10th Circuit: BLM not entitled to key to inspect well sites on private land

In Maralex Resources, Inc. v. Barnhardt, the Tenth Circuit reversed a district court’s order that had granted the Bureau of Land Management (BLM) authority to require a private landowner to provide it with a key to access and inspect oil and gas wells. Although located on private land, the wells produced oil and gas that originated, in part, from tribal mineral interests as a result of a communitization agreement among several landowners.

BLM relied on a statute granting it authority to “inspect lease sites on Federal or Indian lands,” and argued that the statute was ambiguous because it did not address BLM’s authority to inspect wells on private land that are producing oil and gas from tribal mineral interests. BLM thus argued that the courts should defer to its interpretation of the statute.

In an opinion by Judge Mary Beck Briscoe, the Tenth Circuit held that the statute’s silence did not render it ambiguous, and that authority to require the landowner to provide BLM with a key could only be provided by statute. The Court thus reversed and directed judgment in the landowner’s favor.

This opinion is also interesting because it provides a rare instance of the Tenth Circuit exercising its discretion to review an arguably unpreserved claim. A federal appellate court has the discretion to do so, especially when (1) a purely legal claim is at issue; (2) when the parties had a full opportunity to brief the issue and develop the factual record; and (3) when the district court has either made factual findings or the facts are undisputed.

Of course, it’s far better to preserve a claim in the trial court (or agency) than to rely on the appellate court’s discretion to reach an unpreserved claim. But in the right case it can lead to appellate victory, as it did here.

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