10th Circuit Tosses Fight Over Oil and Gas Rights to State Court

State court is the place to resolve a Colorado community’s fight over forced pooling of oil and gas rights.

A storage tank stands near a well pad located in a field near a housing development in Broomfield, Colo., on Feb. 28, 2019. (AP Photo/David Zalubowski)

(CN) — Federal court is not the place to resolve a Colorado community’s challenge to the state’s forced pooling rule for gas and oil extracted under homeowners’ feet, a 10th Circuit panel ruled Monday.

“Timely and adequate state court review of the Commission’s decision was available to Wildgrass under Colorado’s Administrative Procedure Act,” U.S. Circuit Judge Carlos Lucero wrote in a 7-page opinion published Monday. “Though Wildgrass brought a federal claim, state courts are fully equipped to review the constitutionality of a state agency’s procedures.”

In 2016, the Colorado Oil and Gas Conversation Commission sent members of the Wildgrass subdivision in Broomfield a letter offering residents the option to volunteer their oil and gas rights for a large-scale extraction project or be forced to pool them.

Instead, a band of community members sued the state in January 2019.

U.S. District Judge R. Brooke Jackson, a Barack Obama appointee, dismissed the case in March 2020, citing the Burford abstention. Jackson found Burford directs federal courts to leave state issues to state courts where federal review would interfere with the state’s process.

The Wildgrass Oil and Gas Committee appealed. The 10th Circuit affirmed Jackson’s dismissal after hearing arguments on Jan. 20.

“Under the Burford abstention doctrine, federal courts must decline to interfere with the proceedings of state administrative agencies when the court is sitting in equity, timely and adequate state-court review is available and either ‘there are difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar’ or ‘the exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern,’” wrote Lucero, a Bill Clinton appointee.

Donald Trump-appointed U.S. Circuit Judge Joel M. Carson III joined Lucero on the panel along with Obama appointee U.S. Circuit Judge Carolyn McHugh.

While Wildgrass’ complaint has been dismissed from federal court, attorney Joe Salazar continues to challenge the state’s forced pooling law. On behalf of the organized Adams County Communities for Drilling Accountability Now, Salazar filed a lawsuit against the state on Jan. 27 raising similar concerns over the lack of due process afforded to those who challenge the forced pool leases.

Salazar’s firm Colorado Rising for Communities did not respond immediately to a request for comment.

Neither the Colorado Oil and Gas Conservation Commission nor the state attorney general’s office responded before publication.

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