Opinion ID: 2635368
Heading Depth: 1
Heading Rank: 3

Heading: summary of the parties' arguments

Text: In its initial brief, one of Northern's arguments is that the plain language of the statute manifests a legislative intent to vest title to and possession of all storage gas with the injector, regardless of when the gas was injected or when it might have migrated outside the certified boundaries of the gas storage field. It points to the use of the phrases has been previously reduced to possession and at all times in K.S.A. 55-1210(a), and was originally injected and has migrated in K.S.A. 55-1210(c) to support its plain language argument. Northern also contends that public policy considerations dictate that we adopt its interpretation of the statute. It notes that the legislature acknowledged the importance of providing for the storage of natural gas to make natural gas more readily available to consumers and to provide a better year-round market for the gas fields. See K.S.A. 55-1202. Further, Northern contends that requiring it to identify when gas migrated outside the storage field would place an impossible evidentiary burden on the injector. Further, Northern's view is that K.S.A. 55-1210 abolished the rule of capture in this state with respect to injected gas, and therefore, all injected gas which had not been captured, i.e., produced and reduced to possession, by the adjacent landowner before July 1, 1993, remained the personal property of Northern. On the other hand, Northern also argues that the statute operated to revest the injector with title to the injected gas and such a return transfer of title was recognized in this court's prior decision in Union Gas System, Inc. v. Carnahan, 245 Kan. 80, 86, 774 P.2d 962 (1989). Martin Pringle responded by pointing out that the deep-rooted presumption is that legislation will apply prospectively, unless the legislature clearly and unequivocally manifests its intent to apply a statute retroactively. It argues that the legislature did not manifest that retroactive intent in K.S.A. 55-1210. Moreover, Martin Pringle argues that prior to the July 1, 1993, effective date of K.S.A. 55-1210, Northern had lost title to that injected gas which had migrated outside its storage field under the ownership-in-place concept, which vested ownership in the adjoining landowner so long as the gas remained under that adjacent land. Therefore, a construction of K.S.A. 55-1210 which destroys the adjacent landowner's vested right to produce the gas existing under the adjacent land on July 1, 1993, would constitute an unconstitutional taking of property without just compensation. Martin Pringle further contends that Northern misconstrued the pre-July 1, 1993, rule of capture to mean that an adjacent landowner had to actually produce the migrated gas to obtain title to it. Rather, the law firm argues that the ownership-in-place doctrine vested title to the migrated gas in the adjacent landowner when it became part of the adjacent land, regardless of whether the gas had been produced. Likewise, Martin Pringle argues that Northern's reliance on the Union Gas case is misplaced because that case dealt with a formal expansion of the storage field through certification and condemnation, an action which Northern could have attempted, but did not. Martin Pringle also attempts to debunk Northern's public policy arguments by: (1) pointing out the other remedies which are available to a gas storage field operator when the stored gas migrates to adjacent land, such as seeking formal expansion of the storage field boundaries; and (2) explaining how an injector can prove the time at which gas migrated with the aid of a computer-generated simulation, an example of which was attached to its brief. In its reply brief, Northern asserted that it is not seeking a retroactive application of K.S.A. 55-1210, notwithstanding its declaration that the statute abolished the rule of capture and any supplemental ownership-in-place doctrine. The apparent argument is that adjacent landowners had no right, title, or interest in uncaptured injection gas, so that the statute took nothing away from them. Northern also made the rather incredible argument that Martin Pringle did not have standing to argue against an unconstitutional interpretation of the statute because the law firm did not have any claim to the migrated gas. See Martin v. Kansas Dept. of Revenue, 285 Kan. 625, 629-30, 176 P.3d 938 (2008) (court has duty to construe statute in a constitutional manner). In addition to the parties involved in the Nebraska malpractice action, other entities joined the fray in our court. Trans Pacific Group and Trans Pacific Royalty Owners (collectively referred to as Trans Pacific) filed a motion requesting leave to file an amicus curiae brief, a motion to argue, and a motion to continue. Val Energy, Inc., and Nash Oil & Gas, Inc. (Nash), filed a motion for leave to file an amicus curiae brief and a motion to argue. We granted the motions to file amicus curiae briefs, but denied the motions to argue and to continue. Trans Pacific points out that the question as to the proper interpretation of K.S.A. 55-1210(c)(1) previously arose, was briefed, and was decided adversely to Northern in Northern Natural Gas Co. v. Trans Pacific Oil Corp., 2005 WL 2334688 (D.Kan.), aff'd 248 Fed.Appx. 882, 2007 WL 2753079 (10th Cir. 2007). Trans Pacific suggests that Northern's certified question is a thinly veiled attempt to obtain a different interpretation of the statute from state court in an action where the potentially adversely affected landowners or royalty owners are not participating. It challenges the obtuse wording of the question and contends the factual premise upon which it is based is implausible. Given that the jury found no migration after July 1, 1993, Northern would have to prove that its storage gas was migrating to Trans Pacific's wells prior to July 1, 1993, but somehow the migration stopped when the legislature passed the statute. On the merits of the question, Trans Pacific's arguments against a retroactive application of the statute track those of Martin Pringle but do so utilizing facts from the underlying litigation that are outside the facts submitted with the certified question. Val Energy and Nash were not parties to the underlying case. However, Northern sued Nash in the federal District of Kansas, alleging that their wells were producing storage gas that had migrated outside of Northern's storage field. The district court granted summary judgment in favor of Nash on statute of limitations grounds and alternatively on the preclusive effect of the jury trial in Trans Pacific. The Tenth Circuit Court of Appeals affirmed the decision on the statute of limitations grounds. Northern Natural Gas Co. v. Nash Oil & Gas, Inc., 506 F.Supp.2d 520 (D.Kan.2007), aff'd 526 F.3d 626 (10th Cir.2008). Northern also filed suit against Val Energy but dismissed the claims without prejudice. Val Energy claims that the case was dismissed pending the determination of this certified question. Val Energy argues that we should decline to answer the certified question because it is not determinative of any issues in the malpractice lawsuit. It contends that even if the certified question is answered in Northern's favor, Northern would still have to prove all of the elements of the malpractice claim, including that it would have received a favorable decision from the Tenth Circuit. On the merits, the amicus curiae brief reiterates that the legislature did not manifest an intent to apply the statute retroactively and argues that the public policy cannot be to give injectors unlimited rights to the detriment of pre-existing property rights. Both Northern and Martin Pringle filed reply briefs to address the amici curiae briefs. Northern essentially rebutted every point made by the amici, injecting more facts not in the record. Martin Pringle argued the propriety of the certified question, asserted its standing to argue against an unconstitutional interpretation of K.S.A. 55-1210, and declared its agreement with the amici's interpretation of the statute.