Safarik v. Udall

• Decision Date: 07 June 1962
• Docket Number: No. 16646-16651,16654.,16646-16651
• Parties: Louise SAFARIK and Richard P. DeSmet, Appellants, v. Stewart L. UDALL, Secretary of the Interior, Appellee. Raymond J. HANSEN et al., Appellants, v. Stewart L. UDALL, Secretary of the Interior, et al., Appellees. Samuel GARY, Appellant, v. Stewart L. UDALL, Secretary of the Interior, Appellee. John J. KING, Appellant, v. Stewart L. UDALL, Secretary of the Interior, Appellee. Robert SCHULEIN, Appellant, v. Stewart L. UDALL, Secretary of the Interior, Appellee. Betty J. LEWIS et al., Appellants, v. Stewart L. UDALL, Secretary of the Interior, Appellee. Duncan MILLER, Appellant, v. Stewart L. UDALL, Secretary of the Interior, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

304 F.2d 944 (1962)

Louise SAFARIK and Richard P. DeSmet, Appellants, v. Stewart L. UDALL, Secretary of the Interior, Appellee.

Raymond J. HANSEN et al., Appellants, v. Stewart L. UDALL, Secretary of the Interior, et al., Appellees.

Samuel GARY, Appellant, v. Stewart L. UDALL, Secretary of the Interior, Appellee.

John J. KING, Appellant, v. Stewart L. UDALL, Secretary of the Interior, Appellee.

Robert SCHULEIN, Appellant, v. Stewart L. UDALL, Secretary of the Interior, Appellee.

Betty J. LEWIS et al., Appellants, v. Stewart L. UDALL, Secretary of the Interior, Appellee.

Duncan MILLER, Appellant, v. Stewart L. UDALL, Secretary of the Interior, Appellee.

Nos. 16646-16651, 16654.

United States Court of Appeals District of Columbia Circuit.

Argued February 12, 1962.

Decided June 7, 1962.

Mr. Thomas F. McKenna, Santa Fe, N. Mex., with whom Mr. Richard H. Speidel, Washington, D. C., was on the brief, for appellants in Nos. 16,646 and 16,647. Mr. Joseph A. Sommer, Santa Fe, N. Mex., also entered an appearance for appellants in Nos. 16,646 and 16,647.

Mr. James S. Holmberg, Denver, Colo., of the bar of the Supreme Court of Colorado, pro hac vice, by special leave of court with whom Mr. Richard H. Speidel, Washington, D. C., was on the brief, for appellants in Nos. 16,648, 16,649, 16,650 and 16,651.

Mr. Chester C. Shore, Washington, D. C., for appellant in No. 16,654.

Mr. Raymond N. Zagone, Atty., Dept. of Justice, Washington, D. C., of the bar of the Supreme Court of Texas, pro hac vice, by special leave of court, with whom Asst. Atty. Gen., Ramsey Clark, Messrs. Roger P. Marquis and Thomas L. McKevitt, Attys., Dept. of Justice, Washington, D. C., were on the brief, argued for appellee Udall in Nos. 16,646, 16,647 and 16,654, and submitted on the brief for appellee Udall in Nos. 16,648, 16,649, 16,650 and 16,651. Messrs. S. Billingsley Hill and Hugh Nugent, Attys., Dept. of Justice, Washington, D. C., also entered appearances for appellee Udall.

Mr. Henry T. Rathbun, Washington, D. C., for appellee Robert S. Light, and certain other appellees in No. 16,647.

Mr. Samuel W. McIntosh, Washington, D. C., for appellees Coll and Fasken in No. 16,647.

Mr. Samuel W. McIntosh, Washington, D. C., filed a brief on behalf of Robert B. Laughlin, and others, as amici curiae, urging affirmance.

Before PHILLIPS, Senior United States Circuit Judge for the Tenth Circuit,^* EDGERTON and BAZELON, Circuit Judges.

PHILLIPS, Circuit Judge.

In each of these cases relief by declaratory judgment was sought with respect to the denial by the Secretary of the Interior of applications made by appellants for oil and gas leases under the Mineral Leasing Act of 1920, 41 Stat. 437, 30 U.S.C.A. § 181 et seq. In each case a judgment was entered granting the Secretary's motion for summary judgment, denying a cross-motion for summary judgment and dismissing the action. These appeals followed.

Section 17 of the Mineral Leasing Act of 1920, 41 Stat. 437, 443, as amended by the Acts of August 8, 1946, 60 Stat. 950, 951, and July 29, 1954, 68 Stat. 583, 584, 30 U.S.C.A. § 226, reads in part as follows:

"All lands subject to disposition under this Act which are known or believed to contain oil or gas deposits may be leased by the Secretary of the Interior. * * * Leases issued under this section shall be for a primary term of five years and shall continue so long thereafter as oil or gas is produced in paying quantities.

* * * * * *

"Upon the expiration of the initial five-year term of any noncompetitive lease maintained in accordance with applicable statutory requirements and regulations, the record titleholder thereof shall be entitled to a single extension of the lease, unless then otherwise provided by law, for such lands covered by it as are not on the expiration date of the lease withdrawn from leasing under this section. * * * A noncompetitive lease, as to lands not within the known geologic structure of a producing oil or gas field, shall be extended for a period of five years and so long thereafter as oil or gas is produced in paying quantities. A noncompetitive lease, as to lands within the known geologic structure of a producing oil or gas field, shall be extended for a period of two years and so long thereafter as oil or gas is produced in paying quantities. * * *"

Section 30(a) of the Mineral Leasing Act of 1920, added by the Act of August 8, 1946, 60 Stat. 950, 955, as amended by the Act of July 29, 1954, 68 Stat. 583, 585, 30 U.S.C.A. § 187a, provided in pertinent part as follows:

"Notwithstanding anything to the contrary in section 30 hereof, any oil or gas lease issued under the authority of this Act may be assigned or subleased, as to all or part of the acreage included therein, subject to final approval by the Secretary and as to either a divided or undivided interest therein, to any person or persons qualified to own a lease under said sections, and any assignment or sublease shall take effect as of the first day of the lease month following the date of filing in the proper land office of three original executed counterparts thereof * *. Any partial assignment of any lease shall segregate the assigned and retained portions thereof, and as above provided, release and discharge the assignor from all obligations thereafter accruing with respect to the assigned lands; and such segregated leases shall continue in full force and effect for the primary term of the original lease, but for not less than two years after the date of discovery of oil or gas in paying quantities upon any other segregated portion of the lands originally subject to such lease. Assignments under this section may also be made of parts of leases which are in their extended term because of any provision of this Act. The segregated lease of any undeveloped lands shall continue in full force and effect for two years and so long thereafter as oil or gas is produced in paying quantities."

Part 192 of Title 43 of the Code of Federal Regulations sets forth the regulations pertaining to oil and gas leases.

43 C.F.R. § 192.140 (1954 ed.) at all times here material provided in pertinent part:

"§ 192.140 Assignments or transfers of leases or interests therein. Leases may be assigned or subleased as to all or part of the leased acreage and as to either a divided or undivided interest therein to any person or persons qualified to hold a lease. Subject to final approval by the Bureau of Land Management, assignments or subleases shall take effect as of the first day of the lease month following the date of filing in the proper land office of all the papers required by §§ 192.141 and 192.142. * * *"

43 C.F.R. § 192.144 (1954 ed.) provides:

"§ 192.144 Extension of leases segregated by assignment. Any lease segregated by assignment, including the retained portion, shall continue in effect for the primary term of the original lease, or for two years after the date of discovery of oil or gas in paying quantities upon any other segregated portion of the original lease, whichever is the longer period.

"(b) Undeveloped parts of leases assigned out of leases which are in their extended term under any provision of the act shall continue in effect for two years, and so long thereafter as oil or gas is produced in paying quantities."

It will be observed that § 30(a) of the Mineral Leasing Act of 1920, as amended, provided that oil and gas leases may be assigned in whole or in part and that any assignment "shall take effect as of the first day of the lease month following the date of filing in the proper land office of three original executed counterparts thereof"; and that upon assignment the segregated lease of any undeveloped lands "shall continue in * * * effect for two years, and so long thereafter as oil or gas is produced in paying quantities."

On June 4, 1957, as Associate Solicitor of the Department of the Interior, in a memorandum opinion, held an assignment filed in the proper land office in accordance with § 30(a), as amended, supra, during the twelfth month of the last year of the extended term of a lease would effect a two-year extension of the extended term of the lease.

The applications for oil and gas leases made by the appellants and rejected by the Secretary embraced lands included in leases which had been made under the Mineral Leasing Act of 1920. All of such leases were for an original five-year term,¹ with a renewal right for an additional five years. Many of the lessees under such leases are not parties to any of these actions. With two exceptions, assignments of such leases had been made during the twelfth month of the last year of their extended terms, respectively, and prior to August 29, 1958, and the Bureau of Land Management had approved such assignments and recognized them as extending such leases for two years and reflected that fact on its records. In the two exceptions noted, the leases had been assigned prior to the last month of the extended terms of the leases.

In an appeal in the case of Franco Western Oil Company, 65 I.D. 316, decided August 11, 1958, the Secretary overruled the decision of June 4, 1957, of the Associate Solicitor and held that an assignment in order to effect a two-year extension of an oil and gas lease had to be made before the twelfth month of the last year of the extended term of the lease. Under such construction, the maximum extension obtainable was for one year and eleven months.

Thereafter, the Acting Director of the Bureau of Land Management requested clarification of the decision of August 11, 1958, insofar as it might affect noncompetitive oil and gas leases extended under the construction of § 30(a) of the Mineral Leasing Act of 1920, as amended, supra, reflected in the opinion of the Associate Solicitor of June 4, 1957.

On September 30, 1958, the Secretary of the Interior handed down a supplemental decision in which he recited the fact that many partial assignments of leases had been filed during the last...