Southern Ute Indian Tribe v. Amoco Production Co.

Page 1251

151 F.3d 1251

98 CJ C.A.R. 3952

SOUTHERN UTE INDIAN TRIBE, Plaintiff-Appellant, v. AMOCO PRODUCTION COMPANY; Shirley K. Adams; Henry Ashworth; Carla M. Aspaas; Eric K. Aspaas; Helen Ruth Aspaas; Laurabelle Aspaas; Leta M. Adkins; Rita M Adkins; Maxwell C. Anderson; Earl A. Barker; Maurice C Breen, named as: Heirs of Maurice C. Breen, deceased Horace F. Buchanan, named as: the Heirs of Horace Buchanan deceased; George A. Bugg; Carbone Investment Company; Jack Carmack; Rowland Carmack; Joseph C. Ciancio; William Kemp Clark; Colorado National Bank, George Veto Trust; Colorado National Bank of Longmont, conservator Gladys N. Frazzini; Dorothy A. Corgin; Kelly Cox, named as: the Heirs of Kelly Cox, deceased; A.B. Crosby; Barbara Crosby; David Crosby; John Crow, Jr.; Margaret Crow; Manuel Cruz; Louis M. Cummins; Frederick E. Dickerson; J.M. Eakes; Robert McFerran Eakes; Margaret Ellison; Sally M. Etterbeck; Minnie Flaks; Tillie Flaks; Cassio Frazzini; Adele Frost; Robert Galbasin; Abel S. Gallegos; Montey Garnand; Ruby Gibbs Goggans; Christine Hamilton; Hardin Simmons University; H.A. Harmon, named as: the Heirs of H.A. Harmon, deceased; Hondo Oil & Gas Company, named as: the shareholders of Hondo Oil & Gas Company (dissolved); Hyde Oil and Gas Corporation; Charles Kettering; Fidel Lucero; Richard C. Malcomb; Suzanne Heath Manges; Catherine B. McElvain; Mabel McElvain; Thornton H. McElvain,Jr.; Dorothy N. McKelvey; Edwin L. McKelvey; R. Franklin McKelvey; W.R. McMahon; McMurry Oil Company; W. Clay Meredith Charitable Trust; W.A. Moncrief, named as: the Heirs of W.A. Moncrief, deceased; Roy E. Montgomery, personal representative for the Estate of W. Clay Meredith, deceased; Forrest D. Miller, named as: the Heirs of Forrest D. Miller, deceased; HELEN L. MILLER, named as: the Heirs of Helen L. Miller, deceased; Thomas S. Morrissey; Thomas J. Morrissey; Emil Mosbacher; Emil Mosbacher, III; John David Mosbacher; R. Bruce Mosbacher; Myra Theresa Moulds; North Central Oil Corporation; H.L. Oliver; Clara Onofrio; Margaret C. Pargin; Harold F. Payne, Jr.; Neville G. Penrose; Ben M. Peterson, Jr.; Frederick Petrocco; Phillips Petroleum Company; James M. Raymond; W.E. Rennie, named as: the Heirs of W.E. Rennie, deceased; Thomas C. Romolo; Benton E. Smullyen; Clinton I. Smullyen; William Stirling; J.L. Tatum, named as: the Heirs of J.L. Tatum, deceased; Anna Carleo Tomeo; Ernest Tomeo; Turner Securities; Richard W. Turner, Sr.; George C. Vance, named as: the Heirs of George C. Vance, Deceased; Anthony H. Veto; Joseph F. Ware, Jr.; Albert E. Zarlengo; Anthony F. Zarlengo, John Doe and all other unknown persons claiming an interest in the mineral estate located within the N/2 of section 12, T33N, R8W, N.M.P.M., La Plata County, Colorado; Amax Oil & Gas, Inc.; Bowen/Edwards Associates, Inc.; Fuel Resources Development Company; McKenzie Methane Corporation; Meridian Oil, Inc.; Mobil Oil Corporation; National Cooperative Refinery Association; Northwest Pipeline Corporation; Pablo Operating Company; Palo/Eagle Joint Ventures; Richmond Petroleum, Inc.; Williams Production Company; Manuel Lujan, Jr., Secretary of the United States Department of the Interior; Department of Interior, and its subordinate agencies; Bureau of Indian Affairs; Bureau of Land Management; Minerals Management Service; Eddie F. Brown, Assistant Secretary of the Bureau of Indian Affairs; Catherine Frances McElvain Harvey; Delos Cy Jamison, Director of the Bureau of Land Management; and Scott S. Sewell, Director of the Minerals Management Service; Class of Defendants situated similarly to those named non-governmental defendants who claim ownership of an interest in coalbed methane and other coal constituents or claim the right to explore for, develop or produce those substances from coal or coal strata reserved by the United States in patents issued under the Act of March 3, 1909, or the Act of June 22, 1910, for lands located within the exterior boundaries of the Southern Ute Indian Reservation and which class members have not obtained tribal consent to and federal approval of said interests of rights; Jack Balle; J.M. Huber Corporation, Oil & Gas Division; Mary Jean Balle; Donald C. Ciancio; Susie M. Ciancio; NCNB Texas National Bank, as Trustee of the Kelly Cox Testamentary Trust; Addie G. Crosby; Jack W. Crosland, Jr.; Henry L. Enochson; Mary Jane Enochson; J.L. Goggans; Liberty Tulsa, as trustee of the Christine J. Hamilton Trust; Helen Crosland Hendricks; Thomas L. Johnstone; James Eric Kaindl; Larry James Kaindl; Lisa Jean Kaindl; Jane P. Mosbacher, named as The Heirs of Jane P. Mosbacher, Deceased; PM Associates, a Colorado general partnership; First Interstate Bank of Denver, as Co-trustee of the Estate of W.E. Rennie est W.E. Rennie; Roderick L. Turner; Wells Fargo Bank, as trustee of the George C. Vance Trust; Albert E. Zarlengo, Jr., as trustee for the Albert E. Zarlengo Trust; Bell South Corporation Health Care Trust; J. Magness, Inc.; SG Interests I, Ltd; Mosbacher U.S.A., Inc.; Land Owners Coalseam Committee, Defendants-Appellees, and Meridian Oil, Inc.; Pablo Operating Company; Tiffany Gas Company, Union Texas Petroleum Corporation, John Doe oil company and all other unknown persons or entities claiming leasehold working interests or operating rights to explore for, produce or develop coalbed methane or coal constituents from coal or coal strata reserved by the United States in patents issued under The Act of June 22, 1910, for lands located within the exterior boundaries of the Southern Ute Indian Reservations, and which entities have not obtained tribal consent to and federal approval of said exploration, production of development activities, Defendants. Independent Petroleum Association of Mountain States; La Plata County, Board of County Commissioners; La Plata County Cattlemen's Association; National Association of Royalty Owners; Campbell County Wyoming Mineral Owners, Ignacio School District 11 JT; Bayfield School District 10 JT-R, Amici Curiae.

No. 94-1579.

United States Court of Appeals, Tenth Circuit.

July 20, 1998.

Thomas H. Shipps, Maynes, Bradford, Shipps & Sheftel, Durango, Colorado (Scott B. McElroy and Alice E. Walker, Greene, Meyer & McElroy, P.C., Boulder, Colorado, and Michael T. McConnell, Long & Jaudon, Denver, Colorado, with him on the briefs), for Plaintiff-Appellant.

Charles L. Kaiser, Davis, Graham & Stubbs L.L.P., Denver, Colorado (Anthony J. Shaheen and Ezekiel J. Williams, Davis, Graham & Stubbs L.L.P., Denver, Colorado, and David E. Brody, Amoco Production Company, Denver, Colorado, with him on the brief), for Amoco Production Company, Defendant-Appellee.

Before SEYMOUR, Chief Judge, PORFILIO, ANDERSON, TACHA, BALDOCK, KELLY, HENRY, and BRISCOE, Circuit Judges, and MCKAY, Senior Circuit Judge. ^*

SEYMOUR, Chief Judge.

OPINION ON REHEARING EN BANC

This case arose from the relatively recent development of technology that has made coal bed methane (CBM) commercially valuable. The Southern Ute Indian Tribe (the Tribe) appealed the district court's grant of summary judgment to defendants Amoco Production Company and others on the Tribe's claim to ownership of coal bed methane contained in coal acquired by the Tribe as successor in interest to a statutory reservation of coal to the United States. The Tribe also appealed the district court's grant of summary judgment to the Secretary of the Interior, the Department of the Interior, and the Department of the Interior's subordinate agencies (the federal defendants) on the Tribe's claim of breach of fiduciary duty. A panel of this court reversed the district court on the issue of CBM ownership and remanded for further proceedings consistent with its decision. See Southern Ute Indian Tribe v. Amoco Prod. Co., 119 F.3d 816 (10th Cir.1997). Amoco requested rehearing en banc which we granted in part as set out below.

I.

In 1991, the Tribe brought suit against Amoco Production Company, other oil companies, and individual oil and gas lessees and lessors (the Amoco defendants) who asserted ownership interests in CBM contained in coal owned by the Tribe. In its First Amended Complaint, the Tribe claimed ownership of CBM and asserted that various Amoco defendants, by exploring for and extracting CBM under oil and gas leases, had among other things: 1) trespassed on Tribal lands; 2) trespassed on Tribal coal; 3) converted Tribal coal; 4) failed to pay severance tax to the Tribe; and 5) in collusion with State of Colorado officials, deprived the Tribe of federally guaranteed rights in violation of 42 U.S.C. § 1983. The Tribe sought a variety of remedies including: 1) a declaratory judgment vesting in the Tribe ownership of CBM and other substances contained in Tribal coal; 2) a declaratory judgment that Tribal consent is required for CBM extraction; 3) an order quieting title to CBM in the Tribe; 4) injunctive relief to prevent continued exploration and production of CBM without Tribal consent; 5) damages for present and future injuries to coal, for extraction of CBM, for conversion of coal, for civil rights violations, and for failure to pay severance taxes; 6) title to all exploration and production facilities on Tribal lands which, if removed, would interrupt production of CBM; and 7) costs and attorney's fees.

The Tribe also sued the federal defendants in their capacities as trustees for the Tribe. The Tribe claimed that the federal defendants breached their fiduciary duties to the Tribe by allowing exploration and extraction of CBM under oil and gas leases. The Tribe sought a declaratory judgment on the breach of fiduciary duty issue, and sought injunctive relief to prevent the federal defendants from issuing permits to explore for and extract CBM under oil and gas leases or from otherwise acquiescing in the derogation of the Tribe's alleged ownership interest in CBM.

Two issues were identified as fundamental to the resolution of all claims against the...