Marathon Oil Co. v. United States

56 Fed. Cl. 768, 56 ERC (BNA) 2161, 2003 U.S. Claims LEXIS 153, 2003 WL 21488172
CourtUnited States Court of Federal Claims
DecidedJune 19, 2003
DocketNo. 02-102C
StatusPublished
Cited by2 cases

This text of 56 Fed. Cl. 768 (Marathon Oil Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Marathon Oil Co. v. United States, 56 Fed. Cl. 768, 56 ERC (BNA) 2161, 2003 U.S. Claims LEXIS 153, 2003 WL 21488172 (uscfc 2003).

Opinion

OPINION

MEROW, Senior Judge.

This is a claim for post-judgment interest. The plaintiffs seek interest of approximately $1.446 million each on a judgment against the United States in the U.S. Court of Appeals for the Federal Circuit, computed from December 28, 2000, the date judgment was entered, to May 1, 2001, the date plaintiffs received payment of their awards. Plaintiffs assert that they are entitled to recover interest on the Federal Circuit’s judgment under 28 U.S.C. § 1961(c)(2), which allows interest on “final judgments” by that court. Defendant moves to dismiss the complaint on the ground that the Court of Federal Claims lacks jurisdiction to entertain this action. In particular, defendant asserts that the United States has not waived its sovereign immunity to the plaintiffs’ suit for post-judgment inter[769]*769est. The court determines that it does have jurisdiction of the case under the Tucker Act because the plaintiffs’ action constitutes a claim for money against the United States “founded ____ upon ____ [an] Act of Congress.” 28 U.S.C. § 1491(a). But the court agrees with defendant that the claim is mer-itless because the act in question, 28 U.S.C. § 1961(e)(2), does not waive the government’s sovereign immunity to post-judgment interest on the judgment at issue here.

FACTUAL AND PROCEDURAL BACKGROUND

This case has its genesis in contracts that the plaintiffs, Marathon Oil Company (“Marathon”) and Mobil Oil Exploration and Producing Southeast, Inc. (“Mobil”), entered into with the United States more than twenty years ago to explore and develop oil and gas leases on the outer continental shelf off the coast of North Carolina. The United States has jurisdiction, control, and power of disposition over submerged lands on the outer continental shelf that extend beyond state-owned submerged lands. See 43 U.S.C. §§ 1301 et seq. Under the Outer Continental Shelf Lands Act (“OCSLA”) the Secretary of the Interior is empowered to sell leases that “entitle the lessee to explore, develop, and produce the oil and gas contained within the leased area, conditioned upon” various applicable requirements. 43 U.S.C. § 1337(b). In 1981, pursuant to OCSLA, Marathon and Mobil paid more than $78 million apiece to the United States for oil and gas leases in five tracts off the coast of North Carolina.

In 1990 the federal government enacted the Outer Banks Protection Act (“OBPA”), P.L. No. 101-380, § 6003,104 Stat. 484, 555-58 (Aug. 18, 1990), which substantially altered the statutory scheme for issuance of the permits required to explore and develop the tracts. The effect of the OBPA was to impair the plaintiffs’ rights under their lease contracts. In 1992 Marathon and Mobil joined a lawsuit in the Court of Federal Claims filed by other companies with oil and gas leases similarly impaired by the OBPA. The complaints alleged that the United States had breached the lease agreements and demanded restitution of the amounts the plaintiffs paid for the leases in 1981. In April 1996 the court found the United States liable for breach of its lease contracts. See Conoco, Inc. et al. v. United States, 35 Fed. Cl. 309, 336 (Fed.Cl.1996). After a series of subsequent proceedings the court issued separate orders on July 18, 1997 (filed on July 24, 1997) directing the entry of judgment in favor of Marathon in the amount of $78,242,368.59 and partial judgment in favor of Mobil in the amount of $78,257,565.00.

The United States appealed the Court of Federal Claims judgments to the Federal Circuit, which reversed on May 13, 1999. See Marathon Oil Co. v. United States, 177 F.3d 1331, 1340 (Fed.Cir.1999). The Court of Federal Claims thereupon vacated its judgments on May 28, 1999, and entered a new judgment in favor of defendant on June 1, 1999. The plaintiffs appealed the Federal Circuit decision to the Supreme Court, which granted a writ of certiorari and, in a ruling issued on June 26, 2000, reversed the Federal Circuit and remanded the case for further proceedings. See Mobil Oil Exploration & Producing Southeast, Inc. v. United States, 530 U.S. 604, 624, 120 S.Ct. 2423, 147 L.Ed.2d 528 (2000). The Supreme Court held that “the government broke its promise; it repudiated the contracts; and it must give the companies their money back.” Id. at 607,120 S.Ct. 2423.

On remand the Federal Circuit issued a new opinion on December 28, 2000, in which it rejected the government’s argument that the plaintiffs’ awards should be reduced by the decreased value of the leases at the time of breach1 and affirmed the prior judgments [770]*770of the Court of Federal Claims from July-1997. See Marathon Oil Co. v. United States, 236 F.3d 1313 (Fed.Cir.2000). The United States filed a petition for rehearing by the Federal Circuit panel. By order dated February 16, 2001, the Federal Circuit denied the petition for rehearing and stated that the court’s mandate would issue on February 23, 2001.

On February 27, 2001, the Court of Federal Claims ordered that its judgments for the plaintiffs from July 1997 be reinstated, effective as of their original dates, awarding $78,242,368.59 to Marathon and $78,257,565.00 to Mobil. The clerk of court entered judgment on February 28, 2001. The plaintiffs then wrote letters to the Judgment Fund Group, Department of the Treasury (“Treasury”), on March 2, 2001 (Marathon) and March 16, 2001 (Mobil) requesting payment of their awards. The letters were submitted to Treasury by plaintiffs’ counsel in separate cover letters dated March 2, 2001, and March 19, 2001, respectively, along with the original transcripts of the judgments. Neither plaintiff requested in its letter to Treasury that interest be paid on its award. Nor did plaintiffs’ counsel make any such request. On March 28, 2001, the Department of Justice (“DoJ”) sent a letter to Treasury enclosing the two final judgments of the Court of Federal Claims and stating that no further judicial review would be sought. DoJ requested that the awards be certified and paid, without interest, from the Judgment Fund established by 31 U.S.C. § 1304. Marathon and Mobil received payment of their awards on May 1,2001.

On June 8, 2001, the plaintiffs submitted another letter to the Judgment Fund Group, Department of the Treasury, demanding payment of post-judgment interest at the rate specified in 28 U.S.C. § 1961(a), computed daily from December 28, 2000, the date of the Federal Circuit’s judgment on remand from the Supreme Court, to May 1, 2001, the date of payment. According to plaintiffs, 28 U.S.C.

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56 Fed. Cl. 768, 56 ERC (BNA) 2161, 2003 U.S. Claims LEXIS 153, 2003 WL 21488172, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marathon-oil-co-v-united-states-uscfc-2003.