Gulf Oil Corporation v. The Honorable Rogers C. B. Morton, Secretary of the Interior of the United States of America

493 F.2d 141
CourtCourt of Appeals for the Ninth Circuit
DecidedMarch 25, 1974
Docket72-2449
StatusPublished
Cited by30 cases

This text of 493 F.2d 141 (Gulf Oil Corporation v. The Honorable Rogers C. B. Morton, Secretary of the Interior of the United States of America) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gulf Oil Corporation v. The Honorable Rogers C. B. Morton, Secretary of the Interior of the United States of America, 493 F.2d 141 (9th Cir. 1974).

Opinions

[143]*143OPINION

DUNIWAY, Circuit Judge:

This is an appeal by the Secretary of the Interior and subordinate federal officials from a judgment (1) setting aside the Secretary’s orders suspending drilling operations on eleven oil and gas leases in the Santa Barbara Channel, (2) directing the Secretary to forthwith grant all pending applications for drilling permits, and (3) extending the initial term of these leases for 32 months to enable the lessees to exercise their rights under these leases.

We reverse.

1. The Facts

The relevant facts have been stipulated to by the parties. Plaintiffs are the holders of eleven oil and gas leases covering areas of the outer continental shelf in the Santa Barbara Channel, granted in 1968 pursuant to the terms of the Outer Continental Shelf Lands Act, 67 Stat. 462 (Aug. 7, 1953), 43 U.S.C. §§ 1331-1343 (OCS Act). They have paid some $153,000,000 for these leases. In January, 1969, a well being drilled by Union Oil Company under another lease, not one here involved, blew out, causing the massive Santa Barabara oil spill. Shortly thereafter, the Secretary suspended all operations on certain leases in the Channel. This order was complied with, although the companies took an unsuccessful administrative appeal, and the leases were extended for the period of the suspension. In April, 1971, before plaintiffs had begun drilling under the leases here in question, they were again ordered to suspend operations. They were informed that this suspension was to continue until January, 1973, that the lease terms would be extended for an appropriate period of time, and that no royalties would be due from them during the suspension. On appeal, the Secretary sustained the suspension, stating that it was for the purpose of permitting Congress to consider proposed legislation to terminate the leases, and that the action was taken “in the interest of conservation.” His decision incorporated a statement by the Acting Director of the United States Geological Survey which identified three environmental risks which would be involved in continuing operations under the leases: the possibility of another blowout; the possibility that wells would be improperly plugged should the legislation pass and abandonment become necessary; the possibility that geologic structures such as the one which contributed to the 1969 spill would be encountered and fractured, thus causing large quantities of oil and gas to escape. The statement emphasized that none of these risks was acute and that, if the development and extraction of oil were contemplated under these leases, the risks would be acceptable. However, it also concluded that the risks were unacceptable in light of the fact that the leases might be terminated in the near future.

The plaintiffs then filed this action, requesting that the suspensions be declared invalid and revoked, that the Secretary be ordered to issue drilling permits for the leases, and that the leases be extended to compensate for the loss of drilling time. The district court entered judgment in their favor, stating:

“This Court considers that the only suspension orders which can be issued by the Secretary are those provided for by Section 12 of the Act [dealing with suspension during time of war and for defense purposes] or those providing for the suspension of actual operations when requested by the lessee or when necessary to prevent waste or damage to person or property.” 345 F.Supp. at 685, 688-689.

2. The Standard of Review

It is clear that this action, one for relief in the nature of mandamus, is “review of agency action” and so subject to the Administrative Procedure Act, 5 U.S.C. § 703. The Secretary’s action is what has been called “informal” agency action, i. e., administrative action which may be taken without formal hearings [144]*144or other opportunity for public participation. See Note, The Supreme Court, 1970 Term, 85 Harv.L.Rev. 3, 316 n. 10 (1971). Cf. Citizens to Preserve Overton Park v. Volpe, 1971, 401 U.S. 402, 413-417, 91 S.Ct. 814, 28 L.Ed.2d 136.

The six standards of review are established by the Administrative Procedure Act, 5 U.S.C. § 706(2):

“The reviewing court shall—
(2) hold unlawful and set aside agency action, findings, and conclusions found to be—
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.”

Subsections .(E) and (F) obviously have no relevance to this case. The plaintiffs allege no procedural defects in the decision-making process, and contend that their constitutional rights have been violated only in the unlikely event that the suspension order is upheld but the extension of the lease terms is not. The regulations expressly provide for the extension of the lease terms in the event of suspension, 43 C.F.R. § 3305a.4, and nothing in the OCS Act prohibits it. Thus, the Secretary’s action in suspending operations under the leases can be found invalid only if it was unauthorized, 5 U.S.C. § 706(2) (C), or if it was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2) (A).

3. Suspension in the Interest of Conservation is Authorized by Statute

The Supreme Court has held that review under section 706(2)(C) requires an inquiry which delineates the range of choices available to the administrative official, and which makes “a determination of whether on the facts the [official’s] decision can reasonably be said to be within that range.” Citizens to Preserve Overton Park, supra, 401 U.S. at 416, 91 S.Ct. 823.

We first consider the range of choices available to the Secretary. With respect to this question, a careful reading of the statutes leads us to the conclusion that Congress authorized the Secretary to suspend operations under existing leases whenever he determines that the risk to the marine environment outweighs the immediate national interest in exploring and drilling for oil and gas.

Section 5(a)(1) of the Act, 43 U.S.C. § 1334(a)(1), provides:

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

Related

Century Exploration New Orleans, LLC v. United States
745 F.3d 1168 (Federal Circuit, 2014)
Tefel v. Reno
972 F. Supp. 623 (S.D. Florida, 1997)
Conoco Inc. v. United States
35 Fed. Cl. 309 (Federal Claims, 1996)
Clark Oil Producing Co. v. Hodel
667 F. Supp. 281 (E.D. Louisiana, 1987)
Getty Oil Co. v. Clark
614 F. Supp. 904 (D. Wyoming, 1985)
Forelaws on Board v. Johnson
743 F.2d 677 (Ninth Circuit, 1984)
Jicarilla Apache Tribe v. Andrus
687 F.2d 1324 (Tenth Circuit, 1982)
National Audubon Society, Inc. v. Watt
678 F.2d 299 (D.C. Circuit, 1982)
Jicarilla Apache Tribe v. Andrus
546 F. Supp. 569 (D. New Mexico, 1980)
Copper Valley MacHine Works, Inc. v. Andrus
474 F. Supp. 189 (District of Columbia, 1979)
Pauley Petroleum Inc. v. United States
591 F.2d 1308 (Court of Claims, 1979)
Get Oil Out! Inc. v. Exxon Corp.
586 F.2d 726 (Ninth Circuit, 1978)
State of Alaska v. Cecil D. Andrus
580 F.2d 465 (D.C. Circuit, 1978)
Sun Oil Co. v. United States
572 F.2d 786 (Court of Claims, 1978)
County of Trinity v. Andrus
438 F. Supp. 1368 (E.D. California, 1977)
County of Suffolk v. Secretary of Interior
562 F.2d 1368 (Second Circuit, 1977)

Cite This Page — Counsel Stack

Bluebook (online)
493 F.2d 141, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gulf-oil-corporation-v-the-honorable-rogers-c-b-morton-secretary-of-the-ca9-1974.