MSR Exploration, Ltd. v. Meridian Oil, Inc.

MSR Exploration, Ltd. and Gypsy-High-view Gathering Systems, Inc. (collectively MSR) brought this action for malicious prosecution against Meridian Oil, Inc., Fina Oil & Chemical Co., Inc., Blackleaf Partners, Inc., and Blackleaf Gas Associates, LLC (collectively Producers). The action was based upon MSR’s claim that Producers had maliciously filed and pursued creditors’ claims in MSR’s Chapter 11 bankruptcy proceeding. The district court dismissed for lack of jurisdiction because it found that the action was entirely preempted by the provisions of the bankruptcy law. We agree that it is preempted and we affirm.

BACKGROUND

MSR had a contract with the Producers’ predecessors in interest to take and process raw natural gas from the Blackleaf Canyon Unit in Teton County, Montana. The contract required MSR to pay for the gas on a monthly basis and also required MSR and the Producers to share equally in any drop in gas prices. From 1982 until 1985, MSR purchased and paid for the gas each month without dispute.

However, in late 1984 after a drop in the price of processed gas, MSR informed the Producers that it would be reducing the price it paid for gas from the Unit. In early 1985,…