United States District Court, District of Columbia
Royce C. Lamberth United States District Judge
Plaintiff Continental Resources, Inc. ("plaintiff) filed suit against defendants Sally Jewell, Secretary of the United States Department of the Interior; Gregory J. Gould, Director of the Office of Natural Resource Revenue, United States Department of the Interior; James P. Morris, Supervisory Minerals Revenue Specialist, Western Audit and Compliance Management, Office of Natural Resource Revenue, United States Department of the Interior; Office of Natural Resources Revenue; and United States Department of the Interior (collectively "defendants") on January 16, 2014 challenging the "assessment of additional royalties by the Office of Natural Resources Revenue" of $1, 772, 612.07 (plus interest) against plaintiff "in connection with [plaintiff]'s extraction of natural gas pursuant to federal leases." Compl., ECF No. 1. Plaintiff filed its Amended Complaint on March 18, 2014 adding a fourth claim alleging violation of the Freedom of Information Act, 5 U.S.C. § 522. Am. Compl., ECF No. 19. Defendants filed this motion to Dismiss for Lack of Jurisdiction on May 19, 2014. Mot. Dismiss, ECF No. 20. Plaintiff filed it Memorandum in Opposition of defendants' motion to dismiss on May 19, 2014. ECF No. 21. Defendants filed their reply to plaintiffs memorandum on June 6, 2014. Reply Opp'n. Mot. Dismiss, ECF No. 24.
Plaintiff alleges that defendants incorrectly assessed royalties against plaintiff under 30 U.S.C. § 226 and brings this action under the Administrative Procedure Act, 5 U.S.C §§ 701-706, "seeking vacatur of the challenged final agency action, as well as declaratory and injunctive relief." Compl., ECF No. 1 at 2. For reasons stated in the complaint, plaintiff asserts that defendants applied the statute and regulation's provisions incorrectly in assessing royalties, resulting in assessing higher royalties than appropriate under the law. Compl., ECF No. 1 at 2-5. The intricacies of assessing royalties under 30 U.S.C. § 226, while central to the overall cause of action, are not before the Court today in determining whether to grant defendants' motion to dismiss plaintiffs first, second, and third counts pursuant to Fed.R.Civ.P. 12(b)(1) and LCvR 7. Mot. Dismiss, ECF No. 20 at 1. Now before the Court is defendants' motion, which turns instead upon application of the Administrative Procedures Act, 5 U.S.C. §§ 701-706, and the Federal Oil and Gas Royalty Management Act, 30 U.S.C. §§ 1701-1759, as amended by the Royalty Simplification and Fairness Act (hereinafter collectively, "Federal Oil and Gas Royalty Management Act").
The relevant background of this motion starts with defendant Office of Natural Resources Revenue's order to "Report and Pay Additional Royalties, " issued on May 5, 2010. Mot. Dismiss, ECF No. 20 at 2. Plaintiff appealed the order on June 10, 2010 under 30 C.F.R. § 290. Id. Defendant Director of Office of Natural Resource Revenue granted this appeal in part and rejected the remainder on April 11, 2013. Exhibit 2 of Am. Compl., ECF No. 19-2. Plaintiff appealed the Director's decision to the Interior Board of Land Appeals on May 22, 2013. Mot. Dismiss, ECF No. 20 at 2. On June 24, 2013, the Interior Board of Land Appeals, "noted that more than 33 months had passed since [plaintiff] had initiated its administrative appeal process on June 10, 2010" and therefore issued an order "to show cause why the appeal should not be dismissed in light of the 33 month deadline" in the Federal Oil and Gas Royalties Management Act and applicable regulations found at 30 U.S.C. § 1724(h) and 43 C.F.R. § 4.904. Mot. Dismiss, ECF No. 20 at 2. Plaintiff responded, stating that 33 months had passed as of June 17, 2013, depriving the Interior Board of Land Appeals of jurisdiction by operation of law. Plaintiff subsequently filed suit alleging three claims, the fourth being added in the amended complaint. Compl., ECF No. 1 and Am. Compl, ECF No. 19.
The plaintiff bears the burden of establishing that the court has subject matter jurisdiction over its claim. See Moms Against Mercury v. FDA, 483 F.2d 824 (D.C. Cir. 2007). Further, as noted generally by defendants, "[a] party bringing suit against the United States bears the burden of proving that the government has unequivocally waived its immunity." Mot. Dismiss, ECF No. 20 at 4 (citing Tri-State Hospital Supply Corp. v. U.S., 341 F.3d 571 (D.C. Cir) 2003 (citations omitted)). In addition, "[w]hen [sovereign immunity] waiver legislation contains a statute of limitations, the limitations provision constitutes a condition on the waiver of sovereign immunity." United States v. Kubrick,
444 U.S. 111 (1979). The Court further extended this, noting "although we should not construe such a time-bar provision unduly restrictively, we must be careful not to interpret it in a manner that would 'extend the waiver beyond that which Congress intended.'" Block v. North Dakota ex rel. Bd. Of University and School Lands, 461 U.S. 273, 287 (1983) (citing United States v. Kubrick,
444 U.S. 111, 117-118 (1979) (citation omitted)). In the instant case, determination of subject-matter jurisdiction depends upon the time limitation provided by the Federal Oil and Gas Royalty Management Act and specifically when the 180 day filing period provided by § 1724(j) ends.
a. Requirements Under The Administrative Procedures Act
To fully examine defendants' motion, the Court must first turn to the mechanism of plaintiffs suit, which is the Administrative Procedures Act. 5 U.S.C. §§ 701-706. The Administrative Procedures Act allows judicial review of, "[a]gency action made reviewable by statute..." except "to the extent that... statutes preclude judicial review." 5 U.S.C. §§ 704 and 701. Therefore, plaintiff would need to show a waiver of sovereign immunity and final agency action, in order for the Court to have jurisdiction. Defendants do not challenge the waiver of sovereign immunity other than for timeliness of plaintiff s claim. Nonetheless, the Court examines both.
b. Waiver of Sovereign Immunity and Timeliness Under The Federal Oil and Gas Royalty Management Act
Plaintiff relies upon the Federal Oil and Gas Royalty Management Act's waiver of sovereign immunity. 30 U.S.C. §§ 1701-1759. The Federal Oil and Gas Royalty Management Act sets the time for judicial review of an agency determination "within 180 days from receipt of notice by the lessee or its designee of final agency action." § 1724(j). The Act further discusses when failure to issue a decision may constitute final agency action at § 1724(h) where it states in pertinent part:
[i]f no such decision has been issued by the Secretary within the 33-month period referred to in paragraph (1)-...
(B) the secretary shall be deemed to have issued a final decision in favor of the Secretary, which decision shall be deemed to affirm those issues for which the agency rendered a decision prior to the end of such period, as to any monetary obligation the principal amount of which is $10, 000 or more, and the appellant shall have a right to judicial review of such deemed final decision in accordance with Title 5.
Plaintiff, however, rightly notes that the 33-month period discussed above, "may be extended by any period of time agreed upon in writing by the Secretary and the appellant." § 1724(h)(1). In order to determine whether the Federal Oil and Gas Royalty Act provides the needed waiver of sovereign immunity, the Court must determine whether suit was filed timely as required by the statutory provisions ...