Conflict Over Federal Leases Goes Unresolved In State Supreme Court

Jan 10, 2018

Image of the Wyoming Supreme Court January 4 opinion
Credit Supreme Court, State of Wyoming

The Wyoming Supreme Court says a mineral rights case involving overlapping federal leases in the Powder River Basin cannot be resolved without intervention from a federal agency. The court is now sending it back to a Wyoming district court.

It’s not uncommon for the Bureau of Land Management to sell leases that overlap on federal land. But when that happens, it’s typically resolved privately between the two parties. The conflict between Peabody Energy, a coal company, and the Denver-based oil and gas company Berenergy is not so easy. There’s no strong legal priority to decide whether one mineral over another has superior rights in a federal lease.

The case has bounced around in state and federal court due to disagreements over jurisdiction. On January 4, the state Supreme Court released its opinion that a resolution would not be possible.

Tara Righetti, University of Wyoming Law Professor, said deciding the case would be problematic.

“Really doing so without involving a federal agency looks like creating policy for federal lands at the state court level.”

The Supreme Court remanded the case to a district court and requested involvement from either the Secretary of the Interior or the BLM. Oil and gas attorney Kristopher Koski said the federal agency has been quiet on the case so far. He said, if it does not negotiate with the state court, there are other options.

“I would tend to believe the BLM would issue sort of guidance now that the BLM knows that the Wyoming courts are not going to get involved and the federal courts said it’s not a federal question,” Koski said.

In its opinion, the state Supreme Court wrote, “Failing a showing that somehow the Secretary of the Interior or other federal agency can be joined as a party, the district court will be directed to vacate its previous judgment and dismiss.” Koski said the conflict could also be settled in an Interior Department appeals board or be settled privately.

A spokeswoman from BLM Wyoming says the agency is currently reviewing the recently issued decision to determine its next steps.