United States District Court, D. Kansas
MEMORANDUM AND ORDER
THOMAS MARTEN, JUDGE
matter is before the court on Nash Oil & Gas, Inc.'s
Motion for Judgment on the Pleadings. (Dkt. 620). The motion
argues that Northern's claims are barred by res
judicata. The argument is essentially the same one made
by Nash and rejected by Judge Brown in 2009 (Dkt. 152), but
Nash contends the “landscape has changed
significantly” and that the matter should be
reconsidered. Nash's arguments are no more persuasive
than they were in 2009, however, and the court accordingly
denies the motion.
Rule 12(c) standards
court analyzes a motion for judgment on the pleadings under
the same standards governing a motion to dismiss under
Fed.R.Civ.P. 12(b)(6). Park Univ. Enters., Inc. v. Am.
Casualty Co., 442 F.3d 1239, 1244 (10th Cir. 2006).
“To survive a motion to dismiss, a complaint must
contain ‘enough facts to state a claim to relief that
is plausible on its face.'” The Estate of
Lockett by & through Lockett v. Fallin, 841 F.3d
1098, 1106-07 (10th Cir. 2016), cert. denied sub nom.
Lockett v. Fallin, 137 S.Ct. 2298 (2017) (quoting
Bell Atl.Corp. v. Twombly, 550 U.S. 544, 570
(2007)). A claim is plausible if it pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In
reviewing a motion to dismiss, the court must accept as true
all well-pleaded allegations and view those allegations in
the light most favorable to the non-moving party. See
Dias v. City & Cty. of Denver, 567 F.3d 1169, 1178
(10th Cir. 2009).
overview of the litigation surrounding the Cunningham Storage
Field is necessary to address Nash's arguments. Northern
sued Trans Pacific Oil Corp. (“Trans Pac”) in
2002, claiming that Trans Pac's two “Park
Wells” just northwest of the storage field boundary
were producing Northern storage gas. Northern Nat. Gas
Co. v. Trans Pacific Oil Corp., No. 02-1418-JTM (D. Kan.
filed No. 19, 2002). In 2004, Northern sued Nash Oil &
Gas, claiming Nash was producing storage gas from four wells
located about four miles due north of the Park Wells.
Northern Nat. Gas Co. v. Nash Oil & Gas, Inc.,
No. 04-1295-JTM (D. Kan. filed. Sept. 3, 2004). In 2005, in
the Trans Pacific case, a jury found Northern
storage gas had not migrated to the two Park Wells
after July 1, 1993. The Tenth Circuit subsequently affirmed
the judgment. Northern Nat. Gas Co. v. Trans Pacific Oil
Corp., 248 F.App'x 882, 2007 WL 2753079 (10th Cir.
March of 2007, this court granted Nash's motion for
summary judgment in Case No. 04-1295, on two separate
grounds. First, it found Northern's claims for conversion
and unjust enrichment were barred by the statutes of
limitations (two and three years, respectively), because
Northern had reason to believe by 2000 that the challenged
Nash wells were producing storage gas. Second, the court
found the claims were barred by the collateral estoppel
(issue preclusion) effect of the Trans Pacific
judgment, because Northern's expert testified there was a
single migration pathway from the storage field to the Trans
Pac wells to the Nash wells, which was merely “an
extension of the theory presented [and rejected by the jury]
in the [Trans Pac] case.” (Dkt. 136 at 13). On appeal,
the Tenth Circuit affirmed the finding that the claims were
barred by the statute of limitations. Northern Nat. Gas
Co. v. Nash Oil & Gas, Inc., 526 F.3d 626 (10th Cir.
in 2005, the Federal Energy Regulatory Commission (FERC)
found Northern had shown that storage gas was migrating
beyond the storage field's boundaries, and it authorized
Northern to install additional withdrawal and monitoring
wells. Northern installed observation wells to the east of
the Park Wells. Northern alleges that as a result, it
obtained evidence that storage gas was migrating across a
two-mile wide area of the northern boundary, rather than
through a narrow channel as it originally believed. In
October 2008, FERC authorized Northern to expand the field
boundary by 1, 760 acres, finding storage gas had migrated at
least to the two Park Wells and into the southern part of a
larger 4, 800 extension area proposed by Northern.
filed suit against Trans Pac in November 2008, alleging Trans
Pac had produced storage gas from the Park Wells after the
date of the prior jury verdict. The suit was settled in
February 2009. Northern Nat. Gas Co. v. Trans Pacific Oil
Corp., No. 08-1365-WEB (D. Kan.).
filed the instant suit on December 23, 2008, against L.D.
Drilling, Inc., Val Energy, Inc., and Nash Oil & Gas,
Inc. (Dkt. 1). Among other things, the suit challenges
production from 25 wells to the north of the 2008 storage
field boundary, including five wells completed by Nash
subsequent to the filing of Northern's 2004 suit against
Nash. The claims in both the initial complaint and the Third
Amended Complaint (Dkt. 564) include (among others)
conversion,  unjust enrichment, and nuisance.
of 2009, Judge Brown granted Northern a preliminary
injunction allowing it to test the Nash wells for the
presence of storage gas. (Dkt. 60). In November of 2009,
Judge Brown denied Nash's motion to dismiss the
complaint. (Dkt. 152). He rejected Nash's res
judicata argument, finding that under the
Restatement's “transactional approach” for
determining when two lawsuits constitute the same claim or
cause of action, Northern's claims amount to a separate
cause of action from the 2004 lawsuit. Judge Brown noted the
wells at issue here (with one exception) were not in
existence when the 2004 suit was filed, and he found Northern
was challenging conduct that occurred after the filing of the
first suit. He noted that the wells in this suit were in a
different location and were significantly closer to the
storage field boundary. Northern alleged that pressure sinks
caused by the new wells, and their production of large
amounts of water, were unreasonably interfering with
Northern's use of the storage field, such that their
operation constituted a continuing nuisance. Because
“[t]hese allegations involve conduct subsequent to the
filing of the 2004 case, ” Judge Brown concluded
“that such actions should not be considered part of the
same transaction as Case No. 04-1295.” (Id. at
December of 2009, Judge Brown denied Northern's request
for an injunction to shut-in the Nash wells. (Dkt. 166).
Although he found “strong evidence that the gas being
produced by the four Nash wells is storage gas from the
Cunningham Storage Field, ” he found no irreparable
harm because the money from Nash's gas sales was being
held in suspense.
2, 2010, FERC granted Northern authority to condemn a 12,
320-acre portion of the Viola and Simpson formations north of
the existing field-the 2010 Extension Area-including the
acreage where Nash operated the aforementioned wells.
Northern commenced a separate condemnation action.
Northern Nat. Gas Co. v. Approx. 9917.53 Acres, No.
10-1232-JTM (D. Kan. filed July 16, 2010).
September 2010, Judge Brown granted the defendants partial
summary judgment on Northern's conversion claim. He found
the claim was barred as to any gas production before June 2,
2010 (the date of the FERC certificate), due to the
collateral estoppel effect of a Pratt County District Court
judgment which held that Northern ...