Brown v. Cont'l Res., Inc.

This Eighth Circuit case originated in South Dakota between a well operator, Continental Resources, Inc. (“Continental”), and two landowners (“the Browns”). In 2010, Continental drilled an oil production well on the Browns’ land, subject to drilling and pipeline agreements with the Browns. Continental later converted the production well to an input well and began using trucks to transport needed water to the input well. Because such trucking left a pasture unusable, the Browns sued Continental for damages to the surface of their land and the use of their pore space.

The drilling and pipeline agreements gave Continental full rights and access to the Browns’ land for “all oil and gas activity.” The Browns argued that the agreements only contemplated production, not input operations; however, the court found no ambiguity in the contract language. Because input operations are part of “oil and gas activity,” Continental was not liable for surface damages to the pasture.

On the Browns’ pore space claim, the court held that the lost use of a pasture is not compensable under South Dakota law. S.D.C.L. Chapter 45-5A holds a mineral developer liable only under three claims: loss of agricultural production, lost land value, and lost value of improvements. The court declined to imply a remedy for lost land use and affirmed the district court’s summary judgment for Continental.