McKenna v. Seaton, 14095.

• Decision Date: 20 March 1958
• Docket Number: No. 14095.,14095.
• Citation: 259 F.2d 780
• Parties: Patrick A. McKENNA, Appellant, v. Fred A. SEATON, Secretary of the Interior, and John C. de Armas, Jr., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

259 F.2d 780 (1958)

Patrick A. McKENNA, Appellant, v. Fred A. SEATON, Secretary of the Interior, and John C. de Armas, Jr., Appellees.

No. 14095.

United States Court of Appeals District of Columbia Circuit.

Argued February 13, 1958.

Decided March 20, 1958.

Petition for Rehearing Denied May 9, 1958.

Certiorari Denied October 13, 1958.

Messrs. Robert H. Rines, Boston, Mass., and Samuel Nakasian, Washington, D. C., for appellant.

Mr. Fred W. Smith, Attorney, Department of Justice, with whom Mr. Roger P. Marquis, Attorney, Department of Justice, was on the brief, for appellee Seaton. Mr. S. Billingsley Hill, Attorney, Department of Justice, also entered an appearance for appellee Seaton.

Mr. Marvin J. Sonosky, Washington, D. C., for appellee de Armas.

Before PRETTYMAN, FAHY and WASHINGTON, Circuit Judges.

Petition for Rehearing In Banc Denied May 9, 1958.

Certiorari Denied October 13, 1958. See 79 S.Ct. 57.

FAHY, Circuit Judge.

The Secretary of the Interior, an appellee, on May 18, 1956, issued an oil and gas lease of acquired land¹ to John C. de Armas, Jr., also an appellee, rather than to competing applicant Patrick A. McKenna, appellant. McKenna sued in the District Court for cancellation of the de Armas lease and for a direction that the Secretary issue a lease to McKenna as the first qualified applicant.² On motions for summary judgment filed by the Secretary, by de Armas, and by McKenna,³ the court, with the proceedings in the Department of Interior before it, granted the motions of the Secretary and of de Armas, and dismissed McKenna's complaint. We affirm for reasons herein stated.

De Armas filed his application April 2, 1951. McKenna filed his August 17, 1954. De Armas accordingly was first in time by more than three years. If he was qualified as well he was entitled to the lease in preference to McKenna. This is so because the lease to be issued was of the noncompetitive character covering acquired land not within a known geological structure. In this situation the governing statute provides that the lease shall go to "the person first making application for the lease who is qualified to hold a lease."⁴ Section 17 of the Mineral Leasing Act of February 25, 1920, 41 Stat. 443, as amended, 30 U.S.C. § 226 (1952), 30 U.S.C.A. § 226.⁵ The statute also provides, however, that an applicant shall not hold "at one time oil or gas leases exceeding in the aggregate fifteen thousand three hundred and sixty acres granted hereunder in any one State." Section 27 of the Act, 41 Stat. 448, as amended, 30 U.S.C. § 184 (1952), 30 U.S. C.A. § 184.⁶ De Armas' holdings did not disqualify him under this provision; but McKenna contends that de Armas did not include in his application all the information about his holdings required by applicable regulations and, therefore, this disqualified him. De Armas' application did state that he owned no more than the permitted acreage, which was all that was required to be stated by the regulations for public land applications, 15 Fed.Reg. 8583 (1950), 43 C.F.R. § 192.42(a) (Supp.1951),⁷ though not for acquired land. The latter called for a listing by the applicant of his leasehold interests, with reference to their serial numbers. 12 Fed.Reg. 8678 (1947), 43 C.F.R. § 200.5(a) (1) (1949). Previous to January 28, 1951, this listing had been required in applications embracing each category of land, see ibid and 13 Fed. Reg. 9567 (1948), 43 C.F.R. § 192.42(a) (3) (1949), but effective that date had been eliminated as to public land, in favor simply of an affirmative statement that the applicant did not own leasehold interests in the same state covering more acreage than the statutory maximum. 15 Fed.Reg. 8583 (1950), 43 C.F.R. § 192.42 (a) (Supp.1951).⁸ The discrepancy between the regulations was rectified November 3, 1954,⁹ when applications for acquired land were also permitted to contain merely the statement authorized by the January 28, 1951, amendment of the public land regulations, 19 Fed.Reg. 7127, 43 C.F.R. § 200.5 (1954).

In the meantime, in what became known as the first Hooper decision, of August 3, 1954, the Secretary ruled that the separate listing in acquired land applications was mandatory, but that an omission in this regard was a curable defect. Moreover, he ruled that priority would pertain only as of the time the defect was cured by the filing of the information as a part of the application.

At the request of the Bureau of Land Management the Secretary reconsidered his first Hooper decision. The Bureau advised the Secretary that ever since the regulations for public land applications had been amended January 28, 1951, the Bureau had considered separate listing of holdings no longer necessary in applications for leases of acquired land either, and had processed many applications and issued many leases under this practice as compliance with 12 Fed.Reg. 8678 (1947), 43 C.F.R. § 200.5(a) (1) (1949).

In view of this situation the Secretary, on October 28, 1954, in his second Hooper decision, held that to deny priority to all applications filed before August 3, 1954, on the ground they did not contain the separate listing would be "a harsh result." On the basis of this and other considerations, citing Bassie, et al., Chapman and Kirchner, 59 I.D. 235, and notwithstanding his view that the Bureau's practice was "not legally justifiable, and acquired land lease applications which do not contain the statement required by 43 CFR 200.5 are defective," he ruled,

"fairness and equity would seem to require that an applicant or a lessee who has filed an application deficient in this respect in reliance upon the administrative construction should be given time to cure the defect by supplying the details required by the regulation without loss of priority, if all else is regular."

Applicants were given until December 1, 1954, to cure the defect.

On October 21, 1954, de Armas filed a corrected application, listing his lease-holdings. In the meantime, between the first and second Hooper decisions, McKenna had filed, August 17, 1954, listing his leaseholdings. We agree with the District Court in rejecting his claim that this gave him priority over de Armas.

Although the Secretary said that the practice adopted by the Bureau beginning January 28, 1951, was "not legally justifiable," the fact is he decided that an application filed subsequent to that date, though defective in omitting separate listing of other interests, could be corrected without loss of priority if otherwise regular. De Armas' application was corrected and was otherwise regular as well as long prior in time. And even before correction it conformed with a practice in general use which the Bureau construed as sufficient. In these circumstances we cannot say that the issuance of the lease to de Armas was arbitrary, capricious, or otherwise illegal. He had met the requirements of the statute itself, which, moreover, contemplated administration of leases on acquired land as nearly as possible like those on public land. See note 4, supra. Uniformity in practice had been adopted pending reassertion of uniformity in terms of regulations. To decide that the defect was curable within a specified time without loss of priority appears to us to be an entirely fair, reasonable, and rational administrative action, not inconsistent with any statutory provision or any principle of law or equity. No regulation required the Secretary to hold that the defect in de Armas' application deprived him of priority or disqualified him.

In support of his contrary position McKenna cites United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681, and Service v. Dulles, 354 U.S. 363, 77 S.Ct. 1152, 1 L.Ed.2d 1403, the latter of which applied the principles laid down in the former. We think those principles are not applicable. In Accardi it is held that where the Attorney General, in fulfilling his responsibilities in connection with the deportation of certain aliens under the Immigration Act of 1917, 39 Stat. 889, as amended, 8 U.S.C. § 155(c) (1946 ed. Supp. V, 1952),^* had by regulation prescribed that there should be proceedings before, and a decision by, the Board of Immigration Appeals prior to decision by the Attorney General himself, the Attorney General could not "side-step the Board or dictate its decision in any manner." 347 U.S. at page 267, 74 S.Ct. at page 503. In applying the underlying Accardi principles in Service, involving the discharge of an employee under regulations relating to loyalty and security, the Court held that regulations validly prescribed by a Government administrator were binding upon him as well as upon the citizen, even when the administrative action under review was discretionary in nature. In both Accardi and Service the regulations were for the obvious purpose of aiding the Government in reaching a correct decision affecting an individual who claimed the benefit of the prescribed administrative procedures.

The case before us is quite different. A choice was here to be made between two individuals claiming the same right. The Secretary was to decide which of the two was the first qualified applicant. One of the applicants had not initially complied fully with an applicable regulation. But no law or regulation required the Secretary to hold that this in itself disqualified that applicant so as to give priority to another who was later by three years but who complied literally with that particular regulation.¹⁰ The Secretary merely decided that the defect in de Armas' application could be cured within a specified time without loss of his priority. This was not a failure to enforce any regulation, for none bound the Secretary to do otherwise. He simply gave more weight to three years of priority than to what he considered to be a curable irregularity in an application — an irregularity which had no special significance whatever in terms of a fair and reasonable...