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More consolidation in Pt. Thomson cases Judge Gleason leaves administrative action to run its course; does not appoint mediator, holding on settlement discussions Kristen Nelson Petroleum News
A damages suit by Exxon Mobil Corp. against the State of Alaska over the termination of the Point Thomson unit was rolled into the consolidated Point Thomson case by Superior Court Judge Sharon Gleason Oct. 23. A separate administrative action pending before the Department of Administration was not consolidated.
The Department of Natural Resources terminated the Point Thomson unit in a dispute with the working interest owners over an appropriate plan of development and the major owners — ExxonMobil, BP Exploration (Alaska), Chevron U.S.A. and ConocoPhillips Alaska — are appealing DNR’s decision.
The court granted a 30-day extension for filing briefs, which had been due Oct. 29, while denying a request for a status hearing to determine a new briefing schedule. An attorney for ExxonMobil argued the court should grant the request for a scheduling conference “and reject the Department of Natural Resources’ request to treat this atypical case as a routine one.” DNR’s attorney said appellants were not asking for “a defined extension of time” but for an entirely new briefing schedule to be set after a status conference to be held at “some unspecified time in the future.”
The court also denied a motion for a settlement conference and a court-appointed mediator, but “without prejudice to renewal of the motion by any party if informal settlement discussions are unsuccessful in resolving the parties’ dispute.”
Court cites common issues In consolidating the Superior Court damages suit with the other appeals the judge said: “There are common issues of law and fact involved in ExxonMobil’s damage appeal that warrant consolidation of that action with this case.” The judge agreed with the state’s assertion that “consolidation of the damages appeal should ‘allow the court system and the parties to administer the Point Thomson Unit litigation in a more efficient manner than would be the case if the eighth appeal were litigated separately.’”
ExxonMobil requested a stay of its damages claim until final outcome of its application for review to the Department of Administration and final outcome on all remaining issues on appeal before the Superior Court. The state opposed that motion, telling the court it wanted briefing on all issues. The judge stayed the damages claim, but only until the Department of Administration reached a final determination on ExxonMobil’s application for review and any appeal, or until the appeal period expired.
But the judge denied ExxonMobil’s motion to stay its damages claim until all remaining claims currently on appeal before the Superior Court were completely resolved. “The interests of judicial economy and the timely resolution of all of the issues between the parties mitigate against such a stay,” the judge said.
Where to try issues The state accused ExxonMobil of “attempting to create confusion” by filing for damages administratively and in court. The state argued that the damages arguments “belong in this appeal as part of ExxonMobil’s direct administrative challenge to DNR’s unit termination decisions.”
“Notably, none of the other appellants share ExxonMobil’s alleged confusion and have not joined ExxonMobil in its wayward journey through the Alaska legal system,” DNR’s attorneys said Oct. 8.
Attorneys for ConocoPhillips Alaska, BP Exploration (Alaska) and Chevron U.S.A. responded Oct. 23 that “DNR’s contention as to the other appellants’ reasons for not joining ExxonMobil in the damages proceedings is presumptuous, incorrect and inappropriate.”
Attorneys for the other appellants said they share ExxonMobil’s view that Alaska law governing claims for damages against the state is “a mess.”
“Alaska law on this point is confusing, if not confused,” they told the court.
The overlying issue, they said, on which all appellants agree, is that the department’s claim for termination of the Point Thomson unit agreement “for default must be brought in Superior Court as an original action.” The proceeding in Superior Court is an appeal from a decision by the Department of Natural Resources, not an original action.
If the case had been brought as an original action, the appellants’ attorneys said, “the Superior Court would have original exclusive jurisdiction over all claims arising from the transactions and occurrences DNR alleges in support of its claim for termination” of the Point Thomson unit, including any claims against DNR for “wrongful repudiation” of the unit agreement.
Talks ongoing In required updates on the status of settlement talks attorneys for the appellants said ExxonMobil, BP Exploration (Alaska), Chevron U.S.A. and ConocoPhillips Alaska had filed a motion for a settlement conference in July, requesting that DNR “engage in settlement discussions” on the appeal of the termination of the Point Thomson unit; DNR said it was willing to engage in settlement discussions.
Appellants wanted a mediator appointed and in early September the judge said the parties could submit names of up to three mediators or settlement judges with their status reports, due Oct. 15.
Appellants said Oct. 15 that “settlement discussions have commenced and are ongoing” and submitted three names: Elaine Andrews and Brian Shortell, both retired judges, and attorney Blythe Marston.
They requested the prompt appointment of a mediator “so that the mediator can begin to receive and review background materials and settlement communications among the parties. Appellants believe that the complexity and lengthy procedural history of this dispute are likely to require unusually extensive preparation by the mediator,” and that prompt appointment of a mediator would “facilitate the mediator’s efficient and effective involvement, should informal discussions fail to progress.”
In its status report DNR said it “is in active settlement negotiations” and noted that the parties had met twice and were scheduled to meet again that day.
DNR objected to appointment of a mediator, calling it “premature to ask the court to appoint a mediator because the parties are engaged in ongoing discussions. The parties’ efforts are better focused on the current process.”
Time spent selecting and briefing a mediator would divert resources for the discussions the parties are having, DNR said, and “might also derail the ongoing discussions by undermining the parties’ incentive to participate in the informal settlement process.”
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