Northern Natural Gas Company v. L.D. Drilling, Inc. et al

Filing 652

MEMORANDUM AND ORDER denying 642 Defendants' Motion for Review; granting 643 Defendants' Motion for Hearing. The Memorandum and Order of Magistrate Judge Gale lifting the stay of deadlines (Dkt. 641 ) is AFFIRMED and ADOPTED by the court. The case is referred to the Magistrate Judge for development of an updated scheduling order. Signed by District Judge J. Thomas Marten on 1/31/2018. (mam)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

NORTHERN NATURAL GAS COMPANY,
Plaintiff,
v.

Case No. 08-1405-JTM

L.D. DRILLING, INC.,
VAL ENERGY, INC.,
NASH OIL & GAS, INC., et al.,
Defendants.

NORTHERN NATURAL GAS COMPANY,
Plaintiff,
v.

Case No. 10-1232-JTM

APPROXIMATELY 9117.53 ACRES IN PRATT,
KINGMAN, AND RENO COUNTIES, KANSAS,
et al.,

MEMORANDUM AND ORDER
This matter came before the court on January 8, 2018, for arguments on three
pending matters. First, in Case No. 10-1232, Northern asked the court to establish a
schedule to resolve the issues remaining in light of the Tenth Circuit’s mandate
affirming in part and reversing in part the condemnation judgment (Dkt. 1046). Second,
Northern moved for an order directing some of the defendants in 10-1232 to install
bridge plugs in their Extension Area wells. And third, in Case No. 08-1405, defendants
asked the court to overturn Magistrate Judge Gale’s order lifting a stay of deadlines.

The court took these matters under advisement after hearing the arguments, indicating
it would wait at least until a ruling by the U.S. Supreme Court on defendants’ petition
for writ of certiorari in Case No. 10-1232 before proceeding. The U.S. Supreme Court
has now denied the petition (Dkt. 1059), leaving the Tenth Circuit’s mandate in effect.
Both cases present essentially the same choice: whether to proceed or whether to await
a ruling by the Kansas Supreme Court on a related question of state law. For the reasons
that follow, the court concludes that both of the cases should proceed rather than be
stayed.
Case No. 10-1232
Northern asks the court to enter a scheduling order for resolution of the
condemnation’s remaining issues, including payment of compensation. In response,
defendants argue there is a “significant possibility” the Kansas Supreme Court will rule
contrary to the Tenth Circuit’s holding, and they note that “Rule 60 is an appropriate
vehicle for post-judgment relief in light of changed law” of this sort. Defendants argue
the court should “simply wait for resolution of these issues by the Kansas Supreme
Court.” (Dkt. 1048 at 5-6). They also argue no schedule for payment of compensation
can be made until the parties have an opportunity to litigate certain issues. They
contend additional facts have come to light that undermine the opinions of Northern’s
experts upon which the judgment was based, and that the Tenth Circuit’s order is “not
subject to straightforward application on remand.” (Id. at 8).
Now that the U.S. Supreme Court has denied the petition for certiorari, the court
concludes it is obligated to move forward to address the remaining issues in accordance
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with the Tenth Circuit’s mandate. Defendants might be correct in their prediction that
the Kansas Supreme Court will rule in a manner that conflicts with the Tenth Circuit,
but any such ruling is speculative at this point and does not warrant staying the
litigation. The Tenth Circuit was obviously aware of the Pratt County District Court
decision when it refused to alter its opinion or stay its mandate. See Black’s Law
Dictionary (10th ed. 2014) (a mandate is “an order from an appellate court directing a
lower court to take a specified action.”). Should a conflicting ruling be issued at some
future point by the Kansas Supreme Court, defendants would be free to seek Rule 60
relief and to reassert a request for stay. But at this point, the mere possibility of a future
conflict does not warrant putting the case on hold. Similarly, the alleged difficulty of the
remaining issues and the prospect of incurring litigation costs do not warrant further
delay.
Motion to Enforce Prior Orders (Dkt. 1052). Northern seeks an order in No. 10-1232
requiring Nash Oil and Gas and Val Energy “to immediately isolate the Viola and
Simpson formations in their remaining wells within the 2010 Extension Area by setting
a bridge plug.” (Dkt. 1052 at 1). Northern asserts that the KCC has stated that some or
all of these wells are leaking gas from the wellhead and that they present a public
danger. (Id. at 9). In April 2017, the Nash Mabel #2 Well suffered a blowout after being
struck by a farm vehicle. The KCC apparently engaged a private party, entered the well,
and plugged it. (Id.).
Northern states that after the Mabel blowout, it attempted to get the KCC to
enforce its regulations to require the defendants to plug the abandoned wells, but the
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KCC instead filed a motion with FERC asking for an order directing Northern to isolate
the remaining wells. (Id. at 10). Northern contends it has no legal authority to enter the
wells or to plug them, and it contends the defendants’ failure to do so is a violation of
this court’s order granting Northern exclusive possession of the Viola and Simpson
formations in the Extension Area. Northern contends “[t]his Court is obligated to
enforce Northern’s right of exclusive possession in the Viola and Simpson formation[s]”
by directing Nash and Val to set bridge plugs in each of the remaining wells to isolate
the Viola and Simpson formations.
Although not labeled as such, Northern’s motion is a request for injunctive relief.
A party seeking an injunction has an obligation to show, among other things, it has no
adequate remedy available at law. N. Cal. Power Agency v. Grace Geothermal Corp., 469
U.S. 1306 (1984). Leaving aside all other questions, including whether this court has
authority to issue the requested order, the court finds Northern has not shown that it
lacks a legal remedy. Although Kansas law appears to address the plugging of
abandoned wells and isolating wells that penetrate a gas storage formation, and the
KCC has statutory jurisdiction over such matters, the KCC has petitioned FERC to order
Northern to take remedial action based on KCC’s belief that Northern has an obligation
to act under FERC orders or the FERC certificate. But if, as Northern contends, KCC is
mistaken in that regard, Northern does not explain why it cannot obtain a ruling to that
effect from FERC and then pursue available remedies to obtain relief from the KCC.
Accordingly, Northern’s motion for injunctive relief is denied without prejudice.

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Case No. 08-1405
Defendants challenge the Magistrate Judge’s order lifting the stay of deadlines,
arguing that forging ahead will impose unnecessary and significant burdens on the
court and parties “which could be ultimately wasted depending on how the Kansas
Supreme Court … rules.” (Dkt. 642 at 3). Defendants point out the Tenth Circuit
granted Rule 60 relief in Pierce v. Cook & Co., 518 F.2d 720 (10th Cir. 1975) when a related
ruling by the Oklahoma Supreme Court undermined a federal court judgment. But
unlike Pierce, in this case there is only the potential for a conflicting ruling by the Kansas
Supreme Court.
The balance of factors in these circumstances weighs against a stay. As Northern
points out, the case is nearly ten years old but has not yet progressed to judgment. The
last time the case was put on hold to wait for a ruling in a related appeal, the resulting
delay was several years, and the ruling ultimately did not dispose of all the remaining
issues. In the court’s view, the facts weighing against a stay have not changed
materially from May of 2016, when the court initially lifted the stay. (Dkt. 561). As the
court noted in that order, it has an obligation to decide questions of state law when
necessary to render a judgment, even if the questions “are difficult or uncertain or have
not yet been ruled on by the highest court of the state.” (Id. at 2). Should the Kansas
Supreme Court come forth with a ruling while this litigation is still pending, on matters
affecting the remaining issues, the court will have to take the ruling into account at that
time.
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Rule 1 provides that the rules should be employed “to secure the just, speedy,
and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1. It is
time for the instant case to proceed to a resolution. In resolving the remaining issues,
the court will make every effort to reduce the cost of litigation as much as possible.
IT IS THEREFORE ORDERED this 31st day of January, 2018, that:
In Case No. 10-1232, Northern’s Motion to Enforce Prior Orders (Dkt. 1052) is
DENIED without prejudice. Northern’s Motion for Hearing (Dkt. 1047) is GRANTED.
The case is referred to the Magistrate Judge for development of an updated scheduling
order.
In Case No. 08-1405, defendants’ Motion for Hearing (Dkt. 643) was GRANTED;
defendants’ Motion for Review (Dkt. 642) is DENIED. The Memorandum and Order of
Magistrate Judge Gale lifting the stay of deadlines (Dkt. 641) is AFFIRMED and
ADOPTED by the court. The case is referred to the Magistrate Judge for development
of an updated scheduling order.
___s/ J. Thomas Marten______
J. THOMAS MARTEN, JUDGE

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