Amfac Resorts v. U.S. Dept. of the Interior

• Decision Date: 01 March 2002
• Docket Number: No. 01-5223.,No. 01-5226.,No. 01-5233.,No. 01-5229.,01-5223.,01-5226.,01-5229.,01-5233.
• Citation: 282 F.3d 818
• Parties: AMFAC RESORTS, L.L.C., Appellant, v. UNITED STATES DEPARTMENT OF THE INTERIOR, et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 818

282 F.3d 818

AMFAC RESORTS, L.L.C., Appellant, v. UNITED STATES DEPARTMENT OF THE INTERIOR, et al., Appellees.

No. 01-5223.

No. 01-5226.

No. 01-5229.

No. 01-5233.

United States Court of Appeals, District of Columbia Circuit.

Argued November 6, 2001.

Decided March 1, 2002.

COPYRIGHT MATERIAL OMITTED

Appeals from the United States District Court for the District of Columbia (00cv02838) (00cv02885) (00cv02937) (00cv03085).

Kenneth S. Geller argued the cause for appellants. With him on the briefs were David M. Gossett, Mark H. Lynch, Robert A. Long Jr., Daniel F. Attridge, Robert R. Gasaway, Ashley C. Parrish, Edward J. Shapiro and Eric J. Wycoff.

Marina Utgoff Braswell, Assistant U.S. Attorney, argued the cause for appellees. With her on the brief were Roscoe C. Howard Jr., U.S. Attorney, R. Craig Lawrence, Assistant U.S. Attorney, and Michael A. Carvin.

Before: RANDOLPH and GARLAND, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge:

These are four consolidated cases on appeal from the judgment of the district court sustaining regulations of the National Park Service governing concession contracts in the National Park System. Many of the issues are tied to the history of the National Park System and the functions concessioners perform in the operation of the parks.

The history begins with the discovery of "Old Faithful" and the other natural wonders of what is now Yellowstone National Park. In 1872, Congress withdrew the land at the headwaters of the Yellowstone River from "settlement, occupancy, or sale," thus creating the first national park in the United States. Act of Mar. 1, 1872 ch. 24, § 1, 17 Stat. 32. See also AUBREY L. HAINES, YELLOWSTONE NATIONAL PARK: ITS EXPLORATION AND ESTABLISHMENT (1974). Not everyone had been enthusiastic about the plan to create Yellowstone National Park. A local newspaper editorial worried that "the effect of this measure will be to keep the country a wilderness, and shut out, for many years, the travel that would seek that curious region if good roads were opened through it and hotels built therein." HAINES, supra, at 127 (quoting the HELENA DAILY HERALD of Mar. 1, 1872). In the final legislation, Congress responded by authorizing the Secretary of the Interior to lease portions of the park for "the erection of buildings for the accommodation of visitors." 17 Stat. 33.

As the United States withdrew more areas from the public domain, it continued to favor the interests of park visitors. In creating the National Park Service in 1916, Congress authorized the Interior Secretary to "grant privileges, leases, and permits for the use of land for the accommodation of visitors" to each of the "various parks, monuments, or other reservations" under the Secretary's authority. An Act to Establish a National Park Service, ch. 408, 39 Stat. 595 (1916). In the view of the first director of the Park Service, Stephen Mather: "Scenery is a hollow enjoyment to a tourist who sets out in the morning after an indigestible breakfast and a fitful sleep in an impossible bed." Dennis J. Herman, Loving Them to Death: Legal Controls on the Type and Scale of Development in the National Parks, 11 STAN. ENVTL. L.J. 3, 3 (1992).

During its first thirty years, the Park Service followed internal regulations and policies governing concessioners and their obligations to park visitors and to the national park lands. The government also offered financial inducements to private contractors to convince them to provide and operate facilities in what were often remote locations. See Park Concession Policy: Hearings Before the Subcomm. on National Parks of the House Comm. on Interior and Insular Affairs, 88th Cong. 5-8 (1964) [hereinafter Park Concession Policy Hearings] (letter from John A. Carver, Jr., Assistant Secretary of the Interior).

For our purposes the most significant of these incentives was a preferential right of renewal, which "contemplated that every existing contract covering public operations [in the national parks] will be renewed at the expiration thereof, provided, of course, that full and satisfactory service to the public had been given thereunder." Memorandum for the Acting Under Secretary, U.S. Department of the Interior (Aug. 10, 1940). When the Interior Department sought to change its policies and withdraw some of these financial incentives in the late 1940s, the concessioners and some in Congress balked. See H.R. Res. 66, 81st Cong. (1950), passed by the Comm. on Public Lands and included in H.R.REP. No. 81-3133, at 5-6 (1950). In response, the Secretary announced new guidelines for concession contracts and preserved many of the existing financial incentives for concessioners, including the preferential right of renewal. Id. at 4-5. The House Committee on Public Lands passed a resolution endorsing these new guidelines, although the resolution of course had no legal effect. INS v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983).

By the 1960s, other House committees started expressing doubt about the soundness of the Interior Department's contracting policies, particularly the financial incentives it was giving concessioners. See HOUSE COMM. ON GOVERNMENT OPERATIONS, SURVEY OF SELECTED ACTIVITIES, H.R.REP. No. 88-306, pt. 3, at 4-12 (1963) ("The committee's inquiry disclosed considerable weakness in the National Park Service's operations in several matters involving concessioners in the national parks."). When Congress considered the 1964 appropriations bill for the Department of the Interior, the House Committee on Appropriations recommended that "competitive bidding should be required for concession contracts, in lieu of the current practice of granting preferential opportunities to existing concessioners to negotiate new contracts." DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATION BILL, H.R.REP. No. 88-177, at 10 (1963).

Concerned that "certain other committees that do not have jurisdiction" had "attempted to get into the problem of concessions," the House Committee on Interior and Insular Affairs produced a bill to "put into statutory form" the longstanding concessions policies of the Park Service, including the preferential right of renewal. H.R.REP. No. 89-591, at 1 (1965); Park Concession Policy Hearings at 19. In 1965, these concession policies were enacted into law. See 111 CONG. REC. 23,632-48 (1965). Part of the legislation provided that the "Secretary [of the Interior] shall... giv[e] preference in the renewal of contracts or permits and in the negotiation of new contracts or permits to the concessioners who have performed their obligations... to the satisfaction of the Secretary." National Park Service Concessions Policy Act, Pub.L. No. 89-249, § 5, 79 Stat. 969, 970 (1965), repealed by National Parks Omnibus Management Act of 1998, Pub.L. No. 105-391, § 415(a), 112 Stat. 3497, 3515. The preference gave "incumbent concessioners, upon renewal, the right to meet any better offer received" by the Park Service. U.S. DEP'T OF THE INTERIOR, REPORT OF THE TASK FORCE ON NATIONAL PARK SERVICE CONCESSIONS 10 (1990).

The 1965 Act governed all concession contracts entered into by the Park Service. Concessioners paid the government a franchise fee, typically less than five percent of gross revenues, for the privilege of operating on federal land. If they used government-owned facilities they paid an additional fee.

In 1998, after several aborted attempts, Congress repealed the preferential right of renewal and enacted other rules governing concession contracts. National Parks Omnibus Management Act of 1998, 16 U.S.C. §§ 5951-5966.

Plaintiffs are three companies who have current concessions contracts with the Park Service and an association of concessioners. They brought four separate actions challenging the Park Service regulations, issued in 2000, to implement the 1998 Act. 65 Fed.Reg. 20,630 (Apr. 17, 2000) (to be codified at 36 C.F.R. pt. 51). The district court consolidated the four lawsuits, and granted summary judgment to the government on all of the claims save one (which has not been appealed to this court). Amfac Resorts v. United States Dep't of the Interior, 142 F.Supp.2d 54 (2001).

I.

The first issue centers on the 1998 Act's repeal of the statutory preferential right of renewal in § 5 of the 1965 Act. The 1998 Act provided that, except for small contracts and outfitter and guide services, "the Secretary shall not grant a concessioner a preferential right to renew a concessions contract." 16 U.S.C. § 5952(7). A savings clause in the 1998 Act, § 415(a), states: "repeal of [the 1965 Act] shall not affect the validity of any concessions contract or permit entered into under such Act, but the provisions of this title shall apply to any such contract or permit except to the extent such provisions are inconsistent with the terms and conditions of any such contract or permit." Pub.L. No 105-391, § 415(a), 112 Stat. 3497, 3515 (1998).

The Park Service interpreted the repealing and the savings clauses in the following narrative regulation:

§ 51.102 What is the effect of the 1998 Act's repeal of the 1965 Act's preference in renewal?

(a) Section 5 of the 1965 Act required the Secretary to give existing satisfactory concessioners a preference in the renewal (termed a "renewal preference" in the rest of this section) of its concession contract or permit. Section 415 of the 1998 Act repealed this statutory renewal preference as of November 13, 1998. It is the final decision of the Director, subject to the right of appeal set forth in paragraph (b) of this section, that holders of 1965 Act concession contracts are not entitled to be given a renewal preference with respect to such contracts (although they may otherwise qualify for a right of preference regarding such contracts under Sections 403(7) and (8) of the 1998 Act as implemented in this part)....