United States District Court, D. Kansas
MEMORANDUM AND ORDER
THOMAS MARTEN, JUDGE
condemnation action is before the court on competing
dispositive motions by plaintiff Northern Natural Gas (Dkt.
1079) and the defendants (Dkt. 1081). After submitting the
matter for consideration by Special Commissioners, the court
first awarded compensation for Northern's condemnation of
oil and gas rights in 2015 (Dkt. 1000, 1014). This award was
modified on appeal by the Tenth Circuit, substantially
diminishing the award owing to defendants. (Dkt. 1046).
the appeal, this court conducted a January 8, 2018 hearing to
determine the issues remaining in light of the Tenth
Circuit's order. The court rejected the defendants'
argument that the matter should be deferred pending the
resolution of ongoing state litigation. (Dkt. 1060, at 2).
After further argument, the court then issued a new Order
(Dkt. 1076) which comprehensively summarized the status of
Order, the court again concluded (id. at 4-5) that
it was bound by the conclusions of the Tenth Circuit, and was
not free to defer additional rulings in the possibility that
new decisions by the Kansas state courts may alter the legal
landscape. The court further concluded that the calculation
of just compensation must exclude the value of Northern's
storage gas is the 2010 Extension Area on the date of taking,
and that “the amount of the award attributable to that
storage gas can be determined with reasonable accuracy from
the existing record and from the factual finding of the
Commission without a retrial of the case.” Id.
court identified the following issues remaining in the
action: (1) the amount of just compensation (reducing the
value of the award by the amount of storage gas); the amount,
if any, which Northern might set off against that award; and
(3) any other potential adjustments to the award, including
the amount of interest. Id. at 10. The court
directed the parties to file dispositive motions on those
remaining issues, and they have done so. The court has
reviewed those submissions and the extensive record, and
finds that the record supports an award of compensation as
judgment is proper where the pleadings, depositions, answers
to interrogatories, and admissions on file, together with
affidavits, if any, show there is no genuine issue as to any
material fact, and that the moving party is entitled to
judgment as a matter of law. Fed.R.Civ.P. 56(c). In
considering a motion for summary judgment, the court must
examine all evidence in a light most favorable to the
opposing party. McKenzie v. Mercy Hospital, 854 F.2d
365, 367 (10th Cir. 1988). The party moving for summary
judgment must demonstrate its entitlement to summary judgment
beyond a reasonable doubt. Ellis v. El Paso Natural Gas
Co., 754 F.2d 884, 885 (10th Cir. 1985). The moving
party need not disprove plaintiff's claim; it need only
establish that the factual allegations have no legal
significance. Dayton Hudson Corp. v. Macerich Real Estate
Co., 812 F.2d 1319, 1323 (10th Cir. 1987).
resisting a motion for summary judgment, the opposing party
may not rely upon mere allegations or denials contained in
its pleadings or briefs. Rather, the nonmoving party must
come forward with specific facts showing the presence of a
genuine issue of material fact for trial and significant
probative evidence supporting the allegation. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). Once the
moving party has carried its burden under Rule 56(c), the
party opposing summary judgment must do more than simply show
there is some metaphysical doubt as to the material facts.
"In the language of the Rule, the nonmoving party must
come forward with 'specific facts showing that there is a
genuine issue for trial.'"
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P.
56(e)) (emphasis in Matsushita). One of the
principal purposes of the summary judgment rule is to isolate
and dispose of factually unsupported claims or defenses, and
the rule should be interpreted in a way that allows it to
accomplish this purpose. Celotex Corp. v. Catrett,
477 U.S. 317 (1986).
reviewed the extensive record, the court finds that a
sufficient basis for determining just compensation exists.
The Commission's Report makes findings as to the amount
of recoverable gas (both native gas and storage gas) present
in the 2010 Extension Area on the Date of Taking, the amount
of recoverable gas in the 3, 040 Acres subject to Northern
leases on the Date of Taking, and a methodology for
calculating just compensation. The Report (Dkt. 888)
identifies the underlying data used in its calculations.
in the evidence submitted to the Commission was the testimony
of Dr. Paul Boehm. The Commission found Dr. Boehm's
evidence persuasive, particularly with reference to the
amount of native gas in the extension area. (Dkt. 888, at 33
n. 18). This court and the Tenth Circuit have also relied on
Dr. Boehm's conclusions. See N. Nat. Gas Co. v. L.D.
Drilling, No. 08-1405 (Dkt. 420, at 14-16) (noting that
“Defendants have cited no gas composition evidence to
contradict Dr. Boehm's opinions”); N. Nat. Gas
Co. v. L.D. Drilling, , 697 F.3d 1259, 1267 (10th Cir.
2012) (Dr. Boehm's report provided “strong and
clear evidence that ... wells even in the northern portion of
the expansion area [are] producing primarily storage gas,
even though some of those wells are more than 6 miles from
the underground fault”).
plaintiff also attaches to its motion an affidavit by its
expert Randal Brush, who advances several conclusions based
upon his own expertise, publicly availableinformation,
evidence submitted to the Commission, and the
Commission's Report to determine the economic value of
oil and native gas for the 2010 Extension Area. (Dkt. 1080
Exh. 1, at ¶¶ 7, 13-14). Brush's methodology
takes the same approach as that used by the Commission in the
August 26, 2014 Report to the court, which indicated that the
Extension Area outside the Northern leases contained some
2.89 Bcf of recoverable gas. (Dkt. 888). The court has
carefully reviewed the underlying materials, and finds that
Brush's calculations present reliable and persuasive
portrait of the oil and native gas, and that his conclusions
are further evidence to support the condemnation judgment.
the total volumes as determined by the Commission and by the
court, Brush subtracted the gas underlying the Northern lease
and the escaped storage gas located under the 2010 Extension
Area on the Date of Taking. Using the same methodology
employed by the Commission, Brush calculated the value of the
economically recoverable native gas and oil under the tracts
with wells in the 2010 Extension Area.
determined the amount of recoverable native gas for producing
wells in the relevant area, Brush determined the amount of
cash flow, with allowances for taxes, operating costs and
appropriate discounts, to arrive at a value of economically
recoverable oil and gas for each producing well. These
calculations establish that only the following wells
contained native gas in economically recoverable amounts:
Young 1 & 1-26
Producers raise several objections to these conclusions.
Primarily, they argue that, because the court had previously
ruled (Dkt. 810) that compensation would be awarded for both
storage and native gas, they “were not afforded the
opportunity” to present evidence before the Commission
as to the amount of native gas n the Extension area. (Dkt.
1086, at 4). The Producers also complain that the issue of
native gas as documented by ...