Adams v. Eagle Road Oil LLC et al

Filing 37

OPINION AND ORDER by Judge Claire V Eagan that plaintiff's Motion to Remand (Dkt. # 26) is granted, and the Court Clerk is directed to remand this case to Pawnee County District Court. Defendant Cummings Oil Company's Motion to Dismiss Plaintiff's Class Action Petition and Opening Brief in Support (Dkt. # 12) and Defendant Eagle Road Oil LLC's Motion to Dismiss with Brief in Support (Dkt. # 19) remain pending for state court resoloution. ; remanding case (terminates case) ; granting 26 Motion to Remand (Re: State Court Petition/Complaint ) (RGG, Chambers)

UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA

JAMES ADAMS, on behalf of himself and
other Oklahoma citizens similarly situated,
Plaintiff,
v.
EAGLE ROAD OIL LLC,
CUMMINGS OIL COMPANY, and
JOHN DOES 1 through 25,
Defendant.

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Case No. 16-CV-0757-CVE-TLW

OPINION AND ORDER
Now before the Court are the following motions: Defendant Cummings Oil Company’s
Motion to Dismiss Plaintiff’s Class Action Petition and Opening Brief in Support (Dkt. # 12);
Defendant Eagle Road Oil LLC’s Motion to Dismiss with Brief in Support (Dkt. # 19); and
plaintiff’s Motion to Remand (Dkt. # 26). Plaintiff argues that the case was improperly removed
on the basis of federal question jurisdiction, because the class action petition filed by plaintiff in
state court expressly excluded any lands subject to federal Indian law and plaintiff alleged only state
law claims. Defendant Cummings Oil Company (Cummings) responds that plaintiff’s petition uses
the term “tribal land,” which is a term of art under federal Indian law, and plaintiff’s class definition
fails to exclude certain land that is subject to regulation by the federal government. Cummings and
Eagle Road Oil LLC (Eagle Road) also argue that plaintiff has failed to state a claim upon which
relief can be granted.

I.
Plaintiff James Adams filed this case on behalf of himself and other similarly situated
citizens of Oklahoma who suffered damage to personal and real property from earthquakes allegedly
caused by defendants’ disposal of wastewater into injection wells. Dkt. # 3-1. The case was filed
in Pawnee County District Court. Plaintiff alleged claims of absolute liability or ultrahazardous
activity, negligence, private nuisance, and trespass under Oklahoma law. Plaintiff seeks class
certification of his claims, and he identifies the proposed class as follows:
a) Citizens of Oklahoma;
b) owning a home or business in Pawnee County, Creek County or Noble County
(hereafter, the “Class Area”);
c) during the dates of seismic activity within the Class Area between September 3,
2016 to present (the “Class Period”);
d) excluded from the Class are all Class member properties on exclusive federal
and/or tribal land; and,
e) excluded from the Class are Defendants and their officers and directors, and the
judge presiding over this action and his/her immediate family members.
Id. at 9.
On December 21, 2016, Cummings filed a notice of removal, and the removal was based on
federal question jurisdiction under 28 U.S.C. § 1331. Eagle Road consents to the removal of the
case. Dkt. # 3, at 6. Cummings states there are “lands within the Class Area to which fee title is
held by an Indian owner in his/her own name subject to restrictions against alienation,” but these
lands cannot reasonably be described as “exclusive federal and/or tribal land.” Id. at 4. Cummings
cites the American Indian Agricultural Resource Management Act, 25 U.S.C. § 3713 (AIARMA),
and states that federal courts have original jurisdiction over claims based on acts of trespass on

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“Indian agricultural lands” as that term is defined in AIARMA. Id. Defendants argue that the Court
has federal question jurisdiction over plaintiff’s claims to the extent that plaintiff has alleged a classwide trespass claim that includes restricted lands held in fee title by an Indian owner, because
plaintiff is seeking relief that can be granted under AIARMA. Id. at 5. Cummings also cites the
National Indian Forest Management Act, 25 U.S.C. § 3106 (IFMA), and claims that the definition
of “Indian forest land” includes restricted lands that are within the class definition in plaintiff’s
petition. Id. at 5-6.
Cummings argues that plaintiff has failed to allege that its operation of any specific well
caused an earthquake that damaged plaintiff’s property, and plaintiff has not adequately alleged the
causation element of any of his tort claims. Dkt. # 12, at 3-8. Cummings also argues that operating
an injection well is not an ultrahazardous activity as a matter of law. Id. at 9-10. Eagle Road argues
that plaintiff has not adequately alleged causation and that plaintiff has not plead his claims in
compliance with federal pleading requirements. Dkt. # 19. Plaintiff has filed a motion to remand
(Dkt. # 26) and asserts that this Court does not have subject matter jurisdiction over this case.
II.
The Court will initially consider plaintiff’s motion to remand, because plaintiff has
challenged the Court’s subject matter jurisdiction over this case. Plaintiff argues that his class action
petition expressly excludes “any tribe or member of a tribe owning land in trust or with federal
restriction” and, under the well pleaded complaint rule, plaintiff could structure his complaint to
avoid asserting claims that would give rise to federal question jurisdiction. Cummings responds that
the term “tribal land” is a term of art that does not include land owned by individual Indians in trust

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or restricted status, and Cummings argues that federal law governing Indian property owners must
be applied to resolve the trespass claims of the individual Indian land owners.
Removal to federal court is proper when “a civil action includes a claim arising under the
Constitution, laws, or treaties of the United States (within the meaning of section 1331 of this title).”
28 U.S.C. § 1441(c)(1). In deciding whether a case arises under federal law, the court must follow
the well-pleaded complaint rule, “under which a suit arises under federal law ‘only when the
plaintiff’s statement of his own cause of action shows that it is based’ on federal law.” Schmeling
v. NORDAM, 97 F.3d 1336, 1339 (10th Cir. 1996) (quoting Louisville & Nashville R.R. v. Mottley,
211 U.S. 149, 152 (1908)). Federal courts do not have subject matter jurisdiction when a federal
law issue arises only as a defense to the plaintiff’s claims. Franchise Tax Bd. of State of Cal. v.
Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 10-11 (1983). The well-pleaded complaint
rule “makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by
exclusive reliance on state law.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Removal
statutes are construed narrowly and defendant bears the burden to prove the existence of federal
subject matter jurisdiction. Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1094-95 (10th Cir. 2005);
Martin v. Franklin Capital Corp., 251 F.3d 1284, 1289-90 (10th Cir. 2001). “[G]iven the limited
scope of federal jurisdiction, there is a presumption against removal, and courts must deny such
jurisdiction if not affirmatively apparent on the record.” Okla. Farm Bureau Mut. Ins. Co. v. JSSJ
Corp., 149 F. App’x 775, 778 (10th Cir. 2005).1

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Unpublished decisions are not precedential, but they may be cited for their persuasive value.
See Fed. R. App. 32.1; 10th Cir. R. 32.1.
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Federal question jurisdiction under § 1331 exists when a plaintiff pleads “a cause of action
created by federal law” or a “state law claim[] that implicate[s] significant federal issues.” Grable
& Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 312 (2005). Cummings
acknowledges that plaintiff has not alleged a claim created by federal law, but it argues that
members of the proposed class could have claims that must be resolved by reference to federal law
governing Indian lands. Dkt. # 15-16. In Grable, the parties to a state law case regarding seizure
of property for unpaid taxes disputed the correct reading of a provision of the Internal Revenue
Code. Grable, 545 U.S. at 311. Though the plaintiff lacked a federal claim for relief, the defendant
removed the case to federal district court on the ground that the plaintiff’s state law claim raised a
federal question. Id. The Supreme Court noted that the variety of interests at issue in any such
determination had “kept [the Court] from stating a ‘single, precise, all-embracing’ test for
jurisdiction over federal issues embedded in state-law claims between nondiverse parties.” Id. at
313-14. The outcome of the case turned on the proper reading of federal law and there were no
other issues to be reached, and the interpretation of the provision in question was likely to set
precedent for many other tax sale cases Id. at 314-15. The Supreme Court found the federal issue
substantial enough to warrant removal on the basis of federal question jurisdiction. Id. at 314-15.
The Court has reviewed the notice of removal, and it appears that Cummings’
argument for the existence of federal question is two-tiered. Cummings initially argues that “tribal
land” is a term of art with an established meaning under federal law, and by excluding only “tribal
land” from the scope of the proposed class definition the plaintiff has necessarily included individual
Indian owners of land held in trust or restricted status. Based on the assumption that plaintiff
intended to include owners of trust or restricted lands in the proposed class action, Cummings argues

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that federal statutory or common law supplies trespass claims for the owners of trust or restricted
land or, at least, that federal law will affect the trespass claims for owners of lands held in trust or
restricted status.2 The Court will begin by considering whether the proposed class action actually
includes lands subject to federal regulation. Cummings cites 25 U.S.C. § 3501(12), which defines
“tribal land” as “any land or interests in land owned by any Indian tribe, title to which is held in trust
by the United States, or is subject to a restriction against alienation under laws of the United States.”
Federal regulations define “tribal land” as “any tract, or interest therein, in which the surface estate
is owned by one or more tribes in trust or restricted status and includes such lands reserved for BIA
administrative purposes.” 25 C.F.R. § 162.003. However, land ceases to be considered “tribal land”
once it is distributed or allotted to individual members of a tribe. United States v. Oklahoma Gas
Elec. Co., 318 U.S. 206, 216 (1943); Yellowfish v. City of Stillwater, 691 F.2d 926, 929 (10th Cir.
1982). There were two methods by which land was conveyed to individual tribal members. United
States v. Ramsey, 271 U.S. 467, 470 (1926). In a “trust allotment,” the federal government held
title to the land for a certain period of time, and title to the land was conveyed to the individual when
the trust period expired. Id. The other method was known as a “restricted allotment,” in which title
was immediately conveyed to the individual, but the land was subject to a restriction on alienation
for a period of time. Id. Some of the allotted land is still held in trust or restricted status, and
Oklahoma “feature[s] a checkerboard of restricted and unrestricted parcels.” See Gilmore v.

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It is not clear from Cummings’ response to the motion to remand if Cummings is arguing
that federal law provides an essential element of a trespass claim or if the cited federal
statutes preempt or supplant state law as to the trespass claims of owners of trust or restricted
lands. It will not be necessary to resolve this issue unless the Court finds that plaintiff has
actually included the owners of trust or restricted land as possible members of the proposed
class.
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Weatherford, 694 F.3d 1160, 1164 (10th Cir. 2012). Cummings has submitted evidence that
individual members of four Indian tribes reside in Creek, Pawnee, and Noble Counties, and
Cummings has identified at least seven tracts of land that are held in restricted status. Dkt. # 33-1,
at 4.
Plaintiff responds that he was not using the term “tribal land” to mean only land actually
owned by an Indian tribe, and he intended to exclude all lands held in trust or restricted status from
the definition of his proposed class. Dkt. # 27, at 6. Plaintiff has submitted an affidavit from
Andrew Knife Chief, the executive director of the Pawnee Nation, and he states that all lands subject
oversight by the Bureau of Indian Affairs (BIA) are considered “tribal” or “Indian” lands. Dkt. #
27-1, at 2-3. This includes land held in trust or restricted status for the benefit of a tribal member,
even if the land is not owned by the tribe. Id. at 3. Plaintiff explains that he seeks to represent a
class of individuals who are similarly situated to himself, and he does not own any land that is
subject to oversight or regulation by the BIA. Dkt. # 27, at 6.
Cummings’ argument for the existence of federal question jurisdiction is based entirely on
its assumption that the definition of the proposed class includes land that it subject to regulation by
the BIA. However, plaintiff’s petition specifically excludes persons owning “properties on
exclusive federal and/or tribal land” from the proposed class. Dkt. # 3-1, at 9. Cummings claims
that plaintiff’s use of the term “tribal land” does not specifically exclude lands held in trust or
restricted status from the scope of the class, because “tribal land” refers only to land actually owned
by a tribe. There is nothing in plaintiff’s petition that would suggest that he intended to use “tribal
land” only as it defined in federal statutes and regulations, and plaintiff’s reference to “exclusive
federal and/or tribal land” seems to refer more broadly to any land subject to oversight by the federal

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government. Even if there is a dispute about the properties covered by plaintiff’s proposed class,
the Court does not find that this would give rise to federal question jurisdiction. A dispute over the
definition of “tribal land” goes to the membership of plaintiff’s proposed class action, and this
dispute does not by itself give rise to federal question jurisdiction. Disputes over matters concerning
class certification in state court, such as membership in the proposed class, are purely matters of
state procedural law. Cummings should have sought clarification from the state court about whether
the proposed class would include lands held in trust or restricted status for the benefit of tribal
members. Instead, Cummings assumed that plaintiff intended to define “tribal land” as only lands
owned by an Indian tribe, and removed the case to federal court on the basis that federal laws
applying to trust or restricted lands would apply to members of plaintiff’s proposed class. This
assumption is not supported by the plain language of plaintiff’s petition and is refuted by plaintiff.
The Court does not find that the putative class action filed by plaintiff would necessarily include
individual Indian owners of trust or restricted lands as members of the class.
Based on this finding, the Court concludes that it lacks federal question jurisdiction over this
case, and the case should be remanded to state court. Cummings removed the case to this Court on
the assumption that plaintiff included owners of trust or restricted land, but the Court has determined
that the plaintiff did not intend to include owners of land subject to regulation by the BIA in the
membership of the putative class action. This means that federal law governing lands held by
Indians in trust or restricted status will not be applicable to the claims of any potential class member
and there is no substantial issue of federal law that would support removal of this case to federal
court. Cummings may seek clarification from the state court as to whether any person owning trust

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or restricted lands could be a member of the class, but this must be established before the case may
be removable on the basis of federal question jurisdiction.
IT IS THEREFORE ORDERED that plaintiff’s Motion to Remand (Dkt. # 26) is granted,
and the Court Clerk is directed to remand this case to Pawnee County District Court.
IT IS FURTHER ORDERED that Defendant Cummings Oil Company’s Motion to Dismiss
Plaintiff’s Class Action Petition and Opening Brief in Support (Dkt. # 12) and Defendant Eagle
Road Oil LLC’s Motion to Dismiss with Brief in Support (Dkt. # 19) remain pending for state court
resoloution.
DATED this 12th day of April, 2017.

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