United States District Court, D. North Dakota
ORDER FOR DISMISSAL WITHOUT PREJUDICE
L. HOVLAND, CHIEF JUDGE.
the Court are three motions to dismiss, a motion for
preliminary injunction, a motion to stay briefing, a motion
for enlargement of time to respond, and a motion for an
expedited hearing. On July 9, 2018, Enerplus Resources (USA)
Corporation (“Enerplus”) filed a motion to
dismiss. See Docket No. 12. On July 10, 2018,
Petroshale (USA) Inc. (“PetroShale”) also filed a
motion to dismiss. See Docket No. 18. On August 10,
2018, Darryl LaCounte, in his official capacity as Acting
Director of the United States Bureau of Indian Affairs
(“BIA”), and the BIA (together the “Federal
Defendants”), also filed a motion to dismiss.
See Docket No. 29. On September 11, 2018, Prima
Exploration, Inc. (“Prima”) filed a motion for
preliminary injunction. See Docket No. 36. On
September 14, 2018, the Federal Defendants filed a motion to
stay briefing on the motion for preliminary injunction.
See Docket No. 38. Also on September 14, 2018,
Enerplus filed a motion to enlarge the time to respond to the
motion for preliminary injunction. See Docket No.
40. On September 25, 2018, Prima filed a motion for an
expedited hearing on its motion for preliminary injunction.
See Docket No. 45. The motions have been fully
briefed. See Docket Nos. 26-28, 31-35, 42-44, 46, 47
and 49. For the following reasons, the Court orders dismissal
controversy arises from a dispute regarding a mineral
leasehold interest located on the Fort Berthold Indian
Reservation. The following facts are taken from Prima's
complaint. See Docket No. 1. Prima held an interest
in a lease approved by the BIA in 1952. The lease covered 320
acres in the south half of Section 16, Township 152 North,
Range 94 West in McKenzie County, North Dakota (the
“Disputed Leasehold”). On December 17, 2013, the
BIA declared 240 acres of the Disputed Leasehold terminated
and approved a new lease of that same acreage to Enerplus.
Roughly two years later, on December 18, 2015, the BIA
declared the remaining 80 acres of the Disputed Leasehold
terminated and approved a lease of that same acreage to
PetroShale. Prima filed timely appeals of both decisions with
the BIA. To date, the BIA has not made a decision on either
of Prima's appeals. Administrative procedures allow
parties to appeal BIA inaction. See 25 C.F.R. §
2.8. No. inaction appeals have been filed. See
Docket No. 34, p. 11-12.
filed suit in this Court on May 31, 2018. See Docket
No. 1. Prima asserts Enerplus and PetroShale have conspired
with the BIA to divest Prima of its leasehold interest.
According to Prima, the “Defendants have worked
together in an effort to interfere with, trespass upon, and
convert Prima's rights. These efforts have been, for the
most part, done with deceit, with improper intent, and have
been conducted in secret from Prima.” See
Docket No. 1, p. 4. Prima requests a declaration that it has
a valid interest in the Disputed Leasehold. In addition,
Prima asserts various causes of action against the BIA,
including deprivation of due process and unlawful regulatory
taking. See Docket No. 1, pp. 10-11. Prima also
asserts various causes of action against Enerplus and
PetroShale, including trespass, conversion, tortious
interference, slander of title, unjust enrichment, and
accounting. See Docket No. 1, pp. 13-17. Last,
Prima's complaint contains a cause of action entitled
“Preliminary Injunction as Against All
Defendants.” See Docket No. 1, p. 18. Prima
asserts this Court has jurisdiction over its claims under 28
U.S.C. §§ 1331 (federal question jurisdiction) and
1367 (supplemental jurisdiction). See Docket No. 1,
p. 8. Prima has also filed a motion for preliminary
injunction requesting all revenue from production on the
Disputed Leasehold be placed into escrow. See Docket
No. 37. The Defendants oppose Prima's motion for a
preliminary injunction and have filed motions to stay
briefing or extend the time for briefing until after the
Court has addressed the jurisdictional issues the parties
have raised. See Docket Nos. 38 and 40.
Enerplus, and the Federal Defendants have all filed motions
to dismiss Prima's complaint. Enerplus and the Federal
Defendants argue this Court lacks subject matter jurisdiction
because there are appeals pending before the BIA, and thus
Prima has failed to exhaust its administrative remedies.
See Docket Nos. 15 and 30. On the other hand,
PetroShale's motion to dismiss attacks Prima's
standing. PetroShale argues that, based on the chain of
title, Prima never acquired an interest in the disputed
lease, Prima has no standing to sue, and this Court lacks
subject matter jurisdiction. See Docket No. 19.
Prima has filed a number of briefs in opposition to
dismissal. Prima acknowledges the doctrine of exhaustion
ordinarily would apply to its case, but it contends various
exceptions excuse it from pursuing administrative remedies.
See Docket Nos. 27 and 34. Prima also disputes
PetroShale's assertions regarding title and argues that,
in any case, PetroShale's arguments go to the merits of
the matter and are inappropriate at this stage of the
litigation. See Docket No. 28. As discussed below,
the Court concludes Prima must exhaust administrative
remedies before bringing suit in this Court.
STANDARD OF REVIEW
may assert a lack of subject matter jurisdiction by motion
under Fed.R.Civ.P. 12(b)(1). This defense may be brought in
two ways: by facial attack or by factual attack. Branson
Label, Inc. v. City of Branson, 793 F.3d 910, 914 (8th
Cir. 2015). A facial attack simply asserts the plaintiff has
not plead a basis for subject matter jurisdiction.
Branson Label, at 914. In a facial attack, the Court
must afford the non-moving party the benefit of the Rule
12(b)(6) safeguards, and it may only consider the pleadings
and “materials that are necessarily embraced by the
pleadings and exhibits attached to the complaint.”
Carlsen v. Gamestop, Inc., 833 F.3d 903, 906 (8th
Cir. 2016) (quoting Cox v. Mortg. Elec. Registration
Sys., Inc., 685 F.3d 663, 668 (8th Cir. 2012)). On the
other hand, a factual attack asserts the actual existence of
subject matter jurisdiction is lacking “irrespective of
the pleadings, and matters outside the pleadings, such as
testimony and affidavits, are considered.” Id.
at 914-915 (quoting Menchaca v. Chrysler Credit
Corp., 613 F.2d 507, 511 (5th Cir. 1980)). The Court
will treat these motions as facial attacks and consider only
the pleadings and materials embraced by the pleadings; the
Court will not consider testimony or other evidence.
PRIMA MUST EXHAUST ADMINISTRATIVE REMEDIES
asserts the BIA and other Defendants have conspired to divest
Prima of its interest in the Disputed Leasehold. Prima's
conspiracy allegations are premised upon Prima's
assertion that the BIA's decision regarding the Disputed
Leasehold is incorrect. In its words, “Prima brings
this lawsuit seeking a declaration that Prima's interests
in the lease have not been segregated or terminated and for
judgment in the amount of all damages caused by this wrongful
conduct.” See Docket No. 1, p. 3.
Consequently, the issue of whether Prima's lease was
improperly terminated must be addressed before Prima's
conspiracy claims can be decided.
district courts have subject matter jurisdiction under 28
U.S.C. § 1331 to review, pursuant to the Administrative
Procedures Act (“APA”), decisions by the BIA.
Runs After v. United States, 766 F.2d 347, 351 (8th
Cir. 1985) (citing Goodface v. Grassrope, 708 F.2d
335, 338 (8th Cir. 1983)). “Although the APA may not be
used as an independent grant of subject matter jurisdiction
to review agency actions, the Supreme Court stated in
Califano v. Sanders, 430 U.S. 99, 105 . . . (1997),
that 28 U.S.C. § 1331 confers general jurisdiction on
federal courts to review agency actions ‘subject only
to preclusion-of-review statutes.'” Fort
Berthold Land and Livestock Assoc. v. Anderson, 361
F.Supp.2d 1045, 1049 (D.N.D. 2005). Under 25 C.F.R. §
2.6-the regulation governing appeals from BIA
decisions-judicial review of BIA decisions is precluded
unless the decisions is “final.” A BIA decision
is not final if it may be appealed to a superior authority
within the Department of the Interior. Id.; see
also Coosewoon v. Meridian Oil Co., 25 F.3d 920, 924
(10th Cir. 1994) (“Under Department of Interior
regulations, if an agency decision is subject to appeal
within the agency, a party must appeal the decision to the
highest authority within the agency before judicial review is
Court has had prior occasion to explain the legal framework
governing BIA appeals and its history:
Since 1975, regulations governing challenges to decisions of
the Bureau of Indian Affairs have required an administrative
appeal from most BIA decisions before judicial review of such
decisions can be obtained. See, e.g., 25
C.F.R. § 2.3(b) (1988); 40 Fed.Reg. 20, 625-626 (1975).
In 1989, the regulations requiring an administrative appeal
were revised without changing the appeal requirement.
See 54 Fed.Reg. 6478, 7666 (1989). The provision
requiring an appeal now appears at 25 C.F.R. § 2.6(a)
(1992). These regulatory revisions also eliminated an
intermediate appeal to the Commissioner of Indian Affairs and
provided for direct review of BIA Area Director decisions by
the Interior Board of Indian Appeals. See 54
Fed.Reg. 6478 (1989); compare 25 C.F.R. §
2.3(a) (1988) with id. § 2.4(e) (1992). At the
same time, the rules governing appeals to the IBIA were
amended to “ensure compatibility between those
regulations and regulations of the Bureau of ...