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Rocky Mountain Helium, LLC v. United States

ELR Citation: 46 ELR 20178
Nos. No. 2016-1278, (Fed. Cir., 11/16/2016)

The Federal Circuit affirmed in part and remanded in part a lower court decision dismissing a helium extraction company's breach of contract claims against the United States. In 1994, the parties entered a contract under which BLM gave the company the right to extract helium gas from roughly 21,000 acres of federal lands in Colorado and Utah. The company never extracted any helium due to alleged inadequate cooperation with other oil and gas companies. After one year, it stopped paying rent due to BLM. In 2008, BLM notified the company it was canceling the contract for nonpayment, and the parties entered a settlement agreement. The agreement required BLM to direct certain oil and gas lessees to give it information about gas composition on the federal lands covered by the helium contract; BLM would then provide that data to the company and the company would pay rent due. But after BLM provided the company with the information, the company refused to pay, claiming that the information was incomplete. The company then filed suit against BLM, claiming the contract and settlement agreement were breached. The lower court properly dismissed the company's claim as to the original contract because it was terminated in 2004 and never reinstated. But the lower court erred in dismissing the breach of settlement agreement claim. The company sought mediation before payment was due; as such, the agreement's disputes clause was satisfied and the court retains jurisdiction. The matter was therefore remanded.