546 F.Supp. 569 (D.N.M. 1980), CIV-76-588, Jicarilla Apache Tribe v. Andrus

Docket Nº:CIV-76-588 C.
Citation:546 F.Supp. 569
Party Name:JICARILLA APACHE TRIBE, Plaintiff, v. Cecil D. ANDRUS, et al., Defendants.
Case Date:February 12, 1980
Court:United States District Courts, 10th Circuit, District of New Mexico
 
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Page 569

546 F.Supp. 569 (D.N.M. 1980)

JICARILLA APACHE TRIBE, Plaintiff,

v.

Cecil D. ANDRUS, et al., Defendants.

No. CIV-76-588 C.

United States District Court, D. New Mexico.

Feb. 12, 1980

On Counterclaims March 10, 1980.

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John B. Rudolph, William W. Bedwell, Washington, D.C., Nordhaus, Haltom & Taylor, Albuquerque, N.M., for plaintiffs.

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James B. Grant, Asst. U.S. Atty., Albuquerque, N.M., Herbert Pittle, Dept. of Justice, Washington, D.C., for Cecil D. Andrus.

Charles M. Darling, IV, Washington, D.C., Millard F. Carr, Denver, Colo., Jason W. Kellahin, Kellahin & Fox, Santa Fe, N.M., for Tenneco Oil Co.

E. William Cole, Jr., Washington, D.C., S.B. Christy, IV, Jennings, Christy & Copple, Roswell, N.M., for Union Oil Co. of California and Mesa Petroleum Co.

Jason Kellahin, Kellahin & Fox, Santa Fe, N.M., for Tesoro Petroleum Corp. and Nassau Resources, Inc.

Jenkens & Gilchrist, Dallas, Tex., for Kirby Exploration Co.

Jennings, Christy & Copple, S.B. Christy, IV, Roswell, N.M., Fulbright & Jaworski, M.W. Parse, Jr., Houston, Tex., for Delaware-Apache Corp.

Don M. Chrestman, Kenneth A. Swanson, Fort Worth, Tex., and John R. Cooney, Lynn Slade, Albuquerque, N.M., for Aztec Oil and Gas Co. and Southland Royalty Co.

Rex D. Throckmorton, Albuquerque, N.M., for Kirby Exploration Co.

Boesche, McDermott & Eskridge, Glenn R. Davis, Tulsa, Okl., McCormick, Paine & Forbes, Carlsbad, N.M., for Apexco, Inc.

Campbell, Bingaman & Black, Bruce D. Black, Santa Fe, N.M., for Gulf Oil Corp.

Tommy Roberts, Gen. Counsel, Farmington, N.M., for Dugan Production Corp.

Richard TIC. Tully, Farmington, N.M., for Benson-Montin & Greer Drilling and Marrion & Bayless Drilling Corp.

William V. Kastler, Houston, Tex., for Gulf Oil Co.

MEMORANDUM OPINION

CAMPOS, District Judge.

I. PRELIMINARY STATEMENT OF THE CASE.

Plaintiff Jicarilla Apache Tribe filed this suit on April 21, 1976, in the District Court for the District of Columbia, seeking cancellation of certain oil and gas leases on its Reservation. On September 21, 1976, an order was entered transferring the case to this District. It was assigned to another judge in this district and, on July 20, 1978, it was transferred to the present judge on the case.

Trial before the Court without a jury commenced on May 14, 1979, and continued for fourteen (14) trial days. Closing arguments were heard on June 25, 1979, following preparation of a partial trial transcript and submission of briefs and requested findings of fact and conclusions of law by the parties.

During the trial, the Court learned that the Defendant Secretary of the Interior was contemplating further action under the National Environmental Policy Act (NEPA) in relation to the subject matter of this case. Anticipating possible effects on the issues in the case, this Court awaited the further action of the Secretary of the Interior. That action came in January 1980.

Plaintiff is an Indian Tribe organized and incorporated under the laws of the United States, Act of June 18, 1934, Ch. 576, Sections 16, 17, 48 Stat. 487 et seq., 25 U.S.C. Sections 476-477, and residing at the present time on an Executive Order Reservation in northern New Mexico. The original defendants were the Secretary of the Interior, then Thomas S. Kleppe, and two oil and gas companies, Tenneco Oil Co. and Union Oil Co. of California. The latter two held leasehold interests in tribal lands as the result of post-1970 sales of oil and gas leases. Following denial of a motion for class certification of Defendants, the rest of the lessee companies with an interest in the subject matter of the suit were added. The list of Defendants has undergone continuous change as those companies went out of business, merged, transferred their interests in the leases, etc. (1) Cecil D. Andrus was substituted for Kleppe by Order of March 4,

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1977. Numerous pre-trial motions were disposed of along the way; the relevant ones will be discussed below.

The Tribe seeks cancellation of oil and gas leases on two theories: first, that the Secretary of the Interior violated certain federal regulations in advertising the sale of the leases resulting, the Tribe claims, in non-competitive bidding and lower bonus payments to the Tribe; and, second, that the Secretary violated NEPA by not preparing an environmental impact statement (EIS) before approving the oil and gas leases on the Tribe's lands. Involved are four (4) oil and gas lease sales of Jicarilla Apache Reservation land. These occurred on April 22, 1970, July 14, 1971, November 17, 1971, and September 6, 1972. Of a total 415,885.90 acres offered, 276,117.61 acres were actually leased. (2)

Jurisdiction is properly conferred upon this Court by 28 U.S.C. Section 1331, 5 U.S.C. Section 701 et seq., 28 U.S.C. Sections 1361 and 1362, 28 U.S.C. Sections 2201 and 2202, 25 U.S.C. Sections 396 and 398, and the regulations issued by the Secretary of the Interior pursuant thereto.

At trial, the defenses focused on by Defendants were lack of violation of regulations, lack of harm to the Tribe's interests due to the notice procedure, compliance with NEPA, and laches. The issue of whether a moratorium should be issued by the Court was also tried. Such moratorium would toll the running of the primary terms and rentals of the leases during the pendency of the litigation. Counterclaims have not yet been considered by the Court.

II. REGULATIONS AND PUBLICATION OF THE NOTICE OF SALE.

The Tribe claims violations of federal regulations, specifically 25 C.F.R. Section 171.3, by the Secretary of the Interior and his agencies. It is claimed that this resulted in noncompetitive bidding in the leasing of Tribal lands and, thus, the sales brought less than the true value of bonus payments for the lands leased.

Cross motions for partial summary judgment were filed on this issue, and the Court conducted a hearing on the motions. Subsequently, the Court announced its ruling that there had been technical violations of the notice provisions of the regulations. However, summary judgment ordering cancellation of the leases was denied since the Court thought it appropriate to extend the Defendants an opportunity to show that no adverse effects had been suffered by the Tribe. Also, the Court felt it appropriate to extend Defendants the opportunity to show laches on the part of the Tribe.

25 C.F.R. Section 171.3 contains the regulations promulgated by the Secretary pursuant to the statute codified at 25 U.S.C. Section 396b. That statute became law in 1938. It contains the requirements for sales of oil and gas leases on Indian lands such as the Jicarilla Apache Reservation. The statute provides in pertinent part:

Leases ... shall be offered for sale ... after notice and advertisement .... Such advertisement shall reserve to the Secretary of the Interior the right to reject all bids whenever in his judgment

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the interest of the Indians will be served by so doing....

Federal regulations require that after tribal authorization has been obtained, notices be published at least thirty (30) days in advance of the sale. The notices must contain, among other things, the information that specific tracts will be offered to the highest responsible bidder for a bonus consideration in addition to stipulated rentals and royalties. 25 C.F.R. Section 171.3(a). In addition, the regulations require that all notices or advertisements of sales of oil and gas leases must state the right of the Secretary of the Interior to reject bids when such is in the best interest of the Indians. 25 C.F.R. Section 171.3(b). (3)

The Secretary of the Interior has delegated many of his responsibilities to Indian Tribes to agencies within the Department of the Interior. One is the Bureau of Indian Affairs (BIA). The BIA is charged with carrying out trust responsibilities of the United States for Indian Tribes under the supervision and direction of the Secretary. Another is the United States Geological Survey (USGS). The USGS is charged by law and regulation with supervision of exploration, drilling and development of Indian oil and gas lands, and accounting for royalties by lessees to Indian Tribes, under the supervision and direction of the Secretary.

The procedure employed by the local area offices of the BIA and USGS to comply with these regulations was as follows. Upon receipt of an indication of interest by a company or individual in leasing Tribal lands for oil or gas, the BIA contacted the Tribe to determine whether its Tribal Council wished to offer acreage for lease in the particular area. If so, the Tribal Council adopted a resolution authorizing the BIA to offer Tribal lands for oil and gas leasing. More than thirty (30) days prior to the proposed lease sale, a "short form" notice was published in at least two oil and gas journals and press releases were sent to a local newspaper and to at least one nearby metropolitan newspaper. (4) The "short

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form" notice was not intended to and did not comply with all the requirements of the regulations.

The BIA maintained a card file of individuals and companies which had expressed an interest in oil and gas leases on the Jicarilla Reservation. More than 30 days prior to the sale, a "long form" notice was sent to the names in the card file. Bulk mailings of the "long form" notice were made to some post offices in the area to be put on display. In addition, the "long form" notice was sent to anyone requesting details of the sale. One source of knowledge of the sale, fragmentary though it might be, was the "short form" notice.

It is undisputed that the "long form" notice contained all the information required by the regulations.

Elements prescribed by the regulation which were missing from the "short form" notice were the following:

1. A description of the specific tracts being offered.

2. The stipulated rentals and...

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