DA 13-0750

IN THE SUPREME COURT OF THE STATE OF MONTANA

2014 MT 105

ANNE DEBOVOISE OSTBY

ANDREW JAMES OSTBY,

 Petitioners and Appellants,

 v.

BOARD OF OIL AND GAS CONSERVATION 

OF THE STATE OF MONTANA,

 Respondent and Appellee.

APPEAL FROM: District Court of the Fifteenth Judicial District,

In and For the County of Sheridan, Cause No. DV 46-2012-9

Honorable David Cybulski, Presiding Judge

COUNSEL OF RECORD:

For Appellants:

Anne Debevoise Ostby, Attorney at Law, Dagmar, Montana 

For Appellee:

Robert Stutz, Assistant Attorney General, Montana Board of Oil and Gas 

Conservation, Helena, Montana 

Submitted on Briefs: March 26, 2014

 Decided: April 22, 2014

Filed:

__________________________________________

Clerk

April 22 2014
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Chief Justice Mike McGrath delivered the Opinion of the Court. 

¶1 Anne and Andrew Ostby appeal from the District Court’s order of September 10, 

2013, dismissing their petition for judicial review. We reverse.

PROCEDURAL AND FACTUAL BACKGROUND

¶2 The Legislature established the Montana Board of Oil and Gas Conservation with 

broad authority to issue permits to drill for oil and gas and to regulate those activities. 

Section 82-11-111, MCA; Montana Wildlife Federation v. Montana Board of Oil & Gas 

Conservation, 2012 MT 128, ¶ 6, 365 Mont. 232, 280 P.3d 877. In December 2011 the 

Board published notice of its intent to “establish special statewide temporary spacing units 

for wells drilled to the Bakken/Three Forks Pool,” including parts of Sheridan, Roosevelt 

and Richland Counties in Montana. The Board may establish spacing units after notice and 

hearing, § 82-11-201, MCA. The Ostbys appeared at the meeting at which the Board 

considered the spacing unit proposal, and objected that they had received insufficient notice 

and that the Board had not followed proper procedures. The Board proceeded to consider 

and adopt the spacing unit proposal. On March 2, 2012, the Board issued a written order 

adopting the spacing unit. 

¶3 In April 2012 the Ostbys filed in District Court a “Petition for Judicial Review of 

Order Adopted by the Board of Oil and Gas Conservation.” The Petition stated that it was 

filed “pursuant to sections 82-11-144 and 2-4-702, MCA.” The Petition alleged that the 

Board’s adoption of the spacing order was in excess of its statutory authority, and that it was 

arbitrary and an abuse of discretion. The Petition requested that the District Court hold the 
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Board’s action unlawful, set aside the Board’s order, and grant such other relief as may seem 

proper.

¶4 The Board moved to dismiss the Petition and on September 10, 2013, the District 

Court entered a brief “Order Granting Motion to Dismiss.” The District Court’s stated 

rationale for dismissing Ostbys’ proceeding was that the “sole remedy for a person aggrieved 

by an order of the MBOGC is a challenge under Section 82-11-144, MCA.” Ostbys appeal. 

STANDARD OF REVIEW

¶5 This Court reviews a decision on a motion to dismiss de novo, to determine whether it 

is correct. Hartsoe v. Tucker, 2013 MT 256, ¶ 6, 371 Mont. 539, 309 P.3d 39; Grizzly 

Security v. The Armored Group, 2011 MT 128, ¶ 12, 360 Mont. 517, 255 P.3d 143. 

DISCUSSION

¶6 The issue on appeal is whether the District Court properly granted the Board’s motion 

to dismiss Ostby’s petition. 

¶7 A district court considering a motion to dismiss an action should construe the 

complaint in the light most favorable to the plaintiff, deeming all factual allegations as true, 

and dismissal is warranted only if plaintiff is not entitled to relief under any set of facts. 

Missoula YWCA v. Bard, 1999 MT 177, ¶ 3, 295 Mont. 260, 983 P.2d 933; Hauschulz v. 

Michael Law Firm, 2001 MT 160, ¶¶ 7-8, 306 Mont. 102, 30 P.3d 357; Meagher v. 

Butte-Silver Bow County, 2007 MT 129, ¶ 13, 337 Mont. 339, 160 P.3d 552.

¶8 The only rationale the District Court gave for granting the motion to dismiss was that 

the “sole remedy for a person aggrieved by an order of the MBOGC is a challenge under 

Section 82-11-144, MCA.” That statute provides that a person adversely affected by an 
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order of the Board may obtain court review and may seek relief by a suit for injunction 

against the Board. In Montana Wildlife Federation the Federation challenged permits issued 

by the Board on the ground that the Board’s environmental assessments were inadequate 

under the Montana Environmental Policy Act, § 75-1-101, et seq., MCA. The Federation 

contended that since its challenge was based upon MEPA, judicial review was limited to the 

Board’s administrative record and that it was improper to consider other evidence regarding 

the Board’s action. This Court held that § 82-11-144, MCA, is the more specific statute and 

that it governs review of Board actions. Therefore, the district court was not limited to the 

Board’s administrative record and could receive additional evidence when conducting a 

review of the Board’s decisions. Montana Wildlife Federation, ¶ 29. 

¶9 Ostbys seek to distinguish Montana Wildlife Federation on the ground that they 

invoked the Montana Administrative Procedure Act (§ 2-4-101, et seq., MCA) and not 

MEPA in their petition for judicial review. A judicial review proceeding under MAPA, is 

generally confined to the agency’s record, § 2-4-704, MCA. Ostbys contend that they are 

entitled to limited judicial review under MAPA, citing § 82-11-141, MCA. That statute 

provides that “[u]nless otherwise provided, the Montana Administrative Procedure Act 

applies” to proceedings involving the Board. (Emphasis added.) Ostbys contend that unless 

MAPA governs judicial review of Board actions, § 82-11-141, MCA, will be “superfluous.” 

¶10 Section 82-11-141, MCA, carries the important caveat that MAPA applies to Board 

proceedings “unless otherwise provided.” It is clear that § 82-11-144, MCA, provides 

otherwise as to “court review” of actions of the Board. In Montana Wildlife Federation this 

Court determined that § 82-11-144, MCA, is a specific statute governing court review of 
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Board actions, and that it should be applied instead of provisions generally applicable to a 

broad array of State activities. Montana Wildlife Federation, ¶ 29. In addition, MAPA itself 

specifically provides that its judicial review provisions do not “limit use of or the scope of 

judicial review available under other means of review, redress, relief or trial de novo 

provided by statute.” Section 2-4-702(1)(a), MCA.

¶11 We conclude that a proceeding seeking judicial review of an order of the Board of Oil 

and Gas Conservation must proceed as a de novo review in district court and not as a judicial 

review under MAPA. Sections 2-4-702(1) and 82-11-144, MCA; Montana Wildlife 

Federation, ¶ 29.

¶12 While § 82-11-144, MCA, governs the Ostbys’ challenge to the Board’s action, that 

does not determine whether the District Court properly dismissed their action. We conclude 

that the District Court erred in dismissing the action. Even though Ostbys argue that they are 

entitled to MAPA judicial review limited to the administrative record, they also clearly cited 

and relied upon § 82-11-144, MCA, as a legal basis for their petition. As noted, their 

petition was expressly filed “pursuant to” § 82-11-144, MCA. The Petition alleged, in 

language closely following that statute, that the Board failed to follow proper procedure and 

that its adoption of the spacing order was in excess of its statutory authority. The Petition 

alleged, also closely following the statute, that the Board’s action was unwarranted by facts 

in the record, and that it was arbitrary and an abuse of discretion. The Petition alleged, again 

closely following that statute, that the Board’s action interfered with Ostbys’ contractual 

mineral interests, and requested that the District Court hold unlawful and set aside the 

Board’s Order, and grant such other relief as may seem proper.
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¶13 These allegations, coupled with the Ostbys’ express reliance upon § 82-11-144, MCA, 

should have been sufficient to save their Petition from dismissal by the District Court on the 

ground that they had not pursued their “sole remedy” of proceeding under that very statute. 

The District Court could have allowed the action to proceed under § 82-11-144, MCA, as 

pled in the Petition. To the extent that the Ostbys incorrectly relied upon MAPA judicial 

review, the District Court could have stricken the claim for judicial review under MAPA or it 

could have allowed Ostbys an opportunity to file an amended Petition. Outright dismissal of 

the Petition, however, was not warranted. 

¶14 The District Court should have allowed the Ostbys to proceed with their claims under 

§ 82-11-144, MCA. The District Court’s order dismissing the action is reversed and this 

matter is remanded for further proceedings.

/S/ MIKE McGRATH

We Concur:

/S/ LAURIE McKINNON

/S/ MICHAEL E WHEAT

/S/ PATRICIA COTTER

/S/ JIM RICE