W. Energy Alliance v. Salazar

• Decision Date: 12 March 2013
• Docket Number: No. 11–8071.,11–8071.
• Citation: 709 F.3d 1040
• Parties: WESTERN ENERGY ALLIANCE; Baseline Minerals, Inc.; Nerd Gas Company, LLC; Samson Resources Company, Plaintiffs–Appellants, Double Deuce Land and Minerals, Inc.; Wold Oil Properties, Inc.; Laramie Energy II, LLC, Plaintiffs, American Petroleum Institute, Plaintiff–Intervenor, v. Ken SALAZAR, in his official capacity as Secretary of the United States Department of the Interior; United States Department of the Interior; Bureau of Land Management; Don Simpson, in his official capacity as Bureau of Land Management, Wyoming State Director; Juan Palma, in his official capacity as Bureau of Land Management, Utah State Director; Robert Abbey, in his official capacity as Bureau of Land Management Director, Defendants–Appellees, Wyoming Outdoor Council; Wilderness Society; National Wildlife Federation; Southern Utah Wilderness Alliance; Natural Resources Defense Council, Inc.; National Audubon Society; Biodiversity Conservation Alliance; Greater Yellowstone Coalition; Center for Native Ecosystems, Defendant–Intervenors–Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

709 F.3d 1040

WESTERN ENERGY ALLIANCE; Baseline Minerals, Inc.; Nerd Gas Company, LLC; Samson Resources Company, Plaintiffs–Appellants,

Double Deuce Land and Minerals, Inc.; Wold Oil Properties, Inc.; Laramie Energy II, LLC, Plaintiffs,

American Petroleum Institute, Plaintiff–Intervenor,

v.Ken SALAZAR, in his official capacity as Secretary of the United States Department of the Interior; United States Department of the Interior; Bureau of Land Management; Don Simpson, in his official capacity as Bureau of Land Management, Wyoming State Director; Juan Palma, in his official capacity as Bureau of Land Management, Utah State Director; Robert Abbey, in his official capacity as Bureau of Land Management Director, Defendants–Appellees,Wyoming Outdoor Council; Wilderness Society; National Wildlife Federation; Southern Utah Wilderness Alliance; Natural Resources Defense Council, Inc.; National Audubon Society; Biodiversity Conservation Alliance; Greater Yellowstone Coalition; Center for Native Ecosystems, Defendant–Intervenors–Appellees.

No. 11–8071.

United States Court of Appeals,Tenth Circuit.

March 12, 2013.

Rebecca W. Watson (Kathryn Haight, Stephen A. Bain, and Nora R. Pincus with her on the briefs) of Welborn Sullivan Meck & Tooley, PC, Denver, CO, for Plaintiffs–Appellants.

Melanie R. Kay (Robin L. Cooley on the brief) of Earthjustice, Denver, CO, for Defendants–Intervenors–Appellees.

Vivian H.W. Wang, Attorney, Environment and Natural Resources Division, U.S. Department of Justice, Washington, D.C. (Robert Dreher, Acting Assistant Attorney General; and Joanna Brinkman and David C. Shilton, Attorneys, Environment and Natural Resources Division, U.S. Department of Justice, Washington, D.C., with her on the brief) for Federal Defendants–Appellees.

Before MURPHY, SEYMOUR, and HOLMES, Circuit Judges.

SEYMOUR, Circuit Judge.

This litigation concerns whether the Mineral Leasing Act (“the Act” or “MLA”), as amended by the Reform Act of 1987, requires the Secretary of the Interior (“the Secretary”) to issue leases for parcels of land to the highest bidding energy company within sixty days of payment to the Bureau of Land Management (“BLM”). Appellants (collectively “Energy Companies”) brought suit seeking to compel the Secretary to issue 118 pending leases on which they were the high bidders and more than sixty days had passed since they had paid BLM in full. The district court construed 30 U.S.C. § 226(b)(1)(A) as imposing a mandate on the Secretary to decide whether to issue such pending oil and gas leases within sixty days of payment, and ordered BLM to make such decisions regarding the still pending leases of Energy Companies within thirty days. Energy Companies appeal the district court's order and continue to assert that § 226(b)(1)(A) requires the Secretary to issue such pending leases within sixty days rather than merely make a decision on whether the leases will be issued. We hold that the district court's order was not a “final decision” for purposes of 28 U.S.C. § 1291. Accordingly, under the administrative-remand rule we lack jurisdiction and DISMISS the appeal.

I.STATUTORY AND REGULATORY BACKGROUND

The MLA and accompanying regulations establish the procedures for development of oil and gas deposits on federal land.¹ The Secretary has authority under the Act to lease all federal lands “which are known or believed to contain oil or gas deposits.” 30 U.S.C. § 226(a). BLM state offices administer these leases through lease sales. The lease sales at issue in this case are competitive lease sales, where entities bid at an auction and the highest bidder wins the ability to lease parcels for oil and gas development. Id. § 226(b)(1)(A) (“The Secretary shall accept the highest bid from a responsible qualified bidder which is equal to or greater than the national minimum acceptable bid....”). Parcels that will be auctioned are identified by the BLM in a public Notice of Competitive Lease Sale (“Sale Notice”).

Prior to issuing a Sale Notice, parcels are reviewed by BLM field offices to determine conformance with the applicable Resource Management Plan (“RMP”). RMPs are area-wide land use plans that specify which areas will be considered for oil and gas development and what conditions will be placed on such development. If the lands are determined to be available for oil and gas development under the applicable RMP, the BLM field office conducts an interdisciplinary team review of the parcels, focusing on conflicts with wildlife, habitat, wilderness, land characteristics, planning and other resource values. The interdisciplinary team also evaluates whether new and significant information has emerged since the RMP was adopted that would require further analysis of the environmental impact of oil and gas development on the parcels under the National Environmental Policy Act (“NEPA”), 42 U.S.C. § 4321 et seq., or whether a determination of NEPA adequacy can be issued. If the NEPA analysis is determined to no longer be valid, the BLM field office will perform an environmental assessment before the lease sale. These pre-leasing review processes can result in parcel rejections, deferrals, and/or stipulations being placed on the leases. See43 C.F.R. § 3101.1–3 (“The authorized officer may require stipulations as conditions of lease issuance.”).

After these review procedures have been completed, BLM identifies eligible parcels in a Sale Notice, which must be published at least forty-five days before the lease sale takes place. The process of publishing the notice includes a public protest period during which individuals and organizations may file a protest against the inclusion of any or all parcels in the Sale Notice. It is not unusual for BLM to receive protests very close to the date of the sale. If BLM decides to include a protested parcel in the sale, the pending protests are announced at the beginning of the oral auction.

The Sale Notice informs prospective bidders that parcels which are auctioned subject to protest can have further stipulations added to them after the auction, or be withdrawn altogether by BLM. Fed.App. 61 (Notice of Competitive Oil and Gas Lease Sale, August 3, 2010). The high bidder must pay the bid amount to the BLM if it chooses to go forward despite a pending protest. The Sale Notice and the BLM manual also state that protests “must be resolved before issuance of the involved lease.” Id. (emphasis in original); Fed.App. 123 (BLM manual). According to the Sale Notice, BLM “will make every effort to decide the protest within 60 days after the sale.” Fed App. 61 (Notice of Competitive Oil and Gas Lease Sale, August 3, 2010). Due to the complexity, numerosity and timing of the protests, however, many leases that are subject to pending protests are not issued within sixty days of payment. ² If a protested parcel is subsequently withdrawn from leasing, the high bidder is refunded all of the payments it has made to BLM for that parcel. If new stipulations are added to the lease as a result of the protest, the high bidder is given the opportunityto accept the modified lease or reject it and receive a refund. Id.

Before the MLA was amended by the Federal Onshore Oil and Gas Leasing Reform Act of 1987 (“Reform Act”),³ it was well established that the Secretary had extremely broad discretion and was not obligated to issue any lease on public lands. See Udall v. Tallman, 380 U.S. 1, 4, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965) (even though the MLA “directed that if a lease were issued on such a tract, it had to be issued to the first qualified applicant, it left the Secretary discretion to refuse to issue any lease at all on a 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 to issue or reject lease applications within a certain time limit.” Id. at 670. Similarly, in McDonald v. Clark, 771 F.2d 460 (10th Cir.1985), we concluded that the Secretary had the discretion to withdraw a lease from the non-competitive leasing process even after he had determined the first qualified applicant. Id. at 463. We held that until the Secretary actually acts to issue the lease, the applicant has only a “hope or ... expectation of a lease” and not a vested right. Id.

The MLA, as amended by the Reform Act of 1987, continues to vest the Secretary with considerable discretion to determine which lands will be leased. Under 30 U.S.C. § 226(a), “[a]ll lands subject to disposition under this chapter which are known or believed to contain oil or gas deposits may be leased by the Secretary,” (emphasis added) and the Secretary still retains the authority to determine which lands are “to be leased” under § 226(b)(1)(A). The Reform Act did, however, change the federal onshore leasing process in several respects, including shifting the majority of leases previously offered through a non-competitive bidding process to a competitive bidding process (which explains why virtually all of our pre-Reform Act cases arose in the context of non-competitive bidding). The Reform Act also added the sentence that is at issue in the instant litigation, inserting the requirement that in the competitive bidding context, “[l]eases shall be issued within sixty days following payment by the successful bidder of the remainder of the bonus bid, if any, and the annual rental for the first lease year.” 30 U.S.C. § 226(b)(1)(A).

II.FACTUAL AND PROCEDURAL BACKGROUND

Energy Companies were the highest qualified bidders on 118 oil and gas leases at ten competitive lease sales held by BLM between 2005 and 2010. In accordance with 30 U.S.C. § 226(b)(1)(A), they paid BLM a bonus bid, one year's rent, and administrative fees for the leases on which they were high bidders. BLM collected a total of $2,017,144.50 for the...