Northern Natural Gas Company v. Nash Oil & Gas, Inc. , 374 F. App'x 802 ( 2010 )

FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS March 30, 2010
Elisabeth A. Shumaker
TENTH CIRCUIT Clerk of Court
NORTHERN NATURAL GAS CO.,
Plaintiff–Appellee,
v.
NASH OIL & GAS, INC.,
Defendant–Appellant, No. 09-3135
(D.C. No. 6:08-CV-01405-WEB-DWB)
and (D. Kan.)
VAL ENERGY, INC.,
Defendant.
------------------------------
L.D. DRILLING, INC.,
Amicus Curiae.
ORDER AND JUDGMENT*
Before LUCERO, HOLLOWAY, and HOLMES, Circuit Judges.
* This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. This court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 32.1.
Nash Oil & Gas, Inc. (“Nash”) appeals the grant of a preliminary injunction
permitting Northern Natural Gas Company (“Northern”) to test four Nash gas wells.
Because Northern has already conducted the tests ordered by the district court and tested
the same wells pursuant to a data request issued by the Federal Energy Regulatory
Commission (“FERC”), we dismiss this appeal as moot.
I
Northern owns an underground natural gas storage facility in south-central Kansas
known as the Cunningham Storage Field. Nash operates several natural gas wells located
to the north of Northern’s facility. After years of litigation between the parties over
Northern’s claim that various Nash wells were producing Northern storage gas, Northern
applied for FERC permission to expand its certificated storage field to include an
additional 4,800 acres. N. Natural Gas Co., 125 F.E.R.C. ¶ 61,127, at 61,629 (2008).
FERC found that Northern storage gas had migrated into a portion of the proposed
expansion area and granted the application in part, permitting Northern to extend its
certificated boundary to cover an additional 1,760 acres. Id. at 61,635.
In December 2008, Northern filed suit against L.D. Drilling, Inc., Val Energy,
Inc., and Nash in the United States District Court for the District of Kansas. Alleging
that defendants are producing Northern storage gas by creating “pressure sinks” that
cause Northern storage gas to migrate to defendants’ wells, Northern’s complaint asserts
claims for declaratory and injunctive relief, conversion, unjust enrichment, nuisance,
tortious interference with a business relationship, and civil conspiracy.
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Northern moved for a preliminary injunction to compel Nash to permit testing of
four wells, citing a Kansas statute that grants injectors of natural gas the right to test wells
on “adjoining property” to determine if gas migration has occurred. Kan. Stat.
§ 55-1210(c)(2). The district court acknowledged that each of the four wells is located at
least a mile from the boundary of Northern’s certificated storage field. However, the
court further found that all four Nash wells were located on property adjoining sections in
which Northern had obtained storage lease rights: Two wells were located in sections in
which Northern had storage lease rights, and the others were located in sections adjoining
those in which Northern had storage lease rights. The district court concluded that the
lease rights qualified Nash’s wells as “adjoining property” and granted Northern’s
motion. Nash timely appealed.
While this appeal was pending, Northern collected and tested gas samples from
each of the four Nash wells at issue. Based in part on these tests, Northern filed a new
application with FERC in September 2009 to expand the certificated boundaries of the
Cunningham Storage Field. After Nash voluntarily intervened, FERC issued a data
request requiring Nash to submit gas samples from the four wells. Northern subsequently
collected gas samples pursuant to FERC’s order and submitted the resulting information
to FERC.
II
Before addressing the substance of Nash’s appeal, we must first determine if we
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have jurisdiction. Northern contends we lack jurisdiction because the appeal is moot.1
“To qualify as a case fit for federal-court adjudication, an actual controversy must be
extant at all stages of review, not merely at the time the complaint is filed.” Greater
Yellowstone Coal. v. Tidwell, 572 F.3d 1115, 1121 (10th Cir. 2009) (quotation omitted).
In determining whether a case is moot, we ask “whether granting a present determination
of the issues offered . . . will have some effect in the real world.” Kan. Judicial Review
v. Stout, 562 F.3d 1240, 1246 (10th Cir. 2009) (ellipses in original, quotation omitted). A
case is moot if we can no longer grant effective relief as a practical matter. Id. “If a
party to an appeal suggests that the controversy has . . . become moot, that party bears the
burden of coming forward with the subsequent events that have produced that alleged
result.” Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83, 98 (1993) (citation
omitted).
Since entry of the district court’s order, Northern has completed the ordered
testing. Accordingly, we cannot offer Nash meaningful relief: We cannot undo tests that
have been completed. Nash argues that we could impose limits on Northern’s use of the
test results, but this too would be ineffectual. Pursuant to a FERC data request, Northern
again sampled the four Nash wells and obtained information regarding the composition of
natural gas in the wells—information that is entirely redundant with the information
1
Northern also argues that Nash lacks standing to appeal. Because we conclude
this appeal is moot, we need not address Northern’s standing argument. See Arizonans
for Official English v. Arizona, 520 U.S. 43, 66-67 (1997).
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obtained as a result of the district court’s order. We lack “jurisdiction to interfere with an
ongoing proceeding before FERC.” N. Natural Gas Co. v. Trans Pac. Oil Corp., 529 F.3d
1248, 1252 (10th Cir. 2008). Thus an order restricting Northern’s use of the court-
ordered testing would have no actual “effect in the real world.” Kan. Judicial Review,
562 F.3d at 1246; cf. Navani v. Shahani, 496 F.3d 1121, 1127-30 (10th Cir. 2007)
(proceedings before another tribunal can moot an action when they foreclose relief in the
instant action).2
Nash further argues that this case remains fit for adjudication because the question
(as characterized by Nash) of whether the district court could expand Northern’s storage
rights “is a live and active controversy,” and because Nash could sue for wrongful
2
At oral argument, Nash’s counsel raised two arguments not included in its
briefing on the mootness issue. First, counsel stated that the information obtained from
the FERC-ordered testing was subject to a protective order restricting its use. Second,
counsel argued that the appeal was not moot because information with respect to well
bores, depths, manners of completion, and pressure was not provided to FERC and thus
could be subject to a meaningful restrictive order. We generally do not consider issues
raised for the first time at oral argument. See Thomas v. Denny’s, Inc., 111 F.3d 1506,
1510 n.5 (10th Cir. 1997).
Further, Northern’s counsel disputed Nash’s characterizations at oral argument,
and submitted a Fed. R. App. P. 28(j) letter showing the district court heard testimony
and admitted exhibits regarding the FERC-ordered test results. This information suggests
the FERC tests are not subject to a protective order. Nash did not file a response. Nor
has it cited evidence of a protective order or the information it contends was included in
the court-ordered testing but not the FERC-ordered testing.
Finally, we note that Nash’s counsel conceded at oral argument that the continuing
injury for which it seeks redress on appeal is Northern’s use of information regarding the
“content and nature of the gas” rather than “these other matters.” The content and nature
of the gas, as discussed above, has been obtained by Northern by alternative means.
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injunction if we reversed. These arguments miss the mark. An appeal becomes moot
when the court can no longer grant the appellant effective relief. See Mills v. Green, 159
U.S. 651, 653 (1895). We may not “declare principles or rules of law [that] cannot affect
the matter in issue in the case before” us. Id. This prohibition holds true even if the rule
appellant urges us to articulate might be used in future proceedings. California v. San
Pablo & Tulare R.R. Co., 149 U.S. 308, 314 (1893) (Federal courts are “not empowered
to decide moot questions or abstract propositions, or to declare, for the government of
future cases, principles or rules of law which cannot affect the result as to the thing in
issue in the case before it.”).3 We therefore lack jurisdiction to address the issues Nash
identifies, even if our holdings on those issues might aid Nash in some other proceeding.
III
For the foregoing reasons, we DISMISS the appeal as moot.4 All pending
3
Exceptions to this rule exist when an issue is “capable of repetition yet evading
review” or when “the defendant voluntarily ceases an allegedly illegal practice but is free
to resume it at any time.” Riley v. INS, 310 F.3d 1253, 1257 (10th Cir. 2002). Nash
does not contend that either exception applies in this case.
4
Although as a general rule we have a duty to vacate lower court judgments when
we dismiss a case as moot, see United States v. Munsingwear, Inc., 340 U.S. 36, 39-40
(1950), “[t]he duty to vacate . . . is not to be fulfilled sua sponte by the court, but rather a
motion by one of the parties is required,” Plotner v. AT&T Corp., 224 F.3d 1161, 1169
(10th Cir. 2000); see Munsingwear, 340 U.S. at 40-41. Neither party has moved to
vacate the district court’s judgment nor mentioned such relief in its briefing. We
therefore dismiss the appeal without vacating the judgment below.
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motions not addressed by this order and judgment are DENIED.
ENTERED FOR THE COURT
Carlos F. Lucero
Circuit Judge
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