259 P.3d 766
Mont.
2011
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Background

  • Lang owns surface estate in Fallon County; Burlington leases mineral rights and uses Lang’s surface to operate and conduct unitized oil production.
  • Burlington reactivated an abandoned well (#42-25) on Lang’s land in 2008 to dispose of wastewater from East Lookout Butte Unit operations.
  • Lang sought compensation under SODDCA and also claimed a common-law/other right to separate pore-space compensation; the district court denied both.
  • Votruba previously owned the land and reserved minerals; Lang acquired the land in 2003 via deed, which did not reserve pore space.
  • Meridian Oil (predecessor) drilled #42-25 in 1993; unitization of Red River Formation approved in 1995; Unit Plan granted Burlington surface-use rights for unit operations and referenced SODDCA for damages.
  • Burlington disposed of more than two million barrels of wastewater into #42-25 by trial, while Lang argued for separate pore-space compensation.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether Burlington may dispose of wastewater in Lang’s pore space without separate compensation Lang argues pore space beneath #42-25 belongs to Lang’s surface estate and warrants separate pay. Burlington contends pore space is part of mineral estate and can be used for production-related activities under unitization; damages dictated by SODDCA. Yes; Burlington may dispose without separate pore-space compensation.
Whether the district court should have deferred to MBOGC witnesses on statutory interpretation of SODDCA Lang asserts agency witnesses’ opinions should be given deference as statutory interpretation. The witnesses testified in their individual capacities; not an agency interpretation; no basis for deference. No; no deference to individual agency-witness opinions.

Key Cases Cited

  • Hunter v. Rosebud Co., 240 Mont. 194, 783 P.2d 927 (1989) (dominant-mineral use of surface estate)
  • Hurley v. N. Pac. Ry., 153 Mont. 199, 455 P.2d 321 (1969) (surface-use rights under mineral estate)
  • Moser v. U.S. Steel Corp., 676 S.W.2d 99 (Tex.1984) (ownership of pore space under surface estate)
  • Emeny v. U.S., 188 Ct.Cl. 1024, 412 F.2d 1319 (1969) (non-mineral subterranean rights)
  • Humble Oil & Ref. Co. v. West, 508 S.W.2d 812 (Tex.1974) (ownership and use of subsurface resources)
  • Cassinos v. Union Oil Co., 14 Cal.App.4th 1770, 18 Cal. Rptr.2d 574 (Cal.App.2nd Dist.1993) (pore-space concepts in California context)
  • Lewis v. B & B Pawnbrokers, Inc., 1998 MT 302, 292 Mont. 82, 968 P.2d 1145 (Mont. 1998) (agency deference in statutory interpretation)
  • Eldredge v. Asarco Inc., 2011 MT 80, 360 Mont. 112, 252 P.3d 182 (2011) (standard for reviewing district court findings of fact)
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