93-6245 -- Mittelstaedt v. Santa Fe Minerals Inc. -- 02/18/1998

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UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

TED MITTELSTAEDT, an individual; RUTH MITTELSTAEDT, an individual,

Plaintiffs - Appellees,

SANTA FE MINERALS, INC., a corporation,

Defendant - Appellant.

No. 93-6245

ORDER

Filed February 18, 1998

Before TACHA, SETH,^(*) Circuit Judges, and LUNGSTRUM,^(**) District Judge.

This appeal brought by Santa Fe Minerals, Inc. concerns the propriety of deduction of certain costs from royalty payments pursuant to the leasehold agreement in effect between these two parties. Following oral argument, we determined that Oklahoma law contained no controlling precedent that would guide us in deciding the legal issues presented by this case. By order dated January 17, 1995, we certified to the Oklahoma Supreme Court the following question:

In light of the facts detailed below (in the certification order) is an oil and gas lessee who is obligated to pay "3/16 of the gross proceeds received for the gas sold" entitled to deduct a proportional share of transportation, compression, dehydration, and blending costs from the royalty interest paid to the lessor?

The Supreme Court of Oklahoma responded with an answer to the certified question dated January 23, 1998.

We have determined that the answer to the certified question requires additional fact-finding by the District Court with respect to the issues raised in this case. We therefore remand the case to the United States District Court for the Western District of Oklahoma with instructions to decide it in light of the "Certified Question Answered" filed by the Oklahoma Supreme Court in their case No. 84,977 dated January 23, 1998. A copy of that Answer is ordered attached to this order and transmitted with this order to the United States District Court for the Western District of Oklahoma.

REMANDED.

ENTERED FOR THE COURT,

Deanell Reece Tacha Circuit Judge

Attachment not available electronically.

FOOTNOTES
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^*.The late Honorable Oliver Seth, United States Senior Circuit Judge, heard oral argument and participated in the panel's initial certification order, but passed away prior to final resolution of the appeal. The practice of this court permits the remaining two panel judges, if in agreement, to act as a quorum in resolving the appeal. See United States v. Quentin, 106 F.3d 1516 (10th Cir.1997).

^**.The Honorable John W. Lungstrum, District Judge for the United States District Court for the District of Kansas, sitting by designation.

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