California by and through Becerrav. U.S. Dep't of the Interior

381 F. Supp. 3d 1153
District Court, N.D. California·Decided March 29, 2019·No. Case No: C 17-5948 SBA·Published·Cited by 11 cases

Opinion

SAUNDRA BROWN ARMSTRONG, Senior United States District Judge

Plaintiffs State of California and the State of New Mexico (collectively "Plaintiffs") bring the instant action under the *1158Administrative Procedures Act ("APA"), 5 U.S.C. § 706, to challenge the Department of Interior's ("DOI") repeal of regulations (collectively referred to as "the Valuation Rule") that govern the payment of royalties on oil, gas and coal extracted pursuant to leases of federal and Indian lands. The Office of Natural Resources Revenue ("ONRR"), the agency within the DOI responsible for royalty collections, finalized the Valuation Rule on July 1, 2016, and specified an effective date of January 1, 2017. See Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform; Final Rule, 81 Fed. Reg. 43,338 (July 1, 2016).

The repeal process began in April 2017, when the ONRR issued a notice in the Federal Register ("Proposed Repeal") proposing to (1) repeal the Valuation Rule in its entirety and (2) reinstate a set of regulations that had been in effect for decades prior to the promulgation of the Valuation Rule ("pre-Valuation Rule regulations"). See Repeal of Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform; Proposed Repeal, 82 Fed. Reg. 16,323 (Apr. 4, 2017). On August 7, 2017, the ONRR issued its final rule repealing the Valuation Rule and reinstating the pre-Valuation Rule regulations ("Final Repeal"). See Repeal of Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform; Final Repeal, 82 Fed. Reg. 36,934 (Aug. 7, 2017).

Plaintiffs now bring the instant action against the DOI, ONRR and related parties (collectively "Federal Defendants")2 to challenge the ONRR's issuance of the Final Repeal. The crux of Plaintiffs' APA claims is that the ONRR failed to: (1) provide an adequate, reasoned explanation to justify the Final Repeal; (2) consider alternatives to a complete repeal of the Valuation Rule; and (3) comply with the APA's notice and comment requirement. The Complaint also alleges a non-APA claim based on various federal statutes.

The parties are presently before the Court on four summary judgment motions filed by Plaintiffs, Federal Defendants, Conservation Intervenors and Industry Intervenors. Having read and considered the papers filed in connection with this matter and being fully informed, summary judgment is GRANTED in favor of Plaintiffs on their APA claims. Plaintiffs' non-APA claim is DISMISSED and Federal Defendants' summary judgment motion as to said claim is DENIED as moot. The Court, in its discretion, finds this matter suitable for resolution without oral argument. See Fed. R. Civ. P. 78(b) ; N.D. Cal. Civ. L.R. 7-1(b).

I. BACKGROUND

A. FACTUAL SUMMARY

1. Statutory and Regulatory Framework

The federal government leases vast tracts of public and Indian lands to private companies for fossil-fuel exploration, development, and production. Under the Mineral Leasing Act of 1920 ("MLA"), 30 U.S.C. § 181 et seq., the government is entitled to collect royalties based on the "value of the production removed or sold from the *1159lease." 30 U.S.C. § 206(b)(1)(A) (oil and gas); 30 U.S.C.A. § 207(a) (coal) ; see Fina Oil & Chem. Co. v. Norton, 332 F.3d 672, 673 (D.C. Cir. 2003) (citing statutes). The DOI is responsible for administering the leases and issuing regulations to carry out and accomplish the purposes of the MLA. See 30 U.S.C. § 1701 ; 30 U.S.C. § 189.

Free access — add to your briefcase to read the full text and ask questions with AI

California by and through Becerrav. U.S. Dep't of the Interior, 381 F. Supp. 3d 1153 (N.D. Cal. 2019).

381 F. Supp. 3d 1153 (California by and through Becerrav. U.S. Dep't of the Interior) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related