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AMOCO PROD. CO. v. FRY

December 8, 1995

AMOCO PRODUCTION CO., et al., Plaintiffs,
v.
THOMAS A. FRY, et al., Defendants.



The opinion of the court was delivered by: LAMBERTH

 This matter comes before the court on plaintiffs motion to alter or amend this court's October 12, 1995, memorandum opinion and accompanying order granting defendants' motion for summary judgment. See Amoco Production Co. v. Fry, 904 F. Supp. 3, 1995 U.S. Dist. LEXIS 16112, 1996 WL 617227 (D.D.C. 1995). The culmination of several years of litigation, this court's opinion finally resolved a myriad of constitutional and statutory claims that plaintiffs, major oil and gas corporations, raised in an effort to prevent the defendants, primarily the Mineral Management Service ("MMS"), from withholding overpaid royalty payments on various mineral leases.

 Ultimately, this court refused to force the government of the United States to allow the plaintiffs to take credits on overpaid lease royalties while these same plaintiffs refused to pay prior debts on some of the same and other leases administered by the MMS. Plaintiffs persist in complaining that the MMS has acted contrary to their statutory, common law, and constitutional rights, and they now ask the court to alter or amend it previous opinion by either granting their motion for summary judgment or at least denying the defendants' motion. Plaintiffs' latest volley of legal arguments fail now, as they did before, to convince this court that plaintiffs are entitled to an immediate return of their overpaid royalties. Accordingly, the court shall deny plaintiffs' motion to alter or amend the judgment in all respects except that, for the reasons discussed below, the court will vacate the judgment as moot with respect to one of the plaintiffs, Mobil Exploration & Producing U.S., Inc. ("MEPUS").

 I.

 BACKGROUND

 In its opinion dated October 12, 1995, this court granted defendants' motion for summary judgment, finding that the defendants are entitled to withhold plaintiffs' overpaid lease royalties for possible offset of prior underpaid royalties on leases owed by the plaintiffs to the defendants. Plaintiffs, major oil companies who pay monthly mineral royalties to the federal government under oil and gas leases, brought this suit against the administrators of the leases, the MMS, when it began withholding excess royalties paid by the plaintiffs because of underpaid royalties from previous years on some of the same and other leases. The MMS intends to use these credits to offset the prior debts in the event that a direct collection action is time-barred. All of the plaintiffs have raised the statute of limitations as a defense to the MMS' collection of the prior, unpaid royalties in various suits filed across the country; some plaintiffs also challenge the merits of the MMS' claims. In this action, plaintiffs raised a variety of statutory, common law, and constitutional claims that they believed entitled them to take an immediate credit on the overpayment in spite of the alleged prior debts.

 Rejecting their arguments, the court found that the MMS could withhold the credits on overpaid royalties pending the outcome of the numerous legal challenges raised by each plaintiff to the payment of the prior debts.

 In its opinion, the court specifically found that the Outer Continental Shelf Lands Act, 43 U.S.C.A. § 1331-56 (1986 & West Supp. 1995), the statute under which the MMS administers the Outer Continental Shelf (offshore) leases, does not force the MMS to allow the plaintiffs to take an immediate credit on royalty overpayment. Next, the court found that neither the Debt Collection Act, 31 U.S.C.A. § 3716 (1983), nor common law offset principles prevented the MMS from withholding the credits. Finally, the court found that plaintiffs did not have a sufficient property interest in the withheld royalty overpayment to invoke the protection of the due process clause. In light of these findings, the court granted the defendants' motion for summary judgment, thereby allowing the MMS to withhold the royalty credits for potential offset of the prior debts.

 Plaintiffs have now moved for reconsideration of the court's prior opinion. First, plaintiffs MEPUS and Marathon Oil Company ("Marathon") ask the court to vacate its judgment as it pertains to them on the grounds that their claims became moot before the court entered its judgment. Second, the remaining plaintiffs ask the court to alter its judgment by entering summary judgment in their favor.

 III.

 ANALYSIS

 Plaintiffs ask the court to reconsider several aspects of its October 12, 1995, opinion and order. The court shall now explore each basis for plaintiffs' motion and conclude, with the exception of vacating the judgment with respect to MEPUS, that plaintiffs have failed to show any clear errors of law that would warrant altering the court's previous decision.

 A. The Legal Standard:

 The court treats plaintiffs' request to alter or amend the judgment as a motion under Rule 59(e) of the Federal Rules of Civil Procedure. A Rule 59(e) motion to reconsider is not simply an opportunity to reargue facts and theories upon which a court has already ruled. The motion "'must address new evidence or errors of law or fact and cannot merely reargue previous factual and legal assertions." Assassination Archives and Research Center v. United States Dept. of Justice, 828 F. Supp. 100, 102 (D.D.C. 1993) (quoting Mississippi Ass'n of Coops. v. Farmers Home Admin., 139 F.R.D. 542, 546 (D.D.C. 1991)). A court will grant a motion to reconsider only if the moving party can present new facts or clear errors of law that "compel" a change in the court's prior ruling. Natural Resources Defense Council, Inc. v. United States Envtl. Protection Agency, 705 F. Supp. 698, 702 (D.D.C. 1989); see also National Trust for Historic Preservation v. Department of State, 834 F. Supp. 453, 455 (D.D.C. 1993), aff'd in part. rev'd in part sub nom. Sheridan Kalorama Historical Ass'n v. Christopher, 311 U.S. App. D.C. 16, 49 F.3d 750 (D.C. Cir. 1995).

 B. Plaintiffs' Claims of Mootness:

 Plaintiffs MEPUS and Marathon ask the court to vacate its October 12, 1995, judgment as it pertains to them and dismiss their complaints as moot. As the discussion below explains, the court also treats this request as a motion under Rule 59(e), and it shall grant MEPUS's request because a settlement reached between the MMS and MEPUS prior to the court's entry of judgment mooted MEPUS's claims. However, the court shall deny Marathon's request because the court finds that its claim remains live and ripe for decision.

 The court treats MEPUS' and Marathon's request as a motion to alter or amend the judgment under Federal Rule of Civil Procedure 59(e). Plaintiffs argue that the court's inquiry is guided by the line of cases stemming from the Supreme Court case of United States v. Munsingwear, Inc., 340 U.S. 36, 95 L. Ed. 36, 71 S. Ct. 104 (1950). This reliance on the Munsingwear line of cases is misplaced; these cases address the situation where a case becomes moot following the entry of judgment by the district court but while the appeal is pending before the court of appeals or the Supreme Court. To the contrary, in this case, MEPUS and Marathon argue that their claims were mooted before the district court entered its judgment. Because this allegation implicates the court's jurisdiction to have entered the judgment, the request is best analyzed under Rule 59(e).

 A discussion of the latest Supreme Court case addressing the Munsingwear issue illustrates its inapplicability to MEPUS' and Marathon's request. In United States Bancorp Mortgage Co. v. Bonner Mall Partnership, the Supreme Court addressed the question of "whether appellate courts in the federal system should vacate civil judgments of subordinate courts in cases that are settled after appeal is filed or certiorari sought." 513 U.S. 18, 115 S. Ct. 386, 388, 389, 130 L. Ed. 2d 233 (1994) [hereinafter Bancorp]. Following the district court's reversal of the bankruptcy court, petitioner Bancorp appealed to the Ninth Circuit. Bancorp then petitioned the Supreme Court for a writ of certiorari after the Ninth Circuit affirmed the district court. Once the Supreme Court had granted the writ and the case had been briefed, the parties settled. Bancorp then asked the Supreme Court to vacate the judgment of the court of appeals under 28 U.S.C.A. § 2106 (1994). *fn1"

 The Supreme Court's analysis in the Bancorp case does not apply to a claim of mootness prior to a district court's entry of judgment. Whether Bancorp attempted to avoid the adverse judgment of the lower courts by settling the case on appeal was the key issue in Bancorp. Indeed the Court specifically distinguished between settlements reached before a district court enters its judgment and settlements that occur while the case is on appeal. The court found that to allow vacatur pending appeal would actually deter settlement at the earlier stage. Id. at 393. In this case, the actions that allegedly mooted MEPUS' and Marathon's claims occurred prior to this court's entry of judgment. Both MEPUS and Marathon argue that if they had timely notified the court of their respective change in circumstances, the court would never have entered judgment against them. This inquiry differs in kind from questioning whether a party seeks to avoid an adverse judgment by taking actions following that judgment. *fn2"

 Moreover, the Bancorp opinion held that absent extraordinary circumstances, a settlement while an appeal is pending does not entitle the parties to a vacatur of the lower court's decision. The court found, in part, that by settling, the party that lost in the lower court voluntarily forfeits its right to the legal remedy of an appeal. Id. at 392. The Court found that in so doing, the party also surrenders its right to the legal remedy of vacatur. Id. This rationale is also inapplicable to this case. Here, the question for the court is whether at the time it entered judgment, a live controversy existed that would entitle the court to render a judgment on the parties' claims. MEPUS and Marathon, while they are certainly attempting to avoid an adverse judgment, premise their claim upon events occurring before the court entered its judgment.

 With the proper inquiry established, the court now turns to both MEPUS and Marathon's request ...


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