. [00:39:27] Speaker 00: Yeah, I got a question. [00:39:29] Speaker 00: If you would give him two minutes, and there were two questions that were raised as to the characterization of your complaint. [00:39:40] Speaker 00: My question is very simple. [00:39:42] Speaker 00: Do you agree with that characterization of what you're alleging that one, [00:39:46] Speaker 00: that they don't own the minerals underneath? [00:39:50] Speaker 00: And two, even if they do, you have a property right to drill through? [00:39:57] Speaker 04: Okay. [00:39:57] Speaker 04: Number one, we agree that the federal government owns the minerals underneath the surface. [00:40:05] Speaker 04: We also agree that true oil owns all of the materials that are not minerals underneath the surface. [00:40:13] Speaker 04: We agree [00:40:15] Speaker 04: that we presented our case to the State of Wyoming Oil and Gas Conservation Commission and provided notice to the BLM of our proposed traversing well and asked them if they wanted to enter, you know, appear before the Wyoming Oil and Gas Commission. [00:40:34] Speaker 04: and had any objection to it. [00:40:36] Speaker 04: They refused to do that, even though they have an internal memorandum with the State of Wyoming that they share data. [00:40:45] Speaker 03: I'm not sure that's responsive to the Chief's question. [00:40:48] Speaker 04: The second part... I'm saying that with the State of Wyoming's approval and after giving due notice to the BLM of our proposed drilling down through not only the minerals but the non-minerals, Your Honor, [00:41:04] Speaker 04: We had the minerals. [00:41:06] Speaker 03: There are definitions of minerals that include, I think, clay and other things. [00:41:10] Speaker 03: Is that not right? [00:41:12] Speaker 03: I don't think it includes clay. [00:41:15] Speaker 00: Let me be clear. [00:41:17] Speaker 00: Do you contend that you have a property right [00:41:21] Speaker 00: to drill through the subsurface area, which would include the minerals that the federal government owns? [00:41:29] Speaker 04: The answer is yes, Your Honor, and because we are not taking them, we're not disposing of them, we're not [00:41:37] Speaker 03: Possessing them so I had a root if I have a root cellar two miles away from your property and and I I'd like to access it through a secret little tunnel that I would start to build on the other side of your of the of this Area at least would that be a property right that I would say I can just be a mole and just drill through kind of like a [00:42:05] Speaker 03: like everybody's experiencing in Gaza? [00:42:09] Speaker 04: No, Your Honor. [00:42:10] Speaker 03: You have to give notice to everyone, to the governing body, which in this case... But my notice would be I have a property right, because I happen to own a root cellar two miles away. [00:42:21] Speaker 03: That gives me a property right to transverse everybody's land. [00:42:25] Speaker 04: You have to consider everyone's rights, the correlative rights. [00:42:29] Speaker 03: And our point of the whole briefs is that... You're saying that to access land [00:42:34] Speaker 03: to start when I'm not on your property, to end when I'm not on your property. [00:42:39] Speaker 03: I don't have any lease or any right or any permission from you to go across your property. [00:42:44] Speaker 03: But I just want to get from A to B, and you happen to be in the way. [00:42:47] Speaker 03: So that's a property right. [00:42:49] Speaker 03: It's not a regulatory or a police or a constitutional or other right. [00:42:53] Speaker 03: It's a property right. [00:42:56] Speaker 04: It is a property right, but we have to consider... It could be solved by a quiet title action, a QTA. [00:43:02] Speaker 04: Definitely not. [00:43:03] Speaker 04: It's not a quiet. [00:43:04] Speaker 00: And you're saying you gave notice to the Wyoming Commission and gave them the opportunity to respond? [00:43:08] Speaker 04: A big time. [00:43:09] Speaker 00: Okay. [00:43:10] Speaker 00: Got it. [00:43:11] Speaker 00: Thank you very much. [00:43:11] Speaker 00: Thank you, Your Honors. [00:43:13] Speaker 00: Thank you for your fine arguments. [00:43:14] Speaker 00: Thank you.