Vogel v. Marathon Oil Corporation
2016 ND 104
| N.D. | 2016Background
- Marathon operated the Elk USA 11-17H oil well in Mountrail County; Vogel owns mineral interests and alleged unpaid royalties for gas flared at that and other wells.
- Vogel sued Marathon (individual and class claims) seeking declaratory relief and damages for unpaid royalties on flared gas, and later added a claim under the Environmental Law Enforcement Act (ELEA).
- N.D.C.C. § 38-08-06.4 restricts flaring, requires payment of royalties and gross production tax for flaring in violation of the statute, and empowers the Industrial Commission to enforce the section and determine value of flared gas.
- Marathon moved to dismiss under Rules 12(b)(1) and (6), arguing no private right of action exists under § 38-08-06.4, ELEA is cumulative and not a shortcut around administrative remedies, common-law claims are preempted, and Vogel failed to exhaust administrative remedies.
- The district court dismissed Vogel’s complaint without prejudice, concluding the statute provides an administrative remedy through the Industrial Commission, no implied private right of action for damages exists under § 38-08-06.4, ELEA remedies are cumulative, and administrative exhaustion is required.
- This appeal challenges (1) existence of an implied private right of action under § 38-08-06.4, (2) applicability of the ELEA, (3) viability of common-law claims (conversion/waste), and (4) whether exhaustion of administrative remedies was required.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 38-08-06.4 implies a private right of action for damages | Vogel: statute implies royalty owners can sue for unpaid royalties on flared gas | Marathon: statute creates administrative enforcement only; no express or implied private cause for damages | No implied private right of action; statute provides administrative remedy through Industrial Commission |
| Whether ELEA (N.D.C.C. ch. 32-40) permits immediate private enforcement of § 38-08-06.4 without exhausting administrative remedies | Vogel: ELEA creates a private cause of action to enforce environmental statutes, so she may sue in district court | Marathon: ELEA is cumulative; it does not supplant § 38-08 administrative scheme; administrative remedies must be exhausted first | ELEA applies to § 38-08-06.4 as an environmental statute but its remedies are cumulative; plaintiff must first pursue administrative remedies; ELEA available if Commission fails/refuses to act |
| Whether common-law claims (conversion, waste) survive given § 38-08-06.4 | Vogel: common-law claims are complementary and available for unpaid royalties | Marathon: statutory scheme covers and supplants the field; statute permits one-year flaring without royalties, so common-law claims conflict | Common-law claims dismissed as preempted/conflicting; statute governs royalties for flared gas |
| Whether plaintiff must exhaust administrative remedies before suing in court | Vogel: having a private right of action (under § 38-08-06.4 or ELEA) lets her choose forum; exhaustion not required | Marathon: exhaustion required; Industrial Commission has primary expertise and exclusive administrative remedy | Exhaustion of administrative remedies required here; dismissal for lack of subject-matter jurisdiction affirmed |
Key Cases Cited
- Rolette Cty. Soc. Servs. Bd. v. B.E., 697 N.W.2d 333 (N.D. 2005) (when dismissal without prejudice can be appealable if it practically terminates litigation in chosen forum)
- Trade ‘N Post, L.L.C. v. World Duty Free Americas, Inc., 628 N.W.2d 707 (N.D. 2001) (framework for implying private statutory causes of action and weight of legislative silence)
- Empower the Taxpayer v. Fong, 817 N.W.2d 381 (N.D. 2012) (three-factor test for implied private right of action)
- Werlinger v. Champion Healthcare Corp., 598 N.W.2d 820 (N.D. 1999) (statute providing an implied private right of action can allow plaintiff to choose between administrative remedy and private suit)
- Meier v. Novak, 338 N.W.2d 631 (N.D. 1983) (nature and effect of cumulative remedies; pursuit of one remedy generally does not bar action on another)