Case Title: EOG RESOURCES, INC. v. STATE

Citation: 

Docket Number: 02-69

State: wyoming

Court: Wyoming Supreme Court

Date: 2003-03-10T00:00:00Z

Document:
EOG RESOURCES, INC. v. STATE2003 WY 3464 P.3d 757Case Number: 02-69Decided: 03/10/2003
OCTOBER TERM, A.D. 2002

                                                                                                
   

EOG 
RESOURCES, INC., formerly Enron Oil

& 
Gas Company, a Delaware corporation,

Appellant(Defendant) ,

 
 

v.

 

THE 
STATE OF WYOMING,

Appellee(Plaintiff) .

 
 

Appeal 
from the District Court of Laramie County

The Honorable Edward L. Grant, Judge

 
 
    

Representing 
Appellant:

Donald I. Schultz and John P. Glode of Holland & Hart, 
LLP, Cheyenne, Wyoming.

 
 
            

Representing 
Appellee:

Hoke MacMillan, Attorney General; Vicci Colgan, Chief 
Deputy Attorney General; Thomas N. Long, Special Assistant Attorney General; 
James A. Fitzgerald, Special Assistant Attorney General; John M. Eaves and Derek 
V. Larson of Eaves, Bardacke, Baugh, Kierst & Kiernan, P.A., Albuquerque, 
New Mexico; and Mary E. Walta of White, Koch, Kelly & McCarthy, P.A., Santa 
Fe, New Mexico.

 
 
          
          
            
           
            

Before HILL, C.J., and GOLDEN, LEHMAN, and VOIGT, JJ, and 
PERRY, D.J.

 
 
          

            
PERRY, District Judge.

 
  

  
[¶1]      
In this matter EOG Resources, Inc. (EOG) appeals from the trial court's 
grant of the State's motion for voluntary dismissal of an action it instituted 
relating to certain revenues alleged due on oil and gas wells located in 
counties other than Laramie County.  
Prior to the State's motion for voluntary dismissal, EOG moved to dismiss 
challenging the Laramie County district court's jurisdiction to hear the 
matter.  EOG asserts here that the 
district court was required to hear the jurisdictional challenge prior to any 
other motion to dismiss and, as such, EOG claims that the trial court was in 
error in granting the State's voluntary motion to dismiss.  We will affirm the 
ruling of the trial court.

 
        

ISSUES

 

[¶2]      
EOG defines the 
issues as:

 
    

1.                  
Did 
the district court lack jurisdiction over this litigation such that it should 
have dismissed this case pursuant to EOG Resources, Inc.'s Further Motion to 
Dismiss for Lack of Subject Matter Jurisdiction rather than the State of 
Wyoming's Motion to Dismiss under Wyo.R.Civ.P. 41(a)(2)?

2.                  
Assuming the district court had jurisdiction, did the 
district court abuse its discretion by granting the State of Wyoming's Motion to 
Dismiss under Wyo.R.Civ.P. 41(a)(2) Without imposing any curative terms and 
conditions of dismissal?

 
 
            
            
        

The State defines the issues as:

 
 
    

1.                  
Did 
the district court act properly in dismissing this case pursuant to the State of 
Wyoming's Motion to Dismiss under Wyo.R.Civ.P. ("Rule") 
41(a)(2)?

2.                  
Was 
it an abuse of discretion for the district court to grant the State of Wyoming's 
Motion to Dismiss under Rule 41(a)(2) without imposing any terms or conditions 
on the State?

3.                  
Is 
the issue of the authority of the Attorney General to file the suit in the First 
Judicial District properly before the Court?  If it is, the 
Attorney General did have the authority to file the action which it filed in the 
First Judicial District.

 
        
             

FACTS

 

  
[¶3]      
In November of 2000, the State instituted proceedings in the district 
court, First Judicial District, Laramie County, raising several causes of action 
against EOG, including claims under the Wyoming Royalty Payment Act (WRPA).  Wyo. Stat. Ann. §§ 30-5-301 through -305 
(LexisNexis 2001).  The 
State's allegations raised claims as to all state leases with EOG, including 
those wells located in counties other than Laramie County.1

 
[¶4]      At the end of 
January, 2001, EOG filed its Motion to Dismiss for Lack of Subject Matter 
Jurisdiction asserting that the State's action, pertaining to wells in counties 
other than Laramie County, contravened jurisdictional requirements in the 
WRPA.  EOG 
asserted that any action under the WRPA must be filed in the county where the 
subject wells were located, and not in Laramie County.

 
[¶5]      Amongst other 
procedural motions, EOG raised further elements to its jurisdictional challenge, 
claiming that the State's action had been filed without proper action by the 
State Board of Land Commissioners.  
Additionally, EOG twice moved to have the matter of jurisdiction 
certified to this Court.  In August, 
2001, the district court entered two orders, one of which certified the 
jurisdictional question.2

 
 

[¶6]      Thereafter, in 
November, 2001, the State filed suit in the district courts of three other 
counties where wells were located and moved for a voluntary dismissal of the 
action it had originally filed in Laramie County.  In February, 2002, the Laramie County 
district court granted the State's motion for voluntary dismissal.  EOG timely processed this appeal 
claiming that the grant of the State's motion for voluntary dismissal was 
contrary to law, and an abuse of discretion.

STANDARD OF REVIEW

[¶7]On review, questions of the application of the law, 
including identification  
         of the correct 
rule, are considered de novo. Fontaine v. Board of County Commissioners of Park County, 4 P.3d 890, 892 (Wyo. 
2000)."In this instance, there is no contention that any genuine issue of 
material fact exists, and our concern is strictly with the application of the 
law."Id. at 892 (citing Kirby v. 
NMC/Continue Care, 993 P.2d 951, 952 (Wyo. 
194)).

[¶8]  If the trial court had jurisdiction to entertain the 
State's voluntary motion to   
          dismiss, 
then any order dismissing the case under Rule 41(a)(2), and any attendant terms 
and conditions, is subject to review under an abuse of discretion standard.  Aerotech, Inc. v. Estes, 110 F.3d 1523, 1527 (10th Cir. 
1997).

DISCUSSION

 
 
[¶9]      
EOG takes the position that it was improper for the trial court to 
dismiss the Laramie County action upon the voluntary motion of the State, absent 
an initial finding that it had subject matter jurisdiction pursuant to the WRPA 
and, in part, in accordance with the findings of this Court in Weller v. Weller, 960 P.2d 493 (Wyo. 
1998).

 

[¶10]   The Weller 
case 
involved a child custody matter subject to the Uniform Child Custody 
Jurisdiction Act.  Wyo. Stat. 
Ann. 
§§ 
20-5-101 through -125.  In 
Weller, 
appellant challenged subject matter jurisdiction after consenting to the 
proceedings in, and final determination by, the trial court.  This Court held, "[t]he law is well 
established that, when a court lacks subject matter jurisdiction, action taken 
by that court, other 
than dismissing the case, 
is considered to be null and void."  
960 P.2d  at 496 
(emphasis added).

 
[¶11]   Pertinent to the proceedings in the 
present case, the trial court made no operative ruling other than to dismiss the 
action, which was, in part, relief sought under the claims made by 
EOG.

 
[¶12]   Given the facts and circumstances of 
this case, and the nature of the ongoing litigation between these parties on the 
same subject matter, we find that entertaining the State's voluntary motion to 
dismiss was appropriate by the trial court.

 
     
              
            
       

[¶13]   Finally, W.R.C.P. 
41(a)(2) states in pertinent part that a voluntary dismissal may be granted, 
"upon order of the court and upon such terms and conditions as the court deems 
proper."  EOG urges this 
Court to find that the trial court abused its discretion by failing to award EOG 
its attorneys' fees and costs.

 
     
              
   

[¶14]   9 Charles Alan Wright and Arthur R. 
Miller, Federal Practice and Procedure: Civil 2d § 2366, at 302-317 (1995), sets 
forth the general considerations for the rule in question:

 
   
              
           

The 
district court has no power to impose terms and conditions if a plaintiff 
properly dismisses by notice under Rule 41(a)(1).  Nor may the plaintiff seek a conditional 
dismissal under that portion of the rule.  
If the dismissal is by stipulation under Rule 41(a)(1), the parties will 
negotiate the conditions on which they agree to the stipulation.  Accordingly, the authority of the court 
to require "such terms and conditions as the court deems proper" is limited to a 
motion for dismissal under Rule 41(a)(2).

Although 
the power to set terms and conditions is vested in the court, the plaintiff may 
move for dismissal on conditions stated in the plaintiff's motion; under these 
circumstances, the court either must grant the motion on the conditions offered 
or deny the motion.  Dismissal would 
not be voluntary if more onerous conditions were imposed.  The more common practice, however, is 
for the plaintiff simply to move for dismissal without mentioning 
conditions.  The trial court then 
will specify on what conditions it will allow dismissal.  If the conditions are too onerous, the 
plaintiff need not accept the dismissal on those terms.

The 
terms and conditions imposed by the district court upon the granting of a motion 
for a voluntary dismissal under Rule 41(a)(2) generally are for the protection 
of the defendant; although, if one of several plaintiffs moves for the 
dismissal, conditions may be imposed for the protection of the remaining 
plaintiffs as well.  The court may 
dismiss without conditions if conditions have not been shown to be necessary, 
but usually at least should require that the plaintiff pay the costs of the 
litigation.

In 
imposing conditions the trial court is not limited to ordering the payment of 
taxable costs, but may require the plaintiff to compensate for all of the 
expense to which the defendant has been put.  However, these costs cannot include 
those expenses for items that will be useful in another action or that were 
incurred unnecessarily.

The 
district court may require the plaintiff to pay the defendant's attorney's fees 
as well as other litigation costs and disbursements. It appears somewhat 
anomalous to require the payment of an attorney's fee if the plaintiff would not 
have been liable for the fee had the plaintiff lost the case on the merits, but 
the cases support this result.  It 
is for the court, under the circumstances of the particular case, to decide 
whether payment of an attorney's fee should be required.  The judge is not obliged to order 
payment of the fee.  Furthermore, it 
has been held that if the dismissal is with prejudice, the court lacks the power 
to require the payment of attorney's fees, unless the case is of a kind in which 
attorney's fees otherwise might be ordered after termination on the 
merits.

The 
terms and conditions that may be imposed under Rule 41(a)(2) are not limited to 
the payment of money.  The district 
court may allow voluntary dismissal on the condition that the plaintiff produce 
documents or otherwise reduce the inconvenience to the defendant.  It also may condition dismissal on the 
plaintiff's agreement not to assert certain claims in another action.  The Supreme Court has held that a 
district court also may condition dismissal on the parties' agreement to allow 
the court to enforce the terms of a settlement agreement.  In particular cases courts have refused 
to condition dismissal on the requirement that further litigation be in federal 
court, or that defendants who have entered voluntary appearances be permitted to 
withdraw them.

The 
United States cannot be required to pay costs or disbursements as a condition of 
its voluntary dismissal of an action, unless statutory authority exits for the 
assessment of costs against the government.  There is now general statutory authority 
to award costs against the United States, but it is limited to taxable costs and 
may not include the fees and expenses of attorneys.  The fact that the costs taxable against 
the United States are limited might persuade the court not to exercise its 
discretion to permit dismissal if it would not permit dismissal by a private 
plaintiff without the condition that the plaintiff pay attorney's 
fees.

The 
plaintiff has an option not to go forward with a dismissal if the conditions 
specified by the court seem too onerous.  
If the plaintiff accepts dismissal but does not meet the conditions, the 
order of dismissal may be made with prejudice.  At least one court of appeals has held 
that the court explicitly must specify that failure to comply with the 
conditions will result in the entry of a dismissal with prejudice.  A condition that the plaintiff pay the 
defendant's costs is satisfied only by the payment of the costs and not by the 
mere entry of a judgment against the plaintiff for the costs.  The 
court may give the plaintiff the choice between a dismissal with prejudice upon 
payment of taxable costs and a dismissal without prejudice upon payment of the 
defendant's expenses.

 
       
             
        

(Footnotes omitted.)

 

[¶15]   These matters are within the sound 
discretion of the trial court and will not be disturbed absent a clear showing 
that there has been an abuse of judicial discretion.  Determining whether the trial court 
abused its discretion involves the consideration of whether the court could 
reasonably conclude as it did, and whether it acted in an arbitrary or 
capricious manner.  Trujillo 
v. State, 2 P.3d 567, 571 (Wyo. 2000) (citing Solis 
v. State, 981 P.2d 34, 36 (Wyo. 1999)).  "[A]n 
abuse of discretion is present when a material factor deserving significant 
weight is ignored.' Triggs 
[v. 
Triggs, 
920 P.2d 653 (Wyo. 1996)] at 657."  
Reavis 
v. Reavis, 955 P.2d 428, 431 (Wyo. 1998).

 

[¶16]   In matters such as this one, this 
Court will not second-guess the judgment of the trial court as the trial court 
is in the best position to assess the relative merits of claims made by a party 
for costs and fees.  This Court finds that it was within the sound discretion of 
the trial court to deny EOG its costs and fees.

 
 
               
    

CONCLUSION

 

[¶17]   The trial court's 
dismissal of the Laramie County action was proper under W.R.C.P. 41(a)(2) and is 
affirmed.

 

FOOTNOTES

 

1Wyo. Stat. Ann. § 30-5-303(b) (LexisNexis 2001) provides, in part:  "The district court for the county in 
which a well producing oil, gas, or related hydrocarbons is located has 
jurisdiction over all proceedings brought pursuant to this article[.]"  Arguably, this raises the question as to 
whether this particular statutory provision can limit jurisdiction in this 
manner in light of art. 5 § 10 of the Wyoming Constitution.  This is a question for another day.

 
      

2 By 
order entered on September 9, 2001, this Court agreed to answer a certified 
question, which would have addressed the central issue in this case.  By order entered on February 19, 2002, 
this matter was dismissed and the parties were informed that the question would 
be answered in another case.  On 
September 19, 2002, we published the opinion, which resolved the dispute at the 
heart of this case.  BP America 
Production Company v. Madsen, 2002 WY 135, 53 P.3d 1088 (Wyo. 
2002).