Forest Oil Corp v. Union Oil Corportion of California

Filing 71

Order on Motion for Summary Judgment

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA

FOREST OIL CORPORATION,

Case No. 3:05-cv-0078-RRB

Plaintiff,
vs.
UNION OIL COMPANY OF AMERICA,
d/b/a UNOCAL ALASKA,

ORDER DENYING DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT

Defendant.

I.

INTRODUCTION
Defendant Union Oil Company of California (“Unocal”)

moves

for

summary

judgment

dismissing

Plaintiff

Forest

Oil

Corporation’s (“Forest”) claim for equitable relief in the form of
a declaration that Unocal acted imprudently and an injunction to
remove Unocal as the operator of the Trading Bay Unit and Trading

ORDER DENYING MOTION FOR SUMMARY JUDGMENT (DOCKET 19) - 1
3:05-CV-0078-RRB

Bay Field (“Trading Bay Properties”).1 Forest disagrees and argues
that Unocal’s motion is without merit.2
Because the Court concludes that Unocal is not entitled
to judgment as a matter of law, Unocal’s Motion for summary
judgment is DENIED.
II.

FACTS
Forest

and

Unocal

own

working

interests

in

several

offshore oil and gas leases located in Alaska’s Cook Inlet.3

There

are four agreements that govern the relationship between Forest and
Unocal regarding the development and operation of the Trading Bay
Properties.

These agreements are:

1.

The Trading Bay Unit Operating Agreement (“TBUOA”).4

2.

The
Trading
(“TBFOA”).5

3.

The Unit Agreement for the Development and
Operation of the Trading Bay Unit, State of Alaska
(“TB Unit Agreement”).6

Bay

Field

1

Clerk’s Docket No. 19.

2

Clerk’s Docket No. 31.

3

Clerk’s Docket No. 18 at 3.

4

Clerk’s Docket No. 23 at Ex. A.

5

Id. at Ex. B.

6

Operating

Id. at Ex. C.

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3:05-CV-0078-RRB

Agreement

4.

The Alignment Agreement Trading Bay Field/Trading
Bay Unit.7

Unocal is the Operator for the Trading Bay Properties.8

The

agreements govern removal of the Operator.9
Forest brought suit against Unocal alleging, inter alia,
that it is entitled to equitable relief due to Unocal’s imprudent
conduct in operating the Trading Bay Properties.10
III. STANDARD OF REVIEW
Rule 56 of the Federal Rules of Civil Procedure provides
that summary judgment should be granted if there is no genuine
dispute as to material facts and if the moving party is entitled to
judgment as a matter of law.

The moving party has the burden of

showing that there is no genuine dispute as to material fact.11 The
moving party need not present evidence; it needs only point out the
lack of any genuine dispute as to material fact.12

Once the moving

party has met this burden, the nonmoving party must set forth
evidence of specific facts showing the existence of a genuine issue

7

Id. at Ex. A. for Tabler Declaration.

8

Id. at Ex. A at 17 and Ex. B at 11.

9

See Id. at Ex. A at 17, Ex. B at 11, and Ex. C at 8.

10

Complaint at ¶ 27.

11

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

12

Id. at 323-25.

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for trial.13

All evidence presented by the non-movant must be

believed for purposes of summary judgment, and all justifiable
inferences must be drawn in favor of the non-movant.14 However, the
nonmoving party may not rest upon mere allegations or denials, but
must show that there is sufficient evidence supporting the claimed
factual dispute to require a fact-finder to resolve the parties’
differing versions of the truth at trial.15
IV.

DISCUSSION
The Declaratory Judgment Act, 28 U.S.C. § 2201(a), provides:
In a case of actual controversy within its
jurisdiction . . . any court of the United
States, upon the filing of an appropriate
pleading, may declare the rights and other
legal relations of any interested party
seeking such declaration, whether or not
further relief is or could be sought.16

First, the district court must determine whether there is an actual
case or controversy within the jurisdiction.17

13

If there is, “the

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49

(1986).
14

Id. at 255.

15

Id. at 248-49.

16

Alaska’s Declaratory Judgment Act also provides that relief
is available “whether or not further relief is or could be sought.”
Laverty v. Alaska Railroad Corp., 13 P.3d 725, 729 (Alaska 2000).
17

Principal Life Ins. Co. v. Robinson, 394 F.3d 665, 669 (9th
Cir. 2005). Unocal argues that the Court should only consider the
standard for obtaining injunctive relief.
However, given that
Forest has not even obtained the declaration it seeks, the Court
(continued...)
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court must decide whether to exercise its jurisdiction by analyzing
the factors set out in Brillhart v. Excess Ins. Co., 316 U.S. 491
(1942).”18
For there to be a case or controversy, there must be “a
substantial controversy, between parties having adverse legal
interests, of sufficient immediacy and reality to warrant the
issuance of a declaratory judgment.”19
case or controversy.

Here, there is clearly a

The parties disagree about the quality of

Unocal’s operations of the Trading Bay Properties.

The parties’

interests are clearly adverse, and a decision will affect future
operations of the Trading Bay Properties.

The controversy is of

sufficient immediacy given the ongoing nature of operating the
Trading Bay Properties.
Because there is a case or controversy, the Court now
considers

whether

it

should,

in

its

discretion,

exercise

jurisdiction.

The factors to be considered are non-exclusive and

state

“(1)the

that,

determination

of

state

district
law

court

issues;

should

(2)

it

avoid

should

needless
discourage

litigants from filing declaratory actions as a means of forum

17

(...continued)
only considers whether
remedies.

Forest

may

generally

18

Id.

19

Id. at 671 (quotation marks omitted).

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3:05-CV-0078-RRB

pursue

equitable

shopping; and (3) it should avoid duplicative litigation.”20

Other

considerations this Court may consider include:
[W]hether the declaratory action will settle
all aspects of the controversy; whether the
declaratory action will serve a useful purpose
in clarifying the legal relations at issue;
whether the declaratory action is being sought
merely for the purposes of procedural fencing
or to obtain a ‘res judicata’ advantage; or
whether the use of a declaratory action will
result in entanglement between the federal and
state court systems.
In addition, the
district court might also consider the
convenience
of
the
parties,
and
the
availability and relative convenience of other
remedies.21
Here, the factors weigh in favor of the Court retaining
jurisdiction over the declaratory action claim without deciding the
merits of the claim at this point.

First, the equitable relief

sought does not involve any determination of state law issues.
Second,

there

litigation.

is

no

worry

of

forum

shopping

or

duplicative

Third, this Court already has jurisdiction over the

breach of contract claim and the claim for equitable relief relates
to the breach of contract claim.

Thus, judicial administration

concerns favor retaining jurisdiction. Finally, declaratory relief
will clarify the legal relations between the parties.

Thus, there

does not appear to be any persuasive reason to preclude the Court
from addressing the claim for equitable relief.

20

Id. at 672 (quotation marks and citation omitted).

21

Id. (citation omitted).

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V.

CONCLUSION
For the foregoing reasons, Defendant’s Motion for Summary

Judgment is DENIED.
ENTERED this 24th day of April, 2006.
/s/ RALPH R. BEISTLINE
UNITED STATES DISTRICT JUDGE

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