State-Court Jurisdiction Over Private Federal Oil-and-Gas Lease Royalty Disputes; Waiver, Vexatious-Litigant Controls, and Frivolous-Appeal Sanctions

1. Introduction

In White Star Royalty Co. v. McGahey Oil, 2026 ND 132, the North Dakota Supreme Court summarily affirmed (1) an amended judgment quieting title to overriding royalty interests (“ORRI”) and declaring various defendants— including Melissa McGahey—held no interest in the ORRI, (2) an attorney-fee award entered against Melissa McGahey in the district court, and (3) a presiding judge’s pre-filing order designating McGahey a vexatious litigant. The Court further awarded White Star additional attorney’s fees and costs on appeal under N.D.R.App.P. 38, concluding the appeal was frivolous.

The key appellate issues centered on: (a) preservation/waiver of arguments (including standing-related contentions), (b) whether state court lacked subject matter jurisdiction because the dispute involved a federal oil and gas lease interest, (c) whether summary judgment was improper because an LLC allegedly lacked counsel, (d) broad due-process and record-integrity accusations, (e) the validity and appealability of a vexatious-litigant pre-filing order, and (f) sanctions for a frivolous appeal.

2. Summary of the Opinion

  • Quiet-title judgment affirmed (summarily): The Court affirmed the amended judgment quieting title to the subject ORRI and declaring the McGahey-related defendants (and, after remand, Marathon Oil Company) had no interest in the ORRI. The Court invoked N.D.R.App.P. 35.1(a)(1), (6), and (8) to summarily affirm.
  • Unpreserved issues waived: The Court held McGahey failed to show certain issues (including arguments that White Star lacked standing and that assignments were invalid) were preserved in the district court as required by N.D.R.App.P. 28(b)(7)(B)(ii), and it declined to reach them.
  • Subject matter jurisdiction existed: On this record, the Court concluded the district court had subject matter jurisdiction notwithstanding the federal-lease context, and it faulted McGahey for inadequate briefing in the face of authority cited by the appellees.
  • Nonlawyer cannot litigate for an LLC: McGahey could not properly raise or litigate issues on behalf of McGahey Oil LLC, and her related arguments were deemed frivolous.
  • Vexatious-litigant pre-filing order affirmed: The Court held the presiding judge had jurisdiction to enter the order and did not abuse discretion under N.D. Sup. Ct. Admin. R. 58.
  • Frivolous-appeal sanctions imposed: Under N.D.R.App.P. 38, the Court awarded White Star $22,999.50 in attorney’s fees (supported by affidavit and itemization) for defending the appeal.

3. Analysis

3.1 Precedents Cited

A. Preservation, waiver, and standing/capacity framing

  • Bauer v. Adam, 2026 ND 67, ¶ 6, 33 N.W.3d 1: The Court relied on Bauer to reinforce that appellate review is constrained by preservation rules and that failure to comply with appellate briefing/preservation requirements can result in waiver.
  • Nodak Mut. Ins. Co. v. Ward Cnty. Farm Bureau, 2004 ND 60, ¶ 23, 676 N.W.2d 752: Cited for the proposition that failing to object to standing in the trial court (and on appeal) can waive the issue—signaling that “standing” is not treated as a roving, automatically dispositive objection if not properly raised.
  • Judson PTO v. New Salem Sch. Bd., 262 N.W.2d 502, 505 (N.D. 1978): Used to underscore waiver under N.D.R.Civ.P. 12(h) when a defendant fails to properly move on a plaintiff’s “right to sue.”
  • Vermeer Indus. of N.D. v. Bachmeier, 486 N.W.2d 506, 508 (N.D. 1992): Quoted for the important distinction that lack of capacity to sue is not jurisdictional, and failure to raise it timely waives the defense—supporting the Court’s refusal to entertain belated standing/capacity-type challenges.

B. Subject matter jurisdiction where federal oil and gas leases are involved

  • Wallis v. Pan. Am. Petroleum Corp., 384 U.S. 63, 70 (1966): Cited for the broader principle that state law can govern private disputes touching federal oil and gas leases, particularly where the controversy is between private parties rather than implicating a federal governmental interest requiring a federal forum.
  • Bolack v. Underwood, 340 F.2d 816, 820 (10th Cir. 1965): Quoted for the proposition that “no federal statute” governs many private disputes regarding rights to federal oil and gas leases and that, when no federal-government right is involved, state law governs—supporting state-court subject matter jurisdiction.
  • BTU W. Res., Inc. v. Berenergy Corp., 442 P.3d 50, 54 (Wyo. 2019): Cited as persuasive authority aligned with the same jurisdictional theme: state courts may adjudicate private rights disputes even when the underlying asset is connected to federal leasing.

C. Inadequate briefing and forfeiture on appeal

  • Diop v. Altepeter, 2025 ND 196, ¶ 3, 27 N.W.3d 704: Cited for the rule that the Court does not address inadequately briefed issues—used here to dispose of jurisdictional and process-based accusations not meaningfully developed.
  • State v. Gomez, 2025 ND 60, ¶ 18, 18 N.W.3d 829: Cited for the proposition that issues are waived when not supported by reasoning and relevant authority; arguments without supporting citations are “without merit.”

D. Representation of business entities

  • Wetzel v. Schlenvogt, 2005 ND 190, ¶ 11, 705 N.W.2d 836: Cited for the rule that a corporation may not be represented by a non-attorney agent. The Court used this to reject McGahey’s attempt to litigate, on appeal, matters belonging to McGahey Oil LLC.

E. Vexatious-litigant pre-filing orders

  • In re Emelia Hirsch Tr., 2022 ND 224, ¶ 3, 982 N.W.2d 617: Cited for the standard of review: pre-filing orders under N.D. Sup. Ct. Admin. R. 58 are reviewed for abuse of discretion. This frame supported affirmance absent a showing the presiding judge acted arbitrarily, unreasonably, or unconscionably.
  • Bauer v. Adam, 2026 ND 67, ¶¶ 11-12: Cited again in the vexatious-litigant discussion, reinforcing the Court’s acceptance of summary disposition and the administrative-rule framework for managing abusive litigation conduct.

F. Frivolous appeals and appellate fee awards

  • Carpenter v. Southbay Homeowners Ass'n, 2025 ND 114, ¶ 25, 23 N.W.3d 118: Provided the substantive test for frivolousness—whether there is such a complete absence of facts and law that a reasonable person could not expect success—and the characterization of appeals “flagrantly groundless or devoid of merit.”
  • Solberg v. Hennessy, 2024 ND 91, ¶ 4, 6 N.W.3d 820: Cited for the procedural requirement that a request for more than a token amount of attorney’s fees should be supported by an affidavit documenting the work performed, which White Star supplied.

3.2 Legal Reasoning

  1. Strict enforcement of preservation rules (N.D.R.App.P. 28(b)(7)(B)(ii)): The Court treated preservation not as a technicality but as a gatekeeping requirement. Because McGahey failed to cite the record showing that key issues were raised below—and failed to justify review of unpreserved issues—the Court deemed them waived and declined review. This allowed the Court to narrow the case to properly presented issues.
  2. State-court subject matter jurisdiction in a federal-lease-adjacent private dispute: The Court rejected the claim that a federal oil and gas lease automatically deprives state court of jurisdiction. By referencing Wallis, Bolack, and BTU W. Res., Inc., the Court aligned with the principle that, absent a federal statutory scheme controlling the private-party dispute or a federal governmental interest being directly at stake, state courts may adjudicate property and contract interests (like ORRIs) using state law.
  3. Inadequate briefing as an independent basis for rejection: Even where the Court briefly addressed jurisdiction, it emphasized McGahey’s failure to confront appellees’ authorities and to develop analysis—invoking Diop and Gomez. This reflects a consistent appellate posture: arguments must be legally and factually constructed, not asserted.
  4. Entity-representation limits and party status: The Court treated the “LLC had no lawyer” theme as not merely wrong on the merits but improper as presented: McGahey was “not a proper party to represent or raise issues on behalf of McGahey Oil.” Relying on Wetzel, the Court reinforced that business entities must appear through counsel, and a nonlawyer cannot convert that rule into a personal appellate weapon to attack judgments affecting the entity.
  5. Vexatious-litigant regime upheld under administrative rules and abuse-of-discretion review: The Court confirmed (i) appealability of a pre-filing order (N.D. Sup. Ct. Admin. R. 58(6)(a)), (ii) authority of the presiding judge to designate vexatious litigants (Admin. R. 58(3)(a); Admin. R. 2(2); N.D.C.C. § 28-36-04), and (iii) deferential review under In re Emelia Hirsch Tr.. It then concluded jurisdiction existed and no abuse of discretion occurred.
  6. Frivolous-appeal sanctions (N.D.R.App.P. 38): Applying Carpenter, the Court found the appeal so devoid of factual and legal merit that sanctions were warranted, and—consistent with Solberg—awarded the documented $22,999.50 in attorney’s fees.

3.3 Impact

  • Federal-lease context does not automatically federalize private disputes: The decision reinforces that North Dakota district courts can adjudicate private-party controversies involving federal oil and gas lease-derived interests (including ORRIs), especially where no federal governmental interest is directly implicated and no federal statute supplies an exclusive adjudicatory framework.
  • Appellate practice: preservation and briefing are outcome-determinative: The opinion underscores that failure to comply with record-citation and preservation obligations can end an appeal before merits are reached—particularly for standing/capacity-type objections.
  • Litigation management tools are affirmed and financially consequential: The affirmance of the vexatious-litigant pre-filing order and the imposition of substantial appellate fees under Rule 38 illustrate an increasingly robust judicial response to repetitive, unsupported filings—protecting courts and opposing parties from undue burden.
  • Nonlawyer representation limits remain strict: The Court’s reliance on Wetzel serves as a warning that individuals cannot prosecute or defend entity rights on appeal without counsel and cannot bootstrap entity issues into personal appellate standing.

4. Complex Concepts Simplified

Overriding Royalty Interest (ORRI)
A royalty interest carved out of the working interest (often from a leaseholder’s interest). It typically entitles the holder to a share of production revenues free of production costs, but it is dependent on the underlying lease.
Subject matter jurisdiction
A court’s power to hear the type of dispute presented. The opinion illustrates that the mere involvement of a federal oil and gas lease does not automatically remove state-court power when the dispute is between private parties and governed by state property/contract principles.
Standing vs. capacity vs. “right to sue”
These concepts are often conflated. The Court’s citations (including Vermeer Indus. of N.D. v. Bachmeier) reinforce that certain objections (like capacity) are not jurisdictional and can be waived if not timely raised.
Preservation/waiver on appeal
Appellate courts generally review only issues raised and developed in the trial court. N.D.R.App.P. 28(b)(7)(B)(ii) requires pinpoint record citations showing preservation (or a justified reason to consider an unpreserved issue).
Vexatious litigant & pre-filing order
A court-supervised restriction requiring a designated litigant to obtain permission before filing new actions or documents, aimed at curbing abusive or repetitive litigation conduct. In North Dakota, this is governed by N.D. Sup. Ct. Admin. R. 58.
Frivolous appeal (N.D.R.App.P. 38)
An appeal so lacking in factual and legal support that a reasonable person would not expect success. Courts may award “just damages” and costs, including attorney’s fees, to compensate the appellee for having to defend against it.

5. Conclusion

White Star Royalty Co. v. McGahey Oil, 2026 ND 132, is a forceful procedural decision. It (1) reinforces that state courts may adjudicate private disputes involving interests derived from federal oil and gas leases where state law governs and no federal governmental right is at stake, (2) demonstrates rigorous enforcement of preservation and adequate-briefing requirements, (3) reaffirms that nonlawyers cannot represent business entities, (4) upholds the presiding judge’s authority to issue vexatious-litigant pre-filing orders under Admin. R. 58, and (5) signals meaningful financial consequences for frivolous appeals through substantial Rule 38 fee-shifting.