                  United States Court of Appeals
                              For the Eighth Circuit
                         ___________________________

                                 No. 19-1326
                         ___________________________

                              Northern Oil and Gas, Inc.

                         lllllllllllllllllllllPlaintiff - Appellant

                                            v.

                                 EOG Resources, Inc.

                         lllllllllllllllllllllDefendant - Appellee
                                         ____________

                     Appeal from United States District Court
                    for the District of North Dakota - Bismarck
                                    ____________

                               Submitted: May 12, 2020
                                 Filed: July 27, 2020
                                    ____________

Before SMITH, Chief Judge, MELLOY and SHEPHERD, Circuit Judges.
                              ____________

SMITH, Chief Judge.

      Northern Oil and Gas, Inc. (“Northern”) filed this quiet-title action in federal
district court against EOG Resources, Inc. (EOG) regarding their competing interests
in mineral rights in North Dakota. Both companies lease oil and gas rights, and their
lessors litigated a similar matter in state court. The district court found that Northern
was in privity1 with its lessor and held that the lessors’ case barred Northern’s claims.

       Under principles of res judicata, litigants in privity are bound by a prior
judgment controlling an issue in subsequent litigation. In North Dakota, “the privity
doctrine cannot be applied if the rights to property were acquired by the person sought
to be bound before the adjudication.” Gerrity Bakken, LLC v. Oasis Petroleum N. Am.,
LLC, 915 N.W.2d 677, 684 (N.D. 2018). Because Northern acquired its lease before
the lessors’ case, no privity exists between Northern and its lessor. Therefore, we
reverse.

                                     I. Background
        In the 1950s and 1960s, Axel Anderson and Henry Johnson engaged in a series
of transactions involving land and mineral interests. These culminated in a 1962
warranty deed in which Anderson conveyed certain mineral interests to Johnson but
reserved 1/4 for himself. By 2008, Anderson’s interest had passed to Nancy Finkle,
and Johnson’s interest had passed to his descendants (“the Johnsons”). That year,
Finkle entered an oil and gas lease with Northern’s predecessor, which assigned most
of its interest to Northern a few months later.2 The Johnsons entered oil and gas leases
with EOG.



       1
        Privity is “[t]he connection or relationship between two parties, each having a
legally recognized interest in the same subject matter.” Privity, Black’s Law Dictionary
(11th ed. 2019). “Privity exists if a person is so identified in interest with another that
he represents the same legal right.” Ungar v. N.D. State Univ., 721 N.W.2d 16, 21
(N.D. 2006) (cleaned up).
       2
       The Finkle/Northern lease and subsequent assignment were both made a matter
of public record by filing in Mountrail County, North Dakota, several years prior to the
commencement of the North Dakota quiet-title action.


                                            -2-
        In 2011, the Johnsons filed a quiet-title action against Finkle in North Dakota
state court.3 Northern and EOG were not made parties to nor given notice of that
litigation. The state court found in the Johnsons’ favor, terminating Finkle’s interest
in the land at issue.

       Prior to the state-court action, Northern and EOG cooperated in the development
of the land. But two years after the case concluded, EOG informed Northern that it
would no longer do so; it was “reversing” previously paid revenues and invoiced well
costs. In response, Northern filed this quiet-title action in federal district court. EOG
moved to dismiss, arguing that the state-court judgment against Finkle barred
Northern’s quiet-title action by operation of res judicata.

        Under res judicata, the state-court judgment could only preclude Northern’s
claim if it was in privity with Finkle. Northern argued that, under North Dakota law,
privity does not apply where a mineral lessee acquired its interest before the earlier
litigation’s commencement. The district court rejected that argument. Instead it applied
a two-pronged test, which looked to whether Northern’s interests (1) were aligned with
Finkle’s and (2) were protected by the state-court proceedings. The court determined
that Finkle adequately represented Northern’s interest. Therefore, Northern was in
privity with Finkle. The court granted EOG’s motion to dismiss.

      3
         The case turned on the Duhig rule, see Duhig v. Peavy-Moore Lumber Co., 144
S.W.2d 878 (Tex. 1940), which North Dakota has adopted. See Goodall v. Monson,
893 N.W.2d 774, 779 (N.D. 2017). Under that rule, an overconveyance—where the
grantor conveys and reserves greater mineral interests than he owns—does not create
an ambiguity in the deed. Id. Instead, the grantor bears the risk of title loss. Id. The
state trial court found that Anderson did not own all of the minerals he purported to
convey and reserve in the 1962 warranty deed. See Johnson v. Finkle, 837 N.W.2d
132, 134 (N.D. 2013) (affirming the state trial court). Because Anderson bore the risk
of title loss, his successor’s interest in the subject lands—the 1/4 reservation—was
wiped out. The court also declined to reform the deed based on other transactions.


                                           -3-
       A few months later, the Supreme Court of North Dakota decided Gerrity
Bakken, 915 N.W.2d at 685, a factually similar case. Gerrity Bakken leased mineral
interests from certain lessors. Id. at 680. Those lessors filed suit against other parties
(“the defendants”) for the underlying mineral rights but failed to name Gerrity Bakken
in the suit. Id. at 680–81. A state trial court ruled in the defendants’ favor. Id. at 681.
Shortly thereafter, Gerrity Bakken brought a quiet-title action against the defendants.
Id. The defendants argued that, because of the privity doctrine, the earlier judgment
precluded Gerrity Bakken’s suit. Id. at 681, 684. The court rejected that argument and
held that “the privity doctrine cannot be applied if the rights to property were acquired
by the person sought to be bound before the adjudication.” Id. at 684. “[B]ecause
Gerrity Bakken and its predecessors acquired their interest . . . two years before the
2013 quiet title action, the privity doctrine does not apply.” Id.

       Based on the decision in Gerrity Bakken, Northern moved for reconsideration.
The district court denied the motion. The court noted that North Dakota’s privity
standard allows consideration of fundamental fairness. See Kulczyk v. Tioga Ready
Mix Co., 902 N.W.2d 485, 488 (N.D. 2017). Gerrity Bakken’s holding did not address
fundamental fairness, and the district court believed the holding was not one that
“should . . . be applied so rigidly as to defeat the ends of justice or to work an
injustice.” Order Granting Def.’s Mot. to Dismiss at 11, N. Oil & Gas Co. v. EOG
Resources, Inc., No. 1:16-cv-00388-DLH-CSM (D.N.D. Jan. 15, 2019), ECF No. 100
(quoting Riverwood Com. Park L.L.C. v. Standard Oil Co., 729 N.W.2d 101, 107
(N.D. 2007)). In other words, courts are free to consider the timing of the lease as well
as fundamental fairness. Because Northern’s interests were (1) aligned with Finkle’s
and (2) protected by the state court proceedings, the court found that fundamental
fairness counseled binding Northern to the quiet-title judgment.




                                            -4-
                                    II. Discussion
      Northern argues that the district court erred in holding that it was in privity with
Finkle and that res judicata barred its quiet-title action. “The law of the forum that
rendered the first judgment”—here, North Dakota—“controls the res judicata
analysis.” Laase v. Cty. of Isanti, 638 F.3d 853, 856 (8th Cir. 2011) (internal quotation
omitted). “We review a district court’s interpretation of state law de novo. In
interpreting state law, we are bound by the decisions of the state’s highest court.” Cty.
of Ramsey v. MERSCORP Holdings, Inc., 776 F.3d 947, 950 (8th Cir. 2014) (internal
citation omitted). “When there is no state supreme court case directly on point, our role
is to predict how the state supreme court would rule if faced with the same issue before
us.” Blankenship v. USA Truck, Inc., 601 F.3d 852, 856 (8th Cir. 2010) (cleaned up).

        Under North Dakota law, res judicata applies only if Northern was in privity
with Finkle. See Ungar, 721 N.W.2d at 20–21. Typically “privity exists if a person is
so identified in interest with another that he represents the same legal right.”
Hofsommer v. Hofsommer Excavating, Inc., 488 N.W.2d 380, 384 (N.D. 1992)
(internal quotation omitted).4 Northern contends that “the privity doctrine cannot be
applied if the rights to property were acquired by the person sought to be bound before
the adjudication.” Gerrity Bakken, 915 N.W.2d at 684. In other words, it argues that
it is not bound by Finkle’s quiet-title judgment because it acquired its lease in 2008,
three years before the state litigation began.

       Gerrity Bakken sets forth current North Dakota law on the subject of privity and
the application of res judicata. There, in two 1960’s conveyances, a property owner
conveyed a greater mineral interest than he possessed. Id. at 680. In 2013, this fault
came to light, and the buyers’ successors filed a quiet-title action, which also named
“all other persons unknown claiming any estate or interest in, or lien or encumbrance


      4
       Though collateral estoppel and res judicata are not the same, their privity
inquiry is. See Ungar, 721 N.W.2d at 21.
                                           -5-
upon, the property described in the complaint.” Id. at 680–81 (cleaned up). The
plaintiffs did not name Gerrity Bakken, who had entered an oil and gas lease two years
before the case was filed with a putative owner of the disputed property. Id. at 680.
The trial court found for the opponents of Gerrity Bakken’s lessors. Id. at 681. Shortly
thereafter, Gerrity Bakken filed a separate quiet-title action against the prevailing party.
Id. The defendants to Gerrity Bakken’s suit argued that the case should be barred
because it constituted “an impermissible collateral attack on the [earlier] quiet title
judgment.” Id. at 684. Even with the complaint’s broad naming of parties, the court
found that Gerrity Bakken was not a party to the action or in privity with its lessors. Id.
As for the latter, it stated that “the privity doctrine cannot be applied if the rights to
property were acquired by the person sought to be bound before the adjudication.” Id.
Thus, “because Gerrity Bakken and its predecessors acquired their interest from [its
lessors] in 2011, two years before the 2013 quiet title action, the privity doctrine does
not apply.” Id.

       Applying Gerrity Bakken to the instant facts, Northern was not in privity with
Finkle. Like Gerrity Bakken, Northern entered a lease before the state quiet-title action
commenced. And like Gerrity Bakken, Northern’s lessor lost its quiet-title action. The
North Dakota Supreme Court expressly declined to apply the privity doctrine on facts
closely resembling this case. See id. at 684–85. In short, because “the privity doctrine
cannot be applied if the rights to property were acquired by the person sought to be
bound before the adjudication,” id. at 684, we hold that the privity doctrine does not
bar Northern’s action under controlling North Dakota law.

       The district court distinguished Gerrity Bakken and concluded that it is not a
hard-and-fast rule prohibiting consideration of other factors. The court noted that
Gerrity Bakken did not address fundamental fairness, which counsels against reversal.
But even if Gerrity Bakken’s failure to consider fundamental fairness renders it not
“directly on point, our role is to predict how the state supreme court would rule if faced
with the same issue before us.” Blankenship, 601 F.3d at 856 (cleaned up). Gerrity

                                            -6-
Bakken, a case with striking similarity, gives us a convincing clue for making that
prediction.

      To be sure, Stetson v. Investors Oil, Inc., 176 N.W.2d 643 (N.D. 1970) provides
some support for the fundamental fairness argument. There, an individual filed a suit
against an oil prospecting company for unpaid services on an oil well and won. Id. at
644. His trustee then brought a garnishment action, which set up the garnishment of
oil runs and an execution sale of a leasehold interest. Id. at 644–45. The owners of the
prospecting company and financiers who had purchased participating units in an oil
venture well before the garnishment action (“the defendants”) brought a quiet-title
action to prevent the garnishment. Id. at 645. The defendants argued that their rights
were not foreclosed by the earlier suit because they were not a party to the original
judgment; their agent, the company, was. Id. at 647–48. The court rejected that
argument and applied res judicata to bind them to the judgment. Id. at 651. It noted
that the defendants admitted that they participated in and received numerous
communications regarding the underlying action. Id. at 650–51. Under those
circumstances, equity commanded an “expanded” rule of privity to bind the owners to
the prior action. Id. at 651–52.

      Stetson, however, is materially distinguishable: Northern did not admit that it
(1) participated in the prior action or (2) had any communications regarding the prior
action. Indeed, it appears that North Dakota courts have never found it equitable to
apply res judicata where the third party (1) acquired its interest prior to the proceeding
and (2) was not involved in the proceeding. See Bismark Pub. Sch. Dist. v. Hirsch, 136
N.W.2d 449, 454 (N.D. 1965) (finding a prior quiet-title action, which decided title
to chattel attached to land, did not prevent the land’s buyer from arguing he had title
to the chattel because he acquired his interest before the quiet-title action); Hull v.
Rolfsrud, 65 N.W.2d 94, 98 (N.D. 1954) (finding a probate proceeding did not affect
the claim of an individual who acquired his interest to the property in the probate
proceedings before the proceedings commenced).

                                           -7-
       A recent decision further weakens the proposition that fundamental fairness
alone alters the timing component of Gerrity Bakken’s holding. In Great Plains
Royalty Corp. v. Earl Schwartz Co., parties argued over ownership interests in assets.
927 N.W.2d 880, 883–84 (N.D. 2019). The plaintiff argued that res judicata barred
some of the defendants’ arguments because the assets were involved in an earlier
bankruptcy proceeding. Id. at 884–85. One of the defendants was not a party to the
bankruptcy proceeding but had acquired its interest from a party who was, so the
plaintiff argued the former was in privity with the latter. Id. at 888. In its privity
analysis, the North Dakota Supreme Court referenced fundamental fairness. Id. But the
court found that it could not apply privity because the relevant defendant acquired its
interest before the bankruptcy proceeding. Id. at 889. In short, even after noting
fundamental fairness, the North Dakota Supreme Court applied the Gerrity Bakken
rule. The court considered fundamental fairness but declined to apply it in a way that
undermined the Gerrity Bakken rule.5 Thus, we predict that North Dakota would
conclude that fundamental fairness does not overcome Gerrity Bakken in this case.

       EOG offers other arguments, but they too are unavailing. Specifically, it claims
that other rules of privity apply. For instance, it argues that North Dakota has indicated
that a party is in privity where it holds its interest subordinate to a party involved in an
earlier action. See Hull, 65 N.W.2d at 98 (“In order to make a man a privy to an action
. . . he must hold property subordinately.” (internal quotation omitted)). The argument
would conclude that Northern, as a lessee, was in privity with Finkle, a lessor. Notably,
EOG does not provide a case where a North Dakota court actually found a party in
privity because it possessed a subordinate interest. Also, in Gerrity Bakken, the lessee
was not in privity even though its interest was subordinate. In short, though it includes
references to the standard, case law does not suggest that North Dakota courts would
apply the subordinate-interest rule on these facts.



       5
           To the district court’s credit, Great Plains was decided after it issued its ruling.
                                               -8-
        EOG also argues that privity applies because Finkle adequately represented
Northern in the state quite-title action. This argument draws heavily on Taylor v.
Sturgell, 553 U.S. 880, 885 (2008) (finding that the denial of a friend’s FOIA request
did not bar another friend’s identical FOIA request where there was no evidence the
latter “controlled, financed, participated in, or even had notice of [the] earlier suit”).
But Taylor, which dealt with the application of federal law, is not instructive here,
where we are tasked with divining North Dakota law. See Laase, 638 F.3d at 856. And
even if North Dakota courts were to apply that rule, Finkle did not adequately represent
Northern’s interest. “A party’s representation of a nonparty is ‘adequate’ for preclusion
purposes only if, at a minimum . . . [1] the party understood herself to be acting in a
representative capacity or [2] the original court took care to protect the interests of the
nonparty.” Taylor, 553 U.S. at 900. EOG has not shown that Finkle understood herself
to be operating in Northern’s interest.6 It also has not pointed to any “special
procedures” that the state court used to protect Northern’s interest. Taylor, 553 U.S.
at 897–98.7 So even if a North Dakota court were to disregard Gerrity Bakken and
consider if Finkle adequately represented Northern’s interest, we do not believe it
would find that she did.8


       6
        In a separate motion, EOG asks us to take judicial notice of affidavits that it
claims show that Finkle understood herself to be operating in such a capacity. It asks
us to accept the contents as true, and Northern contests those affidavits. “[J]udicial
notice is inappropriate” when documents are offered “for the truth of the matters
within them and inferences to be drawn from them” and the opposing party disputes
those matters. Insulate SB, Inc. v. Advanced Finishing Sys., Inc., 797 F.3d 538, 543
n.4 (8th Cir. 2015) (internal quotation omitted). We deny the motion.
       7
        EOG argues that the state court proceedings alone served to protect Northern’s
interest. But the Court’s use of the phrase “special procedures” throughout Taylor
suggests that the prior proceedings must involve something “special,” that is,
something more than standard court proceedings. See id.
       8
       Northern and EOG also offer arguments regarding ownership interests and
evidence supporting the quiet-title action. Because those issues were not passed on by
                                            -9-
       In short, we believe the North Dakota courts would follow the rule pronounced
in Gerrity Bakken. And applying that rule here, privity—and thus res judicata—does
not apply to Northern because it obtained its property interest three years before the
state quiet-title action commenced.

                                 III. Conclusion
      For the foregoing reasons, we reverse and remand for further proceedings
consistent with this opinion.
                        ______________________________




the district court, we decline to address them for the first time here. See BNSF Ry. Co.
v. Seats, Inc., 900 F.3d 545, 549 (8th Cir. 2018) (“When it would be beneficial for the
district court to consider an alternative argument in the first instance, we may remand
the matter to the district court.” (internal quotation omitted)).
                                         -10-
