2017 ND 148
N.D.2017Background
- Statoil sued numerous mineral owners in two consolidated state-court actions seeking declarations of the proper distribution of oil and gas revenues from wells in Williams and McKenzie Counties after the State redetermined the historic ordinary high‑water mark of the Missouri River (affecting ownership of certain spacing units).
- The United States claims an interest in the disputed lands but was not joined as a defendant in Statoil’s complaints.
- Defendants moved to dismiss under N.D.R.Civ.P. 12(b)(7) and 19, arguing the United States is an indispensable party and cannot be joined in state court for title disputes against the U.S.
- The district court granted dismissal without prejudice, reasoning joinder of the United States was not feasible and Rule 19(b) factors supported dismissal.
- Statoil appealed; because the dismissal effectively foreclosed state-court resolution of the disputes, the judgments were appealable despite being without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dismissal under N.D.R.Civ.P. 19(b) was proper because the U.S. is an indispensable party | Statoil: court misapplied Rule 19(b) and Pimentel; prejudice to the U.S. is minimal and can be mitigated by escrow or carving out U.S. interests | Defendants: U.S. claims a property interest, cannot be joined in state court; proceeding would prejudice U.S. sovereignty and cause multiplicity of litigation | Affirmed: dismissal appropriate because U.S. joinder was not feasible and Rule 19(b) factors (prejudice, inability to shape relief, inadequacy of judgment, alternative forum) favored dismissal |
| Whether Pimentel applies only to foreign sovereign immunity or also to the U.S. sovereign | Statoil: Pimentel limited to foreign sovereigns; not controlling here | Defendants: Pimentel’s reasoning extends to U.S. sovereign immunity; precedent involving the U.S. supports application | Held: Pimentel rationale applies to the United States; sovereign immunity considerations weigh heavily in Rule 19(b) analysis |
| Whether relief can be shaped to avoid prejudice (escrow or excluding U.S. interest) | Statoil: court could order disputed revenue into escrow or omit U.S. land from judgment to avoid prejudice | Defendants: cannot bind non‑party U.S. to escrow; competing percentage claims exceed 100%, so carving out is infeasible | Held: shaping relief would not eliminate prejudice or produce an adequate judgment; factor favors dismissal |
| Whether an adequate alternative forum exists (federal court) | Statoil: dismissal inappropriate absent certainty that federal forum will hear the case | Defendants: possibility of federal forum where U.S. can be joined favors dismissal | Held: the possibility of federal forum where all required parties can be joined supports dismissal under Rule 19(b) |
Key Cases Cited
- Republic of Philippines v. Pimentel, 553 U.S. 851 (2008) (absent sovereign’s claim and assertion of immunity weigh strongly toward dismissal under Rule 19)
- Erdman v. Thomas, 446 N.W.2d 245 (N.D. 1989) (identifies the four interests embodied in Rule 19(b) analysis)
- Cudworth v. Cudworth, 312 N.W.2d 331 (N.D. 1981) (Rule 19 joinder principles)
- Nat’l Farmers Union Prop. & Cas. Co. v. Schmidt, 219 N.W.2d 111 (N.D. 1974) (purpose of Rule 19 is to protect absent parties and avoid multiple litigation)
- Mine Safety Appliances Co. v. Forrestal, 326 U.S. 371 (1945) (dismissal required where a required sovereign entity withholds consent to suit)
- Wichita and Affiliated Tribes of Oklahoma v. Hodel, 788 F.2d 765 (D.C. Cir. 1986) (when combined claims exceed whole, court cannot grant relief without affecting others; accentuates indispensability of absent party)
- Tavis v. Higgins, 157 N.W.2d 718 (N.D. 1968) (state court judgment does not bind absent United States)