Devon Energy Production Co. v. Mosiac Potash Carlsbad, Inc.
693 F.3d 1195
| 10th Cir. | 2012Background
- Devon Energy seeks a declaratory judgment that federal law completely preempts Mosaic's expected state-law claims arising from Devon's unapproved drilling in the BLM-designated Potash Area and that the APA and Interior regulations provide the sole remedies.
- The Potash Area in Eddy and Lea Counties is managed by the BLM under the MLA and the 1986 Order, which restricts drilling to avoid interfering with potash mining and to prevent waste.
- Devon drilled the Apache Well at an unapproved location; BLM later approved the well after Devon moved locations, revealing a dispute over feasibility and authorization.
- Mosaic alleges damages for waste and other torts stemming from Devon's drilling, and Devon filed a federal declaratory action in district court seeking federal-question jurisdiction.
- The district court dismissed for lack of subject-matter jurisdiction, holding no complete preemption and no embedded substantial federal issue under Grable; Rule 59(e) relief was denied.
- On appeal, the Tenth Circuit affirms, holding no complete preemption and no embedded Grable-style federal issue; the Rule 59(e) arguments do not warrant reversal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Mosaic's state-law claims are completely preempted | Devon contends complete preemption via MLA, 1986 Order, and APA; Mosaic's claims are displaced. | Mosaic argues no federal cause of action exists to completely preempt its state claims; APA/MLA do not provide a substitute federal remedy. | Not completely preempted; federal remedy not provided and doctrine not satisfied. |
| Whether Grable-style embedded federal issues give jurisdiction | Devon asserts Mosaic's claims require interpreting MLA/1986 Order; federal issues are embedded and substantial. | Mosaic contends no necessary federal issue; any federal questions are defenses, not in-pleading issues. | Not satisfied under Grable; no necessarily embedded, disputed, substantial federal issue. |
| Whether Devon's Rule 59(e) evidence warrants reconsideration or alters jurisdiction | New evidence (Mosaic's state-court complaint and FOIA materials) supports jurisdiction. | Evidence was previously available or would not change jurisdictional analysis; Rule 59(e) not a vehicle to expand jurisdiction. | Rule 59(e) denied; no abuse of discretion; new evidence would not produce a different result. |
Key Cases Cited
- Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg, 545 U.S. 308 (U.S. Supreme Court 2005) (four-part test for embedded federal-question jurisdiction)
- Schmeling v. NORDAM, 97 F.3d 1336 (10th Cir. 1996) (complete preemption two-part test; placement of analysis)
- Beneficial Nat’l Bank v. Anderson, 539 U.S. 1 (U.S. Supreme Court 2003) (well-pleaded-complaint rule and jurisdictional principles)
- Caterpillar Inc. v. Williams, 482 U.S. 386 (U.S. Supreme Court 1987) (merits-based removal and pleaded-claims approach)
- Nicodemus v. Union Pac. Corp., 440 F.3d 1227 (10th Cir. 2006) (embedded federal issues must be actually disputed and central)
- Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (U.S. Supreme Court 2006) (Grable framework refinement; slim category of cases)