Miller v. Mississippi Resources, LLC

Filing 64

ORDER granting in part Defendant Mississippi Resources, LLC's Motion to Dismiss or Stay 35 and STAYING this action pending Plaintiff David Miller's exhaustion of available administrative remedies before the Mississippi Oil and Gas Board. Signed by Honorable David C. Bramlette, III on February 16, 2018 (JBR)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
DAVID MILLER

PLAINTIFF

v.

CAUSE NO. 5:17-CV-41-DCB-MTP

MISSISSIPPI RESOURCES, LLC

DEFENDANT

MEMORANDUM OPINION AND ORDER
This cause is before the Court on a Motion to Dismiss or Stay
[Doc.

35]

filed

by

Defendant

Mississippi

Resources,

LLC

(“Mississippi Resources”). Having considered the motion, Plaintiff
David Miller’s response in opposition, and applicable statutory
and case law, and being otherwise fully informed in the premises,
the Court finds as follows:
I.

BACKGROUND

At issue is whether a Pike County, Mississippi landowner
complaining that his property was contaminated by an operator’s
oil and gas production activities must present his grievance to
the Mississippi Oil and Gas Board (the “Board”) before suing the
operator. Because the Court concludes that he must, the Court stays
this action pending the landowner’s exhaustion of administrative
remedies before the Board.

Plaintiff David Miller owns approximately 500 acres of real
property located in Pike County, Mississippi, some of which is
subject to oil and gas production and rights of way related
thereto. Defendant Mississippi Resources is conducting oil, gas,
and mineral production activities on some of these lands.
Miller

sued

Mississippi

Resources

in

Pike

County

Court,

alleging negligence, negligence per se, negligent infliction of
emotional

distress,

Mississippi
“extensive

and

Resources’
surface

and

punitive

damages.1

“production
subsurface

He

activities”

alleges
have

contamination,”

that
caused

“saltwater

contamination,” “oil and other hydrocarbon contamination,” and
“production waste contamination.” [Doc. 1-1, ¶7]
Mississippi

Resources

removed

the

case

to

this

Court,

invoking diversity jurisdiction, and now moves to dismiss or stay
on the ground that Miller failed to exhaust administrative remedies
pre-suit. Mississippi Resources reasons that because Miller’s suit
alleges contamination from oil and gas production activities, an
issue within the Board’s jurisdiction, Miller must present his
claim to the Board before filing a lawsuit.
Miller rejoins that he need not present his claim to the Board
because

it

lacks

jurisdiction

over

saltwater-pipeline-based

The Court dismissed Miller’s request for
prejudice for failure to state a claim. [Doc. 12]
1

2

injunctive

relief

with

contamination. Recasting the allegations of his Complaint, Miller
contends that his true gripe is with the “spill of saltwater mixed
with soil.” [Doc. 41, p. 2] This type of contamination, Miller
insists,

is

not

“production

waste”

subject

to

the

Board’s

jurisdiction, but instead a non-exempt hazardous waste under the
Resource Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C.
§ 6972.2
II.
A.

The Board Has
Contamination
Before

a

DISCUSSION

Regulatory

plaintiff

sues

Authority

for

Over

activity

the

Alleged

subject

to

administrative agency review, she must seek relief from the agency
charged with regulating the activity. State v. Beebe, 687 So. 2d
702, 704 (Miss. 1996).
This “exhaustion” requirement applies to a landowner’s suit
against an operator when the landowner alleges conduct or damage
placing the suit within the Board’s jurisdiction. Donald v. Amoco
Prod. Co., 735 So. 2d 161, 176 (Miss. 1999) (en banc). The parties

In 1980, Congress passed the Bentsen Amendments, PUB. L. 96-482, 42
U.S.C. § 6921(b)(2)(A), which exempted from RCRA certain wastes generated by
activities associated with oil and gas production and exploration. Miller draws
much of his argument opposing a stay from a “clarification” of the scope of the
Bentsen Amendments. See Clarification of the Regulatory Determination for Wastes
from the Exploration, Development and Production of Crude Oil, Natural Gas and
Geothermal Energy, 58 Fed. Reg. 15284 (March 22, 1993), available at 1993 WL
78408.
2

3

dispute whether Miller’s allegations fall within the Board’s
jurisdiction.
The Board is the state administrative agency with “exclusive
authority”

to

regulate

“the

use,

management,

manufacture,

production, ownership, investigation and noncommercial disposal
of oil field exploration and production waste.” MISS. CODE ANN. §
53-1-17(7).
“Oil field exploration and production waste” includes “any
chemical, produced water, sludge, oil-water emulsion, oil field
brine, sediment, scale or other waste substance.” MISS. CODE ANN. §
53-1-3(t)(i).
Miller’s allegations of contamination caused by oil and gas
production activities confirm that his Complaint raises issues
within

the

otherwise,

Board’s
Miller

regulatory authority.3
has

pleaded

that

Although

Mississippi

he

argues

Resources’

operations caused “production waste contamination.” [Doc. 1-1,
¶7] And “production waste contamination” is plainly “oil field
exploration and production waste” under Section 53-1-3(t)(i) of
the Mississippi Code.

3 The Board’s grievance procedure begins when an “interested person” asks
the Board to convene to address an issue within its jurisdiction. MISS. CODE ANN.
§ 53-1-29. The Board may then enjoin violations and issue penalties, if
applicable. MISS. CODE ANN. § 53-1-43.

4

The need for Miller to present his grievances to the Board is
unaffected by Miller’s request for tort damages —— relief beyond
the Board’s power to grant. See Howard v. Totalfind E&P USA, Inc.,
899 So. 2d 882, 888 (Miss. 2005). Because “the Board’s authority
embraces the types of harm suffered” by Miller, Miller must
present his grievances to the Board before pursuing his commonlaw damages claims in this Court. Town of Bolton v. Chevron Oil
Co., 919 So. 2d 1101, 1107 (Miss. Ct. App. 2005).
B.

The Court Declines to Excuse Miller’s Failure to Exhaust
The parties appear to assume that exhaustion is required if

Miller’s Complaint raises issues subject to regulation by the
Board. But it is not. Exhaustion is a judge-made rule with judgemade exceptions.
In deciding if it should excuse Miller’s failure to exhaust,
the Court considers whether (1) pursuing an administrative remedy
would

cause

irreparable

harm;

(2)

the

Board

“clearly”

lacks

jurisdiction; (3) the Board’s position is illegal; (4) a legal
issue is dispositive; (5) exhaustion would be futile; and (6) the
suit

is

more

efficiently

resolved

in

this

court.

Pub.

Emp.

Retirement Sys. Of Miss. v. Hawkins, 781 So. 2d 899, 906 (Miss.
2010) (per curiam).
The

first

consideration,

irreparable

harm,

cuts

against

excusing Miller’s failure to exhaust. The Court determined, in its
5

Order

and

Opinion

dismissing

Miller’s

request

for

injunctive

relief, that Miller failed to show a possibility of irreparable
harm. [Doc. 12, pp. 4-6]
The second consideration, “clear” lack of jurisdiction, also
weighs against excusing Miller’s failure to exhaust. Though Miller
contests the Board’s jurisdiction on the ground that some of the
contamination he alleges is non-exempt hazardous waste under RCRA,
he fails to explain why his Complaint alleges damages caused by
other forms of contamination within the Board’s jurisdiction: “oil
and

other

hydrocarbon

contamination,”

“production

waste

contamination,” and “extensive subsurface contamination.” [Doc. 11, ¶7]
Rather than expose the Board’s lack of jurisdiction over the
issues

raised

by

Miller’s

complaint,

Miller’s

science-laden

attempt to evade agency review highlights the need for the Board
to determine its own jurisdiction and proceed accordingly. See
Fillingame v. Miss. State Fire Academy, 217 So. 3d 686, 688-89
(Miss.

Ct.

App.

2016)

(plaintiff

cannot

recharacterize

her

complaint to avoid agency review).
If Miller is correct, and jurisdiction over some of the
contamination-creating conduct alleged turns on such issues as the
timing of custody-transfer, then the Board, with its “specialized
knowledge” of exploration and production, is best positioned to
6

make the jurisdictional determination. See Chevron U.S.A., Inc. v.
Smith, 844 So. 2d 1145, 1148 (Miss. 2002) (en banc) (touting the
Board’s expertise in the area); Smith v. Transcontinental Gas
Pipeline Corp., 310 So. 2d 281, 282 (Miss. 1975) (recognizing the
Board’s power to decline jurisdiction). It is enough for purposes
of exhaustion analysis that Miller has not shown that the Board
“clearly”

lacks

jurisdiction,

particularly

in

light

of

the

allegations in his Complaint that detail contamination “clearly”
falling within the Board’s jurisdiction.
The third consideration

weighs against

excusing Miller’s

failure to exhaust because the Board has not taken a “position” on
any issue related to Miller’s Complaint, let alone an “illegal”
one.
The

Court’s

analysis

of

the

fourth,

fifth,

and

sixth

considerations confirms that exhaustion should be required here.
The parties have not raised a dispositive legal issue. And far
from futile, exhaustion would be useful if Miller’s property is
indeed contaminated in the manner he alleges. The Board can ensure
what Court-awarded money damages cannot —— that the affected
property is actually remediated. And finally, because Miller’s
Complaint

alleges

production

and

exploration-related

contamination, the dispute is more efficiently resolved by the
Board than this Court.

7

III. CONCLUSION
Miller’s Complaint raises issues of contamination subject to
the Board’s regulatory authority, so Miller must exhaust Boardprovided remedies before proceeding before the Court. The Court
therefore stays this suit pending the Board’s resolution of the
issues raised by Miller’s Complaint. See Town of Bolton, 919 So.
2d at 1103.
ACCORDINGLY,
IT IS HEREBY ORDERED that Defendant Mississippi Resources,
LLC’s Motion to Dismiss or Stay [Doc. 35] is GRANTED IN PART as to
its request for a stay and DENIED IN PART as to its request to
dismiss this action.
FURTHER ORDERED that this action is STAYED pending Plaintiff
David Miller’s exhaustion of available administrative remedies
before the Mississippi Oil and Gas Board.
SO ORDERED, this the 16th day of February, 2018.
/s/ David Bramlette_________
UNITED STATES DISTRICT JUDGE

8