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Southern Ute Indian Tribe v. Amoco Prod. Co.

ELR Citation: 27 ELR 21370
Nos. 94-1579, 119 F.3d 816/(10th Cir., 07/16/1997)

The court holds that the Southern Ute Indian Tribe, as the successor-in-interest to the U.S. reservation of coal under 1909 and 1910 coal land acts, owns coal bed methane (CBM) on tribal land, despite coal extraction leases held by private companies. The court first holds that the 1909 and 1910 acts do not by their plain language indicate congressional intent regarding CBM. The acts neither define coal nor mention CBM. Next, the court holds that the 1909 and 1910 acts are ambiguous with respect to Congress' specific intent regarding CBM. It is not reasonable to impute to Congress a desire to retain only solid rock coal constituents and to convey gaseous coal constituents, because CBM is an integral component of coal and in 1909 there appears to have been no technology by which a patent holder could extract CBM from coal without damaging or destroying the coal. And because the commercial value of CBM was unappreciated at the time of enactment, the text of the acts gives the court no particular indication of Congress' specific intent on this matter. Focusing on Congress' general intent, the court holds that Congress intended in the 1909 and 1910 acts a broad definition of coal. Thus, the court holds that CBM trapped in coal is included in the reservation of coal to the United States. The legislative history suggests that Congress adopted an interpretation of coal that encompassed both the present and future economic value of coal, including value that could only be realized through advances in technology such as those that drive the present-day exploration for CBM. And in 1955, Congress itself recognized the supervening rights of coal owners in cases of dual mineral assets such as uranium and lignite. Further, courts have consistently construed mineral reservations in favor of the United States. Next, the court rejects the coal extraction leaseholders' contention that the court should defer to a 1981 U.S. Department of the Interior Solicitor opinion in which the Solicitor construed the meaning of coal in the 1909 and 1910 acts not to include coal bed gas. Agencies can make law only in two formats, legislative rules and adjudications; the Solicitor's opinion was not promulgated with the procedural protections attendant to either format. Accordingly, Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 14 ELR 20507 (U.S. 1984), does not mandate that the court defer to the 1981 opinion. After assessing the merits of the Solicitor's opinion, the court is not persuaded by the Solicitor's conclusion. Therefore, the court reverses the district court ruling and remands for further proceedings.

Counsel for Plaintiff
Thomas Shipps
Maynes, Bradford, Shipps & Sheftel
West Bldg.
835 E. Second Ave., Ste. 123, Durango CO 81302
(303) 247-1755

Counsel for Defendants
Jacques B. Gelin
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before SEYMOUR, Chief Judge, COFFIN* and McKAY, Senior Circuit Judges.