Slawson Exploration Company, Inc. v. Germann et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
Slawson Exploration Company, Inc. )
)
Plaintiff, )
) ORDER GRANTING DEFENDANTS’
vs. ) MOTION FOR VOLUNTARY REMAND
)
Sonya Germann in her official capacity as )
State Director for the Bureau of Land )
Management Montana/Dakotas State Office,) Case No. 1:23-cv-141
Loren Wickstrom in his official capacity as )
Field Manager for the Bureau of Land )
Management North Dakota Field Office, )
United States Bureau of Land Management, )
United States Department of the Interior, )
)
Defendants. )
Before the Court is the Defendants’ motion for voluntary remand filed on July 19, 2024. See
Doc. No. 26. The Plaintiff filed a response in opposition to the motion on August 2, 2024. See Doc.
No. 31. The Defendants filed a reply brief on August 9, 2024. See Doc. No. 32. For the reasons set
forth below, the Defendants’ motion is granted.
I. BACKGROUND
Slawson Exploration Company, Inc. (“Slawson”) is a privately held corporation that is
engaged in oil and gas production and exploration. The Jore Well is an oil well located in McKenzie
County, North Dakota. On September 27, 2019, Slawson submitted a sundry notice to the Bureau of
Land Management’s (“BLM”) North Dakota Field Office requesting royalty-free treatment of gas
flared from the Jore Well from September 2014 through December 2016 (“the flaring period”).
Slawson submitted an economic analysis (“2019 Economic Analysis”) with the request.
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On February 18, 2022, the North Dakota Field Office issued a decision (“2022 field office
decision”) determining that gas flared from the Jore Well during the flaring period was avoidably lost
and denying Slawson’s request for royalty-free flaring. On March 22, 2022, Slawson requested the
State Director review the 2022 Field Office decision. Slawson submitted supplemental data in support
of its request, which included a theoretical analysis of field-wide gas capture (“the First Fieldwide
Economic Analysis”). The Acting State Director for the BLM Montana/Dakotas State Office issued
a decision (“State Director decision”) affirming the 2022 field office decision on April 20, 2022. On
May 18, 2022, Slawson filed a notice of appeal with the Interior Board of Land Appeal (“IBLA”), an
appellate review board within the Department of the Interior. On October 5, 2022, the BLM filed a
motion with the IBLA requesting a remand of the State Director decision. The IBLA granted the
motion. After the IBLA remanded the decision to the State Director, the State Director further
remanded to the decision to the Field Office. On March 7, 2023, the Field Office issued a decision
(“2023 Field Office decision”) once again denying Slawson’s request for royalty-free flaring. On
March 23, 2023, Slawson sought the State Director’s review of the 2023 Field Office decision.
Slawson included another economic analysis (“the Second Fieldwide Economic Analysis”) with its
request. On June 16, 2023, the State Director issued a decision (“the challenged decision”), which
affirmed the 2023 Field Office decision.
On July 28, 2023, Slawson brought this action seeking an order setting aside the challenged
decision. See Doc. No. 1. Slawson also seeks a declaration that 1) the challenged decision is arbitrary,
capricious, and contrary to law; and 2) the gas flared from the Jore Well was unavoidably lost and
not subject to royalty. Id. The Defendants’ counsel conferred with agency counsel and assessed the
administrative record, the relevant statutes, regulations, and guidance. Based on review and
discussions, the Defendants determined reconsideration of the challenged decision is appropriate to
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allow the BLM to more fully consider Slawson’s three economic analyses and to determine whether
to approve Slawson’s request for royalty-free treatment of the gas flared on the Jore Well from
September 2014 through December 2016.
II. LEGAL DISCUSSION
The Defendants request the Court remand the challenged decision to the BLM for
reconsideration. Specifically, the Defendants request a remand to allow the BLM to consider
Slawson’s economic analyses more fully to determine whether to approve Slawson’s request for
royalty-free treatment of the gas flared on the Jore Well from September 2014 through December
2016. Slawson argues the case should not be remanded because the BLM has repeatedly considered
Slawson’s application for royalty-free flaring and economic analyses.
Although neither party provided directly controlling authority regarding an agency’s request
for remand, both parties provided persuasive authority showing a long history of courts remanding
challenged agency decisions under certain circumstances. “[W]hen an agency seeks a remand to take
further action consistent with correct legal standards, courts should permit such a remand in the
absence of apparent or clearly articulated countervailing reasons.” Citizens Against Pellissippi
Parkway Extension, Inc. v. Mineta, 375 F.3d 412, 416 (6th Cir. 2004). A reviewing court has
discretion over an administrative agency’s request for voluntary remand. SKF USA Inc. v. United
States, 254 F.3d 1022, 1029 (Fed. Cir. 2001). In SKF USA Inc., the Federal Circuit held, “[an] agency
may request a remand (without confessing error) in order to reconsider its previous position. It might
argue, for example, that it wished to consider further the governing statute, or the procedures that
were followed. It might simply state that it had doubts about the correctness of its decision or that
decision's relationship to the agency's other policies.” Id. See also Ohio Valley Env't Coal. v. Aracoma
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Coal Co., 556 F.3d 177 (4th Cir. 2009) (concluding an agency is entitled to seek a voluntary remand
to reconsider its previous position without admitting error); W.G.A. v. Sessions, 900 F.3d 957 (7th
Cir. 2018) (allowing an agency to seek remand without confessing error when the agency provides a
persuasive reason.) A remand may be refused when an “agency's request is frivolous or in bad faith.”
SKF USA Inc., 254 F.3d at 1029. However, when an agency’s “concern is substantial and legitimate,
a remand is usually appropriate.”
In this case, remand is warranted to permit the BLM to more fully consider Slawson’s
economic analyses and to reassess Slawson’s request for royalty-free treatment of the gas flared on
the Jore Well. Remand is the appropriate remedy to potentially satisfy Slawson’s allegations of error
because if the BLM on remand determines the economic analyses satisfy the requisite requirements
and Slawson is entitled to royalty-free flaring during the relevant period, this action is moot. See
Sierra Club v. Van Antwerp, 560 F. Supp. 2d 21 (D.D.C. 2008) (finding remand would serve the
interest of allowing the agency to “cure its own potential mistake rather than needlessly wasting the
Court’s and the parties’ resources.”) Slawson alleges the BLM erroneously denied its request for
royalty-free treatment of the gas flared on the Jore Well. See Doc. No. 1. Specifically, Slawson
contends the challenged decision arbitrarily and capriciously rejected its economic analyses. Id. The
Defendants seek a remand to more fully consider Slawson’s economic analyses. Remanding this case
to the BLM could cure the very defect Slawson alleges, which would render this action unnecessary.
The BLM’s request for remand is not vague and unsupported, nor does it seek to bolster its
reasons for denying Slawson’s requests, as Slawson suggests. The BLM stated it is committed to
more fully considering Slawson’s economic analyses, specifying it will consider the original 2019
Economic Analysis, the First Fieldwide Economic Analysis, and the Second Fieldwide Economic
Analysis. See Doc. No. 32, p. 4. Further, the BLM also stated it is committed to reassessing whether
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to approve Slawson’s request for royalty-free flaring. Id. The BLM seeks to cure Slawson’s grievance
regarding the challenged decision through remand. Accordingly, remanding the challenged decision
to the BLM for reconsideration is appropriate in this case. The Court grants the Defendants’ motion
to remand.
III. CONCLUSION
The Court has carefully reviewed the entire record, the parties’ briefs, and the relevant law.
For the reasons set forth above, the Court GRANTS the Defendants’ motion to remand (Doc. No.
26). The Court ORDERS this case be REMANDED to the Bureau of Land Management.
IT IS SO ORDERED.
Dated this 30th day of January, 2025.
/s/ Daniel L. Hovland
Daniel L. Hovland, District Judge
United States District Court
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