Wyoming Wolves De-Listed Under the Endangered Species Act

On March 3, 2017, the D.C. Circuit reinstated the rule promulgated by the United States Fish and Wildlife Service (“FWS”) in 2012 to remove the Northern Rocky Mountain gray wolf in Wyoming from the endangered species list under the Endangered Species Act (“ESA”). Defenders of Wildlife v. Zinke, --F.3d.--, 2017 WL 836089 (D.C. Cir. Mar. 3, 2017).  The FWS has been trying to turn over the management of the wolves in Wyoming to the state since 2008, but has faced several reversals at the hands of the courts.  This decision reverses a 2014 ruling of the U.S. District Court, District of Columbia that vacated the FWS 2012 rule delisting the gray wolf.

Although the D.C. District Court agreed with the FWS finding that the species had recovered and did not overturn FWS’ determination that the gray wolf is not endangered or threatened within a significant portion of its range, it found fault with the state plan to guarantee the required baseline wolf population.  The District Court denied the delisting of the gray wolf because FWS did not require Wyoming to meet a specific numeric buffer above the baseline population but instead relied upon representations in a “non-binding” Addendum to its wolf management plan.  On appeal the D.C. Circuit disagreed, and held that nothing in the ESA demands that level of certainty.  The Court stated that:

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Employer Alert: Colorado Supreme Court Narrows Employer Liability in Negligence Cases

The Colorado Supreme Court recently issued a decision that significantly reduces an employer’s liability in cases where both the employer and the employee are sued for injuries caused by the employee while performing job duties.  

In Ferrer v. Okbamicael, 2017 CO 14, decided on February 27, 2017, a pedestrian sued a taxi cab company and the taxi cab driver who struck her while on the job, causing significant injuries.  The pedestrian asserted two types of claims against the taxi cab employer: one based upon the doctrine of respondeat superior, where an employer is indirectly liable for the acts of its employees, and additional direct claims for negligent hiring, entrustment, supervision and training.  The taxi cab employer admitted that the taxi cab driving was acting within the scope of his employment duties at the time of the accident, thereby conceding the respondeat superior claim, but argued that this concession meant that it could not also be held liable on the direct negligence claims.  The Colorado Supreme Court agreed, establishing new law that an employer can avoid direct claims of negligence in this context by conceding that the employee was acting within the scope of employment at the time of the injury.  

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Update to February 11, 2016 Blog Post/Weed and Water - Can Water Be Used for Marijuana Cultivation in Colorado

Last Year, WSMT blogged about whether water could be lawfully appropriated for Marijuana cultivation.  2/11/16 blog post.  We provided three arguments why that would be allowed.

Almost exactly a year later, the Division  water referee agreed In Re High Valley Farms, LLC, 14CW3095 with two of the reasons we set forth in our blog from last year - namely that appropriation of water is controlled by state law, and that the word "lawfully" in the state law definition of beneficial use of water means that the appropriation, not the use of the water, must be lawful.  A copy of the February 17, 2017 order is available here.

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Wyoming Legislature Rejects Attempts to Penalize Wind Energy Industry

In a state that has been described as having “world class wind,” a boast hard to ignore during a winter that featured days upon days of wind gusts reaching 80 mph at times, wind energy has struggled to find a secure toehold due to the vice-like grip traditional extractive mineral industries have on the energy sector in Wyoming.  That may be changing, however.

This year, bills were proposed in both the Wyoming House and Senate that sought to limit the ability of wind producers to market their product within the State.  Luckily (or not, depending on your point of view), each bill failed in committee before being introduced on the floor of either house.  House Bill 127 sought to increase the tax on wind energy from $1.00/megawatt hour to $5.00/megawatt hour.  This bill was defeated by a 7-2 vote by the House Revenue Committee on January 23, 2017.  In the Senate, Senate File 71 proposed that utility companies that use wind or solar power would incur a penalty of $10.00/kilowatt hour starting in 2019.  After widespread public opposition to this bill reached the desks of the Senate, it died in committee.  So, while Wyoming is the only state in the U.S. to tax wind1, and while wind producers still face a more difficult permitting process before the Industrial Siting Council than their traditional extractive mineral counterparts, the State legislature prevented two significant roadblocks to future development from being erected.

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After Years of Planning, the Forest Service Approves Arapahoe Basin’s Ski Area Expansion (WAHOOOO!)

On March 3rd, the attorneys of Welborn Sullivan Meck & Tooley will embark on our annual ski trip to Arapahoe Basin in the White River National Forest.  We look forward to the trip as a highlight of each winter season and, if we’re being honest with ourselves, a highlight of the year when all the hustle of firm life is exchanged for the exhilaration of a ski day in the Colorado mountains.  It is not too often that we lawyers get outside for an entire day to rip runs and bask in the sun.  

This year we will miss our fearless leader on the slopes and winter’s biggest fan, Chelsey Russell.

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Nonconsenting Owner in a Colorado Oil and Gas Well Must First Pursue Claim for Payment of Proceeds of Production at COGCC – not District Court

A recent Colorado Court of Appeals decision involves two parts of the statutes regarding the Colorado Oil and Gas Conservation Commission (Commission):  the pooling statute and the statute regarding payment of proceeds of production.  In Grant Brothers Ranch, LLC v. Antero Resources Piceance Corporation, ___ P.3d __ (2016), 2016 COA 178, the court held that the nonconsenting owner was required to exhaust its administrative remedies by bringing its claim at the Commission, and that the nonconsenting owner’s claim brought in district court should have been dismissed without prejudice.

The Commission established two drilling and spacing units to produce oil and gas in Garfield County.  Antero Resources Piceance Corporation (Antero) offered to lease the mineral interest owned by Grant Brothers Ranch, LLC (Grant Brothers) in the units.  Grant Brothers did not lease its interest and also refused Antero’s offers for Grant Brothers to participate in the wells.  After Antero’s requests, the Commission entered orders pooling all nonconsenting interests in the units. 

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Proposed Public Land Sale Falls to Public Opposition

On February 1, 2017, Representative Jason Chaffetz (UT-R) announced that he would pull a bill proposing to sell more than 3 million acres of public land.  It was easy to lose track of this sea-change proposal amidst the flurry of activity at the advent of the Trump administration, but the bill’s goal - as well as its failure - is noteworthy despite the fact that it is unlikely to become law.

Focusing first on the proposal, Mr. Chaffetz, a Republican Representative from Utah and chair of the House Oversight Committee, memorialized the argument held by some, especially in the West, that the federal government owns too much land, to the detriment of states.  In his home state of Utah, the legislature is seeking the “return” of federal lands to the state.  See http://publiclands.utah.gov/current-projects/transfer-of-public-lands-act.  Debate over federal property ownership has existed since the country’s inception, but recently the debate came to a head with Cliven Bundy and other groups claiming ownership over federally leased land.  States like Utah also challenged the extent and alleged burden of federal lands within their borders, while conservatives like Mr. Chaffetz aimed to turn that public sentiment into law.  House Republicans recently changed their internal rules to generally facilitate selling public land, and Mr. Chaffetz offered H.R. 621, which would sell 3.3 million acres of Bureau of Land Management lands spread across ten western states, and H.R. 622, which would transfer federal agencies’ policing power to local law enforcement. See http://chaffetz.house.gov/news/documentsingle.aspx?DocumentID=788.

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What Happens After the Nomination? How a Nominee becomes a Supreme Court Justice

On January 31, 2017, President Trump nominated Judge Neil M. Gorsuch, a Coloradan and judge on the Tenth Circuit Court of Appeals (“Tenth Circuit”), to fill the open seat on the United States Supreme Court that has been empty since Justice Antonin Scalia died on February 13, 2016.i   Judge Gorsuch was nominated to the Tenth Circuit by President George W. Bush on May 10, 2006, and confirmed by the Senate on July 20, 2006.  Prior to serving on the Tenth Circuit, Judge Gorsuch earned degrees from Columbia University, Harvard Law School and Oxford University, and he also served as a law clerk for the only other Coloradan who has served on the Supreme Court, Associate Justice Byron R. White and the still-serving Associate Justice Anthony M. Kennedy.ii

While Judge Gorsuch’s legal and personal history are going to be widely discussed over the coming weeks and months, what else happens after the nomination?  How does a nominee become a United States Supreme Court Justice?iii

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Hoping to Fish or Boat on Utah Waters? The Utah Supreme Court May Soon Clarify Your Access Rights.

After nearly a decade of uncertainty, Utahns and visitors alike are looking forward to certainty on two key issues: (1) public access to and (2) navigability of the Beehive State’s premier rivers.  

It all started with Conatser v. Johnson, where the Utah Supreme Court held that the scope of the public’s easement in state waters “provides the public the right to float, hunt, fish, and participate in all lawful activities that utilize the water” and that the public has the right to “touch privately owned beds of state waters in ways incidental to all recreational rights provided for in the easement, so long as they do so reasonably and cause no unnecessary injury to the landowner.”  In response, Utah lawmakers passed H.B. 141: Recreational Use of Public Water on Private Property in 2010, tightening public access to the state’s rivers and streams.  The law prohibits recreational water users (including anglers, kayakers, tubers, hunters and others) from walking on the private bed of a public waterbody.  According to the law, individuals fishing or recreating in public water that flows over closed private property may not walk on the land beneath the water without obtaining landowner permission. 

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Colorado Supreme Court Limits How Transbasin Water May Be Used and Holds That Unjustified Non-Use of Water Rights Will Count Against Water Users When They Change Their Water Rights

The Colorado Supreme Court recently addressed two previously unsettled issues that will impact other water users in Grand Valley Water Users Ass’n v. Busk-Ivanhoe, Inc., 14SA303 (2016).  First, the Court held that imported transbasin water may not be stored in the basin of import prior to first use unless the decree expressly authorizes it.  The Court reasoned that “just as the right to store water is not an automatic incident of a direct flow right, the right to store water in the basin of import prior to use is not an automatic incident of trans mountain water rights.”  Id. ¶ 49 (citations omitted). Second, the Court held that undecreed uses of the decreed amount of water could count as zero use in historical beneficial use analyses rather than be omitted from the study period.  The Court reasoned that the use of water for an undecreed purpose could be treated as “unjustified non-use” and should not be ignored by excluding it from the study period.  Id. at ¶ 71.  

The Court was split on the first issue of storing transbasin water in the basin of import prior to first use.  The dissent argued that the specific decree at issue implicitly permitted such storage.  Id. ¶ 84. It also argued generally that once water is exported it is fully consumed with respect to the basin of export so no further injury can occur there, and no one in the basin of import has any right to the imported water and can therefore not be injured regardless of its use, so the importer can use the water however it sees fit without injuring anyone in either basin.  Id.  ¶ 85.  Thus, the dissent argued, no explicit decree language is needed for storage of imported water.  Id.  

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Hardrock Mining Will Require Hard Cash

On January 11, 2017, EPA published a proposed new rule that would require hardrock mining facilities to post security or prove their financial responsibility under Section 108(b) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund).  Owners and operators of such facilities can already be held strictly liable under CERCLA for cleanup of hazardous substances.  Soon they may also be required to demonstrate their financial strength as a condition of operating.  The total financial obligations imposed by the new rule could exceed $7 billion.

The new rule will apply to over 200 mines and processing facilities that produce gold, silver, copper, lead, iron ore, molybdenum, uranium and other hardrock minerals in over 30 states.  Four types of operations will, however, be exempt:  (1) placer mining; (2) exploration; (3) “[m]ines with less than five disturbed acres that are not located within one mile of another area of mine disturbance that occurred in the prior ten-year period, and that do not employ hazardous substances in their processes”; and (4) “[p]rocessors with less than five disturbed acres of waste pile and surface impoundment.”

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Amended BLM Right Of Way Regulations

The Bureau of Land Management (BLM) published amended rules governing rights of way granted under Title V of the Federal Land Policy and Management Act (“FLPMA”) and under the Mineral Leasing Act (for oil or gas pipeline rights of way) on December 19, 2016, 81 Fed. Reg. 92,122 (https://www.gpo.gov/fdsys/pkg/FR-2016-12-19/pdf/2016-27551.pdf).  The rules take effect January 18, 2017, assuming they are not affected by Congressional efforts to undo “midnight rules” promulgated by the outgoing Administration.  The amended rules are most significant for their changes to the processes for obtaining authorizations to use federal lands for solar and wind energy development.  However, the amendments will also affect, to a lesser extent, oil and gas operators who seek FLPMA rights of way for roads or water pipelines, or Mineral Leasing Act rights of way for oil and gas pipelines.  Please see our earlier blog discussing the proposed rule amending the right of way regulations at http://www.wsmtlaw.com/blog/blm-buries-change-to-mla-rights-of-way-in-wind-and-solar-leasing-change.html.  

Until now, the BLM’s policy on processing right of way applications for renewable energy projects was contained in instruction memoranda.  Those policies, as modified in the final rule, are now contained in the regulations to be codified in 43 C.F.R. Part 2800.  

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Weighing the Scales: Master Leasing Plan Aims to Balance Oil, Natural Gas and Mining with Conservation of Arches and Canyonlands National Parks

Internationally known for rugged landscapes and stunning views, the treasured Arches and Canyonlands National Parks now have a plan, that is, a Master Leasing Plan.  

The Bureau of Land Management (“BLM”) introduced the concept of Master Leasing Plans (“MLPs”) as part of a suite of federal onshore oil and gas leasing reforms rolled out by Secretary Salazar in early 2010.  The MLP’s intended purpose is to harmonize competing resources, i.e., the balancing of oil and gas development with conservation of natural and cultural resources.  MLPs provide BLM with an additional land use planning tool, allowing it to amend a governing resource management plan (“RMP”) to include new terms and conditions imposed by the MLP.  The goal, but not necessarily the reality, is to reduce risk of litigation and community protests over oil and gas leasing by enlisting early stakeholder input about where energy development is appropriate and how to protect other resources.

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Wyoming Supreme Court Justices Disagree: An Unusual Circumstance

Wyoming’s Supreme Court Justices seem to agree most of the time.  In fact, in 2016 more than 95% of the Court’s orders and opinions were unanimous.  The most recent disagreement is in Cheyenne Newspapers, Inc. v. The Board of Trustees of Laramie County School District Number One, 2016 WY 113, 2016 WL 6995555 (Wyo. 2016).

This case features a dispute between Cheyenne Newspapers, Inc., doing business as the Tribune-Eagle (“Tribune-Eagle”), and Laramie County School District No. 1 (“School District”) regarding a public records request.  The Tribune-Eagle submitted a request February 11, 2014, to inspect all emails to, among and from school board members since December 1, 2013, regarding school board topics.  This required the School Board to search not only the School District’s computer system, but also the personal email accounts of the school board members, because school board members use their personal email accounts to conduct school board business.  After completing the search the School District informed the Tribune-Eagle that the requested records could be obtained upon the payment of a $110.  The fee was for the clerical staff time and professional personnel time required to process the request.  The Tribune-Eagle refused to pay the fee and filed a declaratory judgment action seeking a ruling that the Wyoming Public Records Act (the “Act”) does not allow a government entity to charge for access to electronic records when the records request is for inspection only and not copying of the records.  The District Court found the fees to be allowable under the Act and also to be reasonable.  The Wyoming Supreme Court affirmed in a 3-2 split decision.

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Employer Alert Update: Nationwide Injunction Delays Implementation of New Overtime Rule for White Collar Employees.

Yesterday, a federal judge in Texas issued a nationwide preliminary injunction barring implementation of the new overtime rule that raises the salary threshold for white collar employees from $23,660 to $47,476. Court Decision This ruling means that the new salary threshold for overtime exemptions of executives, administrators, professionals and highly compensated employees will not go into effect on December 1, 2016, as planned. (Additional information concerning the new rule can be found in this blog post: White Collar Exemption Blog.

The ruling was the result of lawsuits filed in the Texas court against the U.S. Department of Labor (DOL) by 21 states and a coalition of business groups to stop the new overtime rule from ever becoming effective. The Texas court granted the defendants’ request to enjoin implementation of the rule on the ground that the DOL exceeded its authority in raising the minimum salary requirements for the exemptions.

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With $646 Billion In Annual Spending, The Outdoor Recreation Industry Has Caught The Eye Of The Hill

Private groups estimate that the outdoor recreation industry generates $646 billion in consumer spending each year and supports 6.1 million jobs—more than pharmaceuticals and motor vehicles and parts combined (see chart below). Yet, policy makers have been left in the dark as to the sector’s influence on the national economy because the federal government has never measured the recreational industry’s economic impact. H.R. 4665 seeks to better inform both policy makers and the industry by requiring tracking of the growing economic impacts of outdoor recreation on the national GDP.

Last week, H.R. 4665, entitled Outdoor Recreation Jobs and Economic Impact Act (the “Outdoor REC Act”), moved closer to law after the U.S. House of Representatives approved the bill sponsored by Representative Donald Breyer (D-VA) and Representative Dave Reichert (R-WA), and authored by Representative Peter Welch (D-VT). A true bipartisan bill, the legislation passed the House by voice vote under fast-track consideration.

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The Uncertain Future of the Clean Power Plan under the Trump Administration

Since the Obama Administration announced its implementation in August of 2015, the Clean Power Plan (“CPP”) has managed to survive despite the many challenges brought against it. The Environmental Protection Agency (the “EPA”) rule was the centerpiece of the Obama Administration’s climate change plan and seeks to reduce carbon pollution from power plants by 32% from baseline 2005 levels by 2030 by setting reduction goals for each state. However, the CPP has encountered many legal roadblocks, and, with the election of Donald Trump and a Republican Congress, its future appears to be in doubt.

On February 9, 2016, the United States Supreme Court ordered the Obama Administration to stay any efforts to implement the CPP until the completion of all legal challenges to the same in a 5-4 ruling. While the Court stay of the CPP is not final, it placed the Obama Administration’s environmental agenda in peril. However, the death of Justice Scalia in February appeared to put the CPP in a much more stable position. The sitting panel of the United States Court of Appeals for the District of Columbia Circuit, which will decide the challenge, is composed of a majority of judges appointed by Democratic Presidents that would likely uphold the regulations. A majority of the Supreme Court would then be needed to overturn the Supreme Court’s decision. Prior to the election, that seemed unlikely, as the Court was deadlocked at 4-4. Oral arguments in case against the CPP were heard in the D.C. District Court on September 27, 2016, but no final ruling has been issued.

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CAUTION: New Federal Oil And Gas Royalty Regulations Take Effect January 1, 2017

The U.S. Department of Interior recently announced new regulations (effective January 1, 2017) governing how federal royalties on oil and gas produced from federal leases are to be calculated. These regulations make some significant changes on how lessees are to value the production of natural gas from federal leases for the purposes of determining federal royalties. Some notable changes, with a focus on natural gas, are briefly addressed below, but the regulations should be viewed in their entirety in light of the specific marketing, transportation and processing circumstances involved.

Valuation of Unprocessed Gas

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Wyoming Tangles With BLM Over Wild Horses

What is the “law of the land” and how should it be enforced? These questions drive the interplay between state and federal governments, particularly in the Rocky Mountain West. This is especially true when you consider that the federal government owns vast areas of the surface of Colorado (35.9%), Wyoming (48.1%) and the other 10 public land states as well as 700 million acres of federal minerals throughout the U.S. See “Federal Land Ownership: Overview and Data,” by the Congressional Research Service dated December 29, 2014.i This state/federal tension regularly leads to conflicts over oil and gas, mining, environmental regulation … and wild horses?

The Wild Free-Roaming Horses and Burros Act was enacted by Congress in 1971 to protect wild horses and burros from “capture, branding, harassment, or death” and, significantly, declares wild horses and burros to be an “integral part of the natural system of the public lands.” The law was enacted in response to a campaign led by “Wild Horse Annie” and has proved to be one of the most difficult management challenges for the Bureau of Land Management (“BLM”). Caught between wild horse lovers, state governments and ranchers, the BLM is spending close to $75 million a year, primarily to feed and care for the bulk of the “wild” horse population off the range in leased pasture. BLM recently testified that there are 67,000 WHB in 10 states and 47,000 are in leased pasture because the population is 2.5 times more than the range can sustain.ii 

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Don’t Risk Litigation Over the Arbitration Clause in Your Oil and Gas Lease

The arbitration clause in an oil and gas lease is likely not the most hotly negotiated term or even one that the parties think twice about. However, recent litigation in Pennsylvania should serve as a reminder to lessors and lessees to be aware that a poorly drafted arbitration clause may lead to unwanted litigation.

Recently, the United States Supreme Court denied a petition to review Chesapeake Appalachia, LLC v. Scout Petroleum, LLC, 809 F.3d 746 (3d. Cir. 2016) cert. denied (Oct. 3, 2016), a case addressing whether an arbitration clause used in numerous oil and gas leases covering lands in the Marcellus Shale region of Pennsylvania permitted class arbitration and whether the issue of class arbitrability is one for the courts or for the arbitrators to decide. The leases contained identical gas royalty clauses (except for some differing royalty percentages). The clauses provided that Chesapeake shall pay the lessor-royalty owners a certain percentage of the proceeds Chesapeake received from the sale of gas less four specific charges: transportation, treatment, processing and volume deduction to the point of measurement. All of the leases also included the following identical arbitration provision, which was silent as to both the availability of classwide arbitration and whether the question of classwide arbitrability should be submitted to the arbitrators or the court:

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