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Duncan Energy Co. v. U.S. Forest Serv.

ELR Citation: 26 ELR 20202
Nos. No. 93-4005, 50 F.3d 584/40 ERC 1783/(8th Cir., 03/21/1995)

The court holds that the holder of mineral rights on land within the Missouri National Grasslands area, which is part of the Custer National Forest in North Dakota, may not proceed with mineral development without first obtaining U.S. Forest Service authorization of a surface use plan. The court first holds that the district court erred in reading North Dakota law to allow a mineral rights holder to "interfere with or even destroy" the surface estate. The mineral developer's rights are limited to so much of the surface and such use thereof as are reasonably necessary to explore, develop, and transport the minerals. The court next holds that although North Dakota law protects the surface owner's property rights by limiting the mineral holder to the reasonable use of the surface, North Dakota law does not, and could not, cloak the Forest Service with the specific authority to approve surface use plans. Contrary to the district court's view, the Forest Service's special use regulations, 36 C.F.R. §251.50(a), which provide that all uses of National Forest System land are designated special uses and must be approved by an authorized officer, do not give it "veto authority" over mineral development. Moreover, although the Forest Service Manual does not cite the special use regulations, the manual's substance is consistent with the regulations. Furthermore, the Forest Service's position in this case does not violate the Custer National Forest Management Plan and is reconcilable with its position in other litigation and congressional hearings regarding other national forests. The court thus holds that the Forest Service has the limited authority to determine the reasonable use of the federal surface. Finally, the court holds that if North Dakota law is read to allow a developer unrestricted access after 20 days' notice to the surface owner and no injunctive relief is available, then North Dakota law is preempted or falls under choice-of-law principles, because it is inconsistent with the special use regulations. Allowing unrestricted use after 20 days' notice would impede Congress' objective of protecting federal lands and abrogate a congressionally declared program of national scope.

Counsel for Appellees
Charles L. Kaiser
Davis, Graham & Stubbs
370 17th St., Ste. 4700, Denver CO 80201
(303) 892-9400

Counsel for Appellants
Cameron W. Hayden, Ass't U.S. Attorney
U.S. Attorney's Office
220 E. Rosser Ave., Rm. 372, Bismark ND 58502
(710) 250-4396

Before Wollman and Hansen, JJ.