*1 Mexico, L.L.C., sum, Fisher nor the Gulf of because neither Statoil for, Plaintiff- the basis Intervenor majority opinion identifies Appellee of, process the undefined due the contours him- Fisher seeks to avail right of which v. self, guilty his Fisher must be bound CORP.; AND KERR-McGEE OIL GAS open court plea, admission[ ] “solemn Lynn Belcher; Cathy Bump; Dan C. the act with which he that he committed Guy; Gary Hummel; Zeornes A. Allen States, v. charged.” Brady United [was] Keel; Small; Wayne D. Kevin A. G. 757, 90 1463. 397 U.S. at S.Ct. Zeornes, Defendants-Appellants. III. Conclusion Lynn Belcher; Cathy Bump; Dan S. C. clear, certainly agree To I with the Guy; Gary Hummel; Zeornes A. Allan falsify- conduct in majority that Lunsford’s Keel; Small; Wayne D. Kevin A. G. identity of the informant on the ing Zeornes, Plaintiffs-Appellants reprehensible. was But search warrant our natural reaction of extreme distaste to Mexico, L.L.C., Statoil Gulf of
Lunsford’s criminal act does not instanta- Defendant-Appellee. neously guilty plea transform Fisher’s into process some form of due violation that No. 11-30038. him permits plea. to now withdraw Appeals, United States Court of Only well-grounded application of settled Fifth Circuit. permit such an precedent would extraordi- nary respect my result. With distin- March 2013. guished colleagues, indispensable fac- missing majority opinion. tor is in the above,
For all of the reasons discussed I majority opinion
believe errs revers- judgment of the district court. Brady either the v. Ma-
Under traditional framework,
ryland or some form of claim claim, Brady v. United States Fish-
er is not entitled to the relief he seeks. in denying
The district court did err to vacate
Fisher’s motion his conviction
and sentence under 28 U.S.C. I
respectfully dissent. USA, INC., E P
TOTAL &
Plaintiff-Appellee *3 O’Connor, Dupre,
Scott Allen Dana Erin Jr., Gordon, Arata, Hayne, C. Peck McCol- lam, L.L.C., Duplantis Eagan, & New Or- leans, LA, Plaintiff-Appellee. Harris, Giuliani, Bracewеll & Warren W. L.L.P., Watt, Dick Andre deLau- Charles & Henne- als nay, Thompson Beckworth referred to herein as the “Belcher Watt Houston, TX, man, L.L.P., (ORRIs Till- Andrew Group” totalling assigned 0.2625% Pearce, Montgomery Lilly, 1999) man John Y. and to Kerr-McGee Oil and Gas Barnett, L.L.P., Orleans, LA, In- New (“Kerr-McGee”) (ORRI Corporation Plaintiff-Appellee. tervénor 2001). assigned 3.7373% Rubin, Roy Dugas, Michael H. David When under the lease was Ferachi, Stafford, Kyle McGlinchey Achee obtained three oil companies P.L.L.C., LA, Rouge, Baton Ernest L. Ed- owned the lessees’ working interests: wards, Jr., Moore, Jr., Billy Richard USA, (“Chevron”) (58% Chevron Inc. Beirne, Parsons, L.L.P., Maynard & M. share), USA, (“Total”) Total E P& Inc. Darden, Fantaci, Taylor Matthew James (17% share), Mexico, and Statoil Gulf of Carver, Darden, Tessier, Finn, Koretzky, (“Statoil”) (25% share). L.L.C. *4 Chevron Blossman, Orleans, LA, Andrew New immediately began paying overriding roy- III, McCollam, Firm, P.C., McCollam Law alties out of production its share of the to Gunn, Flores, Michael Chad Erin David Group the Belcher and Kerr-McGee. To- Huber, Pfeiffer, Hilary Constance Hankins Statoil, however, tal and took the position L.L.P., Beck, Secrest, Houston, Redden & they that were not obliged immediately to TX, Defendant-Appellant. begin paying overriding royalties out of Stephen Ottinger, Ottinger Patrick He- their shares of production. They claimed L.L.C., bert, LA, Lafayette, for Thomas that no overriding royalties were due be- Jr., al., Campbell, M. et Amici Curiae. cause the ORRI contracts con- pay” stating
tained “calculate and that: “The interest as- signed herein paid shall be calculated and in the same manner and GARZA, DENNIS, Beforе and same terms and conditions as the landown- HIGGINSON, Judges. Circuit er’s under the Lease.”2 Total and Statoil asserted that the “calculate and DENNIS, Judge: Circuit pay” clauses were to suspend intended This case involves a contractual inter- obligation their pretation dispute overriding over whether production payments out of whenever royalties payable are out of the initial oil 12]é% the United States’ landowner gas production from a tract of land on suspended pur- under the lease were to be adjacent the outer continental shelf Deep suant to the Outer Continental Shelf In pursuant Louisiana. to the Outer (“DWRRA”).3 Royalty Water Relief Act (“OCSLA”),1 Continental Shelf Act Lands that, It undisputed upon the com- United States issued mineral lease of mencement of under the lease companies the tract to oil for mineral ex- in payment government’s ploration. overriding In 1999 and (“ORRI”) royalties 12]6%landowner was determined royalty interests were carved until working suspended out of the lessees’ 87.5 million barrels all assigned equivalent produced, pursu- to seven individu- of oil had been (1995) (codified etseq. § 1. 43 U.S.C. 1331 3.Pub.L. No. 104-58 at 43 1337(a), § U.S.C. and with further uncodified Although pay” the two "calculate and claus- 1337). present in sections notes to U.S.C. vary slightly wording, undisputed es it is that are identical in substance. Therefore, Total and the same manner and ant to the DWRRA. the land- overriding royalties are the same terms and conditions as argue, no Statoil clearly, owner’s under the lease” long payment so as the U.S. due explicitly, unambiguously was intend- royalties suspended. landowner suspend payment overriding ed to Group Belcher and Kerr-McGee disa- if, royalties upon production, the greed, contending that the “calculate and DWRRA suspend to result a threshold pay” clauses were intended were payment royalties circum- of landowner overriding royalties under meant to ensure that United States. stances but were overriding royalties would be calculated conclude, applicable under the Loui- We required by methods as using same law, pay” siana the “calculate and measuring computing lease the ORRI contracts royalties. government’s landowner 12/&% explicitly express do not words, they argued that the “cal- other that overriding payments intent culate and clauses were intended to suspended shall be whenever the U.S. specify pay- the manner of calculation and royalties are suspended landowner overriding royalties, ment of not to make DWRRA; the “calculate and depen- the accrual of interpreted clauses must be further upon roy- dent of landowner in search of the common intent of the *5 to litigation alties the United States. This assignment contracts. As- agreed ensued. Because Chevron with the suming deciding without that the “calcu- interpretation ORRI owners’ of the “calcu- pay” may reasonably late and clauses be pay” late and clauses and continuеd to contend, interpreted as Total and Statoil them, overriding royalties to Chevron has the clauses are least because party not been sued or made a to this may a reasonable inference also be drawn case.4 pay” merely that the “calculate and clauses granted
The district court
a motion for
refer
lease terms and conditions for
Statoil,
summary judgment by Total and
calculating overriding royal-
the method of
declaring
pay”
that
the “calculate and
they
that
ties and
do not intend for the
assign-
the 1999 and 2001 ORRI
obligation
royal-
pay overriding
lessees’
to
explicitly require
ments
and
suspended
ties out of
to be
shall
any
altogether under
circumstances. Be-
suspended during
be
of the
ambiguity
permissible
cause of this
and
12/¿%
U.S.
under the
inference,
genuine dispute
there is a
as to
court expressly
DWRRA.
district
re-
fact, viz.,
a material
issue of
assign-
engage
interpretation
fused to
further
parties’
regarding
ment contract
intentions
contracts in search of
the “calculate and
clauses. There-
parties’
intent or to consider
evi-
fore, because,
reviewing
summary
dence on that issue.
novo,
judgment de
we must resolve all
inferences,
ambiguities, permissible
and
Group
ap-
The Belcher
and Kerr-McGee
material issues of fact in favor of the non-
pealed.
appeal
The issue on
comes down
moving parties,
Group
the Belcher
and
language
to whether the
the “calculate
Kerr-McGee,
providing
and
that the over-
we conclude that Total and
riding royalties “shall be
judgment
calculated and Statoil are
entitled to a
as
See,
1349(b)(1).
correctly
e.g.,
Royalty
§
4. The district court
determined that
Tidelands
“B”
jurisdiction
pursuant
Corp.
Corp.,
it had
this action
Oil
over
804 F.2d
Gulf
(5th Cir.1986).
jurisdictional grant,
OCSLA’sbroad
43 U.S.C.
n. 1
Ltd.,
reasons,
Operating
we Mesa
working Westport geos interest. The six trict for the Eastеrn District of Louisiana cientists and landmen held on to their seeking declaratory judgment embracing overrides, Zeornes, except split who his interpretation assign- Total’s of the ORRI ex-wife, Cathy override with his Zeornes January ments. the Belcher Guy. Kerr-McGee received 3.7373% Group against seeking filed suit Statoil to an pursuant ORRI judgment declaratory the lessees containing pay” provision a “calculate and obliged pay overriding royalties were substantively identical to that in the Bel pro- the ORRI owners from first and all Group assignment, cher which stated that duction. The district court consolidated described herein “[t]he interventions, Through third- cases. shall be calculated and in the same claims, counterclaims, party Total and manner and to the same terms and aligned against became the Belcher un Statoil conditions as Group der the Lease.” and Kerr-McGee. *8 saved, removed, the
8. Sections 5 and 6 of the form lease are or sold from leased alia, area”; boilerplate provisions specifying, inter that Lessor shall determine ”[t]he Lessor, pay production royalty paid that Lessee shall the at the whether shall be "[t]he value”; expiration year and that value of ”[t]he of each lease which com- amount or royalty discovery production purposes computing of mences after a of oil and paying quantities, royalty” production never be a minimum of from this lease shall 12)4%; produc- fixed the fair market valuе of the "[t]he [this] that Lessee shall less than royalty ... in amount or value of tion.” summary “royalty moved for ests to suspension” Total and Statoil under the judgment, contending that the ORRI as- Appellants DWRRA. also submitted other pay” “calculate and signment contracts’ affidavits and sworn statements from indi- clearly explicitly and demonstrate viduals familiar with of the Gulf Mexico oil contracting intent that over- parties’ the industry supporting reading their riding royalty payments to ORRI owners pay” provision. Appellants “calculate and govern- the suspended shall be whenever summary judgment. did not cross-move for 12$% landowner becomes ment’s 14, 2010, On December the district court under the Total and suspended DWRRA. granted summary judgment appel- for the not submit affidavits or Statoil did lees, concluding that the “calculate and support of their motion other evidence pay” provisions clearly ex- Instead, summary judgment. they re- press assignment the common intent of the upon they lied what contend to be the contract parties payment of over- explicit words of the “calculate clear and riding royalties suspended shall be when- pay” assignment clauses of the con- payment government’s ever the tracts. 12$% un- suspended is opposition appellees’ motion for sum, der the DWRRA.9 In the district summary judgment, appellants submitted court reasoned as follows: by affidavits the individual members of the Group by Belcher official Westport undisputed ap- [I]t is that the DWRRA approvеd original who both of the ORRI Lease, plies subject thus, that assignments, attesting government’s royalty federal suspend- is assignments those intended the “calcu- during production ed of first 87.5 late and clauses to refer to the lease equivalent.... million barrels of oil purpose measuring comput- for the [T]he “calculate and ing overriding royalties and not for the are not clearly because purpose suspending overriding royalties provide overriding royalties that during of the U.S. landown- “shall be calculated and in the same Also, er’s under the DWRRA. manner and to the same terms appellants expert submitted an witness’ and conditions as the landowner’s [fed- survey representatives of other oil com- government’s] royalty eral panies operating the Gulf of Mexico. Thus, Lease.” Total’s and pay- Statoil’s survey purportedly This identified least ments of the overriding eighty other instru- payments suspended until produc- containing pay” pro- ments “calculate and tion reaches the 87.5 million barrels of visions like that at issue here and deter- equivalent. oil company party mined that no other USA, E Total & P Inc. v. Kerr-McGee Oil interpreted such an instrument pro- these Corp., inter- & Gas subject overriding royalty visions to Nos. 09-CV-6644 & 10-CV- Appellants argue explicitly require in the alternative that the contract should be reformed on the basis of from shall original suspended government’s mutual mistake because none of the ever be because the contracting рarties assignment suspended, of over- landowner is and that fur- riding royalty interpretation required interests intended that ther in search intent, meaning have parties' clause would ascribed to it we reverse and proceedings the district court. Because we conclude remand the case for further regard, reaching appellants’ that the ORRI contain- contracts without pay” provisions the "calculate and argument. do not alternative contract reformation
487 (E.D.La. 5207591, 106, at *4 Dec. 2010 WL when federal pro- the same 2010) (fourth 14, in original). alteration DWRRA, duction suspended by was obligated were “expressly state The district court refused to consider their intent in agreement.” [their] opposing affidavits served and filed appellants tending as extrinsic evidence (alteration (citations original) Id. *5 in- original assignment parties’ show the omitted) Indus., (quoting Kenner Inc. v. tent that the “calculate and Plastics, Inc., 557, Sewell 451 So.2d refer the terms and conditions of the (La.1984)). for the purpose measuring lease The Belcher Group and Kerr-McGee computing overriding royalties and not timely appealed. purpose defeating deferring for the or govern- while the DISCUSSION ment’s is sus- 12%% pended under the The district We review the district DWRRA. court’s provision regard- court concluded that the grant summary novo, judgment de af ing words of art and technical terms set firming only if the moving party has dem forth Louisiana Civil Code article 204710 onstrated that genuine there is no issue as not apply did because “there is no one material fact and that judgment as word or group of words a matter of law is warranted. McMurray Pay’ ‘Calculate and provisions that is sub- ProCollect, Inc., (5th 687 F.3d ject Total, meaning.” to a technical 2010 Cir.2012); 56(c). see Fed.R.Civ.P. In de 5207591, at WL *4. The district court thus termining presents whether case triable stated that it “need not consider extrinsic fact, we, court, issues of like the district give evidence to provi- words these may not credibility make determinations generally sions their prevailing meaning.” weigh and we evidence must resolve 2046,11 quoting Id. After Civil Code article all ambiguities and draw all permissible the district court further reasoned: inferences in favor of non-moving par Here, there are no consequences absurd Inc., ty. Liberty Lobby, See Anderson v. of tying owners’ 242, 255, 477 U.S. 106 S.Ct. payments to govern- those of the federal (1986); L.Ed.2d 202 Shortstop, Int’l Inc. v. landowner, ment as treating Inc., (5th Rally’s, Cir. overriding owner no better or 1991). government. worse than the federal OCSLA, “Under the law be years DWRRA was enacted several applied to the continental [outer shelf] before either here was exe- federal, exclusively albeit the law of the cuted, original parties and the adjacent adopted state is surrogate fed assignments charged were with the eral law to extent that such law is knowledge of that assign- law before the applicable and not inconsistent with feder original ments were executed. If the al law.” EP assignments Operating P’ship, Ltd. had intended Hеre, to provide parties agree F.3d at 566. royalties on the first 87.5 million barrels governs Louisiana contract law the inter- provides part: provides: 10. Article 2047 "Words of Article 2046 "When the words of explicit a contract are clear and and lead to given art and technical terms must be their consequences, interpre- no absurd no further meaning technical when the contract involves parties' tation be made in search of the a technical matter.” La. Civ.Code art. 2047. La. Civ.Code intent.” art. 2046. *10 488 working dependent upon interest and is assignment con of the ORRI
pretation
issue,
the extent that [law is]
continued existence of the mineral
“[t]o
tracts
with [OCS
not inconsistent
applicable
alia,
Fontenot v. Sun
(citing,
lease.”
inter
regu
laws and
with other Federal
or
(1971)),
LA]
Co.,
642,
257 La.
as thе
reasoning
contracting
Those clauses do
trict court’s
Lease.”
payment
state that
obligated
expressly
state
parties were
during the
suspended
shall
royalty suspension
apply
would not
suspension of the
or threshold
temporary
appellants’ overriding
interests.
landowner
government’s
Total,
Rather,
See
2010 WL
*5.
Consequent-
royalty under the DWRRA.
any-
clear indication
the absence
*12
the
ly, under
Code article 2046 and
Civil
contracts, lease,
where
the
cases,
may
a court
not find that
Louisiana
statutory
that statuto-
or relevant
scheme
suspend
intended to
the over-
royalties was
ry suspension
government
royalty obligation
exclusively
based
riding
also, counterintuitively,
apply
intended to
of the calculate and
on the words
overriding royalty
interests renders
interpret
overriding
clauses but must
at
on this
the contracts
least
further in search of the
royalty contracts
issue.
CLK,
intent. See
972
parties’ common
Moreover,
syntax
of the ORRI as
(“A
contract is considered
So.2d
1286
signments
provisions,
and lease
without
provision
a
ambiguous ... when
lacks
evidence,
interpretation or
not
further
do
bearing
particular]
on
issue or when the
[a
clearly
explicitly require
reading
or
contract
uncertain
language used
is
argued
by
them
for
Total and Statoil. The
fairly
or
to more than one
susceptible
is
ORRI
contracts state that the
Blanchard,
interpretation.” (quoting
755
overriding royalty percentages
shall be
381)).
So.2d at
oil,
“payable
gas,
casing
out of all
sup
conclusion is further
Our
pro
head
and associated substances
by
well-recognized
ported
distinction
duced, saved,
from the
and marketed
overriding royalty
and a
between
interests
added);
(emphasis
lease”
and it is undis
royalty.
government’s
Unlike the
lessor’s
that
puted
production
the lessees’ share of
OCSLA,
royalty reserved under
“[a]n
begins
payable throughout pro
with and is
overriding royalty
is a fractional
[interest]
reasonably
duction from the lease. This
gross production
interest in the
of oil and
signify
overriding
can be read to
that the
lease,
gas under a
in addition to the usual
royalty
payable
shall be
from
lessees’
royalties paid to the lessor.” Meeker v.
production
entirety,
share of
over its
875,
Oil
Ambassador
only during periods
not
which the land
(10th Cir.1962)
added),
(emphasis
rev’d on
owner is entitled to
share of
grounds,
other
375 U.S.
84 S.Ct.
Likewise,
production.
simple
affirma
(1963). Thus,
tion,
relieving
[federal
as the
accounting without
and
” Total,
the Lease.’
over-
under
obligation
their
lessees of
(alteration
in original).
out of
at *4
the ORRI owners
WL
riding royalties to
working inter-
not find the district court’s reason-
entirety of the lessees’
We do
the words of the
ing persuasive because
production.
est
clear,
are not
“calculate and
words,
“calculate and
In other
explicit,
unambiguous,
and
and the district
reasonably may
interpreted
any
for
court did not offer
other reason
overriding royalty payments
mean
finding
provisions unambiguous.
these
paid by using
and
be calculated
shall
for the measure-
prescribed
owners,
same methods
the Belcher
Because the ORRI
the landowner’s
computation
ment and
Kerr-McGee, did not file a
Group conditions of
royalty under the terms and
summary judgment
cross motion for
or ask
lease,
subject to
specifically
is
which
than a reversal of
relief here other
provisions for
regulations’
the federal
not
judgment,
court’s
we do
the district
calculating,
accounting
measuring,
parties’
arguments
other
or con
reach
meaning that
instead of
production,
in opposition
sider the affidavits submitted
shall be
payment of
summary judgment
Lou
below. Under
were
suspended if the
law, interpretation of a contract is
isiana
Al-
suspended
to be
DWRRA.
intent of
the determination of the common
that Total and
though we have assumed
La.
art.
parties,
Civ.Code
contrary interpretation
equally
Statoil’s
of a contract are clear and
when
words
sum-
purposes
as reasonable for
their
absurd conse
explicit and lead
no
motion, we conclude that
mary judgment
quences,
interpretation
no further
ambiguous
require
are
fur-
the clauses
intent,
parties’
made in search of the
id.
parties’
in search of the
interpretation
ther
However,
art. 2046.
the inverse of Article
intent.
true: when the words of the
is also
explicit,
clear and
but are
contract are not
hand,
court,
on the other
did
district
in fur
ambiguous,
engage
a court should
specifically
address
ORRI owners’
interpretation
parties’
ther
search
clauses,
interpretation
reasonable
by applying
intent
the Louisiana Civil
argu-
extensive
despite the ORRI owners’
interpretation
articles on contractual
Code
summary
opposition
ments for it in their
See,
pertinent
e.g.,
Louisiana cases.
judgment.
Consequently,
the district
(“In
Henry,
tracts. points meaning from a gram- different arrangement, matical where ORRI itself is CONCLUSION modified “subject the final clause to the reasons, For these the district court’s same terms and conditions as the landown- judgment is reversed and the case is re- hence, royalty,” er’s plausibly, subject even manded to it for further proceedings con- nonpayment suspension altogether. sistent with this opinion. simpler, less terms: “The subject ORRI shall be to the same terms HIGGINSON, Judge, Circuit and conditions as the landowner’s royalty concurring: Lease,” under the if even that condition is agree I with Judge reasoning Dennis’ Indeed, altogether. had the outcome, explain but write to in fur- sentence separated dependent clause why ther detail I believe the contracts’ “, subject commas'—'thus: language ambiguous. same terms conditions,” Appellees — stronger would have a argument as to (“ORRI”) assignment contracts contain clarity meaning. stating: “calculate and “The contracts, Given language overriding royalty interest assigned herein however, that, I say cannot for the reasons shall be calculated and the same above, the sentence is free of ambiguity. subject manner and to the same terms conditions as the landowner’s GARZA, EMILIO Judge, M. Circuit many under the Lease.” Like complex dissenting: sentences, ambiguity exists in this one’s subject, structure. ORRI is the and one I predicate is the and pay” “calculate[ ] verb royalty suspension Because ais term or phrase. condition royalty payment under the Appellants imply that prepositional lease and the “calculate and phrase and subordinate clause that fol contracts make the e., low—i. “in the same manner and interests to the same modify terms and conditions”— same terms and conditions as the landown- Int’l Primate Prot. phrase, that verb cf. lease, er’s royalty under the I respectfully Fund, League v. Adm’rs Tulane Educ. dissent majority’s from the conclusion that 72, 79-80, 500 U.S. S.Ct. ambiguous. contracts (1991), L.Ed.2d 134 and bеcause the verb *17 Royalty suspension unambiguously is a phrase affirmative, pay” “calculate[ ] and is royal- it term or condition of the logically imply does not opposite, its nonpayment ty suspension. or under the lease. The first footnote of Manners and states, contemplate pay terms and conditions all the lease “This lease eligi- ment in place. terms, the first In simpler royalty ble for PL suspension pursuant on as “a future and uncertain event to Public Law dition” PL 104-58 refers
104-58.” or extent of an obli- 104-58, includes the Outer Con- which the existence No. which Royalty Relief Deep liability depends; Water or an uncertain gation tinental Shelf “DWRRA”). (hereinafter According Act a triggers negates act event that or DWRRA, royalties “suspension duty promised performance.” a to render of not less than set at a volume shall be clearly stipulates The footnote Id. at 333. equivalent of oil ... 87.5 million barrels provisions payment that the lease’s for than depths greater for leases water if superseded by the royalties are DWRRA 104-58. It is undis- No. meters.” Pub.L. eligible royalty suspension, lease is for this lease covered that because puted the lessee’s contractual qualifying thus depths located water property block royalty duty payments to make meters, the landowner’s greater than 800 eligible the lease is United States. Where the first 87.5 mil- royalty suspended is royalty suspension, the footnote ne- for under produced of oil lion barrels royаlty gates duty the lessee’s to make states, eligi- next “If lease. The footnote such, royalty is payments. suspension As ble, pay- [providing 5 and 6 Sections the landowner’s a term or condition of of this lease Lessor] ment of the lease. royalty under suspended 30 C.F.R. instrument will be ” in the pay” The “calculate and clauses Part refers to Part 26.... 30 CFR make unambiguously contracts Leasing, Outer Continental Shelf Oil overriding royalty interests seq., provi- § 1331 et where the 43 U.S.C. the same terms and conditions as the land- are codified. The sions of the DWRRA The “cal- owner’s under the lease. clearly requires that if the footnote thus pay” Westport clauses of the culate and un- eligible royalty suspension lease state, Group Assignment to the Belcher DWRRA, der the Sections 5 and 6 of overriding royalty assigned “The suspended. As Sections 5 lease will be in the herein shall be calculated provide of the lease instructions for and 6 same manner and to the same calculating paying the landowner’s and conditions as the landowner’s terms lease, the footnote un- royalty under the Lease.” The “calculate ambiguously royalty suspension makes payment Westport or condition of of the land- clause Chev- term owner’s under the lease. Assignment nearly ron contains identical language. majority The holds “the ‘calcu- however, majority, ambigu- The finds assign- pay’ late and the ORRI a term or ous whether the footnote is contracts ment do of the lease because the footnote condition express the intent “may eligible” the lease rather states payments suspended shall be whenever the eligible.” majority than The “shall be suspended landowner U.S. if the footnote did not might be correct Ante, The under the DWRRA.” at 482. state, eligible, “If 5 and 6 of also Sections majority finds it whether thus superseded by will be this lease instrument ” added). apply royalty contracts (emphasis Part 26 .... CFR interests. Dictionary Black’s defines a “term” Law language of the “calculate and plain stipulation,” as a “contractual Blaok’s Law (9th state, however, 2009), ed. and a “con- DICTIONARY exist, likely to refer to CFR Part 260 refers to Outer the footnote intended 1. Because 30 Leasing, Oil and 43 U.S.C. Continental Shelf 30 CFR Part 260. seq., 30 CFR Part 26 does not 1331 et
497
subject
must be
terms and conditions as the
of the
landowner’s
as
the same terms and conditions
royalty under the Lease.” If
parties
royalty under the lease. The
did not intend the clear import of the
“subject
English dictionary defines
Oxford
language, they may
contracts’
seek to re
upon.”
or conditional
“dependent
to” as
Holt,
Agurs
form the contract.
v.
232 La.
English Dictionary
(10th
1427
ed.
OxfoRd
(1957).
Where,
95 So.2d
645
1999);
see also Webster’s
Third New In
however,
language
of a contract
is
DiCtionary
(1993) (defin
ternational
unambiguous,
clear and
lack
we
the au
conditioned,
“subject to” as “to be
af
thority
beyond
to look
the four corners of
fected,
way:
or modified
some indicated
the document
in search
parties’
contingent
something
relation to
having
art.2046;
intent. La. Civ.Code Ann.
Taita
usually dependent
on such relation for
Styrene Corp.,
Chem.
v. Westlake
form, validity,
significance”).
final
(5th Cir.2001).
F.3d
Thus,
pay”
the “calculate and
terms
explicitly import
majority
The
relies on the fact that it
conditions from the lease as limitations on was not certain
qualify
the lease would
scope
overriding royalty rights.
suspension of the United States’ landown-
majority, emphasizing
long
The
royalty
er
under the DWRRA at the time
standing
overriding
distinction between
the lease at
signed
issue
this case was
royalties
interests and
reserved
ambiguity
core source of
in the “calcu-
landowner,
holds it
late
majority
clauses. The
cor-
whether the “calculate and
rectly
prior
notes that
to our
decisions
require
application
royalty suspension to
Norton,
Snyder Corp.
Santa Fe
overriding royalty
interests. Ante at
(5th Cir.2004),
F.3d 884
and Kerr-McGee
majority
491. The
assignment
holds the
Interior,
Corp.
Dep’t
Oil & Gas
v. U.S.
“any
contracts lack
clear indication” that
(5th Cir.2009),
assignment contracts contain a clear di
to be one of the terms and conditions of
rective that
inter
royalties
ests “shall be calculated and
in the
Ante,
same
manner and
to the same
to.
at 492-93.
Snyder Corp.,
(holding Department
regulation
Fe
See Santa
This
assignment contract
in
explicitly
are listed
due on
exactly
plain
what the
lan-
intended
have
example,
assignment contract. For
the
pay”
clauses
guage of the “calculate
states,
assignment
the
contract
pay-
calculation and
to make the
state:
conveyed
overriding royalty
The
interest
royalties subject to
overriding
ment of the
event,
not,
ac-
any
paid
or
shall
conditions as the land-
the same terms and
oil,
gas, casinghead gas
upon
crued
the lease. A lack of
royalty under
owner’s
hydrocarbon substances used
and other
surrounding
royalty
when the
sus-
clarity
operation, development
produc-
or
not evince
period
apply
would
does
pension
lost;
unavoidably
purposes
tion
or
clarity regarding whether the
a lack of
overriding royalty
paid upon
shall be
no
was a term of
royalty suspension period
recycling
repressuring
used in
or
overriding royalties be-
the lease that the
operations
pressure
op-
maintenance
through
to
the “calculate and
came
erations.
clauses.
pay”
Moreover,
“calcu-
language
the clear
of the
“grant-
the
majority
The
also concludes
pay”
assign-
late and
clauses
both of the
contracts
ing”
assignment
clauses of the
qualify
granting
ment contracts
the
claus-
the “calculate and
meaning
make the
by
overriding royalty
stating
es
the
pay”
ambiguous.
granting
The
clauses
interests are to be calculated and
Westport Assignment
clause
the
“subject to the same terms and conditions
states,
undersigned
“The
Group
Belcher
the landowner’s
TRANSFER,
CONVEY,
hereby
... does
added).
ASSIGN,
(emphasis
lease.”
AND
OVER unto the fol-
SET
...
the interest set out
lowing parties
majority
assignment
The
also finds the
names,
overriding roy-
as an
opposite their
there is no
contracts
because
oil,
alty
gas,
out of all
payable
interest
royalty suspension
in the as-
reference
substanсes
casinghead gas and associated
signment contracts. The lack of the ex-
marketed from the
produced, saved and
plicit
royalty suspension
reference
added).
(emphasis
granting
lease.”
The
assignment
proves nothing.
contracts
Westport
Assign-
clause in the
to Chevron
incorpo-
pay”
The “calculate and
states,
assigned
ment
“The interest
herein
the land-
rate the terms and conditions of
overriding royalty
...
is
an
owner’s
under the lease. Even
(1%)
totaling
percent
one
of 8/8ths
proposed interpretation
under the
saved,
...
re-
gas production
of oil and
major-
“calculate and
clauses that the
moved,
(emphasis
or sold from the Lease.”
ity urges,
the terms and conditions the
added).
if
majority implies
allegedly
refer
“calculate
require
intended to
to,
payment,
“mechanics” of
so-called
pro-
to wait until the lease
owners
assignment
are not
stated
duced
million
of oil before
87.5
barrels
assignment
contracts. The fact that the
phrasing
receiving
payments,
roy-
incorporate
contracts do not both
granting
clauses would not have
by
alty suspension provision
reference
explicitly granted
landown-
the terms and conditions
pro-
owners an interest in all or
8/8ths
er’s
under the lease and mention
unconvincing.
duction. This
Even
royalty suspension provision by
name
within the four corners of the
ambiguity
not an
make. Where a
does
group,
“grant-
contract to the Belcher
term is
referenсe to an
incorporated
ing”
meant to
clause was
never
agreement,
extrinsic
the contract need not
unqualified.
the ORRI
incorporated
mention the
term within
also
established that when a contract
incorpo
the four corners of
contract. See Pe
agreement
rates terms of an extrinsic
*20
La.,
Props.,
Chesapeake
trohawk
L.P. v.
reference,
parties
the
to the
contract
(5th Cir.2012)
L.P.,
380,
rely
on the fact
that
are not
(holding provisions incorporated by refer
parties
agreement
to the extrinsic
as a
ence
pro
have identical force and effect to
source of ambiguity. See JS & H Constr.
itself).3
visions within the contract
Auth.,
Co. v. Richmond Cnty. Hosp.
(5th Cir.1973)
212,
F.2d
(holding sub-
majority
support
also finds
for con-
contractor
by
bound
arbitration
cluding
provision
the “calculate and
clauses are
incorporated by
ambiguous
overriding
gener
the fact that
the
reference from the
al
party
interest owners were not a
to
conditions of contract
primary
between
the lease.
puzzling.
This is
It
is well-
contractor
principal).4
Despite the
majority’s attempt
distinguish
3. The
Petro-
court held the old
implied
lease had no
war-
Properties
unavailing.
hawk
Ante at 491 n.
ranty
provision
of title
because it contained
adopted
parties
13. In that case we held the
a
through warranty
"a scratched
provi-
title
provision
incorpo
of an earlier lease that was
La.,
Chesapeake
sion.”
L.P. v. Petrohawk
by
rated
reference in the new lease. Petro
L.P.,
85-DEW-MLH,
Props.,
5:09-cv-013
No.
Props.,
Importantly,
hawk
lied Lewis, Where, at 1260.
ment. 653 So.2d
however, rights of third would reformation, prejudiced by
not be reforma v. permissible.
tion is See Samuels State BOUDREAUX, Farm Mut. Auto. Ins. 939 So.2d Wallace Plaintiff-Appellant (La.2006); Bayou v. Bldg. Corp. M.R. Utils., Inc., (La.Ct.App. 637 So.2d 1994) (permitting rights reformation where DEEPWATER, TRANSOCEAN party of third successor chain title INC., Defendant-Appellee. reformation). prejudiced by
would not be No. 12-30041. While Louisiana law is clear that third *22 United Appeals, States Court of rely integrity are on the parties entitled Fifth Circuit. contracts, third must have actually contract relied on the erroneous March Samuels, language prejudiced. to be See (“There simply
939 So.2d at no interpretation
rules contractual ignore
would lead us to the clear intent of to the fortuitous benefit of a party company
third insurance who did not rely issuing
even on this error in its own
policy.”); Am. Elec. Power Co. v. cf. Affili (5th FM
ated Ins.
Cir.2009) (denying claim for reformation party
where third assumed relied on
contract and there was no indication third error).
party would have known of denying Appel
district court thus erred in
lants’ claim reformation on basis
that Total rely and Statoil were entitled to unambiguous language.
on the contract
Ill I affirm
Accordingly, would the district holding
court’s con- unambiguously apply
tracts
suspension provision of the DWRRA
overriding royalty interest owners. I grant
would reverse district court’s
summary judgment Appellants’ claim