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Petro-Hunt, L.L.C. v. United States

United States Court of Appeals, Federal Circuit

July 17, 2017

PETRO-HUNT, L.L.C., Plaintiff-Appellant
v.
UNITED STATES, Defendant-Appellee

         Appeals from the United States Court of Federal Claims in Nos. 1:00-cv-00512-MBH, 1:11-cv-00775-MBH, Judge Marian Blank Horn.

          Joseph Ralph White, White Andrews, LLC, Oxford, MS, argued for plaintiff-appellant. Also represented by Sharon Andrews, Bruce Alan Baker, Jr., White, Andrews & Shackelford, LLC, New Orleans, LA; EDMUND Michael Amorosi, Smith, Pachter, McWhorter, PLC, Tysons Corner, VA; D. Joe Smith, Jenner & Block LLP, Washington, DC.

          KATHERINE J. BARTON, Environment and Natural Resources Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Represented by John Cruden, Brian C. Toth.

          Before Prost, Chief Judge, Clevenger, and Reyna, Circuit Judges.

          Clevenger, Circuit Judge.

         Petro-Hunt, L.L.C. appeals the decision of the United States Court of Federal Claims to dismiss its claims for permanent takings, temporary takings, judicial takings, and breach of contract by the United States ("United States" or "the Government"). The Court of Federal Claims dismissed Petro-Hunt's permanent takings claims, contract claims, and some temporary takings claims under the statute of limitations. Petro-Hunt, L.L.C. v. United States, 90 Fed. CI. 51 (2009) C Petro-Hunt F). The Court of Federal Claims subsequently held that the remaining temporary takings claims were barred by 28 U.S.C. § 1500. Petro-Hunt, L.L.C. v. United States, 105 Fed. CI. 37 (2012) ('Petro-Hunt IF). And, because Petro-Hunt's judicial takings claim would require the Court of Federal Claims to question the merits of the Fifth Circuit's decision regarding the same servitudes asserted in the instant case, the Court of Federal Claims held it also lacked jurisdiction over those claims. Petro-Hunt, L.L.C. v. United States, 126 Fed. CI. 367 (2016) ('Petro-Hunt III'). Because we agree with the Court of Federal Claims' reasons for its dismissal of Petro-Hunt's claims, we affirm.

         I

         The facts of this case are generally undisputed and are set forth in the Court of Federal Claims' multiple decisions. See Petro-Hunt I, 90 Fed. CI. at 53-57. We recite here the facts pertinent to the issues before us.

         A

         Petro-Hunt's claims relate to ninety-six mineral servitudes underlying roughly 180, 000 acres of the Kisatchie National Forest in Louisiana ("Kisatchie"). Under Louisiana law, the right to enter land and extract minerals can be held separately from ownership of the land in the form of a mineral servitude. Petro-Hunt I, 90 Fed. CI. at 53. Such servitudes generally prescribe (i.e., revert back to the landowner) if not used for a period of ten years. Id. This ten-year rule of prescription cannot be modified by contract. Id.

         Between 1932 and 1934, the original owners of the relevant servitudes, Bodcaw Lumber Company and Grant Timber Company, transferred six mineral conveyances, resulting in ninety-six servitudes, to Good Pine Oil. Each of these six deeds conveying mineral rights to Good Pine Oil contained a clause contemplating that a ten-year prescriptive period would apply. From 1934 to 1937, Bodcaw and Grant conveyed, through eleven written instruments, 180, 000 acres of land, burdened by ninety-six mineral servitudes in favor of Good Pine Oil, to the United States. All but one of the eleven transfer instruments explicitly stated that the conveyances were subject to one or more of the mineral deeds granting rights to Good Pine Oil.

         In 1940, the Louisiana legislature enacted Act 315 of 1940, 1940 La. Acts 1250 ("Act 315").[1] Act 315 created an exception to Louisiana's law of prescription and retroactively confirmed that all outstanding, but not yet prescribed mineral rights reserved in land sold to the United States, were now imprescriptible, so long as the United States remained the landowner.

         In 1941, Good Pine Oil transferred its mineral rights to William C. Brown. One year later, Brown transferred his mineral rights to Nebo Oil Company. Based on Act 315, Nebo Oil believed it had acquired imprescriptible mineral servitudes.

         In 1948, the United States filed a declaratory judgment against Nebo Oil, claiming that Nebo's mineral rights to an 800 acre tract of land had prescribed to the Government due to non-use. The district court ruled that Act 315 was retroactive and thus Nebo Oil owned the mineral property in perpetuity. United States v. Nebo Oil Co., 90 F.Supp. 73, 89 (W.D. La. 1950). On appeal, the Fifth Circuit agreed, holding that Nebo Oil's mineral rights to that specific tract were imprescriptible. United States v. Nebo Oil Co., 190 F.2d 1003, 1010 (5th Cir. 1951) ("Nebo Oil").

         In 1973, the Supreme Court decided United States v. Little Lake Misere Land Co., 412 U.S. 580 (1973). The Court held that Act 315 could not be applied retroactively to outstanding mineral interests in land acquired by the United States under the Migratory Bird Conservation Act, 45 Stat. 1222, 16 U.S.C. §§ 715-715s. Id. at 595. It reasoned that retroactive application of Act 315 would deprive the United States of "bargained-for contractual interests" by abrogating the terms of the acquisition instruments relating to prescription and thus was "plainly hostile to the interests of the United States." Id. at 597. Notably, the Court did not overrule Nebo Oil and distinguished its facts. Id. at 586.

         In the 1980s, relying on the Court's decision in Little Lake Misere, the Government, through the Bureau of Land Management ("BLM"), began to issue mineral leases on Petro-Hunt's mineral property. While the parties disagree as to the exact timing of these leases (and even as to the number thereof), it appears that the majority of them were granted beginning in 1991, with more than forty-five leases made from that year up to the beginning of this lawsuit. Each lease was for a period of ten years.

         In the 1990s, owners of the mineral servitudes disputed the Government's issuance of leases on their mineral property. In response, in 1991, the Forest Service informed BLM, in a letter on which Hunt Petroleum (a co-owner of the relevant servitudes) was copied, that all but two of the mineral servitudes had prescribed and were now owned by the United States. The letter cited a 1986 U.S. Department of Agriculture legal opinion indicating that the United States had ownership of the servitudes on all parcels acquired before the enactment of Act 315 and on which no wells had been drilled. In 1993, BLM responded to another protest by Hunt Petroleum in a letter to Hunt and Placid Oil, its co-owner at the relevant time, by citing a title report indicating that the servitudes had prescribed to the United States. In 1998, Petro-Hunt acquired Placid Oil's 64.3% undivided interest in the servitudes and thus owns the mineral servitudes at issue in this case as a successor in interest.[2]

         In 1996, Central Pines Land Company and other holders of mineral servitudes brought an action against the government and lessees under mineral leases granted by the government, seeking declaratory relief and to quiet title in the servitudes. Central Pines Land Co. v. United States, No. 2:96-cv-02000 (W.D. La. filed Aug. 22, 1996). Like those at issue in this case and in Nebo Oil, the mineral servitudes in Central Pines were on property acquired by the United States for Kisatchie prior to Act 315's enactment. On appeal, the Fifth Circuit held that Act 315 could not provide the federal rule of decision because, as in Little Lake Misere, it was hostile to the United States' interests in "obtaining the mineral rights via the default rule of prescription in place before Act 315." Central Pines Land Co. v. United States, 274 F.3d 881, 891 (5th Cir. 2001). Instead, the court held that the ten-year prescriptive period of residual (pre-Act 315) Louisiana law should govern the case and thereby concluded that the servitudes on Kisatchie lands had prescribed for non-use. Id. at 892, 894. The Supreme Court denied Central Pines's petition for a writ of certiorari. Central Pines Land Co. v. United States, 537 U.S. 822 (2002). While summary judgment motions were pending in the district court, Central Pines had filed a complaint in the Court of Federal Claims, alleging a taking in violation of the Fifth Amendment based on the same facts alleged in its district court complaint. Central Pines Land Co. v. United States, 99 Fed. CI. 394 (2011). This court affirmed the Court of Federal Claims' dismissal of Central Pines's taking claims for lack of jurisdiction pursuant to 28 U.S.C. § 1500. Central Pines Land Co. v. United States, 697 F.3d 1360, 1367 (Fed. Cir. 2012).

         B

         On February 18, 2000, Petro-Hunt and others not party to the current action filed suit against the Government in the United States District Court for the Western District of Louisiana. Complaint, Petro-Hunt, L.L.C. v. United States, 179 F.Supp.2d 669 (W.D. La. 2001) (No. OO-cv-0303), ECF No. 1 (the "Quiet Title Action"). Petro-Hunt alleged it was the owner of all aforementioned ninety-six mineral servitudes under the theory that Act 315 and the Nebo Oil decision had rendered them imprescriptible. It further alleged that starting in 1991, the United States, claiming ownership over the mineral rights, wrongfully granted a series of oil and gas leases covering the property in interest. Based on these factual allegations, Petro-Hunt filed for a declaratory judgment under 28 U.S.C. § 2409a to quiet title to the property. In the alternative, it alleged an unconstitutional taking without just compensation in violation of the Fifth Amendment.

         In 2001, the district court granted summary judgment in Petro-Hunt's favor and ruled that Nebo Oil precluded the United States from litigating title to the ninety-six mineral servitudes, which the court held Petro-Hunt owned in perpetuity. Petro-Hunt, L.L.C. v. United States, 179 F.Supp.2d 669 (W.D. La. 2001). However, in 2004, the Fifth Circuit reversed the district court, holding that res judicata applied only to the mineral rights in the 800-acre parcel described in Nebo Oil. Petro-Hunt, L.L.C. v. United States, 365 F.3d 385, 396-97 (5th Cir. 2004). It found that Petro-Hunt's remaining mineral property was subject to the contractual provisions permitting prescription after ten years of non-use. Id. at 398-99. The Fifth Circuit remanded the case to the district court for it to determine whether any of the servitudes had prescribed. The Supreme Court denied Petro-Hunt's petition for writ of certiorari. Petro-Hunt, L.L.C. v. United States, 543 U.S. 1034 (2004).

         In 2005, the parties stipulated that five servitudes, representing approximately 109, 844 acres, still existed due to use, but that the remainder had prescribed. So the district court issued a judgment that Petro-Hunt was the owner of those five servitudes, now subject to the law of prescription, and 800 acres of the 1120 acre Nebo Oil servitude, which remained imprescriptible. Quiet Title Action, ECF No. 228. It additionally found that ninety servitudes and the remaining 320 acres of the Nebo Oil servitude had prescribed to the United States. Id. at 2-3. In 2007, the Fifth Circuit affirmed the district court's order. Petro-Hunt, L.L.C. v. United States, No. ...


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