A Court-Side Seat: A Drill Bit, Bridled Power, Elephants in the Room and the Resolution of a Fossil Feud

Pillsbury - Gravel2Gavel Construction & Real Estate Law

Several interesting decisions were released by the U.S. Court of Appeals for the DC Circuit on June 16, 2020.

Solenex LLC v. Bernhardt, Secretary of the Interior
This is an oil lease case involving land located in a region of “unique cultural and environmental significance.” The original lease by the Department of the Interior’s Bureau of Land Management was issued in 1982. Thirty-four years later, it was cancelled by the Department. In the intervening years, the lease was assigned to other parties, but for one reason or another, the lessee never received a drilling permit. Environmental studies were prepared, but a major issue was a concern with the historic and religious values the Indian tribes cherished. In 2013 and after considerable back and forth at the agency, Solenex, the latest lessee, filed a lawsuit claiming that the Department had unreasonably delayed the granting of a drilling permit. When the Department cancelled the lease in 2016 for environmental reasons, Solenex challenged this action in the U.S. District Court of the District of Columbia, which granted summary judgment to the plaintiff. The lower court held that this delay was so unreasonable that it violated the Administrative Procedure Act (APA). However, the DC Circuit has now reversed the lower court, holding that the record and circuit precedent did not support the ruling of the lower courts. Delay alone is not enough to strip an agency of its ability to act nor does it justify setting aside an agency action, and the court was also not persuaded that the plaintiff’s “reliance interests” were significant.

Friends of Animals v. Bernhardt
This case involved the Fish and Wildlife Service’s shifting rules and policies regarding the importation of sport-hunted animal trophies—in this instance, African elephants. The importation of trophies has been permitted if the case was made that the hunting of these animals served a useful purpose. In 2014 and 2015, the Service made elephant “findings” that would countenance the importation of these trophies. However, the DC Circuit held, in another case, that such findings were invalid because the notice and comment provisions of the APA were not observed. (Along the way, one court observed that the Endangered Species Act does not require the Secretary to engage in a notice and comment proceeding before making such determinations). Consequently, these practices and procedures have terminated, but the plaintiff wanted a ruling that future actions must observe the APA and that the withdrawn actions were also subject to the APA. The court viewed the matter as now moot and did not provide further relief.

Meerck & Co. v. US Department of Health and Human Services.
In an administrative law case involving the Department’s new rule that would require drug manufacturers to disclose in their advertisement the wholesale costs of new drugs for which payment is available under Medicare and Medicaid, both the lower court and the DC Circuit held that the cited provisions of the Social Security Act (42 USC Section 1302 and Section 1395) did not authorize the Department to do any more than manage the system. These provisions did not allow the Department to regulate “market actors,” and it does not enjoy “unbridled power” to regulate in this manner.

May Murray v. BEJ Minerals, LLC
Finally, a noteworthy ruing was made by an en banc panel of the U.S. Court of Appeals for the Ninth Circuit on June 17, 2020. The dispute involves the ownership of dinosaur fossils found in Montana several years ago. Do these very valuable fossils belong to the surface owner, or the owner of the mineral estate beneath the surface. The Supreme Court of Montana, responding to a certified question, advised the Ninth Circuit that under Montana law, the dinosaur fossils are not “minerals” and thus belong to the surface owner.

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