Tearlach Resources Ltd. v. Western States International, Inc.

This is an appeal by the assignee of an oil and gas lease on federal land from the dismissal of its action against the assignor and others. The dismissal was entered after the trial court vacated the amended judgment in the assignee’s favor on the ground the trial court lacked subject matter jurisdiction, because federal courts have exclusive jurisdiction to adjudicate rights in the lease. We conclude the matter presented only issues concerning the contractual relationship between the parties and tort claims; the interests of the United States were not implicated in the litigation and the jurisdiction of the federal courts was not exclusive. Accordingly, we reverse.

FACTUAL AND PROCEDURAL SUMMARY

This case arises out of an assignment of an interest in certain mineral leases. Western States International, Inc. (Western States), and Gas and Oil Technologies, Inc. (Gas & Oil), now known as United Pacific Energy Corporation (UPEC), entered into an agreement to sell and assign a 60 percent interest in certain oil and gas leases to Tearlach Resources (California) Limited (Tearlach California), a wholly owned subsidiary of Tearlach Resources Limited (Tearlach), a Canadian…