261 P.3d 412
Alaska2011Background
- Alaskan Crude Corp operates the Arctic Fortitude Unit near Deadhorse; James W. White is president and a leaseholder.
- The Unit includes Burglin 33-1; Alaskan Crude must meet Stage 2 work obligations under the unit plan of exploration.
- DNR Commissioner determined in 2007–2008 that Alaskan Crude defaulted on Stage 2 deadlines and could terminate the Unit if not cured.
- Alaskan Crude contested whether a pending AOGCC decision on Burglin 33-1’s gas-only status constituted force majeure.
- Alaskan Crude argued the force majeure would toll deadlines and that the Commissioner’s proposed cure was an unlawful unilateral amendment.
- Superior Court upheld the Commissioner's decision; Alaskan Crude appealed to Alaska Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether AOGCC decision/pending appeal is force majeure. | Alaskan Crude argues pending AOGCC appeal delays are force majeure. | DNR says such appeals are foreseeable and not force majeure. | No force majeure from AOGCC decision or pending appeal. |
| Whether the default cure is an unlawful unilateral amendment. | Alaskan Crude contends cure extends beyond unit agreement as a unilateral change. | DNR argues cure follows the unit agreement procedures. | Default cure consistent with unit agreement; not a unilateral amendment. |
| What standard governs review of the force majeure determination. | Alaskan Crude seeks de novo contract interpretation of lease clause. | DNR reviews its own regulation under reasonable basis; deferential standard. | Deferential standard of review to agency interpretation; proper interpretation of unit agreement. |
| Whether force majeure under the unit agreement requires unforeseeability. | Foreseeability of AOGCC and litigation supports force majeure. | Litigation foreseeable and not beyond control; not force majeure. | AOGCC decision and related litigation not force majeure. |
| Whether the court properly treated the lack of a judicial decision as a force majeure issue. | Pending judicial outcomes may toll deadlines. | Not force majeure; terms foresee the appeal process. | Lack of judicial decision not force majeure; not tolling deadlines. |
Key Cases Cited
- Beal v. McGuire, 216 P.3d 1154 (Alaska 2009) (analysis of force majeure and governmental actions in lease contexts)
- Button v. Haines Borough, 208 P.3d 194 (Alaska 2009) (principles of administrative decision review and standards)
- Exxon Corp. v. State, Dep't of Natural Res., 40 P.3d 786 (Alaska 2001) (case on unit development and regulatory authority)