Arnold v. Morton

• Decision Date: 23 January 1976
• Docket Number: No. 74--2218,74--2218
• Citation: 529 F.2d 1101
• Parties: Hillin L. ARNOLD et al., Plaintiffs-Appellants, v. Rogers C. B. MORTON, the Secretary of Interior of the United States, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1101

529 F.2d 1101

Hillin L. ARNOLD et al., Plaintiffs-Appellants, v. Rogers C. B. MORTON, the Secretary of Interior of the United

States, et al., Defendants-Appellees.

No. 74--2218.

United States Court of Appeals,

Ninth Circuit.

Jan. 23, 1976.

John D. Zeglis (argued), of Sidley & Austin, Chicago, Ill., for plaintiffs-appellants.

Jacques B. Gelin, Atty. (argued), U.S. Dept. of Justice, Washington, D.C., for defendants-appellees.

OPINION

Before DUNIWAY, TRASK and SNEED, Circuit Judges.

SNEED, Circuit Judge.

This case reaches us on appeal from the district court's order granting the motion of the defendants for summary judgment. The case arises from a rejection by defendant Secretary of the Interior of plaintiffs' applications for oil and gas leases under the Mineral Lands Leasing Act ¹ on lands that are within the exterior perimeter of Naval Petroleum Reserve No. 4 (Pet. 4). The Interior Board of Land Appeals held that the Secretary did not have jurisdiction to issue the leases because the lands in question had been made a part of Pet. 4 and therefore were under the control of the Navy. Starling Brokers, 6 IBLA 237 (1972). Plaintiffs' action below sought a review of the agency determination ² and a decision by the district court that they are entitled as a matter of law to the leases for which they applied. We agree with plaintiffs that the lands in question are not a part of Pet. 4, but do not agree that plaintiffs are entitled to leases as a matter of law. We, therefore, reverse the lower court's order granting the Secretary's motion for summary judgment and remand these proceedings to that court with instructions to order the Secretary to consider plaintiffs' lease applications in the light of this Opinion.

I. Naval Petroleum Reserves and The Mineral Lands Leasing Act.

In the years following the turn of the century it became increasingly apparent that petroleum was to be the fuel of the future. The Government undertook to discover which lands in the public domain probably contained oil and to withdraw these public lands from those upon which entry was allowed and a claim could be staked out. History of Naval Petroleum Reserves, S.Doc. No. 187, 78th Cong., 2d Sess. 1--2 (1944). Four specific reservations were made for the Navy. ³ Naval Petroleum Reserve No. 4 is located in Alaska. It is an area of some 35,000 square miles in the northern part of the state. It was created by an Executive Order of President Harding signed on February 27, 1923. Exec.Order No. 3797--A. Initially the Naval Petroleum Reserves remained under the control of the Secretary of the Interior. In 1920, however, Congress enacted a statute which required the Navy to 'take possession of all properties within the naval petroleum reserves as are or may become subject to the control and use by the United States for naval purposes, and on which there are no pending claims or applications for permits or leases under (the Mineral Leasing Act of 1920).' Act of June 4, 1920, c. 228, 41 Stat. 813. ⁴

The Mineral Lands Leasing Act, 30 U.S.C. §§ 181--287, allows the Secretary of the Interior to lease lands which have or are thought to have oil and gas deposits. If the land involved is, like the land plaintiffs seek to lease, not within any known geologic structure of a producing oil or gas field, the first qualified applicant is entitled to a lease. 30 U.S.C. § 226(c). ⁵ Plaintiffs' applications were apparently the first by qualified applicants due to the fact that prior claims on the lands had expired by operation of law or had otherwise been terminated.

II. The Scope of Naval Petroleum Reserve No. 4.

Plaintiffs contend that when Pet. 4 was created certain islands of land within in the exterior perimeter of the Reserve were excluded from the withdrawal. In Exec.Order No. 3797--A President Harding 'set apart as a Naval Petroleum Reserve all of the public lands within the following described area not now covered by valid entry, lease or application . . . (there followed a description of the land).' (Emphasis supplied) Plaintiffs contend that the italicized language was intended to exclude from Pet. 4 all lands meeting its terms. The Secretary, on the other hand, claims that all lands within the exterior perimeter were included in the Reserve and that upon expiration of any then existing rights on land within the exterior perimeter the land covered by those rights was withdrawn.

At the outset we state that the words of the Executive Order ought to govern if they are clear. Administrative practice is no authority when that practice is contrary to law. Since we find the language of the Executive Order read in the light of the case law to be compelling, we have no occasion to pass on the contention of the Secretary that he has continuously dealt with Pet. 4 as if it contained no islands of land under his jurisdiction. Fairbank v. United States, 181 U.S. 283, 308--11, 21 S.Ct. 648, 45 L.Ed. 862 (1901); United States v. Alger, 152 U.S. 384, 14 S.Ct. 635, 38 L.Ed. 488 (1894); United States v. Tanner, 147 U.S. 661, 13 S.Ct. 436, 37 L.Ed. 321 (1893).

The language used to create Reserves No. 1 and No. 2 differs from that which was used in the Executive Order which created Pet. 4. In establishing the former, President Taft withdrew 'all lands included in (areas are described) . . . subject to valid existing rights.' ⁶ (emphasis supplied.) The plaintiffs contend that the natural interpretation of the words used in creating Pet. 1 and Pet. 2 is that the whole of the area within the exterior perimeter is included pending the expiration of pre-existing claims on a part of the land. When this language is contrasted with the language used in Exec.Order No. 3797--A, plaintiffs argue that it is clear that Exec.Order No. 3797--A sought to leave islands of public land within the Reserve. The Secretary, on the other hand, claims that these language differences are mere technical variations in word usage which are of no substantive importance.

Even without more, we find the plaintiffs' argument appealing. The 'not now covered' language of Exec.Order No. 3797--A does not seem to connote an intent for the property to revert, while 'subject to' does indicate such an intent. There is, however, more. In Navajo Indian Reservation, 30 L.D. 515 (1901), the Secretary drew the distinction between a savings clause, which merely protects valid prior claims, and an exception to the withdrawal, in a case which presented an issue parallel to the one we face. The question was whether an order creating an Indian Reservation attached as soon as valid rights existing at the creation of the reservation were extinguished or were tracts which had claims upon them excepted from the Reservation. The Secretary decided in Navajo that the language used was an exception to the creation of the reservation and thus the lands upon which there had been valid claims 'never became a part of the reservation but remained and are a part of the public domain.' Id. at 519. After noting that some Indian reservations had been created with savings clauses and others with an exception to a withdrawal, the Secretary concludes that 'it is fair to presume that the change of language was made for a purpose, and that it was supposed and intended that such provisions should have different meanings.' Id. at 518--19.

In Solicitor's Opinion, 55 I.D. 205 (1935), it was stated that the phrase 'subject to existing valid rights', when used in the context of a withdrawal of land from certain forms of disposition, was an indication that all of the land within the exterior boundary of the designated area was included in the withdrawal. If the area was not all included in the withdrawal there would be no need to make the withdrawal 'subject to valid existing rights.' Id. at 208. President Harding's Executive Order No. 3797--A does not use this language, which would have been appropriate had he intended to withdraw the whole area into the Naval Petroleum Reserve.

We agree with plaintiffs that James F. Rapp, 60 I.D. 217 (1948) and Emma H. Pike, 32 L.D. 395 (1904) are inapposite. Both cases discuss what the legal result is when private rights expire upon land which is admittedly within the scope of a withdrawal. 'It is well-settled that an executive order creating a reservation for a public purpose, and embracing land covered by a prima facie valid entry, will take effect if the entry is subsequently cancelled.' Id. at 397. However, as plaintiffs point out in their brief, in neither Pike nor Rapp was there any question raised as to which lands were covered by the order of withdrawal. But this is precisely the question here.

From these authorities the conclusion is inescapable that within the Department of Interior there has existed since at least 1879 an awareness of the distinction between withdrawals which included all tracts within designated exterior lines and those which excluded one or more islands within such exterior lines. Moreover, these sources indicate that, while withdrawals without regard to their language could not extinguish existing rights derived from previous appropriations, ⁷ total inclusion generally was achieved by use of a description of the exterior lines accompanied by language expressing the thought in one way or another that the withdrawal was subject to valid existing rights. On the other hand, the exclusion of tracts within exterior lines was evidenced by reasonably explicit language. While the language of Exec.Order No. 3797--A is not as explicit as that in Navajo Indian Reservation, supra, ⁸ or as it might be, it is plainly unlike that used in the Orders creating Reserves No. 1 and No. 2 as well as that generally used to indicate total inclusiveness. We must presume that this difference was intended to serve a purpose and we believe the purpose was to exclude from Pet. 4 those tracts 'now covered by valid entry, lease or application.'

We, therefore, conclude that the Secretary...