484 P.3d 572
Alaska2021Background
- PLC, LLC and MH2, LLC (PLC) hold an overriding royalty interest (ORRI) in State lease ADL 384314 within the Ninilchik Unit; an ORRI entitles PLC to a share of production revenue if and when the lease produces at surface.
- Unit operator Hilcorp applied to expand the Falls Creek Participating Area and initially included an 80-acre portion of PLC’s lease, describing it as “proven to contribute” to gas production.
- DNR used a different geological methodology, modified Hilcorp’s application, and approved an expansion that excluded PLC’s 80 acres, concluding those acres were not reasonably estimated to produce in paying quantities.
- PLC appealed to the DNR Commissioner; the Commissioner dismissed the appeal for lack of standing (reasoning ORRI holders lack an interest in unit management). PLC appealed to superior court, which affirmed and struck a non‑record well file (Appendix A); PLC also raised an appearance‑of‑impropriety claim arising from the judge’s law clerk using a draft opinion as a writing sample.
- The Supreme Court held PLC had statutory standing to appeal (reversed superior court), remanded to DNR for merits consideration, upheld the superior court’s exclusion of Appendix A, denied vacatur based on the law‑clerk issue, and vacated the superior court’s award of attorney’s fees to the State.
Issues
| Issue | Plaintiff's Argument (PLC) | Defendant's Argument (State) | Held |
|---|---|---|---|
| Standing under AS 44.37.011(b): is PLC “aggrieved” and eligible to appeal DNR’s expansion decision? | PLC: Exclusion of its acreage from the participating area directly affects PLC’s financial interest (lost ORRI revenue); DNR’s decision plausibly caused injury. | State: ORRI holders lack management rights and have no stake in unitization decisions; any dispute is with the operator, not DNR. | Held: PLC has interest‑injury standing; the exclusion plausibly caused financial harm, so PLC is “aggrieved.” Court reversed superior court and remanded. |
| Supplementing record / striking Appendix A (AOGCC well file) | PLC: Appendix A shows a producing well bottom hole beneath PLC’s lease and fills a gap left by a confidential geologic report missing from the record. | State: Appendix A was never submitted to DNR or the Commissioner and cannot be added at appellate stage. | Held: Superior court did not abuse discretion in striking Appendix A; parties must present evidence to the agency and record supplementation is allowed only in narrow circumstances. |
| Motion for relief / vacatur due to law‑clerk appearance of impropriety | PLC: Clerk used a draft of the opinion as a writing sample for a job with the State’s law firm, creating an appearance of impropriety that requires vacatur or rehearing. | State: Judge attested she authored the opinion and there was no substantive ex parte contact; typographical similarities do not show impaired judicial independence. | Held: Denial of relief was not an abuse of discretion. Applying Liljeberg factors, risk of injustice and undermining public confidence did not warrant vacatur. |
| Award of attorney’s fees to the State | PLC: Fees were improper given PLC’s standing and eventual reversal (or at least not appropriate to leave in place). | State: Superior court awarded fees under appellate rules against unsuccessful appellant. | Held: Supreme Court vacated the superior court’s grant of attorney’s fees to the State (because PLC has standing and the Court remanded on the merits). |
Key Cases Cited
- Allen v. Alaska Oil & Gas Conservation Comm’n, 1 P.3d 699 (Alaska 2000) (statutory standing in oil and gas administrative context; independent‑judgment review of standing)
- Gottstein v. State, Dep’t of Nat. Res., 223 P.3d 609 (Alaska 2010) (ORRI holder claims in unitization and due process context)
- Griswold v. Homer Bd. of Adjustment, 440 P.3d 248 (Alaska 2019) (interpretation of who is “aggrieved” and limits on taxpayer standing)
- Keller v. French, 205 P.3d 299 (Alaska 2009) (interest‑injury test and sufficient personal stake requirement)
- Tesoro Corp. v. State, Dep’t of Revenue, 312 P.3d 830 (Alaska 2013) (hypothetical harm is insufficient to confer standing)
- Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847 (U.S. 1988) (factors for vacating a judgment tainted by appearance of impropriety)
- Alvarez v. Ketchikan Gateway Borough, 28 P.3d 935 (Alaska 2001) (limits on supplementing an administrative record on appeal)
- S. Anchorage Concerned Coal., Inc. v. Municipality of Anchorage Bd. of Adjustment, 172 P.3d 774 (Alaska 2007) (post‑proceeding scientific evidence and record supplementation)