Pan American Petroleum Corporation v. Pierson, 6372.

• Decision Date: 20 December 1960
• Docket Number: No. 6372.,6372.
• Citation: 284 F.2d 649
• Parties: PAN AMERICAN PETROLEUM CORPORATION, a corporation, Appellant, v. Ed PIERSON, individually and as Supervisor for the State of Wyoming, Bureau of Land Management, Department of the Interior; Cecil L. Hase, individually and as Manager of Cheyenne Land Office, Bureau of Land Management, Department of the Interior; R. P. Rigtrup, individually and as Acting Manager of Cheyenne Land Office, Bureau of Land Management, Department of the Interior; John Doe I, individually and as the Examiner appointed or to be appointed by Manager or Acting Manager, Cheyenne Land Office; and John Doe II and John Doe III, individually and in any capacity they may hold as representatives of the Cheyenne Land Office, Bureau of Land Management, Department of the Interior, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

284 F.2d 649 (1960)

PAN AMERICAN PETROLEUM CORPORATION, a corporation, Appellant, v. Ed PIERSON, individually and as Supervisor for the State of Wyoming, Bureau of Land Management, Department of the Interior; Cecil L. Hase, individually and as Manager of Cheyenne Land Office, Bureau of Land Management, Department of the Interior; R. P. Rigtrup, individually and as Acting Manager of Cheyenne Land Office, Bureau of Land Management, Department of the Interior; John Doe I, individually and as the Examiner appointed or to be appointed by Manager or Acting Manager, Cheyenne Land Office; and John Doe II and John Doe III, individually and in any capacity they may hold as representatives of the Cheyenne Land Office, Bureau of Land Management, Department of the Interior, Appellees.

No. 6372.

United States Court of Appeals Tenth Circuit.

October 28, 1960.

Rehearing Denied December 20, 1960.

A. G. McClintock, Cheyenne, Wyo. (T. J. Files, Casper, Wyo., Virgil C. McClintock and Frank H. Houck, Casper, Wyo., were with him on the brief), for appellant.

A. Donald Mileur, Atty., Dept. of Justice, Washington, D. C. (Perry W. Morton, Asst. Atty. Gen., John F. Raper, Jr., U. S. Atty., District of Wyoming, Cheyenne, Wyo., and Roger P. Marquis, Atty., Dept. of Justice, Washington, D. C., were with him on the brief), for appellees.

Before PHILLIPS, LEWIS and BREITENSTEIN, Circuit Judges.

BREITENSTEIN, Circuit Judge.

The question presented is whether appellant, Pan American Petroleum Corporation, may maintain an action to enjoin the appellees, officers of the Bureau of Land Management, Department of the Interior, stationed in the State of Wyoming, from proceeding with an administrative action for the cancellation of oil and gas leases held by Pan American. This appeal is from a judgment of the trial court sustaining a motion to dismiss the complaint.

Pursuant to the Mineral Leasing Act of 1920, as amended,¹ the Secretary of the Interior issued to Walter G. Davis and others oil and gas leases covering portions of the public domain lying in Wyoming. By assignment Pan American became the owner of certain of these leases and the owner of interests in other of such leases. Some of these leases so held in whole or in part by Pan American are presently producing oil or gas, others cover lands known to contain oil or gas, and still others are not producing and not known to contain oil or gas.

The Wyoming State Supervisor of the Bureau of Land Management brought a proceeding, styled a "Contest," in the Wyoming office of that Bureau. Therein it is alleged that Davis and others willfully, falsely and fraudulently procured the issuance and assignment of federal oil and gas leases: (1) for the purpose of enabling Davis and others to obtain leases covering acreage in excess of that permitted by statute and regulations; (2) without disclosing that an agent was involved and without the interest and qualifications of Davis or others being disclosed; and (3) at a time when Davis was not qualified to hold such leases. The complaint prays for the cancellation of the leases. An appropriate notice was served on Pan American, as a party interested in certain of the leases, which required the filing of an answer within 30 days. Before the expiration of that period Pan American brought the instant action in the United States District Court for the District of Wyoming. Jurisdiction exists under 28 U.S.C. § 1331 as the action arises under the laws of the United States and the controversy involves more than the required jurisdictional amount.

Pan American alleges that federal oil and gas leases may not be cancelled by administrative action, that the unauthorized administrative action will cause it great and irreparable damage and will result in the taking of its property without due process of law, and that it has no remedy other than injunctive relief. The complaint asks that the defendant officers be restrained from taking any action to cancel the leases except through a proceeding instituted by the Attorney General of the United States in the United States District Court for the District of Wyoming.

The defendant officers moved to dismiss on the grounds that the complaint fails to state a claim as the leases may be cancelled in an administrative action, that the Secretary of the Interior is an indispensable party, and that Pan American has not exhausted its administrative remedies.

The trial court held that the leases could not be cancelled by administrative action but dismissed the complaint on the ground that the Secretary of the Interior was an indispensable party.²

At the outset it should be noted that the government lawyers who appear for the defendant officers of the Bureau of Land Management do not assert the defense of sovereign immunity. Instead they rely upon the doctrine of the indispensable superior officer and say that the action may not be maintained in the absence of the Secretary of the Interior who may be sued only in the jurisdiction of his official residence, that is, the District of Columbia.

Sovereign immunity does not prevent a suit against a federal officer who is acting in excess of his authority. The instant action raises the sole question of whether the defendant officers are so acting. Since the decision in United States v. Lee, 106 U.S. 196, 1 S.Ct. 240, 27 L.Ed. 171, the traditional remedy of a person aggrieved by governmental action, and precluded from a suit against the sovereign by the doctrine of immunity, has been a suit against the government officer responsible for that action and such suits have been permitted when the officers have exceeded their statutory powers.³ The situation here presented is not one of asserted erroneous action within the ambit of statutory authority.⁴

The practical operation of the doctrines of sovereign immunity and indispensable superior officer has presented many difficulties and has evoked much comment among the law writers.⁵

The application of the doctrine of the indispensable superior presents practical and legal difficulties. The rejection of the unavailability of the defense of sovereign immunity in a suit against a government officer because of his official conduct should carry with it a realization of the practicality of venue and geography. Recognition of this principle is established by the decision in Shaughnessy, District Director of Immigration and Naturalization v. Pedreiro, 349 U.S. 48, 54, 75 S.Ct. 591, 595, 99 L.Ed. 868, wherein the Court said that its decisions "have established a policy under which indispensability of parties is determined on practical considerations."⁶ If concern is to be given to such practical considerations, and we think they should be given concern, then this action to restrain proceedings in Wyoming for the cancellation of federal oil and gas leases involving land in Wyoming should be maintained in the United States District Court for the District of Wyoming and should not be defeated by the inability of the plaintiff to sue the Secretary of the Interior in that court.

Doubt has been cast upon the simplicity of this approach by a complex of decisions by the United States Supreme Court and the lower federal courts in cases involving the question of the indispensable superior. In five decisions the Supreme Court has permitted the action without joinder of the superior⁷ and in four other cases has held that a superior was an indispensable party.⁸ Williams v. Fanning is often taken as the leading case and is relied upon by Pan American. It will not be helpful to review the many decisions of the lower federal courts which have applied Williams v. Fanning, but it is fair comment that they have achieved no substantial uniformity of application.⁹ As we read Williams v. Fanning, it notes three inquiries which are pertinent in determining the indispensability of a superior officer. These are: (1) Does the relief sought require the superior "to take action, either by exercising directly a power lodged in him or by having a subordinate exercise it for him"?; (2) Are the subordinates acting in excess of their authority?; and (3) Will the relief sought "expend itself on the public treasury or domain, or interfere with the public administration"?¹⁰

As to the first, the relief sought by Pan American requires no action by the Secretary or any subordinate. The purpose is to enjoin the cancellation of the leases by administrative action. There is no effort to compel the exercise of any power or authority. Instead, the purpose is to prevent the allegedly wrongful exercise of claimed power and authority. This is not a case like Richman v. Beck, 10 Cir., 257 F.2d 575. The relief there sought would have required the issuance of permits by the Secretary of the Interior for the trailing and grazing of sheep.¹¹

Related to the problem of the impact of the decree upon the non-joined superior is the query as to whether effective relief may be obtained by a decree acting upon the subordinate. The administrative proceeding here sought to be enjoined is denominated a "Contest" and is brought under 43 C.F.R. 221 (1954 Supp.).¹² It was instituted by the Wyoming State Supervisor of the Bureau of Land Management, Department of the Interior, and, by the applicable regulations, had to be instituted in Wyoming.¹³ The decree thus will affect land within the jurisdiction of the court and will operate against the officers who either instituted or will conduct the proceeding and who are within the jurisdiction of the court. Control over the actions of the local officers will suffice to stop the administrative proceeding. The argument that such subordinates may be left under the command of their superior to do what the court has forbidden was rejected in Williams v. Fanning as being immaterial if the decree will "effectively grant the relief desired by expending itself on the subordinate official who is before the court."¹⁴ Such is the situation here.

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