Amoco Production Co. v. Southern Ute Indian Tribe (06/07/1999)
Amoco Production Co. v. Southern Ute Indian Tribe (06/07/1999)
By: Laurel Druley, Medill News Service
Questions presented
Whether, in reserving to the United States ""coal"" in lands patented under the 1909 and 1910 Coal Land Acts, 30 U.S.C. Sec. 81, 83-85, while passing the surface land and all other minerals (including natural gas) to the patentee, Congress reserved only the solid rock fuel commonly known as ""coal,"" but not natural gas in coal formations.
Brief
Does Colorado's Southern Ute Tribe have rights to more than $200 million worth of methane trapped in coal beds under its reservation? That all depends on how the U.S. Supreme Court will interpret a couple of 90-year-old federal laws that gave the government ownership of all coal. Methane gas is a by-product of coal.
In 1994, U.S. District Judge Lewis Babcock ruled that Amoco, as well as 20 other gas-field production companies and numerous individual landowners, were entitled to the gas. Babcock rejected the tribe's claim that the federal government had illegally betrayed the tribe's rights to the gas.
On appeal, the panel concluded that the Coal Land Acts of 1909 and 1910 are ambiguous. Amoco petitioned for rehearing en banc. The court granted rehearing limited to the issue of whether ""coal"" as used in the acts unambiguously excludes or includes coal bed methane.
The 10th Circuit Court of Appeals reversed the district court's decision saying the tribe has owned the methane since 1938 when the federal government gave it the coal rights under what is today part of the 700,000-acre Southern Ute reservation.
At the time the 1909 and 1910 laws were written, methane in coal was considered a dangerous nuisance - not the valuable natural resource that technology today allows to be taken out of coal and marketed.
According to the appeals court, the Congress of 1909 and 1910 clearly knew the gas was included in the coal when it gave the Southern Utes the coal rights.
Amoco contends the tribe owns the coal but not the gas.
The U.S. Supreme Court granted certiorari on Jan. 22, 1999 and limited review to the question presented above.
On June 7, 1999, the Court sided with Amoco and reversed. Writing for a 7-1 majority, Justice Anthony Kennedy held that coal, as used in the 1909 and 1910 Acts, does not encompass coal bed methane gas. The majority reasoned that the question was not whether, based on what scientists know today, CBM gas is a constituent of coal, but whether Congress so regarded it in 1909 and 1910. The common understanding of coal at that time would not have encompassed CBM gas, oil or any other energy resources, Justice Kennedy wrote.
Justice Ruth Bader Ginsburg dissented, Justice Stephen Breyer took no part in the case.