Langved v. Continental Resources, Inc.
2017 ND 179
| N.D. | 2017Background
- Arthur Langved owns leased and unleased mineral interests in lands subject to Industrial Commission spacing-unit orders from 2013–2014; three horizontal wells had been completed under those units.
- Continental sought to terminate existing overlapping 2560- and 1280-acre units and create new 480-, 1280-, and 1680-acre spacing units covering portions of the Elm Tree–Bakken and Sanish–Bakken pools, allow multiple wells per unit, and reduce well setbacks.
- Continental presented expert testimony and exhibits at an evidentiary hearing that the existing configuration was inefficient, would require more wells, and that surface access constraints (shoreline, terrain, cultural resources, pipeline, failed surface-use negotiations with Langved) justified reconfiguration.
- Langved opposed, testified about loss of bargaining power over surface use and reduced royalty recovery, but offered no expert contrary evidence.
- The Commission found the proposed reconfiguration would prevent waste, avoid unnecessary wells, protect correlative rights, reduce surface impacts, and increase estimated ultimate recovery with fewer wells; it denied Langved’s reconsideration and the district court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commission action effected an unconstitutional taking/substantive due process violation | Langved: reunitization diminished vested property rights and effectively took surface estate/royalties without compensation | Commission/Continental: action is regulatory under statutory authority, not an inverse-condemnation taking | Court: did not convert appeal into inverse condemnation; took no such claim — refusal to address as takings claim; affirmed Commission action |
| Commission authority to modify spacing units under N.D.C.C. ch. 38-08 | Langved: Commission exceeded authority by reunitizing producing units and altering rights | Commission: statute authorizes establishment and modification of spacing units to prevent waste/avoid unnecessary wells/protect correlative rights; Langved’s lease even permits reunitization | Court: Commission regularly pursued its authority; statutory grant (including § 38-08-07(4)) permits modification; affirmed |
| Sufficiency of evidence that modification prevents waste and avoids unnecessary wells | Langved: reconfiguration harms his royalty share; disputed benefits | Continental: presented quantitative modeling and testimony showing fewer wells and greater total recovery under new plan; surface constraints made prior plan impractical | Court: substantial and credible evidence supports finding that proposed units would prevent waste and reduce the number of wells while increasing recovery; affirmed |
| Protection of correlative rights | Langved: new units reduce his recoverable royalties and thus impair correlative rights | Commission/Continental: correlative rights mean opportunity to produce, not a guaranteed share; Langved still shares in production and opportunity is preserved | Court: correlative rights preserved (opportunity to produce); estimated reduction in royalties does not show violation; affirmed |
Key Cases Cited
- Gadeco, LLC v. Industrial Commission, 812 N.W.2d 405 (N.D. 2012) (standards for judicial review of Commission orders)
- Amoco Production Co. v. North Dakota Industrial Commission, 307 N.W.2d 839 (N.D. 1981) (judicial review standard for Commission appeals)
- Hanson v. Industrial Commission, 466 N.W.2d 587 (N.D. 1991) (definition of substantial evidence and correlative rights principle)
- Hystad v. Industrial Commission, 389 N.W.2d 590 (N.D. 1986) (definition of correlative rights)
- Texaco Inc. v. Industrial Commission, 448 N.W.2d 621 (N.D. 1989) (Commission authority to establish spacing units)
- Dahm v. Stark County Bd. of County Comm’rs, 841 N.W.2d 416 (N.D. 2013) (appeals from county decisions not convertible to inverse-condemnation claims)
- Hagerott v. Morton County Bd. of Comm’rs, 778 N.W.2d 813 (N.D. 2010) (same principle regarding inverse condemnation)
- Gowan v. Ward County Commission, 764 N.W.2d 425 (N.D. 2009) (same principle regarding inverse condemnation)
- Environmental Driven Solutions, LLC v. Dunn County, 890 N.W.2d 841 (N.D. 2017) (scope of Commission’s regulatory powers)
- GEM Razorback, LLC v. Zenergy, Inc., 890 N.W.2d 544 (N.D. 2017) (Commission’s broad authority over oil and gas development)
- Imperial Oil of North Dakota, Inc. v. Industrial Commission, 406 N.W.2d 700 (N.D. 1987) (reviewability of Commission legal determinations)