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TEXAS OIL & GAS CORP. v. HODEL

January 15, 1987

TEXAS OIL & GAS CORPORATION, Plaintiff,
v.
DONALD HODEL, Defendant*



The opinion of the court was delivered by: GREEN

 This matter comes before the court on plaintiff's motion to enforce judgment. For the reasons set forth below, that motion is denied.

 On September 25, 1980, this court upheld a decision of the Secretary of the Interior ("Secretary") to cancel oil and gas leases issued to Texas Oil and Gas Corporation ("TXO") for parcels of land within the Fort Chaffee military reservation in Arkansas. Texas Oil & Gas Corp. v. Andrus, 498 F. Supp. 668 (D.D.C. 1980) (" TXO I "). *fn1" TXO I2 was not the first case before this court to raise issues involving oil and gas leases at Fort Chaffee. On September 21, 1979, approximately 39 days before the plaintiff filed its complaint in TXO I, Arkla Exploration Company ("Arkla") filed a suit challenging as arbitrary and capricious the Secretary's determination that the subject lease property was not within a "known geological structure of a producing oil or gas field" (hereinafter referred to as the "KGS" issue). Arkla Exploration Co. v. Andrus, No. 79-2501 (D.D.C. Oct. 10, 1980) (" Arkla I "). At the request of TXO counsel, the court agreed to address the procedural administrative law questions raised in TXO I before turning to the Arkla I KGS matter. Hearing Before the Court, TXO I, July 24, 1980, Tr. at 6-7. Fifteen days after the court rendered its judgment against the plaintiff in TXO I, the court ordered that Arkla I be "dismissed without prejudice, and with all rights preserved to each party . . . in consideration of the uncertainty of the timing of appellate review." Arkla I. The plaintiff promptly filed an appeal in TXO I.

 On June 11, 1982, the U.S. Court of Appeals for the District of Columbia reversed this court's decision in TXO I. The circuit court held that the Secretary had erred in cancelling the TXO oil leases and directed that the Fort Chaffee leases be reinstated:

 
The first consequence that flows from our decision is that the Fort Chaffee leases must be reinstated. We have rejected the Secretary's proffered rationale for cancellation; the leases were valid when issued. . . . Therefore the validity of the issued leases continues undiminished. In addition, we see no reason why TXO should not receive favorable action on its applications for drilling permits on two of the leased parcels at Fort Chaffee, which have been held in abeyance since September 20, 1979.
 
. . . .
 
As matters stand, TXO must have its twenty Fort Chaffee leases . . . .

 Texas Oil & Gas Corp. v. Watt, 221 U.S. App. D.C. 108, 683 F.2d 427, 435 (D.C. Cir. 1982) (" TXO II ").

 Approximately seven weeks later, on August 2, 1982, a certified copy of the judgment in TXO II was received by the Clerk of this court "in lieu of mandate." Letter of July 30, 1982, George A. Fisher, Clerk, to James F. Davey, Clerk. Before this court had an opportunity to remand the case to the Secretary *fn3" (which was done on September 7, 1982), Arkla filed an action in the United States District Court for the Western District of Arkansas challenging the Secretary's decision on the "KGS" issue. *fn4" The complaint filed in the Western District of Arkansas raised the same issues that had been dismissed without prejudice by this court prior to appeal in TXO I.

 Shortly after the complaint was filed in Arkansas, the parties (including TXO) agreed not to take any action "to change the status of the case until September 30, 1982." Arkla Exploration Co. v. Watt, 548 F. Supp. 466, 469 (W.D. Ark. 1982) (" Arkla II "). This agreement followed a decision by that court to deny a motion by TXO to transfer the case back to the United States District Court for the District of Columbia.

 On September 20, 1982, the district court denied motions to dismiss, ruling that Arkla had standing to seek district court review and was not barred from suit by the doctrine of collateral estoppel or the applicable statute of limitations. Arkla II, 548 F. Supp. 466. Ten days later the district court entered a preliminary injunction restraining the Secretary from reinstating the Fort Chaffee leases to TXO. See Arkla II, 562 F. Supp. 1214 (W.D. Ark. 1983).

 On April 19, 1983, the Arkansas district court granted judgment for Arkla. The Court concluded that the Secretary's decision not to list the Fort Chaffee oil and gas fields as "known geological structures" was based on "arbitrary" procedures. Arkla II, 562 F. Supp. at 1226. The Court enjoined the Secretary "from issuing further leases of the Fort Chaffee mineral lands until a proper KGS determination is made by the United States Geological Survey." Id. at 1227.

 TXO, which had been made a party to the Arkla II suit, appealed the April 19, 1983 decision to the United States Court of Appeals for the Eighth Circuit. The circuit court affirmed the district court's Arkla II decision on the merits. The court also concluded that the lower court's opinion was not inconsistent with TXO II :

 
The D.C. Circuit . . . ruled only on the timeliness of TXO's lease applications under applicable federal statutes and has ordered only that TXO's leases be reinstated "as matters stand . . . ." 683 F.2d at 435. That Court did not consider the KGS issue. Its ruling presupposes that the leases were issued in accordance with the applicable law and that the leased lands are not within a KGS. For our Court to require the Secretary to offer these lands for lease only after a lawful KGS determination does not conflict with the decision of the D.C. Circuit, to which this issue never has been presented. Because we hold these leases invalid notwithstanding the timeliness of TXO's application for them, our mandate necessarily supersedes that of the D.C. Circuit. The parties should not have any doubt that the instant decision now controls this matter.

 Arkla Exploration Co. v. Texas Oil & Gas Corp., 734 F.2d 347, 353 (8th Cir. ...


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