477 P.3d 1133
Okla.2020Background
- Revolution Resources (operator) filed a petition under the Oklahoma Surface Damages Act (SDA) to appoint appraisers after failing to reach a surface-use agreement and served Ten‑Day Notice; under §318.5 petitioning allows entry to drill.
- Revolution obtained OCC and City permits and entered the NE/4 of Sec. 9, T13N R4W (Annecy's 2019 purchase) to begin well construction.
- Annecy (surface owner) sought a temporary injunction claiming irreparable harm from drilling (loss of residential development value and denial of due‑process notice of a BOA variance hearing).
- District court denied the injunction, finding no clear-and-convincing proof of irreparable harm and noting the SDA provides an adequate legal remedy (money damages via appraisal process).
- The Oklahoma Supreme Court briefly granted an injunction pending appeal conditioned on a bond; after full review the Court affirmed the trial court, dissolved the temporary injunction, and remanded to determine costs/attorney fees secured by the bond.
- Parties disputed municipal authority post‑§137.1: Annecy argued the City should have required a BOA variance (with notice/hearing); Revolution invoked §137.1 preemption limiting local regulation of oil-and-gas operations.
Issues
| Issue | Plaintiff's Argument (Annecy) | Defendant's Argument (Revolution) | Held |
|---|---|---|---|
| 1) Whether Annecy proved irreparable harm to obtain a preliminary injunction | Drilling will irreparably harm Annecy's planned luxury-home development and property value; money damages inadequate | Diminution in value is compensable under the SDA; injury is pecuniary not irreparable; injunction inappropriate | Denied — Annecy failed to prove irreparable harm by clear and convincing evidence; SDA provides adequate legal remedy |
| 2) Whether Annecy is likely to succeed on merits (due‑process/variance claim) | City failed to give notice/opportunity to be heard at BOA variance hearing; Annecy would likely prevail at such a hearing | Variance/BOA issues are hypothetical in light of §137.1; local regulation preempted in many respects; remedy under SDA controls | Not decided on merits here; Court held the issue is not ripe in the SDA action and belongs to separate declaratory action; likelihood not established for injunction |
| 3) Whether the SDA precludes equitable relief (injunction) when it provides a statutory appraisal/damages remedy | Injunction justified to protect development and prevent irreparable loss | SDA constitutes a special statutory procedure providing full legal compensation; injunction should not be granted where statute provides remedy at law | Held SDA supplies a full, adequate legal remedy (diminution in market value); injunction improper in this context |
| 4) Whether the Supreme Court's earlier temporary injunction pending appeal was proper | Annecy sought emergency relief pending appeal | Revolution asserted injunction should not have been issued because prerequisites (irreparable harm, likelihood on merits) were unmet | The interim injunction is dissolved; Supreme Court on review concluded it should not have been granted and remanded to determine costs/fees under the posted bond |
Key Cases Cited
- Ward Petroleum Corp. v. Stewart, 64 P.3d 1113 (Okla. 2003) (explains SDA purpose and appraisal/diminution-in-value remedy)
- Turley v. Flag-Redfern Oil Co., 782 P.2d 130 (Okla. 1989) (surface estate servient to mineral estate; SDA protects surface owner via damages)
- Dulaney v. Oklahoma State Dept. of Health, 868 P.2d 676 (Okla. 1993) (right to make reasonable use of surface to enjoy mineral rights)
- Amoco Production Co. v. Lindley, 609 P.2d 733 (Okla. 1980) (injunction is extraordinary equitable relief)
- Sharp v. 251st Street Landfill, Inc., 925 P.2d 546 (Okla. 1996) (requires clear-and-convincing proof for injunctive relief)
- Hines v. Independent School Dist. No. 50, Grant Cty., 380 P.2d 943 (Okla. 1963) (defines irreparable injury as not fully compensable in damages)