Justia Real Estate & Property Law Opinion Summaries

Gas producers that lease land from Alaska must pay royalties calculated on the value of the gas produced from the leased area. The royalty may be calculated in one of two methods: the âhigher ofâ pricing or contract pricing. âHigher ofâ pricing is the default method of calculating royalties and is calculated using market data and the prices of other producers. The Department of Natural Resources (DNR) usually does not calculate the royalty payments under âhigher ofâ pricing until years after production. Under contract pricing, the lesseeâs price at which it sells gas is used to determine the royalty payment. Appellant Marathon Oil requested contract pricing from 2008 onward and sought retroactive application of contract pricing for 2003-2008. The DNR approved contract pricing from 2008 onward but denied the retroactive application. The superior court affirmed the DNRâs decision. On appeal to the Supreme Court, Marathon argued that the statute that governs contract pricing permitted retroactive application of contract pricing. Upon review of the arguments and the applicable legal authority, the Supreme Court concluded that though the statute was ambiguous, it would defer to the DNRâs interpretation. Accordingly, the Court affirmed the superior courtâs decision to uphold the DNRâs order.

In district court, appellants were held liable for violating the Town of Levantâs Article 1010 land use ordinance by allowing a third partyâs mobile home to be moved onto and remain on their land after receiving multiple notices of the violation. At issue was whether appellants could be held responsible for a violation caused by a third party and whether there was evidence that they played a role in leaving the mobile home on their property. The Court affirmed, holding that (1) under the four-factor analysis outlined in Town of Boothbay v. Jenness, the landowners were responsible for land use violations committed on their property, and (2) there was sufficient evidence that the appellants had notice of the violation and the ability and opportunity to correct the violation but failed to do so.