                                                              FILED
                                                  United States Court of Appeals
                     UNITED STATES COURT OF APPEALS       Tenth Circuit

                            FOR THE TENTH CIRCUIT                       October 23, 2012

                                                                      Elisabeth A. Shumaker
                                                                          Clerk of Court
OPTIMA OIL & GAS COMPANY, LLC,
a Colorado Limited Liability Company,

             Plaintiff-Appellant,

v.                                                        No. 11-6230
                                                   (D.C. No. 5:09-CV-00145-C)
MEWBOURNE OIL COMPANY,                                    (W.D. Okla.)
a Texas Corporation,

             Defendant-Appellee.


                            ORDER AND JUDGMENT*


Before TYMKOVICH, HOLLOWAY, and MATHESON, Circuit Judges.


      Optima Oil & Gas Company, LLC, appeals from the district court’s order

granting Mewbourne Oil Company’s motion to dismiss for lack of subject matter

jurisdiction. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.




*
      After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
                                  BACKGROUND

      Optima owned 85% of the oil and gas leasehold rights in certain property in

Ellis County, Oklahoma (the Unit).1 Mewbourne owned the remaining 15%. In

2006, Optima informed Mewbourne that it intended to be the operator of the Unit and

that it was taking steps toward development of the Unit. Nonetheless, Mewbourne

filed an application with the Oklahoma Corporation Commission (OCC) seeking an

order force pooling Optima’s rights and interests in the Unit and naming Mewbourne

as the operator of the Unit.2 Mewbourne sent notice of the application and hearing to

Optima’s Oklahoma City, Oklahoma office. An Optima employee signed the certified

mail receipt, but did not give anyone in management the certified mail. Optima did

not appear at the hearing on the application, because it did not know about it.

      Despite knowing Optima’s opposition to the pooling application, Mewbourne

proceeded at the hearing before an OCC Administrative Law Judge (ALJ) with an

uncontested application for force pooling. The ALJ recommended to the OCC that

the pooling application be granted.

      The day after the hearing, someone at Optima discovered the unopened mail

containing the notice of hearing and the application. Optima filed a motion to stay

1
     The Unit was in Section 1, Township 20 North, Range 24 West, Ellis County,
Oklahoma.
2
       “‘Force pooling’ occurs when the [OCC] requires owners of drilling rights to
pool their interests and contribute to development costs.” Fleet v. Sanguine, Ltd.,
854 P.2d 892, 895 n.8 (Okla. 1993), abrogated on other grounds by Purcell v. Santa
Fe Minerals, Inc., 961 P.2d 188, 193 (Okla. 1998).


                                         -2-
issuance of an order granting the pooling application or to reopen proceedings.

Although the motion was set for a hearing, the OCC granted the pooling application

before the motion was heard. The same day the application was granted, Optima

filed a motion to vacate the pooling order and requested a full hearing on the

application’s merits.

      The ALJ held a hearing on the motion to reopen, at which Optima presented

witness testimony and argued that Mewbourne knew it opposed the application for

force pooling and to name Mewbourne as operator. Mewbourne also appeared at the

hearing and presented argument. The following day, the ALJ heard the motion to

vacate, and the parties presented additional testimony, evidence, and argument.

Mewbourne’s witness admitted on redirect that he knew Optima objected to the

pooling application and request to name Mewbourne as operator. The ALJ

recommended that the pooling order be vacated and the matter be reopened for a

complete hearing on the merits, in light of the question of notice and Mewbourne’s

knowledge that Optima opposed the pooling application. An appellate referee agreed

with the ALJ’s recommendation, but the OCC rejected the recommendations to grant

the motions to vacate and reopen. Optima appealed.

      The Oklahoma Court of Civil Appeals vacated the pooling order and the order

denying the motions to reopen and to vacate, concluding that the OCC erroneously

designated Mewbourne as operator. The Oklahoma Court of Civil Appeals found

that Optima did not have actual notice of the pooling application and that Mewbourne


                                         -3-
had presented the application as uncontested despite knowing that Optima would

oppose it. Also, the court found that Mewbourne misled the OCC by failing to

disclose facts necessary for the OCC to make an informed decision. The Oklahoma

Court of Civil Appeals remanded to the OCC “for a full hearing on the merits of

Mewbourne’s Pooling Application and any further proceedings consistent with this

opinion.” Aplt. App., Vol. 1, at 47. The Oklahoma Supreme Court affirmed the

Oklahoma Court of Civil Appeal’s decision in favor of Optima.

      Optima then filed this suit in federal district court against Mewbourne,

alleging claims of tortious interference with contractual relationships and tortious

interference with prospective business opportunities and seeking damages.3 The

complaint asserted that while the appeal from the OCC’s decision was pending,

Optima’s lessors agreed to extend the leases for six months to commence drilling.

Even though the lease extensions were recorded, Mewbourne contacted the lessors

and convinced them to sign top leases covering the same leases Optima held.4

Optima asserted that although Mewbourne knew Optima’s lease extensions would

expire if Mewbourne delayed drilling beyond the six-month extension time,

Mewbourne filed a motion with the OCC for a one-year extension of time to begin


3
       Optima also asserted abuse-of-process, fraud, and constructive-fraud claims in
its complaint, but later voluntarily dismissed those claims.
4
       A top lease is a “lease[] that take[s] effect only if the pre-existing lease should
expire or be terminated.” Concorde Res. Corp. v. Kepco Energy, Inc., 254 P.3d 734,
736 n.4 (Okla. Civ. App. 2011).


                                           -4-
drilling. A hearing was held on the motion. Both parties appeared and Optima

objected to an extension. According to Optima, Mewbourne misrepresented at the

hearing that granting an extension would preserve the status quo, even though

Mewbourne knew that Optima would lose its leasehold rights in the Unit and those

rights would vest in Mewbourne due to the top leases. The OCC granted a one-year

extension of the date to begin drilling. Optima successfully appealed, but its leases

had already expired and Mewbourne had obtained all of Optima’s leasehold interests.

      In the complaint, Optima asserted that Mewbourne’s tortious conduct caused it

to lose significant business opportunities and subjected it to financial harm. Optima

maintained that during Mewbourne’s actions before the OCC to force pool the Unit,

Mewbourne, under oath, knowingly withheld and misrepresented material facts to the

OCC, wrongfully depriving Optima of its leasehold rights and interests. And

“Mewbourne engaged in wrongful and fraudulent conduct at the [OCC] designed to

deny Optima the ability to commence drilling within the time necessary to preserve

its leasehold rights.” Id. at 25. Further, Optima contended that Mewbourne’s

actions, despite knowing Optima held an 85% leasehold interest, resulted in

extinguishment of Optima’s leasehold interests, thereby denying Optima prospective

business opportunities.

      The district court denied Mewbourne’s first two motions to dismiss—one

under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon

which relief may be granted and the other under Federal Rule of Civil Procedure


                                         -5-
12(b)(1) for lack of subject matter jurisdiction due to incomplete diversity of

citizenship between the parties. The court granted, in part, Optima’s motion for

partial summary judgment under Federal Rule of Civil Procedure 56, holding that

Mewbourne is bound by the Oklahoma Court of Civil Appeal’s determination that

Mewbourne misled the OCC, causing it to enter an erroneous pooling order.

      Mewbourne filed a third motion to dismiss. This Rule 12(b)(1) motion to

dismiss for lack of subject matter jurisdiction asserted that Optima must submit its

tortious interference claims for damages to the OCC. The district court granted the

motion, relying on Leck v. Continental Oil Co., 800 P.2d 224 (Okla. 1989). In Leck,

the plaintiff sought damages for misrepresentations the defendant made to the OCC

during a hearing. Id. at 229. Leck held that the OCC has jurisdiction to consider

intrinsic fraud claims for damages based on a defendant’s misrepresentations to the

OCC during adversarial proceedings. Id. at 229-30. The district court determined

that, as in Leck, Optima’s complaint made clear that its tortious interference claims

arose from Mewbourne’s misrepresentations to the OCC and jurisdiction would

therefore lie only in the OCC, not the district court. This appeal followed.5



5
       Before ruling on the second motion to dismiss, the district court held an
evidentiary hearing on the issue of whether there was complete diversity of
citizenship between the parties. The court concluded that there was. On appeal, we
granted Optima’s unopposed motion to file a Supplemental Appendix containing an
affidavit more clearly establishing diversity. Accordingly, the only jurisdictional
question before us is whether the district court erred in granting the third motion to
dismiss.


                                          -6-
                                         ANALYSIS

       We review de novo the district court’s Rule 12(b)(1) dismissal for lack of

subject matter jurisdiction. Smith v. United States, 561 F.3d 1090, 1097 (10th Cir.

2009). In doing so, we “accept[] the district court’s findings of jurisdictional facts

unless they are clearly erroneous.” Wyoming v. U.S. Dep’t of Interior, 674 F.3d

1220, 1231 (10th Cir. 2012) (internal quotation marks omitted).

       Optima argues that the district court had subject matter jurisdiction over its

tort claims related to or arising from Mewbourne’s misconduct before the OCC.

Optima contends that the court applied Leck too broadly, because Leck is limited to

cases involving intrinsic fraud, whereas its tort claims involve extrinsic fraud.

See Leck, 800 P.2d at 226 (stating that “allegations . . . in the nature of intrinsic

fraud” must be decided in forum where fraud occurred). Optima maintains that all

issues of fact concerning intrinsic fraud were resolved by the Oklahoma Court of

Civil Appeals, but its tort claims could not be resolved by the OCC because they are

not based on the adjudicated facts.

       Leck defines intrinsic fraud as

       any fraudulent conduct of the successful party which was practiced
       during the course of an actual adversary trial of the issues joined and
       which had no effect directly and affirmatively to mislead the defeated
       party to his injury after he announced ready to proceed with trial. If
       during the trial the successful party urges forged instruments or perjured
       testimony or fails to introduce witnesses of whom he had knowledge
       and whose testimony would help his adversary and impair his own case,
       he is guilty of fraud; but it is intrinsic fraud, for relief from which
       application must be made to the court having jurisdiction of the issues
       joined and tried.

                                           -7-
800 P.2d at 229-30 (internal quotation marks omitted). In contrast, extrinsic fraud is

“(a) any fraudulent conduct of a successful party, (b) perpetrated outside of an actual

adversary trial or process and (c) practiced directly and affirmatively on the defeated

party, (d) whereby he was prevented from presenting fully and fairly his side of the

case.” Patel v. OMH Med. Ctr., Inc., 987 P.2d 1185, 1196 (Okla. 1999). “Examples

of extrinsic fraud include false representations that the defeated party is merely a

nominal party against whom no relief is sought, false promise of compromise,

concealment of suit, kidnapping of witnesses, and similar conduct.” Id. The Leck

court found that the “allegations of misrepresentation” in that case were “allegations

of intrinsic fraud because they refer[red] to false information given by the appellee at

the adversarial hearing before the [OCC].” 800 P.2d at 230.

      In its complaint, Optima asserted misrepresentation by Mewbourne to the OCC

as the basis for its claims. With respect to the tortious interference with contractual

and business relations claim, Optima asserted that “[a]s a result of Mewbourne’s

misconduct, Mewbourne interfered with Optima’s contractual rights under its leases.

. . . Mewbourne engaged in wrongful and fraudulent conduct at the [OCC] designed

to deny Optima the ability to commence drilling within the time necessary to

preserve its leasehold interests.” Aplt. App., Vol. 1, at 25. With respect to the

tortious interference with prospective business advantage, Optima asserted that

“Mewbourne’s intentional and tortious acts and conduct resulted in the

extinguishment of Optima’s leasehold interests. Mewbourne wrongfully,

                                          -8-
intentionally and maliciously interfered with [Optima’s] prospective business

advantage by cutting off Optima’s leasehold interests and all potential business

opportunities related thereto . . . .” Id. at 26.

       As the district court found, these claims arise from misrepresentations made by

Mewbourne to the OCC and any damages arise as a result of the misrepresentations.

The alleged fraudulent misrepresentations to the OCC with regard to cutting off

Optima’s leasehold interests are intrinsic fraud. See Fransen v. Conoco, Inc., 64 F.3d

1481, 1489 (10th Cir. 1995). “A claim that a party misrepresented facts to the OCC

is properly brought before the OCC.” Id. (citing Leck); Leck, 800 P.2d at 230

(“Relief from intrinsic fraud must be made by direct attack in the same case in which

the fraud was committed.”). The district court therefore correctly determined that it

did not have jurisdiction to consider Optima’s claims. See Fransen, 64 F.3d at 1489

(citing Leck); Leck v. Cont’l Oil Co., 892 F.2d 68, 69 (10th Cir. 1989) (per curiam)

(concluding that district court correctly decided that it lacked subject matter

jurisdiction to consider issue regarding misrepresentation to OCC).

       Optima also contends that Leck is distinguishable because there was no

adversarial proceeding on the merits of the force pooling application.6 See Leck,


6
       Mewbourne contends that this issue, as well as others, were not raised in the
district court and therefore should not be considered on appeal. We reject that
argument because waiver and forfeiture rules do not apply to jurisdictional issues and
therefore issues concerning jurisdiction can be raised at any time. See Forest
Guardians v. U.S. Forest Serv., 495 F.3d 1162, 1170 n.7 (10th Cir. 2007); Huerta v.
Gonzales, 443 F.3d 753, 755 (10th Cir. 2006).


                                            -9-
800 P.2 at 230 (noting misrepresentation made at adversarial hearing). It is true that

the proceedings on the uncontested application were not adversarial because Optima

had not received actual notice of the hearing and application and therefore did not

appear at the hearing. All other proceedings before the OCC, however, were

adversarial proceedings. And the Oklahoma Court of Civil Appeals explicitly

remanded for a full hearing on the merits of the pooling application. Therefore, we

conclude that there were adversarial proceedings available for Optima to assert its

claims against Mewbourne.

      Optima next contends that Okla. Stat. tit. 23, § 3 permits a cause of action for

tortious interference. See id. (“Any person who suffers detriment from the unlawful

act or omission of another, may recover from the person in fault a compensation

therefor in money, which is called damages.”). This statute does not in any way

undermine Leck’s holding that proceedings on intrinsic fraud must occur before the

OCC, not the district court.

      Optima further contends that because it does not seek relief from the prior

OCC ruling on the intrinsic fraud issues that have already been vacated and there is

no issue to reconsider at the OCC, the only remaining issue is a private dispute for

money damages, which is appropriately heard in the district court. “The distinction

between public and private rights is not always immediately apparent.” Rogers v.

Quiktrip Corp., 230 P.3d 853, 857 (Okla. 2010). Leck states that district courts have

jurisdiction over private rights disputes, whereas the OCC has limited jurisdiction to


                                         - 10 -
protect the “public rights in development and production of oil and gas.” 800 P.3d

at 226; see id. (indicating that unitization orders, pooling orders, and orders setting

allowables on unit’s well are matters of public rights; recognizing that OCC “has

jurisdiction to hear only public rights disputes involving actions on joint operating

agreements or disputes concerning a pooling order’s effect”); see also Rogers,

230 P.3d at 857 (“Public rights, at a minimum, must arise between the government

and others: the liability of one individual to another under the law as defined is a

matter of private rights.”). When addressing the misrepresentation issue, Leck does

not expressly state that it is dealing with a public right. We conclude, however, that

Leck considered a public right, because the essence of the claim was intrinsic fraud

on a tribunal. Since we conclude that intrinsic fraud is at issue in this case, we also

conclude that a public right is at issue. Additionally, we note the Leck plaintiff

sought money damages for the misrepresentations to the OCC. Leck, 800 P.2d at

229. Therefore, nothing in Leck precludes Optima from also seeking damages from

the OCC.




                                          - 11 -
                                   CONCLUSION

      Accordingly, we conclude the district court correctly granted Mewbourne’s

motion to dismiss for lack of subject matter jurisdiction. The judgment of the district

court is AFFIRMED.


                                                 Entered for the Court


                                                 Timothy M. Tymkovich
                                                 Circuit Judge




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