Texaco, Inc. v. Hickel

• Decision Date: 19 August 1970
• Docket Number: No. 23097.,23097.
• Citation: 437 F.2d 636
• Parties: TEXACO, INC. v. Walter J. HICKEL, Secretary of the Interior, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

437 F.2d 636 (1970)

TEXACO, INC. v. Walter J. HICKEL, Secretary of the Interior, Appellant.

No. 23097.

United States Court of Appeals, District of Columbia Circuit.

Argued March 10, 1970.

Decided August 19, 1970.

Mr. George S. Swarth, Atty., Department of Justice, with whom Messrs. Edmund B. Clark, Attorney, Department of Justice, and Gerald D. Secundy, Attorney, Department of Justice, at the time the brief was filed, were on the brief, for appellant.

Mr. John J. Wilson, Washington, D. C., with whom Mr. William E. Rollow, Washington, D. C., was on the brief, for appellee.

Before LEVENTHAL, ROBINSON and MacKINNON,^* Circuit Judges.

LEVENTHAL, Circuit Judge:

This is an appeal from a judgment of the District Court granting Texaco's petition for a mandamus-type order to require the Secretary of the Interior to issue a permit to drill an offshore well, off the Louisiana coast. The basis of the action was that the proposed well site was within an area covered by a lease from the State of Louisiana, a lease that was maintained by a 1958 decision of the Secretary of the Interior pursuant to Section 6 of the Outer Continental Shelf Lands Act, 43 U.S.C. sec. 1335. Pursuant to a 1968 decision of the Department's Solicitor, the Secretary refused to issue the permit. The District Court's order vacated the 1968 decision of the Solicitor and directed the Secretary to issue a permit. For reasons set forth in this opinion we affirm the ruling vacating the 1968 decision of the Solicitor, but we remand in order to permit further consideration of the baseline issue within the Interior Department.

Background

On February 7, 1936, the State of Louisiana issued to Texaco's predecessors in interest State Mineral Lease No. 340 covering submerged land lying off the shore of Marsh Island and Vermilion Parish. The northern boundary of the leased land ran, with exceptions not here relevant, along the mean high water line. The southern boundary was established as:

Beginning at a point in the South shore line of Marsh Island * * *; Thence South into the marginal or maritime belt of the Gulf of Mexico * * * to the extreme limit or boundary of the domain, territory and sovereignty of the State of Louisiana.

At the time the lease was executed, Louisiana claimed a seaward boundary three leagues from land.

In 1947 the Supreme Court decided United States v. California, 332 U.S. 19, 67 S.Ct. 1658, 91 L.Ed. 1889, which held that the United States rather than the State of California owned the submerged land lying seaward of the ordinary low water mark. In 1950 the Court applied the same rule in the case of Louisiana. United States v. Louisiana, 339 U.S. 699, 70 S.Ct. 914, 94 L.Ed. 1216. One effect of this 1950 decision was to deprive Texaco of the right to conduct offshore operations under its Louisiana lease of land "to the extreme limit" of Louisiana's sovereignty.

The coastal states, their lessees, and other interested parties objected strongly to these Tidelands decisions of the Supreme Court and sought relief in Congress. In 1953 Congress responded by enacting the Submerged Lands Act¹ and the Outer Continental Shelf Lands Act.² The Submerged Lands Act provided for the extension or confirmation of State boundaries out beyond the line of ordinary low water. All coastal states were given the right to claim a boundary three miles distant from the "coast line" as defined in the Act. States bordering on the Gulf of Mexico, which had traditionally claimed seaward boundaries in excess of three miles, were granted the opportunity to prove and claim such an historical boundary, — up to a limit of three marine leagues (approximately nine miles.)³ The Outer Continental Shelf Lands Act asserted federal jurisdiction, including jurisdiction to grant mineral leases, over all submerged lands on the continental shelf seaward of the lands granted to the States by the Submerged Lands Act.

The 1953 legislation also concerned itself with the status of mineral leases which had been issued by the coastal states and which purported to grant an interest in the Submerged Land on the Outer Continental Shelf. Section 6(b) of the Outer Continental Shelf Lands Act, 43 U.S.C. § 1335(b) provides that any person holding such a lease "may continue to maintain such lease, and may conduct operations thereunder" provided that the lease meets the requirements specified in § 6(a). Section 6(a), 43 U.S.C. § 1335(a), states that § 6 is applicable to "any mineral lease covering submerged lands on the outer Continental Shelf issued by any State" if that lease meets a number of specified requirements, including the requirement that:

(2) such lease was issued prior to December 21, 1948, and would have been on June 5, 1950, in force and effect in accordance with its terms and provisions and the law of the State issuing it had the State had the authority to issue such lease.

Section 6 contemplates that application shall be made to the Secretary of the Interior for a determination that a State lease meets the requirements of § 6(a) and that applicant is therefore entitled to continue to maintain the lease.

In 1953 Texaco filed an application with the Secretary pursuant to the Outer Continental Shelf Lands Act requesting authority to maintain its State Lease No. 340 as a federal lease. This application was rejected in the first instance by the Bureau of Land Management on the ground that the State Lease did not cover submerged land on the Outer Continental Shelf. Texaco appealed to the Solicitor of the Department of the Interior through whom the Secretary exercised his § 6 validation authority. Texaco contended that its State Lease covered land 27 miles out into the Gulf from the shore and offered in support of this claim a certificate issued by the Louisiana State Mineral Board, which, Texaco argued, should be conclusive on the issue of coverage.⁴

On February 12, 1958, the Solicitor ruled that Texaco was entitled to validation as to submerged land which Louisiana thought in good faith to be its property at the time it issued the lease and which it in good faith intended to convey to the leasee. Under this standard the Solicitor found that Lease No. 340 covered submerged land three leagues out into the Gulf of Mexico from the coast line.

At the time of the 1958 validation proceeding before the Solicitor there was pending in the Supreme Court an original action brought by the State of Louisiana to establish an historical boundary of greater than three miles. In 1960 a decision was issued rejecting Louisiana's claim. United States v. States of Louisiana, Tex., 363 U.S. 1, 80 S.Ct. 961, 4 L.Ed.2d 1025. Consequently Louisiana was entitled to claim only that seaward boundary granted to all coastal states by the Submerged Lands Act, namely three miles from the coast line as therein defined.

In 1965 the Supreme Court took up the question of the meaning of the words "coast line" for purposes of the Submerged Lands Act. In United States v. California, 381 U.S. 139, 85 S.Ct. 1401, 14 L.Ed.2d 296, the Court concluded that Congress intended to allow the courts broad latitude in formulating a coast line which would demarcate inland waters from the marginal sea. The Court went on to adopt the Convention on the Territorial Sea and the Contiguous Zone⁵ as providing the definition of inland waters and thereby established the coast line for the purposes of the Submerged Lands Act to be the so-called "salient points" line.

Later in 1965 the Supreme Court issued a supplemental decree in the Louisiana boundary litigation awarding Louisiana submerged land within three miles of the salient points line. United States v. Louisiana, 382 U.S. 288, 86 S.Ct. 419, 15 L.Ed.2d 331. The concept of the salient points line will be considered further; it suffices here to say that this line is seaward of the shoreline.

On January 20, 1966, Texaco sought a permit to drill a well within three leagues of this salient points line but more than three leagues from any point on the shore.

Local officials of the Department of the Interior initially determined that Texaco's proposed well was beyond the seaward boundary of its lease. Texaco appealed this determination to the Secretary claiming that the 1958 decision of the Solicitor continuing Texaco's lease from the State of Louisiana determined that the seaward boundary of Texaco's lease was 9 miles from the coast line of Louisiana as defined in the Submerged Lands Act. On January 24, 1968, the Solicitor issued an opinion holding that the 1958 determination in fact established the seaward boundary of the continued lease to be a line 9 miles from the Chapman line, a line which, with respect to the lease here in issue, runs along the shoreline of Louisiana. The parties agree that the proposed well is more than 9 miles from this line.

On February 19, 1968, Texaco filed an action in the District Court to set aside the 1968 Solicitor opinion and to compel the issuance of a drilling permit. The District Court held that the opinion was without a reasonable basis, and ordered that a permit issue. The court noted that the continuation order which was the result of the 1958 validation proceedings defined the seaward boundary of the lease in terms of "coastline" and referred to the Submerged Lands Act for definition of this term. Turning to the Solicitor's opinion in 1958, the court found that the Solicitor intended to use the word "coastline" in conformity with the Submerged Lands Act and did not intend to fix in the validation proceeding the meaning of the Submerged Lands Act definition of "coastline." Therefore the court felt that the subsequent construction of the definition of "coast line" in the Submerged Lands Act which the Supreme Court announced in its 1965 decision, United States v. California, supra, should control.

Although we agree with the conclusion of the District Court that the action taken on January 24, 1968 in denying a drilling permit to Texaco was...