Tuesday, September 17, 2013

Judgment in Mineral Dispute Stays Put in State Court

Tearlach Resources Ltd. v. Western States International, Inc., No. F065511 (D5, as amended Sept. 17, 2013) 

The trial court entered judgment in a case about a dispute over an oil and gas lease on federal land. It subsequently granted a motion to vacate the judgment under Code of Civil Procedure § 473(d) on the grounds that it lacked subject matter jurisdiction to enter the judgment because it believed that the claim was subject to the exclusive jurisdiction of the federal courts. The court of appeal reversed, holding that (a) federal court jurisdiction is exclusive only when a statute expressly provides that result; (b) that the Mineral Leasing Act of 1920, which governed the claims at issue, did not provide for exclusive federal jurisdiction; and (c) because the dispute was just a contract dispute between lessees and assignees, the interests of the United States were not sufficiently implicated to make it a necessary party, such as to require exclusive federal jurisdiction under 28 U.S.C. § 1346(f), which vests the federal courts with exclusive jurisdiction to actions to quiet title to real property in which the United States claims an interest.

Reversed.

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