Budd Distinctions

"The District Court ruled that the action was governed by Arkansas law, and this ruling was not contested on appeal. In dismissing the action, the court declared that the decision of the Arkansas Supreme Court in Budd v. Ethyl Corp. provided a “clear, concise and unambiguous determination of the law” to be applied. Relying on that decision as controlling, the District Court held that the common law rule of “capture,” as interpreted by the Arkansas Supreme Court, precluded relief. The Court of Appeals concluded that Budd did not decide whether the rule of capture protects one who, by force, pushes minerals out from under the land of another when the minerals would remain in place without the application of such force. In Budd, the Arkansas Supreme Court treated two tracts separately. It relied on the rule of capture as to a 240-acre tract outside the recycling area, but denied relief as to a 40-acre tract within the recycling area because Budd owned only an “inchoate” leasehold interest. Since Young’s tract was within the recycling area and Young owned title to it in fee simple, the dispositions in Budd were not controlling. Counsel for the defendants conceded that the Arkansas Supreme Court had not held that relief for an owner in fee simple was barred by the rule of capture when minerals beneath his land were forced to migrate to the property of another by means of injection wells."