Amerada Hess Corp. v. Department of Interior

• Decision Date: 25 March 1999
• Docket Number: No. 97-5223,97-5223
• Parties: 1999 CJ C.A.R. 2990 AMERADA HESS CORPORATION, Plaintiff-Appellant, v. DEPARTMENT OF INTERIOR, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1032

170 F.3d 1032

1999 CJ C.A.R. 2990

AMERADA HESS CORPORATION, Plaintiff-Appellant, v. DEPARTMENT OF INTERIOR, Defendant-Appellee.

No. 97-5223.

United States Court of Appeals, Tenth Circuit.

March 25, 1999.

Jerry E. Rothrock of Akin, Gump, Strauss, Hauer & Feld, L.L.P., Washington, D.C. (Patrick D. O'Connor of Moyers, Martin, Santee, Imel & Tetrick, Tulsa Oklahoma and David M. Castro, Amerada Hess Corporation, Houston, Texas with him on the briefs) for the Plaintiff-Appellant.

Robert L. Klarquist, Department of Justice, Washington, D.C. (Lois J. Schiffer, Assistant Attorney General, Stephen Lewis, United States Attorney, and Phil Pinnell, Assistant United States Attorney, Tulsa, Oklahoma; David C. Shilton, Department of Justice, Washington, D.C.; and Geoffrey Heath, Office of the Solicitor, Department of Interior, Washington, D.C., with him on the briefs) for the Defendant-Appellee.

Before TACHA, McWILLIAMS and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

In this case, we are asked primarily to determine whether reimbursements for certain production-related costs, received by a federal gas lessee from its gas purchasers under an administrative order of the Federal Energy Regulatory Commission ("FERC"), are properly subjected to federal royalties by the Secretary of the Interior ("Secretary") under the authority of the Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. §§ 1331-1356. We are also required to resolve whether the Secretary's claims may be offset by the lessee's own claims for reimbursement from the Secretary. Finally, we must determine whether either set of claims is barred under the applicable statute of limitations. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm the district court's holding that the Department of the Interior ("DOI") is entitled to royalties on cost reimbursements received by Amerada Hess Corporation ("AHC"). Finding lack of jurisdiction, we vacate the district court's rulings on AHC's claims for offsetting royalty overpayments against the royalties owed DOI.

I

The case grows out of two separate administrative proceedings before DOI. The first, finalized in an agency decision of December 13, 1993, determined that AHC, a lessee of continental shelf oil and gas deposits owned by the United States, was time-barred from claiming reimbursement from the Secretary for a royalty over-payment of $683,333. Under OCSLA, which authorizes the Secretary to lease continental shelf oil and gas reserves, 43 U.S.C. § 1337, the Secretary is entitled to royalties on the "amount or value of the production saved, removed, or sold" by a lessee, id. at § 1337(a)(1)(A). If the Secretary determines that a lessee has paid excessive royalties, the lessee is entitled to reimbursement without interest "if a request for repayment of such excess is filed with the Secretary within two years after the making of the payment." Id. at § 1339(a). In this case, AHC applied for reimbursement nearly six years after the alleged over-payment was made. The Secretary denied the request, citing the two year statute of limitations.

A second administrative determination, dated December 1, 1995, requires AHC to pay DOI $1,022,669.52 in additional royalties on some sixteen offshore leases. The DOI based this determination on a series of administrative orders that FERC issued under the price-setting authority of the Natural Gas Policy Act of 1978, 15 U.S.C. § 3320(a)(2). ¹ FERC regulations stipulate that sale prices may always include "production-related" costs, defined as "costs, other than production costs, that are incurred ... to deliver, compress, treat, liquefy, or condition natural gas." 18 C.F.R. §§ 271.1104(a) & 271.1104(c)(7)(i). To implement these regulations, FERC issued a number of administrative orders establishing generic cost allowances for gathering and compression costs. See Order 94-A, 48 Fed.Reg. 5152, 5180 (Feb. 3, 1983). The Fifth Circuit upheld these orders, see Texas Eastern Transmission Corp. v. FERC, 769 F.2d 1053 (5th Cir.1985), thereby allowing numerous gas producers, including AHC, to receive large lump-sum reimbursements from their purchasers. It is these so-called "Order 94 reimbursements" that DOI found royalty-bearing under OCSLA, 43 U.S.C. § 1337(a)(1)(A).

AHC claims this latter determination is arbitrary and capricious, unsupported by substantial evidence, and in excess of statutory authority. The company also insists 28 U.S.C. § 2415(a) bars DOI's claim for royalty payments on the Order 94 reimbursements. ² Finally, AHC contends that it is entitled to offset its obligations to DOI against royalty over-payments on other leases ("cross-lease netting"). In its December 1, 1995, decision, DOI rejected all these claims. The district court affirmed DOI and granted summary judgment against AHC on all its claims, and the company appeals.

II

A

AHC's amended complaint, filed in the district court, asserts jurisdiction under OCSLA's citizen suit provisions, see 43 U.S.C. § 1349(a), as well as under the Administrative Procedure Act ("APA"), see 5 U.S.C. § 704. Section 1349(a)(1) states that:

any person having a valid legal interest which is or may be adversely affected may commence a civil action on his own behalf to compel compliance with this subchapter against any person, including the United States, and any other government instrumentality or agency (to the extent permitted by the eleventh amendment to the Constitution) for any alleged violation of any provision of this subchapter or any regulation promulgated under this subchapter, or of the terms of any permit or lease issued by the Secretary under this subchapter.

43 U.S.C. § 1349(a)(1). ³ The government counters, first, that this citizen suit provision cannot support an action challenging a decision of the Secretary rendered in fulfillment of his duties under the Act, and second, that even were jurisdiction to lie under 43 U.S.C. § 1349(a), judicial review should nonetheless proceed in accordance with APA standards and procedures.

We agree with the government's contention that this suit cannot be brought under 43 U.S.C. § 1349(a)(1). In closely analogous circumstances, the Fifth Circuit has refused to exercise jurisdiction under this provision. See OXY USA, Inc., v. Babbitt, 122 F.3d 251, 258 (5th Cir.1997). OXY holds that the citizen suit provision is not available to challenge agency decisions that "were or will be otherwise subject to judicial review under the APA." Id. Any other interpretation of the citizen suit provision would implicitly repeal the APA with respect to such agency decisions--contrary to the well-established canon of statutory construction against repeals by implication. See id. (citing Watt v. Alaska, 451 U.S. 259, 267, 101 S.Ct. 1673, 68 L.Ed.2d 80 (1981); 1A Norman J. Singer, Sutherland on Statutes and Statutory Construction § 23.09, at 338 (5th ed.1993)). In addition the Supreme Court has recently refused to construe the Endangered Species Act's citizen suit provision, 16 U.S.C. § 1540(g)(1)(A), as an "alternative avenue for judicial review of the Secretary's implementation of the statute" because such an interpretation "would effect a wholesale abrogation of the APA's 'final agency action' requirement." Bennett v. Spear, 520 U.S. 154, 174, 117 S.Ct. 1154, 1166-67, 137 L.Ed.2d 281 (1997). ⁴ Although there is no dispute that "final agency action" has occurred in this case, appellant's construal of 43 U.S.C. § 1349(a)(1) would abrogate the APA in precisely such fashion. Like the Supreme Court and the Fifth Circuit, we refuse to adopt such an implausible interpretation. Consequently, we conform our review to APA standards and the available administrative record.

B

Furthermore, we are without jurisdiction to consider appellant's claims that the Secretary has erroneously refused to repay or refund AHC's various royalty overpayments. Under the Tucker Act, 28 U.S.C. § 1491, an action against the United States, for monetary relief in excess of $10,000, and founded upon the Constitution, federal statute, executive regulation, or government contract, must be brought in the Court of Federal Claims. See 28 U.S.C. § 1491(a)(1). AHC's claims for repayments proceed from at least one of these enumerated sources of law, and are intended to obtain more than the minimum amount of monetary relief required for Court of Claims jurisdiction under the Tucker Act. Exclusive jurisdiction over these claims thus lies in the Court of Claims. See Diamond Shamrock Exploration Co. v. Hodel, 853 F.2d 1159, 1168 (5th Cir.1988) (finding exclusive jurisdiction of Court of Claims to hear refund request from oil and gas producer-lessee that had paid royalties to DOI under OCSLA); see also National Ass'n. of Counties v. Baker, 842 F.2d 369, 376 & n. 5 (D.C.Cir.1988) (characterizing 43 U.S.C. § 1339(a) as "compensation mandating" and therefore within the exclusive jurisdiction of the Court of Claims when other provisions of the Tucker Act have been met).

Both parties argue that the Court of Claims does not have exclusive jurisdiction over AHC's refund claims because AHC seeks declaratory judgments concerning its rights to refunds under OCLSA. Accordingly, the parties contend the district court had jurisdiction to hear all of AHC's claims under the APA, which provides concurrent jurisdiction to "court[s] of the United States" where an action seeks "relief other than money damages." 5 U.S.C. § 702. This argument, which asks us to place the form of a complaint over the substance of its claims, is unavailing. ⁵ "[I]f the plaintiff's 'prime objective' or 'essential purpose' is to recover money (in an amount in excess of $10,000) from the federal government, then the Court of Federal Claims' exclusive jurisdiction is triggered." Burkins v. United States, 112 F.3d 444, 449 (10th Cir.1997) (citations omitted); see also Amoco Production Co. v. Hodel, 815 F.2d 352, 361 (5th Cir.1987) (citation omitted) (declining to exercise...