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Recent Thomson legal decisions a toss-up One Superior Court judge agrees DNR has denied permits; another refuses to allow Exxon’s request for a partial trial de novo Kristen Nelson Petroleum News
Alaska Superior Court Judge Sharon Gleason has denied a request from Exxon Mobil Corp. for a partial trial de novo for discovery on specific topics in the appeal of the state’s 2008 termination of the Point Thomson unit. The request was for a procedure in which the appeal court holds a trial as if a prior trial had never been held, often conducted in appeals from small claims court judgments.
In this case the prior event was a Department of Natural Resources administrative hearing.
Meanwhile, Judge Patrick McKay denied a state attempt to kill an ExxonMobil suit for a Point Thomson drilling permit (see sidebar).
Appellants in the trial de novo motion — ExxonMobil, BP Exploration (Alaska), Chevron U.S.A. and ConocoPhillips Alaska — had moved for a partial trial de novo based on an assertion that DNR failed to afford them due process during 2008 remand proceedings.
Gleason said that appellants maintain they should have discovery rights on certain topics and be able to augment the existing appeal record in six areas including a report prepared for the state by consultant PetroTel and communications between DNR Commissioner Tom Irwin, Hearing Officer Nan Thompson and third parties including the governor’s office and members of the Legislature.
Gleason said appellants “maintain that this discovery together with the existing administrative record, ‘will establish their right to a plenary trial de novo in this Court or, in the alternative, remand to an independent hearing officer.’”
She said appellants cite several federal cases and assert the record in this administrative appeal should be expanded to include all documents and evidence on which the agency might have relied in making its decision.
Reluctance from courts But Gleason said a review of the cited cases “indicates that federal courts have demonstrated considerable reluctance to permit discovery or augmentation in administrative appeals.”
In its response, DNR said a partial trial de novo in the form of discovery and augmentation was unwarranted. “DNR’s determination must be supported by substantial evidence in the record as a whole, and DNR is obligated not to rely upon evidence that is not in the record,” Gleason said, adding that there is “strong presumption” that an agency has “properly designated the entire administrative record, and a party appealing an administrative decision should be required to show clear evidence to the contrary to obtain discovery.”
In an August letter in response to a public records request by Chevron for the the PetroTel evaluation of the Point Thomson sands reservoir, a 2007 study contracted for by DNR, Irwin stated that the study “was not relied on in any manner in the administrative process underlying this appeal” and was in fact commissioned by the executive branch as part of the policy and decision-making process under the Alaska Gasline Inducement Act. A 15-page summary of the report was released 2008.
While Exxon told the judge there were “direct parallels” between the PetroTel conclusions and the commissioner’s Point Thomson termination decision and argued it “should not blindly have to accept the bald statements of its litigation adversary” that the report had no impact on the decision, Gleason said the commissioner’s “decisions on remand contain no reference to the PetroTel Report”; Irwin has “unequivocally indicated” that there was no reliance on the report; and courts have held in the past that “Administrative personnel are presumed to be honest.”
The judge said in denying the request to include the PetroTel report in the record that while the report relates to Point Thomson, appellants failed to “make a substantial showing, on the basis of the agency’s written decisions,” that Irwin may have relied on the report.
Issue of personnel Gleason said appellants “maintain that due process requires that DNR separate ‘personnel responsible for advocacy from decision-makers performing a judicial role,’” and seek discovery to prove the commissioner “may have had extensive contact with personnel responsible for advocacy.”
The judge said DNR maintains that the remand hearing on the Point Thomson unit termination was an agency hearing before the commissioner and not an adversary proceeding, and thus communication by the commissioner with DNR staff, litigation counsel and third parties during the course of the remand hearing are not prohibited.
In opposing the motion, DNR said it does not dispute that the commissioner was advised by DNR staff and litigation personnel during the remand proceedings, and has conferred with members of the Legislature and executive branch on Point Thomson.
Gleason said the issue is a legal one, “whether the communications that DNR has acknowledged took place are consistent with the requirements of due process” to which appellants are entitled. If the communications are prohibited their content is irrelevant and if they are permitted, appellants “are not entitled to explore their content. The legal issue can be resolved on the current record,” she said.
Appellants also seek a full record of DNR’s financial interest in the outcome of the remand proceeding, and maintain that DNR’s financial interest in the outcome is a factor the court must consider.
Gleason said the record contains a DNR memo which concluded that re-leasing the Point Thomson acreage could provide the state with some $3 billion, a much greater value than allowing the current owners to retain the leases. The state’s pecuniary interest is substantial and Gleason said that for purposes of the administrative appeal there is no basis for further augmentation of the exact nature of the state’s financial interest in the outcome.
Independence of process Gleason cited precedent for “strong presumption against discovery” in administrative proceedings because of the objective of “preserving the integrity and independence of the administrative process”; said discovery and augmentation of the record is not warranted at this time; and denied the motion for a partial trial de novo.
Her decision was dated Jan. 13 and she said that a supplement to the appellants’ motion, filed Jan. 12, would be treated as a distinct motion, and DNR would be accorded an opportunity to file in opposition to that motion.
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