True Oil, LLC v. Bureau of Land Management.
No. 23-8082. 9/9/2025. D.Wyo. Judge Ebel. Administrative Procedure Act—Declaratory Judgment Act—Quiet Title Act—Subsurface Mineral Rights—Subject Matter Jurisdiction.
September 9, 2025
True Ranches, LLC owns a surface estate in a tract of land in which the federal government owns the mineral estate. True Oil, LLC, a related entity, owns the mineral estate in an adjacent tract of land. True Ranches agreed to let True Oil drill a horizontal traversing well that begins on True Ranches’ surface estate, traverses through the federal subsurface mineral estate on that tract, and ends in True Oil’s adjacent tract (the proposed well). The Bureau of Land Management (BLM) manages the federal minerals that would be traversed. The drilling process for the proposed well would involve removing a small amount of federal minerals, but the completed well would produce only from True Oil’s minerals in the adjacent tract. BLM informed True Oil and True Ranches (plaintiffs) that they had to apply to BLM for a permit to drill (APD) before drilling the proposed well through the federal mineral estate. Plaintiffs insisted they did not need a permit and brought this claim under the Administrative Procedure Act (APA) and the Declaratory Judgment Act (DJA) requesting a declaration that they have a right to drill the proposed well through the federal mineral estate without BLM’s consent. Plaintiffs asserted that BLM does not have the legal authority to require its consent for the proposed well because it will not produce from the federal minerals. The district court concluded that Congress has authority to regulate a well traversing the federal minerals because in the Stock-Raising Homestead Act, under which the mineral and surface estates in this case were split, the government retained regulatory authority sufficient to protect its mineral estate from injury. The court also held that the US Constitution’s Property Clause gives Congress authority to regulate a well traversing the federal mineral estate and then concluded that Congress delegated this authority to BLM in the Mineral Leasing Act, so BLM was authorized to regulate traversing wells. Further, the district court held that True Oil qualifies as an “operator” under BLM’s regulations governing APDs, so BLM had authority under those regulations to require True Oil to file an APD. The court entered judgment in favor of BLM on the merits.
On appeal, plaintiffs argued only that BLM does not have the right to require them to obtain BLM’s authorization to drill. BLM asserted for the first time on appeal that plaintiffs’ claim had to be brought under the Quiet Title Act (QTA), and whether the claim belongs under the QTA is a jurisdictional issue. Under Block v. N. Dakota ex rel. Boar of University & School Lands, 461 U.S. 273, 286 (1983), the QTA is the sole means through which adverse claimants may challenge US title to real property. Accordingly, if a claim falls within the QTA’s scope, a court lacks jurisdiction to hear it under another statute. The Tenth Circuit concluded that granting plaintiffs’ requested relief requires resolving a dispute over property rights that can be resolved only under the QTA. Therefore, the Tenth Circuit and the district court lacked subject matter jurisdiction to consider the merits of plaintiffs’ claim brought under the APA and the DJA. And because it decided this case on jurisdictional grounds, the Tenth Circuit did not address the merits of the claim or determine either party’s rights with respect to this dispute.
The judgment in favor of BLM was vacated and the case was remanded with instructions to dismiss this action for lack of jurisdiction.