Continental Resources, Inc. v. North Dakota Board of University and School Lands et al

Filing 61

ORDER adopting proposed case schedule by Magistrate Judge Clare R. Hochhalter. Land Board's pleadings setting forth its claim to the stake are due by 6/14/2019. The United States shall assert its claims, if any, consistent with the Court's previous order by 8/13/2019. This matter shall be stayed following the United States' 8/13/2019 filing. The parties shall submit a status report by 9/19/2019. A status conference is set for 9/20/2019 before the Magistrate Judge.(BG)

UNITED STATES DISTRICT COURT
DISTRICT OF NORTH DAKOTA
CONTINENTAL RESOURCES, INC.,
Plaintiff,
vs.
NORTH DAKOTA BOARD OF UNIVERSITY
AND SCHOOL LANDS, and the UNITED
STATES OF AMERICA,
Defendants.

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Case No. 1:17-cv-00014

Proposed Case Schedule
______________________________________________________________________________
The Parties propose that the Court adopt the following case schedule:
1. By June 14, 2019, the North Dakota Board of University & School Lands (“Land Board”)
shall file a pleading that sets forth its claim to the stake.
2. By August 13, 2019, the United States of America (“United States”) shall make a filing.
The nature of the filing is subject to the dispute set forth below.
3. After the United States’ August 13, 2019 filing, proceedings in the case will be stayed,
including any deadline the Land Board or Continental Resources, Inc. (“Continental”),
may have to respond to the United States’ August 13 filing, until September 19, 2019 or
such other date set by further order of the Court. During the stay, the United States and
Land Board shall discuss whether the dispute that gave rise to this litigation can be
resolved. By no later than September 19, 2019, the United States and Land Board shall
inform the Court about the status of their discussions, at which time the Court will
consider a schedule by which the case will be brought to conclusion.
With respect to Paragraph 2, the parties do not agree as to what filing the United States should or
must make. The respective positions of the parties are set forth below.
Position of Continental Resources, Inc.:
Paragraph 2 should read as follows:

2.

By August 13, 2019, the United States of America (“United States”) shall file a
pleading that sets forth its claims to the stake and, as appropriate, responds to the
Land Board’s filing.

Pursuant to the Court’s Order on December 31, 2018, the United States must affirmatively
“assert [its] claims, if any, to the disputed stake.” Order Denying Mot. to Dismiss, ECF No. 49,
at 14 (Dec. 31, 2018). That is, the Court has expressly directed the United States—as it has also
directed the Land Board—to set forth in its filing the scope of its claims to the stake as the Court
has defined it—“royalty payments the United States claims to own but has not received”—and
the basis for those claims. Id. at 13-14. The Court has determined that it has jurisdiction to
adjudicate the United States’ claims (and those of the Land Board), once asserted. Id. at 5-10.
Continental’s interpleader complaint can be resolved without resorting to the Quiet Title Act
(“QTA”). While the United States is free to assert whatever defenses it may have to a QTA
claim, should North Dakota advance one, the Court has already determined that the dispute
between the sovereigns with respect to the royalty payments supports its jurisdiction under 28
U.S.C. § 2410. Id. at 5-10. Accordingly, the QTA does not affect this Court’s subject matter
jurisdiction, and there is no need for special procedures to allow the United States to raise, for a
second time, issues concerning the QTA.
Indeed, the United States has already advanced its arguments opposing interpleader, and its
obligations thereunder, in its briefing on its Motion to Dismiss. The Court rejected that Motion,
concluded it had jurisdiction to resolve Continental’s interpleader complaint, and ordered the
United States to “assert [its] claims . . . to the disputed stake.” See generally id.
Position of North Dakota Board of University and School Lands:
Paragraph 2 should read as follows:
2.

By August 13, 2019, the United States of America (“United States”) shall make a
filing with the court that sets forth its claim to the stake and shall file its response
to the Land Board’s filing.

Position of the United States of America:
Paragraph 2 should read as follows:
2.

By August 13, 2019, the United States of America (“United States”) shall file
either an answer to the complaint or a Rule 12 motion.

The United States is not questioning the Court’s conclusion in its December 31, 2018 order that
sovereign immunity does not bar this action and it acknowledges the order’s directive that
“North Dakota and the United States shall assert their claims, if any, to the disputed stake . . . .”
ECF No. 49 at 14. While this language can certainly be read to require both parties to
affirmatively assert their claims, the United States notes that elsewhere in the decision the Court
stated that it declines to consider any merits arguments “until North Dakota has actually asserted
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its claims.” Id. at 3. Further, in a typical action under the Quiet Title Act, the party disputing
federal title files a complaint and the United States then responds by filing either an answer or a
Rule 12 motion, consistent with the Federal Rules of Civil Procedure. In declining to consider
certain arguments advanced by the government in its motion to dismiss, including a statute of
limitations argument, the Court appeared to recognize that these arguments are properly
advanced in the second phase. Id. at 3, 5, 12. Because a statute of limitations defense calls into
question the court’s subject matter jurisdiction, it is a defense that a defendant may assert by
Rule 12 motion. For this reason, the United States respectfully recommends a path forward that
is compatible with both considerations (i.e., initiating an action, on the one hand, and allowing
the United States to advance appropriate defenses, on the other). Specifically, the United States
proposes that that the Court’s scheduling order authorize the United States to file an answer or a
Rule 12 motion by August 13, 2019, as it would do under any claim arising under the Quiet Title
Act. The United States’ posture in a title challenge should not be different simply because the
proceedings that are to occur in the second phase of this case were initiated by interpleader.
Dated April 12, 2019.
CONTINENTAL RESOURCES, INC.
/s/ Lawrence Bender
LAWRENCE BENDER, ND Bar #03908
FREDRIKSON & BYRON, P.A.
1133 College Drive, Suite 1000
Bismarck, ND 58501-1215
[e-mail]
[phone]
DAVID W. OGDEN, admitted pro hac vice
PAUL R.Q. WOLFSON, admitted pro hac vice
NATHANIEL CUSTER, admitted pro hac vice
WILMER CUTLER PICKERING HALE AND DORR LLP
1875 Pennsylvania Avenue, NW
Washington, DC 20006
[e-mail]
[e-mail]
[e-mail]
[phone]
Counsel for Continental Resources, Inc.
STATE OF NORTH DAKOTA
WAYNE STENEHJEM
ATTORNEY GENERAL
/s/ Charles M. Carvell______________
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CHARLES M. CARVELL, No. 03560
Special Asst. Attorney General
[e-mail]
314 East Thayer Avenue
P.O. Box 400
Bismarck, ND 58502-0400
Telephone [phone]
Facsimile [phone]
DAVID P. GARNER, No. 06860
[e-mail]
JENNIFER L. VERLEGER, No. 06732
[e-mail]
Assistant Attorneys General
Office of the Attorney General
500 North 9th Street
Bismarck, ND 58501-4509
Telephone [phone]
Facsimile [phone]
Attorneys for North Dakota Board
of University & School Lands
CHRISTOPHER C. MYERS
United States Attorney
/s/ Kent Rockstad
KENT ROCKSTAD
Quentin N. Burdick United States Courthouse
655 First Avenue North - Suite 250
Fargo, ND 58102-4932
[phone]
ND Bar Board ID No. 05434
[e-mail]
JEAN E. WILLIAMS
Deputy Assistant Attorney General
Environment and Natural Resources Division
JOHN S. MOST, Trial Attorney
Natural Resources Section
P.O. Box 7611, Washington, D.C. 20044
202-616-3353 || 202-305-0506 (fax)
[e-mail]
Counsel for United States of America

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ORDER
The court, having discussed relevant issues with counsel on this date, ADOPTS the parties’
proposed case schedule, except as modified below:
1. By June 14, 2019, the North Dakota Board of University & School Lands (Land
Board) shall file a pleading that sets forth its claim to the stake.
2. By August 13, 2019, the United States of America shall assert its claims, if any, in a
manner consistent with the Court’s order, dated December 31,2018.
3. After the United States’ August 13, 2019 filing, proceedings in the case will be
stayed, including any deadline the Land Board or Continental Resources, Inc.
(“Continental”), may have to respond to the United States’ August 13 filing, until
September 19, 2019, or such other date set by further order of the Court. During the
stay, the United States and Land Board shall discuss whether the dispute that gave
rise to this litigation can be resolved. By no later than September 19, 2019, the United
States and Land Board shall inform the Court about the status of their discussions, at
which time the Court will consider a schedule by which the case will be brought to
conclusion.
4. A status conference will be held among counsel and the Court, in Bismarck, North
Dakota, on September 20, 2019, beginning at 10:00am, Central Time. All counsel are
encouraged to attend the status conference, in person.
No trial date or final pretrial hearing will be determined, pending the outcome of the
September 20, 2019, status conference.
IT IS SO ORDERED.
Dated this 15th day of April, 2019.
/s/ Clare R. Hochhalter
Clare R. Hochhalter, Magistrate Judge
United States District Court

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