In a split ruling, a Tenth Circuit Court of Appeals panel has upheld the dismissal of energy companies’ claims relating to oil and gas leases that the Bureau of Land Management (BLM) awarded in late 2008 and then repudiated in early 2009 Impact Energy Res., LLC v. Salazar, Nos. 11-4043, -4057 (10th Circuit, 9/5/2012).

After bids for oil and gas leases in Utah were solicited and opened in late 2008, at the end of the Bush administration, BLM awarded leases to the highest bidders, including the plaintiff energy companies. Environmental groups protested the auctions, and, when BLM accepted payment from the winning bidders, it stated “the express caveat that the leases could not actually be issued until all protests were resolved.” On February 4, 2009, newly appointed Secretary of the Interior Ken Salazar held a press conference announcing that the properties would not be leased. On February 6, Salazar signed a memorandum to BLM’s Utah director reiterating his decision not to lease the parcels. Neither the Interior Department nor BLM immediately made the February 6 memorandum public. On February 12, BLM issued letters to the winning bidders reiterating the decision not to lease the parcels.

The plaintiffs sought to appeal the lease withdrawals to the Interior Board of Land Appeals, but that board determined that it lacked jurisdiction because the decision was approved by the secretary; it dismissed the action on April 9. In its briefing, BLM took the position that the decision was final on February 6, 2009, and the board’s decision recognized confusion as to the date of final action on the withdrawal, but declined to issue an advisory opinion on the issue.

On May 13, plaintiffs brought suit in the U.S. District Court for the District of Utah under the Administrative Procedure Act (APA) and Mineral Leasing Act (MLA). The district court dismissed the action as time barred under the MLA, which requires actions contesting a decision of the secretary involving an oil and gas lease to be commenced “within ninety days after the final decision of the Secretary relating to such matter.” Plaintiffs appealed to the Tenth Circuit.

The appellate panel majority agreed that the action was time barred and should have been brought within 90 days of the February 6, 2009, Salazar memorandum, although each analyzed the issue slightly differently. One judge held that the term “decision of the secretary” was equivalent to the “final agency action” that triggers the APA’s limitations period and that the memorandum constituted both the decision and the final agency action. A concurring judge reasoned that the phrase “decision of the Secretary” was independent of final agency action and that the February 6 memorandum constituted the decision, thus triggering the 90-day limitation period even if the plaintiffs had no notice of that decision. The majority also rejected the plaintiffs’ claim that equitable tolling should apply to extend the deadline for filing their action, reasoning that the plaintiffs had adequate notice of the decision, with more than 30 days to prepare and file a lawsuit, and also had notice that the government viewed February 6 as the date of the decision.