Court Opinion

ID: 169822
Source: CourtListenerOpinion
Date Created: 2010-08-14 17:49:24+00
Date Added: 2024-06-11T17:25:04.240578
License: Public Domain

FILED
                                                    United States Court of Appeals
                                                            Tenth Circuit
                       UNITED STATES CO URT O F APPEALS
                                                                 September 27, 2007
                              FO R TH E TENTH CIRCUIT
                                                                 Elisabeth A. Shumaker
                                                                     Clerk of Court

    PA T H. HAYES, Restricted Indian,
    Heir in Interest to the Restricted Estate
    of Leona James Hayes, deceased,

                 Plaintiff-Appellant,

    v.                                                    No. 07-6025
                                                    (D.C. No. CIV-06-627-W )
    CHESAPEAKE OPERATIN G, IN C.,                         (W .D. Okla.)
    a/k/a Chesapeake Energy Corporation,

                 Defendant-Appellee.

                              OR D ER AND JUDGM ENT *

Before HO LM ES, HOL LOW A Y, and SEYM OUR, Circuit Judges.

         Pat H. Hayes, proceeding pro se as an heir to the estate of his mother,

Leona James Hayes, filed a civil complaint requesting damages from defendant

Chesapeake Operating, Inc. The district court entered summary judgment in favor

*
       After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. It may be cited, however, for its persuasive value
consistent w ith Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
of defendant. M r. H ayes appeals and, construing his filings liberally, see Haines

v. Kerner, 404 U.S. 519, 520-21 (1972), we affirm.

      M r. Hayes’s mother was the owner of restricted Indian lands regulated by

the United States Department of Interior. 1 M r. Hayes believes that, in dealing

with the oil and gas leases covering the estate’s lands, defendant Chesapeake

violated the lease terms and applicable regulations. Based on his reading of

25 C.F.R. § § 213.1 and 213.37, he asked the central regional director of the

United States Geological Survey (USG S, a bureau of the United States

Department of the Interior), to schedule a hearing at the Anadarko Agency of the

Bureau of Indian Affairs (BIA, another bureau of the Interior Department) on the

alleged violations and his claims for $26,520,000 in damages. 2

1
       Title 25, part 213 of the Code of Federal Regulations governs the leasing of
restricted lands of members of the Five Civilized Tribes of Oklahoma for mining
purposes.
2
      Section 213.37 provides, in pertinent part:

      Failure of the lessee to comply with any provisions of the lease [of
      restricted lands] [or] the regulations . . . shall subject the . . . lessee
      to a penalty of not more than $500 per day for each day the terms of
      the lease, [or] the regulations . . . are violated. . . . Provided, That
      the lessee shall be entitled to notice and hearing, within 30 days after
      such notice, with respect to the terms of the lease, regulations, or
      orders violated, which hearing shall be held by the supervisor. . . .

       Section 213.1 defines “supervisor” as a “representative of the Secretary of
the Interior under direction of the Director of the U.S. Geological Survey.” The
Department of Interior, however, has twice reorganized without changing the
applicable regulations. According to the Department, “onshore minerals
                                                                      (continued...)

                                          -2-
      M r. Hayes did not await agency action. On his own, he obtained

permission to use the conference room at the Andarko agency and scheduled a

hearing for M arch 22, 2006. In a written response to M r. Hayes’s “hearing”

notification, the Interior Department Solicitor advised him that the references in

the regulations to USG S w ere no longer accurate and that the Chickasaw Agency

had jurisdiction over his concerns. The Solicitor’s letter made it clear that

M r. Hayes himself could not schedule or conduct a hearing, that no Interior

Department representative would appear at the purported hearing, and that the

Anadarko conference room would not be available for M r. H ayes’s purposes.

      M r. Hayes then filed an “appeal” with the Secretary of the Interior

Department, asserting that he w as entitled to damages due to C hesapeake’s

default for failing to attend the M arch 22 “hearing” he had scheduled. The

Interior Board of Indian Appeals (IBIA) observed that M r. Hayes’s appeal did not

identify an official action or inaction which it could review. It therefore

dismissed the matter for lack of jurisdiction and referred the matter to the BIA

Eastern Oklahoma Regional Director and the Chickasaw Agency Superintendent.

2
 (...continued)
management functions, with the exception of royalty management” are currently
performed by the Bureau of Land M anagement, and not the USGS. Hayes v.
Chesapeake Operating, Inc., 2006 W L 1743217, **1 n.2, 43 I.B.I.A. 54, 55 n.2.
(2006).

                                         -3-
      Rather than pursuing his claims with the Regional Director or the

Chickasaw Agency, M r. Hayes filed a district court lawsuit seeking enforcement

of his so-called “default judgment.” H e sought $102,522,000 in compensatory

damages and fines, along with $205,104,000 in punitive damages. The district

court determined that M r. Hayes failed to exhaust his administrative remedies,

granted Chesapeake’s summary judgment motion, and denied M r. Hayes’s cross-

motion for summary judgment.

      In spite of his failure to follow agency procedures, M r. Hayes maintains on

appeal that he is entitled to default judgment against Chesapeake. “W e review a

district court’s dismissal on exhaustion grounds for an abuse of discretion,”

though we examine “[q]uestions regarding the applicability and construction of

federal law . . . de novo.” Quarles v. United States ex rel. Bureau of Indian

Affairs, 372 F.3d 1169, 1171 (10th Cir. 2004).

      As this court has explained, the doctrine of exhaustion of administrative

remedies provides that:

      no one is entitled to judicial relief for a supposed or threatened injury
      until the prescribed administrative remedy has been exhausted. A
      party must exhaust administrative remedies when a statute or agency
      rule dictates that exhaustion is required. Under Department of
      Interior regulations, if an agency decision is subject to appeal within
      the agency, a party must appeal the decision to the highest authority
      within the agency before judicial review is available.

Coosewoon v. M eridian Oil Co., 25 F.3d 920, 924 (10th Cir. 1994) (citations

omitted). Application of the doctrine permits an administrative agency to develop

                                         -4-
a factual record and apply its expertise to that record. M cKart v. United States,

395 U.S. 185, 193-94 (1969).

      M r. Hayes’s claims were never addressed in prescribed Interior Department

proceedings. Accordingly, we see neither abuse of discretion nor legal error in

the district court’s determination that M r. Hayes failed to exhaust administrative

remedies and was therefore not entitled to judicial review.

       The judgment of the district court is A FFIRM ED. M r. Hayes’s motion to

dismiss his appeal and motion to file for dismissal out of time are DENIED. See

10th Cir. R. 27.2(A)(3) (requiring a motion to dismiss to be filed within 15 days

after filing of notice of appeal, unless good cause is shown). His motion to

proceed in forma pauperis is D ENIED.

                                                     Entered for the Court

                                                     Stephanie K. Seymour
                                                     Circuit Judge

                                         -5-