Friday, September 7, 2012

The Intersection of Ad Law, Natural Resources, and More: Federal Oil & Gas Leases

Federal oil and gas deposits were back in the news this week when the Tenth Circuit effectively upheld the Interior Department's decision to withdraw 77 controversial leases from auction.

The dispute traces back to the waning days of the Bush-43 administration, which put a large block of leases up for auction as it was heading out of office.  Some of these were proximate to valued scenic and recreation areas, including Arches National Park and Dinosaur National Monument, and so environmentalists protested.  Contesting possible climate change impacts, the auction process itself also became a lightning rod when Tim DeChristopher submitted false bids in a civil disobedience effort to monkeywrench the sales.  Then, when Ken Salazar became Secretary of the Interior, he withdrew 77 of the leases from auction.  This he announced in a February 4, 2009 press conference, followed by an internal memorandum making the decision official two days later.  Numerous leaseholders and various counties then challenged Salazar's decision in federal court.

In a notable administrative law decision this Wednesday, Impact Energy Resources v. Salazar, the Tenth Circuit ruled that the district court had properly dismissed the lawsuit challenging Interior's decision as time barred.  Plaintiffs had sued 90 days after notice of the lease withdrawal was mailed to them on February 12, 2009, not within 90 days from when Salazar directed the withdrawal via his February 6, 2009 memorandum.  Because actions under the Mineral Leasing Act are subject to a 90-day statute of limitations, the panel, 2-1, found that the lawsuit was too late.

On this score, there were two interesting currents running through the decision.  First, the majority split over how a "final" decision under the Mineral Leasing Act interfaces with a "final agency action" under the APA.  Judge Lucero contended that once a final decision was made by the Secretary under the MLA, the question of whether the agency itself had made a final decision for APA purposes became immaterial:  "The MLA unambiguously starts the limitations clock when the Secretary makes a final decision, not when the BLM engages in final agency action."  By contrast, Judge Seymour would have ruled that a Secretary Salazar's final decision under the MLA was also a final agency action under the Administrative Procedure Act.  "[I]t seems clear to me," she wrote, "that when the Secretary makes a final decision for MLA purposes he is also taking 'final agency action' pursuant to the APA." 

Second, the majority found that there was no equitable tolling argument based on the delay between Salazar's issuance of the internal memorandum withdrawing the leases and the BLM's providing notification of that decision to the lessees.  "Although the Energy Companies had time to prepare their claims before the limitations period expired, they gambled that a court would accept their proffered limitations theory.  Equitable tolling is not required under these circumstances."

Although one could claim that this decision is limited to the narrow area of mineral leasing on federal lands, it could make much larger waves going forward.  At the least, it provides precedent that Interior can rely on to make internal decisions about mineral leases and then control the clock for how quickly parties might challenge those decisions.  As Judge Tymkovich wrote in dissent, "The [majority's] opinion allows the Secretary of the Interior to make a non-public final decision and start the clock on judicial review of that decision, even if the Department tells no one about it."  Whether one is pro- or anti-federal leasing, the lack of transparency that such a regime could allow for seems problematic.  Indeed, even if this ruling remains limited to federal mineral leases, it could have wide impacts given how much of the American West is dominated by federal land.

Perhaps more broadly, the decision could be relied on to give agencies more control over whether they might be sued in other statutory regimes that, like the Mineral Leasing Act, start the statute of limitations clock from when a decision is made rather than when the action accrues.  In this way, the Tenth Circuit's decision also shows how central to environmental, natural resources, and energy issues administrative law continues to be.  I often tell students that every modern law student should take administrative law.  The Tenth Circuit's ruling is yet one more arrow in that quiver. 

Finally, and most reaching of all, the Tenth Circuit's decision highlights what long has been, and in all likelihood will continue to be, a prime battleground for environmental disputes in the West -- control over federal lands, how those lands are utilized, and what role they play in combatting or enabling climate change.  Is this why the proposed Romney-Ryan energy plan reads as much like a polemic on states rights as a substantive clarification of their preferred energy policy?  Much more could be said about why it is tragic that candidates think they must make energy policy partisan, when it is one of the most important places we can find win-win-win solutions that both create jobs and protect the environment we all rely on to live.  For now, though, it is enough to note that the Tenth Circuit's decision is one more way that federal oil and gas leasing could be a key area for debate leading up to this November.

-Lincoln Davies

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