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Parties Involved:
Amoco Production Company
Appellee
J. Casper Heimann
Appellant
Roberta Nelson
Appellant
Howard W. Robertson
Appellant
Pauline Robertson
Appellant
Deana Shugart
Appellant

Document Text:

FILED 

United St:Jte~ (oui-c i;:, f Appeals 

Temb Cirrnit 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT .JUL 2 8 1992 

.ROBERT L. HOECKER 

AMOCO PRODUCTION COMPANY, Clerk 

Plaintiff/Counterdefendant, 

Appellee, 

v. 

J. CASPER HEIMANN and OWAISSA 

HEIMANN, his wife; ROBERTA 

NELSON; HOWARD w. ROBERTSON and 

PAULINE ROBERTSON, his wife; 

J. CASPER HEIMANN, as Trustee 

for Randall Lynn Heimann, 

deceased, Jay Dee Heimann, 

Gene Alvin Heimann and Russell 

Gary Heimann; PAULINE ROBERTSON, 

as Trustee for Van Howard 

Robertson; and DEANA SHUGART, 

a married woman, dealing in 

her sole and separate estate, 

Defendants/Counterclaimants, 

Appellants. 

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No. 91-2114 

(D.C. No. 84-1430-JB) 

(Dist. New Mexico) 

ORDER AND JUDGMENT* 

Before SEYMOUR and TACHA, Circuit Judges, and BENSON,** District 

Judge. 

*This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

**The Honorable Dee V. Benson, United States District Judge for 

the District of Utah, sitting by designation. 

Appellate Case: 91-2114 Document: 010110275100 Date Filed: 07/28/1992 Page: 1
This dispute is now before the court a second time. In the 

previous appeal, Amoco Production Company (Amoco) challenged a $4 

million judgment arising out of its unitization of a carbon 

dioxide field in New Mexico, asserting as error, inter alia, the 

district court's failure to give collateral estoppel effect to a 

decision by the New Mexico Oil Conservation Commission (CCC) 

approving the unitization. We agreed with Amoco, holding that 

"l) a good faith inquiry into an oil and gas lessee's 

conduct is unnecessary where the unitization previously 

was approved by an independent state agency which passes 

on the fairness of the participation formula, such as 

the CCC, and (2) the OCC's approval of the unitization 

plan in this case has collateral estoppel effect upon 

the appellees' challenge to the unit's allocation 

formula." 

Amoco Prod. Co. v. Heimann, 904 F.2d 1405, 1408 (10th Cir.), cert. 

denied, 111 s. Ct. 350 (1990). Accordingly, we reversed and 

remanded with instructions to vacate the judgment against Amoco 

and enter judgment in its favor. 

In addressing Amoco's collateral estoppel argument, we 

considered our opinion in Amoco Prod. Co. v. Jacobs, 746 F.2d 1394 

(10th Cir. 1984), which also concerned the validity of a 

unitization agreement approved by the CCC. We recognized that 

Jacobs contains language which could be construed as suggesting 

that CCC approval is not dispositive on the issue of good faith. 

Amoco v. Heimann, 904 F.2d at 1412-13. In holding that, to the 

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Appellate Case: 91-2114 Document: 010110275100 Date Filed: 07/28/1992 Page: 2
contrary, OCC approval is conclusive on the issue of good faith, 

we overruled that reading of Jacobs. 

On remand to the district court, the Heimanns argued 

unsuccessfully that our decision overruling Jacobs should be given 

purely prospective application and thus should not be applied in 

this case. They renew this argument in this appeal, urging that 

prospective application is required under the three-factor test 

set out in Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07 (1971). 

They contend that the situation here is analogous to that in 

England v. Louisiana State Bd. of Medical Examiners, 375 U.S. 411 

(1964), in which the Supreme Court did not apply the rule 

announced in that case to the parties before it. Id. at 422. 

"The general rule, of course, is that retroactive effect is 

given to decisions overruling a prior holding." Benedict Oil Co. 

v. United States, 582 F.2d 544, 549 (10th Cir. 1978) (en bane). 

The Supreme Court has observed that "[f]ormulation of a rule of 

law in an Article III case or controversy which is prospective as 

to the parties involved in the immediate litigation would be most 

unusual, especially where the rule announced was not innovative." 

Simpson v. Union Oil Co., 396 U.S. 13, 14 (1969). 1 Accordingly, 

1 We note that while there is Supreme Court authority for 

applying a decision purely prospectively, see,~, Cipriano v. 

City of Houma, 395 U.S. 701, 706 (1969); England v. Louisiana 

State Bd. of Medical Examiners, 375 U.S. 411 (1964), there is also 

some support on the Court for the view "that prospective 

decisionmaking is incompatible with the judicial role, which is to 

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Appellate Case: 91-2114 Document: 010110275100 Date Filed: 07/28/1992 Page: 3
the Court has indicated that three factors are to be considered in 

determining whether a court should depart from the general 

practice and hold its decision inapplicable to the parties in the 

case. "First, the decision to be applied nonretroactively must 

establish a new principle of law, either by overruling clear past 

precedent on which litigants may have relied, or by deciding an 

issue of first impression whose resolution was not clearly 

foreshadowed." Huson, 404 U.S. at 106 (citation omitted). 

Second, the court must look "'to the prior history of the rule in 

question, its purpose and effect, and whether retrospective 

operation will further or retard its operation.'" Id. at 107 

(quoting Linkletter v. Walker, 381 U.S. 618, 629 (1965)). 

Finally, a court must weigh "the inequity imposed by retroactive 

application," and apply a decision nonretroactively to avoid 

"substantial inequitable results," "'injustice or hardship.'" Id. 

(quoting Cipriano v. City of Houma, 395 U.S. 701, 706 (1969)). 

Examination of the above factors in this case reveals that 

prospective application is clearly not appropriate. 

First, the decision at issue does not establish a new 

principle of law by overruling clear past precedent. To the 

say what the law is, not to prescribe what it shall be." .American 

Trucking Ass'ns, Inc. v. Smith, 110 s. Ct. 2323, 2343 (1990) 

(Scalia, J., concurring in judgment)(agreeing with view of 

Stevens, J., dissenting, with whom three other Justices joined). 

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Appellate Case: 91-2114 Document: 010110275100 Date Filed: 07/28/1992 Page: 4
contrary, as we discussed in our prior opinion, the holding in 

Jacobs is equivocal rather than clear and has confused the 

parties, the district court, and commentators. See Heimann, 904 

F.2d at 1412-13 & n.6. Moreover, as we pointed out previously, 

see id. at 1417, the language in Jacobs itself is contrary both to 

our decision in Chenoweth v. Pan Am. Petroleum Corp., 314 F.2d 63, 

65 (10th Cir. 1963), and to authority from other circuits. 

Second, prospectivity would defeat the policies which application 

of the collateral estoppel doctrine in this case is designed to 

promote. The doctrine as applied to bar reconsideration of 

agreements approved by the OCC would both reduce unnecessary 

litigation and foster comity between state and federal courts in 

an area that is primarily of state concern. See Heimann, 904 F.2d 

1419. Prospective application here would not only intrude upon 

the jurisdiction of the OCC and the New Mexico courts, but would 

engender further proceedings in federal court. Finally, we find 

no substantial inequity here of the sort necessary to overcome the 

general rule of retroactivity. The Heimanns have had the 

opportunity to present their agreement to the OCC, a neutral and 

detached agency empowered to rule on their claims. They have 

appealed the OCC decision to the state district court and then to 

the state supreme court. Thus, this case does not present the 

situation present in Huson and England where "nonretroactive 

application •.• simply preserve[d the] right to a day in court." 

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Appellate Case: 91-2114 Document: 010110275100 Date Filed: 07/28/1992 Page: 5
H 404 US at 108. 2 

uson, .. Moreover, the costs and fees incurred by 

the Heimanns in pursuing their counterclaim in federal court, even 

if justifiably expended in reliance on the language in Jacobs, 

simply do not rise to the level of substantial injustice necessary 

to overcome the general rule of retroactivity. 

Accordingly, the judgment of the district court is AFFIRMED. 

Entered for the Court 

Stephanie K. Seymour 

Circuit Judge 

2 It is true, as the Heimanns point out, that the Supreme Court 

in England, 375 U.S. 411, held that the plaintiffs were entitled 

to their day in federal court even though their claims had already 

been adjudicated in state court. That case is nonetheless 

distinguishable. The Court there emphasized the right of a 

plaintiff to have his federal constitutional claims determined by 

a federal court and the federal court's concommitant duty to take 

jurisdiction over such a claim when jurisdiction is properly 

invoked. See id. at 415-17. No such federal constitutional claim 

is at issue here. 

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