Gavel to Gavel: McGirt and Energy Regulation – Where Do Things stand?

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Chief Justice John Roberts began his dissent in McGirt v. Oklahoma with a valid concern for destabilization of governance in much of Oklahoma. The majority’s holding, he warned, “creates significant uncertainty for the State’s continuing authority over any area that touches Indian affairs, ranging from zoning and taxation to family and environmental law.” McGirt v. Oklahoma, 591 U.S. ___, 140 S. Ct. 2452, 2482 (2020) (Roberts, C.J., dissenting).

While the holding in McGirt was limited to both the Muscogee Nation reservation and the federal Major Crimes Act, the dissenting Justices and the state alike predicted the implications would be far broader. In that vein, since the Supreme Court decided McGirt in the summer of 2020, Oklahoma courts have ruled that Congress never disestablished the remaining four of the Five Tribes’ reservations. Thus, the Oklahoma Corporation Commission’s (OCC) jurisdiction to regulate energy in “Indian Country” remains even more important.

The Oklahoma Supreme Court currently has this issue before it in Canaan Resources X v. Calyx Energy III, LLC, Supreme Court Case #119245 (filed Dec. 8, 2020). Prior to McGirt, Canaan protested the OCC’s approval of Calyx’s applications to drill a multi-unit horizontal well in Hughes County. The land in question is within the Muscogee reservation, and the case involves a restricted Indian lease held in trust by the United States government.

Following McGirt, Canaan asserted the OCC now lacked the ability to issue the orders at all. Canaan’s argument framed the McGirt holding as a bulwark covering all areas of law by implication. According to Canaan, McGirt’s holding clearly divested the OCC of any regulatory authority within the Muscogee reservation – a direct challenge to the State’s jurisdiction. The OCC rejected Canaan’s argument, expressing its position that, even in light of McGirt, its regulatory jurisdiction in Indian Country remains intact.

The Oklahoma Supreme Court stayed the proceedings through at least the end of September due to continuing receivership proceedings involving the property in dispute. Whatever the result, the case seems ripe for U.S. Supreme Court review as the nine Justices continue to draw the lines of what exactly McGirt means in areas of law outside the criminal landscape.

This article first appeared in The Journal Record on September 29, 2021, and is reproduced with permission from the publisher.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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