Justheim Petroleum Co. v. Department of Interior
| Decision Date | 07 August 1985 |
| Docket Number | No. 83-2214,83-2214 |
| Citation | 769 F.2d 668 |
| Parties | JUSTHEIM PETROLEUM COMPANY, Plaintiff/Appellant, v. The DEPARTMENT OF The INTERIOR, et al., Defendants/Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Harold A. Hintze of Fox, Edwards & Gardiner, Salt Lake City, Utah, for plaintiff/appellant.
J. Carol Williams, Washington, D.C. (F. Henry Habicht, II, Asst. Atty. Gen., Washington, D.C., Brent D. Ward, U.S. Atty. and Joseph W. Anderson, Asst. U.S. Atty., Salt Lake City, Utah, and Anne S. Almy, Dept. of Justice, Washington, D.C., with her on the Brief), for defendants/appellees.
Before BARRETT, MOORE, and TIMBERS *, Circuit Judges.
Justheim Petroleum Company (Justheim) appeals from the district court's grant of summary judgment in favor of the Department of Interior (Interior). The district court agreed with the Interior Board of Land Appeals (IBLA) that Justheim did not have a vested right to the issuance of leases covering certain federal lands in Utah, and that the Bureau of Land Management's (BLM) rejection of Justheim's lease applications was therefore not an abuse of discretion. The facts are not in dispute.
On June 10, 1974, Justheim filed lease applications with the Utah office of the BLM. At that time, the lands covered by these applications were not within any known geologic structure. Leases could therefore be issued for these lands pursuant to 30 U.S.C. Sec. 226(c) without competitive bidding to the first qualified applicant.
Although Justheim was the first qualified applicant for the leases at issue, the BLM notified Justheim that its applications would be held in abeyance for one year pending resolution of an action by the State of Utah against the Secretary of Interior (Secretary) in which the State sought title to the same lands. The decision further stated that if the action between the State and the Secretary had not been resolved within one year, then the BLM would reject Justheim's lease offers.
Justheim appealed this decision to the IBLA. On February 13, 1975, the IBLA rendered a decision reversing the BLM, holding that "the suspension of the offers for a maximum of one year from the date of the decision below regardless of whether the state selection applications have been ... judicially resolved is not sound." Justheim Petroleum Co., 18 IBLA 423, 424 (1975). As a result of this decision, Justheim's lease applications were held in abeyance "until such time as the state selection applications [were] judicially resolved." Id.
Thereafter, however, and prior to resolution of the action by the State against the Secretary, the Acting Utah State Director of the BLM expressed the position of the BLM that it would be in the public interest to lease certain lands, including those covered by the applications at issue here, if the State would consent to such. The State refused to consent to the issuance of any such leases, and none were issued.
On May 19, 1980, the dispute between the State and the Secretary was resolved in Andrus v. Utah, 446 U.S. 500, 100 S.Ct. 1803, 64 L.Ed.2d 458 (1980). There the Court held that the State of Utah did not have the right to select lands covered by Justheim's applications. What ostensibly was the final impediment to the issuance of leases to Justheim was thus removed. On August 26, 1980, however, Under Secretary James Joseph issued a directive which imposed a moratorium upon the further issuance of leases to certain lands in the State, identified as designated tar sands areas, which included those lands covered by the applications at issue here. "The purpose of the directive was to not issue additional oil and gas leases in the area prior to passage of legislation enabling the Bureau to issue combined hydrocarbon leases for both oil and gas and tar sands or prior to the inception of a Bureau tar sands leasing program...." R.Vol. I at 60.
On May 28, 1981, the Secretary qualified the August 26, 1980, directive by directing the Utah BLM office to issue leases for those applications made prior to the August 26, 1980, moratorium:
We continue to remain interest [sic] in preserving the opportunity to issue tar sand leases without encumbering oil and gas leases in the same acreage. Even so, there are a small number of oil and gas lease applicants whose offers were submitted prior to August 26, 1980, but whose leases have not been issued because of the Under Secretary's directive. In the interests of equity, please direct the Utah State Office to proceed with the issuance of oil and gas leases in DTSA's applied for prior to August 26, 1980. Disposition of the applications received on or after that date will await further policy review. (Emphasis added).
A copy of this directive was placed in Justheim's file at the Utah BLM office, and, based upon this directive, Justheim expended substantial sums of money in exploratory drilling on the subject leases, apparently having been granted a permit by the BLM to do so. It is upon this directive that Justheim claims it had a "vested right" to the issuance of leases for lands covered by its lease applications.
For reasons which do not appear in the record of this appeal, the Utah BLM office did not immediately issue leases to qualified applicants who had filed lease applications prior to August 26, 1980. In the meantime, Congress passed the Combined Hydrocarbon Leasing Act (the Act), which, among other things, amended 30 U.S.C. Sec. 226(c) to require that lands within DTSA's be leased only by competitive bidding. The Act had an effective date of November 16, 1981.
On March 5, 1982, the BLM rejected Justheim's lease applications for the reason that the lands covered by the lease applications, following passage of the Act, were no longer subject to noncompetitive leasing. This decision was upheld by the IBLA. Justheim Petroleum Co., 67 IBLA 38 (1982). Justheim then filed a petition for review of the administrative decision in the district court, where the case was submitted upon cross-motions for summary judgment. Following the district court's grant of summary judgment in favor of Interior, the present appeal was taken.
Under the Mineral Leasing Act of 1920, 30 U.S.C. Sec. 181 et seq., 41 Stat. 437 (1958), the Secretary has broad "discretion to refuse to issue any lease at all on a given tract." Udall v. Tallman, 380 U.S. 1, 4, 85 S.Ct. 792, 795, 13 L.Ed.2d 616 (1965). The mere application for a lease thus vests no rights in the applicant, Haley v. Seaton, 281 F.2d 620, (D.C.Cir.1960), except the right to have the application fairly considered under the applicable statutory criteria. Schraier v. Hickel, 419 F.2d 663, 667 (D.C.Cir.1969). This result obtains both when the applicant is the first qualified applicant and when the applicant files in response to a government notice that it will receive offers. Id.; Arnold v. Morton, 529 F.2d 1101, 1106 (9th Cir.1976). In addition, the Secretary is under no requirement to issue or reject lease applications within a certain time limit. Angelina Holly Corp. v. Clark, 587 F.Supp. 1152, 1156 (D.C.1984); Rowe v. United States, 464 F.Supp. 1060, 1070 (D.Alaska 1979), aff'd in relevant part, 633 F.2d 799 (9th Cir.1980), cert. denied, 451 U.S. 970, 101 S.Ct. 2047, 68 L.Ed.2d 349 (1981).
Justheim does not dispute these general legal principles, but instead takes issue with Interior's argument that rights do not "vest" until a lease is signed by the authorized officer. Justheim recognizes that, under the federal regulations, a lease "issues" when signed by "the authorized officer." 43 C.F.R. 3112.6-2. Justheim argues, however, that rights to a lease can vest prior to the time the lease is actually signed when, as here, the Secretary specifically exercises his discretion and directs a local BLM office to issue leases. Justheim relies on Southwestern Petroleum v. Udall, 361 F.2d 650, 655 (10th Cir.1966), as authority for...
To continue reading
Request your trial
-
Impact Energy Res., LLC v. Salazar
...much to say about agency action and may intervene before a decision is finalized. Thus, for example, in Justheim Petroleum Co. v. Department of Interior, 769 F.2d 668 (10th Cir.1985), we found that even though the Secretary had directed the BLM to issue certain oil and gas leases to an appl......
-
W. Energy Alliance v. Salazar
...given tract”). We consistently affirmed the broad discretion afforded to the Secretary under the MLA. In Justheim Petroleum Co. v. Dep't of the Interior, 769 F.2d 668 (10th Cir.1985), a case arising in the non-competitive bidding context, we held that “the Secretary is under no requirement ......