Petro-Hunt, L.L.C. v. United States , 365 F.3d 385 ( 2004 )

United States Court of Appeals
Fifth Circuit
F I L E D
REVISED May 28, 2004
March 31, 2004
UNITED STATES COURT OF APPEALS
For the Fifth Circuit Charles R. Fulbruge III
Clerk
No. 02-30760 c/w
02-30786
PETRO-HUNT, L.L.C., et.al,
Plaintiffs – Appellees,
VERSUS
UNITED STATES OF AMERICA, et. al,
Defendants,
UNITED STATES OF AMERICA,
Defendant – Appellant.
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PETRO-HUNT, L.L.C., et. al,
Plaintiffs-Appellants,
versus
UNITED STATES OF AMERICA, et. al,
Defendants-Appellees.
Appeals from the United States District Court
for the Western District of Louisiana
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Before EMILIO M. GARZA, and DENNIS, Circuit Judges, and VANCE*,
District Judge.
DENNIS, Circuit Judge:
Petro-Hunt, L.L.C., Hunt Petroleum Corporation, and Kingfisher
Resources, Inc., (collectively “Plaintiffs”) filed a declaratory
judgment action seeking to quiet title to mineral rights in
approximately 180,000 acres of federally owned land within the
Kisatchie National Forest. Plaintiffs claim those rights as
successors in interest to 96 mineral servitudes that were created
before the United States purchased the land in the 1930s. The
district court granted summary judgment in favor of Plaintiffs on
the grounds of res judicata and denied Plaintiff’s request for
attorneys’ fees. The United States timely appeals the district
court’s grant of summary judgment and Plaintiffs cross-appeal on
the issue of attorneys’ fees. Because we reverse district court’s
summary judgment ruling and remand for further proceedings not
inconsistent with this opinion, we need not reach the merits of
Plaintiffs’ cross appeal regarding attorneys’ fees since plaintiffs
are no longer prevailing parties.1
I. BACKGROUND
In order to give the proper context to our discussion of the
*
District Judge of the Eastern District of Louisiana, sitting
by designation.
1
Prevailing party status is a prerequisite to recovering
attorneys’ fees under 28 U.S.C. § 2412(b).
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merits of this factually dense case, we begin with a brief
discussion on Louisiana mineral law, the servitudes in question,
and the applicability of certain Louisiana laws to property owned
by the United States.
A. Mineral Servitudes Under Louisiana Law
Louisiana law governing mineral servitudes does not
recognize a separate mineral estate in oil and gas.2 Mineral
rights can be owned separate from the surface land only in the
form of a mineral servitude.3 Hence, any attempt to sell or
reserve the ownership of oil and gas results in the creation of a
mineral servitude, and the holder of that servitude has the right
to enter the property and extract the minerals.4 Louisiana law
has long provided that a mineral servitude is extinguished by
prescription resulting from ten years’ nonuse.5 The period of
prescription on mineral servitudes begins to run on the date a
2
Frost-Johnson Lumber Co. v. Salling’s Heirs, 91 So. 207,
243–245 (La. 1920).
3
Central Pines Land Co. v. United States, 274 F.3d 881, 884
(5th Cir. 2001).
4
Central Pines, 274 F.3d at 884. See La. R.S. § 31:21 (“A
mineral servitude is the right of enjoyment of land belonging to
another for the purpose of exploring for and producing minerals and
reducing them to possession and ownership.”); see also Luther L.
McDougal, III, Louisiana Mineral Servitudes, 61 TUL. L. REV. 1097,
1098–99 (1987).
5
Central Pines, 274 F.3d at 884. See La. R.S. § 31:27.
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servitude is created,6 and is interrupted only by “good faith
operations for the discovery and production of minerals.”7
Because the rule of prescription reflects a public policy
favoring “the timely return of outstanding minerals to the owner
of the land,”8 the rule may not be abrogated by contract.9 The
Louisiana Supreme Court has declared that “it is against the
public policy of this state to allow . . . servitudes to remain
alive for a longer period than 10 years without use,” and that
any contracts to the contrary are void as against public
policy.10
B. Creation of Mineral Servitudes
In 1932, five Louisiana lumber companies – Good Pine Lumber,
Trout Creek Lumber, Tall Timber Lumber, Bodcaw Lumber, and Grant
Timber – entered an agreement to pool the mineral rights on their
respective land holdings in central Louisiana.11 As part of the
pooling agreement, the companies created a joint venture called
6
See La. R.S. § 31:28; see also Ober v. Williams, 35 So. 2d
219, 224 (La. 1948).
7
La. R.S. § 31:29.
8
See Mire v. Hawkins, 186 So. 2d 591, 597 (La. 1966).
9
See Leiter Minerals, Inc. v. California Co., 132 So. 2d 845,
853 (La. 1961). On the other hand, agreements to shorten the
period of prescription do not conflict with public policy and are
valid. Id.
10
Id.
11
United States v. Nebo Oil, 190 F.2d 1003, 1005 (5th Cir.
1951).
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the “Good Pine Oil Company” and separately conveyed to that
company the rights to explore and develop their property for the
production of oil, gas, and sulphur.12 Of these conveyances, six
that Bodcaw Lumber and Grant Timber made to Good Pine Oil between
November 12, 1932, and May 3, 1934, are relevant to this case.
All of these six conveyances involved multiple parcels of land,
many of which were non-contiguous, and thus resulted in multiple
mineral servitudes.13
Each of the six deeds conveying mineral rights to Good Pine
Oil contained a clause providing that the ten year period of
liberative prescription applied. Five of the deeds expressly
stipulated that “none of said [mineral] rights in any of said
lands shall be prescribed unless there shall elapse a full period
of ten (10) years in which there shall be no exercise of any of
the foregoing rights or user of any of the lands aforesaid under
and by virtue hereof.” The sixth contained strikingly similar
language. Because the prescriptive period described in these
instruments is equivalent to the liberative prescription period
of ten years, the contract provision applying a prescriptive
12
Id.
13
See Cox v. Sanders, 421 So. 869, 873 (La. 1982)(stating that
“a landowner cannot create a single servitude or mineral royalty
right on two or more non-contiguous tracts; and if this is
attempted by a single instrument, there are nevertheless as many
servitudes or royalty interests as there are non-contiguous tracts
of land” and quoting Whitehall Oil Co. v. Heard, 197 So. 2d 672,
675 (La. Ct. App. 1967)).
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period of ten years is enforceable.
C. Acquisition by the United States
In the late 1930s, the United States acquired approximately
180,000 acres of land in three Louisiana parishes (Grant Parish,
Natchitoches Parish, and Winn Parish) from Bodcaw Lumber and
Grant Timber for inclusion in the Kisatchie National Forest. The
United States acquired the lands under the Weeks Forestry Act14
through nine acts of sale and two judgments in condemnation.15
Each of these eleven conveyances came after the six transactions
in which Bodcaw Lumber and Grant Timber conveyed mineral rights
on the lands to Good Pine Oil. Consequently, at the time of
acquisition, the approximately 180,000 acres of land that the
United States acquired was burdened by 96 separate mineral
servitudes in favor of Good Pine Oil.
The eleven instruments of transfer (nine deeds and two
judgments) conveying the lands to the United States addressed the
pre-existing mineral servitudes in different ways. All but one
of the instruments contained language stating that the
conveyances were “subject to” one or more of the mineral deeds
granting rights to Good Pine Oil. Most of these transfer
instruments contained an additional clause stating that the
“mention” of the earlier mineral reservation was “made solely for
14
16 U.S.C. § 515.
15
The record shows that the United States acquired the lands
between November 28, 1934, and January 28, 1937.
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the purpose of limiting vendor’s warranty to the United States in
present sale, and the recital of the said Mineral Sale shall in
nowise extend or enlarge the same in point of time.”
Five of the instruments (four deeds and one judgment) also
contained additional mineral reservations in the name of Bodcaw
Lumber or Grant Timber, which were to become effective upon the
prescription of the relevant servitudes held by Good Pine Oil.
For example, the February 11, 1936 deed conveying 24,943.93 acres
owned by Bodcaw Lumber “specially reserved” unto Bodcaw Lumber
“all of the oil, gas and other minerals . . . subject to the
sales to Good Pine Oil Company, Incorporated, for a period of ten
years after the expiration of the rights of the said Good Pine
Oil Company, Incorporated, under the laws of the State of
Louisiana.” This deed further provided that this “specially
reserved” right would be extended beyond ten years if the right
were exercised in a particular fashion, and that if the original
ten year period or any extended period terminated for nonuse, “a
complete fee in the land [would] become vested in the United
States.” The other four instruments also contained clauses
granting reversionary mineral interests to Bodcaw Lumber or Grant
Timber upon the prescription of the Good Pine servitudes.16 Each
16
Because the Good Pine servitudes were still in effect, the
“reversionary” clauses were invalid. See Liberty Farms v. Miller,
45 So. 2d 610, 614 (La. 1950) (“One may not reserve reversionary
rights to minerals when he is not the owner of the minerals at the
time the reservation is made. It is settled that, in such
instances, the reservation is ineffective and the outstanding
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of the instruments stated that at the termination of the
reservations, the United States would hold the land in “complete
fee.”
D. Act 315
In 1940, well after the mineral and land transactions
described above were complete, the Louisiana Legislature passed
Act 315 to eliminate the rule of prescription for mineral rights
on lands held by the United States:
[W]hen land is acquired by conventional deed or
contract, condemnation or expropriation proceedings by
the United States of America . . . , and by the act of
acquisition, verdict or judgment, oil, gas, and/or
other minerals or royalties are reserved, or the land
so acquired is by the act of acquisition conveyed
subject to a prior sale or reservation of oil, gas
and/or other minerals or royalties, still in force and
effect, said rights so reserved or previously sold
shall be imprescriptible.17
The purpose of the Act was to facilitate the federal
government’s purchase of large tracts of land for National
Forests, National Parks, military installations, and like
purposes.18 The United States was having difficulty acquiring
such tracts in Louisiana because landowners who wished to retain
mineral rights were reluctant to sell their land for fear of
mineral interests revert to the person owning the land at the time
prescription accrues.”).
17
See 1940 La. Acts 315; see also La. R.S. § 31:149.
18
See United States v. Little Lake Misere Land Co., 412 U.S.
580, 599 & n.16 (1973) (citing Leiter Minerals, 133 So. 2d at 851).
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losing mineral reservations through prescription.19 By making
mineral servitudes on federal land “imprescriptible” – and thus
“prevent[ing] the federal government from acquiring mineral
rights by prescription” – Act 315 also served Louisiana’s
interest in taxing and regulating minerals on federal land,
powers that would be in doubt should ownership of the minerals be
vested in the United States.20
E. Nebo Oil
In 1948, the United States filed a declaratory judgment
action against the Nebo Oil Company to quiet title to the
minerals on a particular servitude claimed by Nebo Oil as
successor in interest to Good Pine Oil.21 The complaint referred
to a specific parcel, approximately 800 acres in size, lying in
portions of section 19 (Township 13 North, Range 6 West) and
section 24 (Township 13, Range 7 West) in Natchitoches Parish.
This parcel was one of several parcels acquired by the United
States through a February 11, 1936 deed from Bodcaw Lumber, which
totaled 24,943.93 acres. Nebo Oil claimed a mineral servitude on
the 800-acre parcel as a result of a November 12, 1932 conveyance
of mineral rights from Bodcaw to Good Pine Oil.
19
Leiter Minerals, 132 So. 2d at 851.
20
Id. at 851–52, 854; see also Little Lake Misere, 412 U.S. at
599–600 (citing Leiter Minerals).
21
Sometime after December 1941, Nebo Oil Company acquired all of
the mineral rights formerly held by Good Pine Oil. See Nebo Oil,
190 F.2d at 1006.
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In its complaint, the United States averred: (1) that no
drilling operations had been conducted on the 800-acre parcel
during the ten year period beginning on November 12, 1932; (2)
that the mineral servitude on the parcel had therefore prescribed
for nonuse; and (3) that Nebo Oil intended to drill a well on the
land and had advised the government that the company would resist
interference. To prevent injury to its property, the United
States sought declaratory relief and an order permanently
enjoining Nebo Oil from entering the 800-acre parcel for mineral
production.
In denying the United States relief, the District Court for
the Western District of Louisiana held that the 800-acre
servitude had been rendered “imprescriptible” by Act 315.22
This court affirmed that judgment.23 First, this court found
22
See United States v. Nebo Oil, 90 F. Supp. 73 (W.D. La. 1950).
23
See Nebo Oil, 190 F.2d at 1003. The district court’s final
decree in Nebo Oil included a broad finding that the prescriptive
periods of the Louisiana Civil Code “do not apply to lands
purchased by the United States under the Weeks Act, as amended, for
national forest purposes . . . .” The court further found that
“under the terms of the deed from Bodcaw Lumber . . . to Good Pine
Oil . . . dated November 12, 1932, and the deed from Bodcaw Lumber
. . . to the United States of America dated February 11, 1936, the
oil, gas and sulphur in, on and under the lands conveyed to the
United States under such deed . . . , which deed covered the lands
herein involved, were vested in perpetuity in Good Pine Oil . . .
, its successors and assigns, and, through it, in the defendant
herein, as its successor in interest.” Despite the breadth of
these findings, the district court returned to the property that
was actually before it when it concluded its decree: “IT IS NOW
ORDERED, ADJUDGED AND DECREED that the oil, gas, and sulphur in, on
and under the lands described in the complaint are vested in
perpetuity in Nebo Oil Company, Inc., its successors and assigns.”
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that it was bound by Louisiana precedent holding that rules of
prescription, including Act 315, “are retrospective in their
operation.”24 Second, we held that Act 315’s elimination of the
rule of prescription as to servitudes on federal land did not
dispose of federal property in violation of Article IV, Section
3, clause 2 of the United States Constitution or violate the
Contract Clause of the Constitution or the Due Process Clause of
the Fourteenth Amendment. The apparent reasoning was that the
United States’s interest in reclaiming the mineral rights through
prescription was not a vested right at the time Act 315 was
passed because the Good Pine servitudes had been created less
than ten years earlier.25
F. After Nebo Oil
Subsequent to our decision in Nebo Oil, there were two
decisions concerning the retroactive applicability of Act 315 to
mineral servitudes located on property owned by the United
States. First, in United States v. Little Lake Misere Land
Company, the government sued to quiet title in two adjacent
parcels of land in Cameron Parish, Louisiana, which it had
24
See Nebo Oil, 190 F.2d at 1008 (citing Whitney Nat’l Bank of
New Orleans v. Little Creek Oil Co., 33 So. 2d 693 (La. 1947)).
25
See id. at 1008–10; see also id. at 1008 (“It cannot be
considered a vested right if it is nothing more than a mere
expectation, or hope, based upon an anticipated continuance of the
applicable general laws.”).
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acquired under the Migratory Bird Conservation Act.26 The
instruments of acquisition – a 1937 deed and a 1939 judgment in
condemnation – reserved to Little Lake Misere oil, gas, sulphur,
and other minerals for a period of ten years from the date of
vesting of title in the United States.27 But those instruments
further provided that if the initial ten year period ended and no
production was occurring, or if operations subsequently ceased
for more than sixty days, “the right to mine, produce and market
said oil, gas, sulphur or other mineral shall terminate . . . and
the complete fee title to said lands shall thereby become vested
in the United States.”28 Nevertheless, following the enactment
of Act 315, the servitude holder, Little Lake Misere, asserted
that the reservations had become “imprescriptible.”
In a brief per curiam opinion, this court held in favor of
the servitude holder, finding that the contractual terms of
prescription did not apply to the servitudes in question in the
light of Act 315.29 This holding was based on our prior decision
in Nebo Oil regarding the constitutionality of the retroactive
application of Act 315.30
26
412 U.S. at 582.
27
Id.
28
Id. at 583.
29
See United States v. Little Lake Misere Land Co., 453 F.2d 360
(5th Cir. 1971).
30
Id. at 362.
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But the United States Supreme Court granted certiorari and
reversed.31 In so doing, the Court did not expressly reject our
interpretation of Louisiana law or the analysis of Act 315’s
constitutionality in Nebo Oil. Instead, invoking the choice-of-
law doctrine of Clearfield Trust Co. v. United States,32 the
Supreme Court held that this court erred in presuming, as a
threshold matter, that Louisiana state law applied.33
Furthermore, because Little Lake Misere involved a determination
of rights under a land acquisition agreement that was “explicitly
authorized, though not precisely governed, by the Migratory Bird
Conservation Act” and “to which the United States itself is a
party,” the Supreme Court held that it was for the federal courts
to “fashion” the governing rule of law in that case.34
Determining that Act 315 would deprive the United States of
“bargained-for-contractual interests” by abrogating the terms of
the acquisition instruments relating to prescription, the Supreme
Court held that the Act was “plainly hostile to the interests of
the United States” and could not be “borrowed” as the rule of
decision.35 Finally, the Supreme Court held that the appropriate
31
See United States v. Little Lake Misere Land Co., 318 U.S. 363
(1943).
32
318 U.S. 580 (1943).
33
See Little Lake Misere, 412 U.S. at 591.
34
See id. at 594.
35
Id. at 596.
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rule of decision was to be supplied by either federal common law
or “residual” state law (i.e., state law without Act 315), both
of which would give effect to the contract terms.36
The second decision pertinent here was Central Pines Land
Company v. United States.37 In that case, we were called upon to
revisit our Nebo Oil ruling in the light of the Supreme Court’s
opinion in Little Lake Misere.38 The facts of Central Pines
were quite similar to those of Nebo Oil. First, like Nebo Oil,
Central Pines involved the acquisition of land by the United
States in the 1930s for the Kisatchie National Forest.39 Second,
also like Nebo Oil, the lands so acquired were subject to a
preexisting mineral servitude.40 Finally, the successor in
interest to the servitude owner also argued that Act 315 had
rendered the servitude in Central Pines “imprescriptible.”41
Despite the factual similarities between Central Pines and
Nebo Oil, and perhaps taking a cue from the Supreme Court’s
Little Lake Misere decision, this court ruled that Act 315 did
36
Id. at 604.
37
274 F.3d 881.
38
274 F.3d at 881.
39
See id. at 885.
40
Id.
41
Id. at 886.
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not apply to Central Pines.42 While we declined to expressly
overrule Nebo Oil’s constitutional analysis, we also rejected the
presumption in Nebo Oil that Louisiana law governed the terms of
the transactions at issue.43 In particular, following the
analysis of Little Lake Misere, this court held that the right
asserted by the United States – i.e., the right to reclaim
mineral interests through prescription – was a right acquired
through a duly authorized federal land acquisition agreement and,
therefore, that federal choice-of-law principles applied.44
Applying these principles, the Central Pines court
determined that Act 315 could not be borrowed as the rule of
decision because, as in Little Lake Misere, it was hostile to the
government’s contractual interests in reclaiming minerals through
the “legal rules in place at the time of contract.”45 While
acknowledging that this interest was “arguably not as powerful as
the federal right to enforce explicit contractual terms” (the
right at stake in Little Lake Misere), we determined that this
interest outweighed any state interest in applying Act 315.46
Noting that the “main justification” for Act 315 was to
42
274 F.3d 886.
43
Id. at 889-90.
44
Id. at 888-90.
45
Id. at 891.
46
Id. at 891–92.
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facilitate federal land acquisitions, this court observed that
“[such] justification has no bearing on retroactive application
of Act 315, because an acquisition cannot be facilitated by a law
not yet in existence.”47 Finally, in recognition of the federal
interest in the general rule of prescription, we also determined
that the proper rule of decision was “residual” state law, i.e.,
Louisiana law without Act 315.48
G. The Present Dispute
In the 1990s, the United States began granting mineral
leases on certain Forest Service lands that had been burdened by
Good Pine servitudes but were not involved in Nebo Oil. The
government regarded these servitudes as prescribed for ten years’
nonuse. In determining that the servitudes were subject to the
rule of prescription, rather than Act 315, the United States
relied on the Supreme Court’s ruling in Little Lake Misere.
In response to this leasing activity, the Plaintiffs, who
are successors in interest to Nebo Oil Company, initiated this
declaratory judgment action on February 18, 2000. Their
complaint named the United States and various parties to whom the
United States granted mineral leases or offers to lease on lands
that are or were burdened by Good Pine servitudes as defendants.
Plaintiffs sought a ruling declaring that they are the owners, in
47
Id. at 892 (citing Little Lake Misere, 412 U.S. at 599).
48
Id.
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perpetuity, of those servitudes and that the mineral leases and
offers to lease issued by the United States were therefore null
and void. The United States argued in response to the
Plaintiffs’ complaint that the 95 separate mineral servitudes
through which the Plaintiffs claim mineral rights are subject to
prescription for nonuse and that the relevant leases and offers
to lease relate to lands on which the servitudes claimed by
Plaintiffs have already prescribed.
Plaintiffs filed a motion for summary judgment49 in the
district court. In their motion, Plaintiffs argued that they
were entitled to judgment as a matter of law because Nebo Oil and
the doctrine of res judicata or collateral estoppel50 would bar
49
Plaintiffs actually filed two motions for summary judgment.
In their second summary judgment motion, Plaintiffs argued that
even if the rule of prescription applied, five servitudes burdening
nearly seventy percent of the 180,000 acres in dispute had not
prescribed because they had exercised their rights through
continuous drilling operations. The United States conceded that
sufficient drilling operations had interrupted the running of
prescription on some of the servitudes and introduced evidence
regarding the particular histories of each of the 96 Good Pine
servitudes. But the district court dismissed this second motion as
moot due to its res judicata determination and expressly declined
to consider the issue of whether sufficient drilling operations
interrupted the prescriptive period as to any particular servitude.
Because we reverse the district court’s grant of summary judgment
and because the district court has not had an opportunity to pass
on the question of what servitudes may have prescribed, we will not
reach the merits of Plaintiffs’ second motion and remand this issue
to the district court.
50
Although Plaintiffs did not specifically use the term
“collateral estoppel” in their motion for summary judgment,
Plaintiffs’ argument in favor on the motion was based on res
judicata. “The rules of res judicata encompass two separate but
linked preclusive doctrines: (1) true res judicata or claim
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any defense raised by the United States as to the
prescriptibility of the servitudes. The United States opposed
the Plaintiffs’ motion for summary judgment.
H. The District Court’s Ruling
On December 18, 2001, the district court issued a memorandum
ruling granting the Plaintiffs’ motion for summary judgment.
Holding that res judicata barred the United States’s asserted
defenses to Plaintiffs’ claim of ownership due to this court’s
decision in Nebo Oil, the district court declared that Plaintiffs
were “the exclusive owners in perpetuity of the approximately
180,000 acres of mineral servitudes at issue in this case.” The
district court based its ruling on this court’s decision in Nebo
Oil. The court noted that the 800-acre servitude addressed in
Nebo Oil burdened a parcel of land that the United States
acquired in 1936 as part of a larger purchase of 24,943.93 acres
and that all 24,943.93 acres were burdened by mineral servitudes
that were owned in common with the 800-acre servitude. Because
the Nebo Oil decision referred to the 24,943.93-acre transaction,
the district court found that Nebo Oil “applied Act 315 of 1940
preclusion and (2) collateral estoppel or issue preclusion.” See
St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 436 (5th
Cir. 2002)(internal citation omitted). Because these two doctrines
are separate, collateral estoppel will be analyzed separately in
this opinion.
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to the mineral reservation and sale of the 24,943.93 acre tract”
and that “res judicata clearly applies” to disputes over the
minerals on this tract.
As for the remainder of the approximately 180,000 acres of
land – acquired by the United States in ten additional
transactions that were not specifically addressed in Nebo Oil –
the district court found that res judicata was also applicable
due to the factual similarity in the transactions.
Specifically, because of the similarities in the transactions
through which the United States acquired the lands and in the
earlier transactions creating mineral servitudes on the land, the
district court stated: (1) that “the entire 180,000 acres was
similarly situated to the 800 acres at issue in Nebo Oil”; (2)
that the United States had a “full and fair opportunity” (in Nebo
Oil) to “litigate the application and constitutionality of
Louisiana Act 315 to this mineral property”; and (3) that “[t]he
government should not be allowed to litigate now that which it
could have litigated 50 years ago.”
Accordingly, the district court entered a final judgment on
May 29, 2002. The United States timely appealed.
II. ANALYSIS
The critical issue before this court focuses on whether the
United States is precluded from challenging Plaintiffs’ assertion
of ownership over all 96 of the mineral servitudes arising from
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their status as successors in interest to Good Pine Oil. Because
the district court granted summary judgment, we review that
decision de novo.51
A. Res Judicata–A Claim Precluded by Sameness?
“Claim preclusion, or res judicata, bars the litigation of
claims that either have been litigated or should have been raised
in an earlier suit.”52 The test for res judicata has four
elements: (1) the parties are identical or in privity; (2) the
judgment in the prior action was rendered by a court of competent
jurisdiction; (3) the prior action was concluded by a final
judgment on the merits; and (4) the same claim or cause of action
was involved in both actions.53 In this case, there is no
dispute over the competency of the Nebo Oil court, the finality
of its judgment in that case, or the sameness of the parties.
The only dispute is whether this case involves the same claim or
cause of action as Nebo Oil.
To determine whether two suits involve the same claim or
cause of action, this court has adopted the transactional test of
51
Central Pines, 274 F.3d at 886.
52
In re Southmark Corp., 163 F.3d 925, 934 (5th Cir. 1999). See
Brown v. Felsen, 442 U.S. 127, 131 (1979) (“Res judicata prevents
litigation of all grounds for, or defenses to, recovery that were
previously available to the parties, regardless of whether they
were asserted or determined in the prior proceeding.”).
53
Southmark, 163 F.3d at 934.
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the Restatement (Second) of Judgments, § 24.54 Under that test,
the preclusive effect of a prior judgment extends to all rights
the original plaintiff had “with respect to all or any part of
the transaction, or series of connected transactions, out of
which the [original] action arose.”55
What factual grouping constitutes a ‘transaction’, and
what groupings constitute a ‘series’, are to be
determined pragmatically, giving weight to such
considerations as whether the facts are related in
time, space, origin, or motivation, whether they form a
convenient trial unit, and whether their treatment as a
unit conforms to the parties’ expectations or business
understanding or usage.56
“[T]he critical issue is whether the two actions under
consideration are based on the same nucleus of operative
facts.”57
Contending that this action is not based on the same nucleus
of operative facts as the action in Nebo Oil, the United States
points out that it initiated the Nebo Oil litigation in response
to learning that Nebo Oil intended to conduct drilling operations
on a particular 800-acre parcel of federal land under a mineral
servitude that, in the view of the United States, had
54
Id. (citing Southmark Properties v. Charles House Corp., 742
F.2d 862, 870–71 (5th Cir. 1984)).
55
Restatement (Second) of Judgments § 24(1) (1982).
56
Id. § 24(2).
57
Southmark, 163 F.3d at 934 (internal quotation and citation
omitted).
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prescribed.58 The operative facts of that action included: (1)
the United States’s purchase of the 800-acre parcel from Bodcaw
Lumber on February 11, 1936; (2) the creation of the mineral
servitude burdening that parcel in a November 11, 1932 conveyance
from Bodcaw Lumber to Good Pine Oil; and, most importantly, (3)
the history of use or nonuse of that servitude. In contrast, the
United States argues that the rights asserted by the parties in
this case depend on ten additional federal land acquisitions,
five additional mineral conveyances to Good Pine Oil, and the
drilling histories on 95 additional servitudes.
The district court found that it did not “need to delve into
such matters as what constitutes contiguous tracts, the number of
servitudes, and whether prescription of nonuse was interrupted by
good faith operations for the discovery and production of
minerals.” The district court reasoned that it was “faced with
what may be viewed as a primarily legal question.” Because all
of the Good Pine servitudes were similarly situated with respect
to application of Act 315, the court did not expressly identify
the operative facts of this case and Nebo Oil and determine that
they were the same. Instead, the district court relied on the
fact that Nebo Oil addressed a federal land acquisition and the
58
The United States acknowledges that it is precluded, as a
matter of res judicata, from re-litigating title to the 800-acre
mineral servitude at issue in Nebo Oil.
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similarity among that acquisition and the other ten acquisitions
at issue here.
But the district court’s reliance on the factual
similarities among the various servitudes and land acquisitions
was misplaced. As the United States correctly points out, these
observations of factual similarity, although potentially relevant
for purposes of collateral estoppel, are not relevant to res
judicata. Collateral estoppel prevents parties from re-
litigating the same issues conclusively determined between them
in a previous action. Although similar in principle, true res
judicata is concerned with a sameness of operative facts.
Neither the Plaintiffs nor the district court have identified a
principle of res judicata that requires an owner of separate
properties to litigate title to all of those properties in
response to a threat to his right of full use and enjoyment of
only one of them.59 While an action to quiet title in one
property may raise the same legal issues that would also be in
question in an similar type of action involving a similarly
59
Like the district court, the Plaintiffs seize on the Supreme
Court’s statement in Nevada v. United States, 463 U.S. 110, 129
n.10 (1983), that “[t]he policies advanced by the doctrine of res
judicata perhaps are at their zenith in cases concerning real
property, land and water.” While this is certainly true, nothing
in the Nevada opinion undermines the principle that the doctrine of
res judicata does not bar a second action unless it is the “same
cause of action” as the first one. See id. at 130 (“To determine
the applicability of res judicata to the facts before us, we must
decide first if the ‘cause of action’ which the Government now
seeks to assert is the ‘same cause of action’ that was asserted
[previously].”).
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situated property, the operative facts of the two actions would
be distinct.
In this case, each of the Good Pine servitudes was a
distinct real right under Louisiana law.60 The Nebo Oil action
involved one servitude burdening an 800-acre parcel of land and
was filed in response to a threat to the United States’s asserted
right of full use and enjoyment of that land. The United States
took the position that the servitude was subject to prescription
and had prescribed, and therefore it had to show ten years’
nonuse of that particular servitude to succeed on its claim. The
existence and use histories of the other Good Pine servitudes
were not operative facts of either the government’s claim or Nebo
Oil’s defense to that claim. Although the reasoning of Nebo Oil
– that the Good Pine servitudes were imprescriptible due to Act
315– made the use histories irrelevant as a matter of law, each
servitude remained a distinct real right. If Nebo Oil remains
good law, this court’s holding that Act 315 rendered the Good
Pine servitudes imprescriptible is final and conclusive between
the United States and the Plaintiffs as a matter of collateral
estoppel. But res judicata is no bar to the United States’s
defense in this action because its claim with respect to each
servitude depends on a unique set of operative facts. Thus, if
60
See McDougal, supra note 4, at 1099.
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the United States’s defense of this action is limited, it would
be limited only under collateral estoppel.
B. Collateral Estoppel–An Issue Precluded by Prior Litigation?
Collateral estoppel precludes a party from litigating an
issue already raised in an earlier action between the same
parties61 only if: (1) the issue at stake is identical to the one
involved in the earlier action; (2) the issue was actually
litigated in the prior action; and (3) the determination of the
issue in the prior action was a necessary part of the judgment in
that action.62 In this circuit, collateral estoppel applies to
“pure questions of law” only when there has been no “change in
controlling legal principles.”63 The United States contends that
61
“Mutuality” is a prerequisite only when the party to be
estopped is the United States. See United States v. Mendoza, 464
U.S. 154 (1984).
62
Stripling v. Jordan Prod. Co., LLC, 234 F.3d 863, 868 (5th
Cir. 2000).
63
See, e.g., Hicks v. Quaker Oats Co., 662 F.2d 1158, 1167 (5th
Cir. 1981)(discussing the effect of Montana v. United States, 440
U.S. 147 (1979) on the exception to collateral estoppel explained
in United States v. Sunnen, 333 U.S. 591 (1948), and concluding
that post-Montana, Sunnen stands only for the proposition that
“estoppel would not apply where there had been a change in
controlling legal principles between the two decisions.”); EEOC v.
Am. Airlines, Inc., 48 F.3d 164, 170 (5th Cir. 1995)(quoting
Montana, 440 U.S. at 161, for the proposition that “a significant
change in the legal climate may defeat collateral estoppel where
modifications in controlling legal principles . . .could renders a
previous determination inconsistent with the prevailing
doctrine.”); RecoverEdge, L.P. v. Pentecost, 44 F.3d 1284, 1291
(5th Cir. 1995)(stating “As one treatise points out, however,
‘courts have readily perceived that for purposes of preclusion,
‘issues are not identical if the second action involves application
-25-
collateral estoppel does not apply in the present case because it
seeks to raise issues that are not identical to the issues
litigated in Nebo Oil and, in any event, there has been a change
in controlling legal principles. We agree.
In ruling that the United States is precluded from re-
litigating the applicability of Act 315 to the Good Pine
servitudes, the district court did not specify what particular
issues were actually litigated in Nebo Oil. But, as the United
States discusses in its brief, the question of Act 315’s
applicability to this case can be divided into three distinct
sets of legal issues. First, there are threshold choice-of-law
issues, including whether the rights arising out of the federal
land acquisitions are governed by state law (including Act 315)
or by federal law, and, if federal law governs, whether and what
provisions of state law should be “borrowed” to provide the rules
of decision.64 Second, there are issues regarding the
interpretation of Act 315 under state law, including the question
of a different legal standard, even though the factual setting of
both suits is the same.’” citing 18 Wright, Miller & Cooper,
Federal Practice and Procedure § 4417, at 165 (footnote
omitted)(quoting Peterson v. Clark Leasing Corp., 451 F.2d 1291,
1292 (9th Cir. 1971); Brister v. A.W.I., Inc., 946 F.2d 350, 354
n.1 (5th Cir. 1991)(explaining that “not only the facts, but also
the legal standard used to assess them, must be identical” and
citing Southern Pac. Transp. Co. v. Smith Material Corp., 616 F.2d
111, 115 (5th Cir. 1980)).
64
See Little Lake Misere, 412 U.S. at 590–604; Central Pines,
274 F.3d at 887–92.
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whether Act 315 is to be applied retroactively. Finally, there
are issues concerning whether applying Act 315 retroactively is
constitutional. That these issues are distinct legal issues
cannot be doubted after this court’s ruling in Central Pines.65
Nebo Oil only addressed the latter two sets of issues.66
That is, in Nebo Oil, this court assumed the applicability of Act
315, confined its analysis to an interpretation of the Act under
state law, and determined that the Act did not violate the
federal constitution.67 In the present case, the United States
does not seek to revisit the issues actually addressed in Nebo
Oil. Instead, it seeks to raise the threshold choice-of-law
issue that Nebo Oil did not address because it was presumed. In
particular, the United States contends that: (1) federal law
governs the rights arising out of its acquisition of the lands at
issue in this case;68 (2) Act 315 may not be borrowed as the rule
of decision because it is hostile to the United States’s
contractual interests;69 and (3) the rule at the time of the
65
See 274 F.3d at 889–90.
66
See id. (describing the scope of Nebo Oil).
67
See id.
68
See Little Lake Misere, 412 U.S. at 594; Central Pines, 274
F.3d at 887–90.
69
See Central Pines, 274 F.3d at 890–92.
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contract (i.e., the Louisiana rule of prescription) should
govern.70
Because these questions of law are not “identical” to the
issues raised in Nebo Oil and were not “actually litigated” in
Nebo Oil, we find that the United States is not precluded, under
collateral estoppel, from raising them in this case.71 Although
the Plaintiffs cite scattered portions of both the district
court’s opinion and the United States’s brief in Nebo Oil in an
effort to show that the choice-of-law issue was determined in
that action, we stand by our prior finding in Central Pines that
it was not.72
Nevertheless, even if the choice-of-law issue had been
raised in Nebo Oil, changes in the controlling legal principles
prevent the United States from being precluded from litigating
the issue in this case.73 After the decisions in Little Lake
Misere and Central Pines, it is clear that federal law governs
70
See id. at 892.
71
RecoverEdge 44 F.3d at 1290.
72
See 274 F.3d at 889–90.
73
The Plaintiffs’ argument that the Supreme Court’s decision in
United States v. Stauffer Chem. Co., 464 U.S. 165 (1984), compels
a contrary conclusion is mistaken. In that case, there had been no
change in controlling legal principles between the first and the
second action. See id. at 170. The Court was concerned, instead,
with the exception to the otherwise applicable rules of preclusion
for “unmixed questions of law” arising in “successive actions
involving unrelated subject matter.” See id. The United States
does not rely on this exception in this case.
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the choice-of-law decision presented by the facts of this case.
Hence, we are prohibited from borrowing Act 315 as the federal
rule of decision because it is hostile to the federal interests
at stake.74
III. CONCLUSION
Because neither res judicata nor collateral estoppel
preclude the United States from challenging Plaintiffs’ assertion
of ownership over the mineral servitudes in question, we reverse
the district court’s grant of summary judgment. In addition, we
find that the 95 servitudes that were not at issue in Nebo Oil
are subject to the contractual provisions permitting prescription
after ten years’ nonuse. Accordingly, we remand this case so
that the district court can determine which servitudes have in
fact prescribed.
REVERSED AND REMANDED.
74
See Central Pines, 274 F.3d at 888–90.
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