Court Opinions

 

BLM, in the early 1980’s, issued a number of oil and gas leases on National Forest lands within the Badger-Two Medicine area in Montana, in accordance with the results of the required environmental and historic-preservation reviews that had been conducted for those lands by BLM and the Forest Service.  After further environmental review, applications for permit to drill were approved on some of the leased lands.  In 1993, however, BLM, in the face of environmental and Tribal concerns that had been raised, suspended the leases to allow for additional review; and the suspensions remained in place thereafter.  Ultimately, in 2016 and early 2017, the leases were canceled by BLM altogether, on the ground that they had been improperly issued because the pre-leasing environmental and historic-preservation reviews had been deficient.  BLM’s position, as in many other cases where it has cancelled leases long after issuance on the basis of some asserted procedural deficiency occurring before the leases were issued, was that administrative cancellation in such situations was authorized under the 1963 decision of the U.S. Supreme Court in Boesche v. Udall.  Most of the Badger-Two Medicine lessees accepted the cancellations; but two of them brought suit.  In Solenex LLC v. Jewell, and Moncrief v. U.S. Department of Interior, the U.S. District Court for the District of Columbia, on September 24, 2018, ruled in favor of the two lessees.  The court declined to determine whether BLM’s cancellation authority, under the Boesche case, was as unlimited as BLM claimed, finding that, even if such authority existed, its exercise in this case was arbitrary and capricious: “Regardless of the lawfulness of the lease’s issuance thirty years ago, the agency’s rescission of the lease must still comply with the [Administrative Procedure Act].”  The court explained (with emphasis in the original), “The reasonableness of an agency’s decision to rescind a lease must be judged in light of the time that has elapsed and the resulting reliance interests at stake. . . . Federal defendants appear to argue that no time-period, however long, would prove too attenuated to reconsider the issuance of a lease under newly discovered legal theories. . . . Horsefeathers!”  Appeals of these decisions to the U.S. Court of Appeals for the District of Columbia Circuit are pending.