Griffin & Griffin Exploration, LLC v. United States, 116 Fed. Cl. 163

This case is in the United States Court of Federal Claims (No. 10-638L).
Plaintiffs Griffin & Griffin Exploration, LLC; Robert L. Smith & Associates, Inc.; and Robert L. Smith allege breach of contract and seek damages from the United States for two oil and gas leases (Griffin leases) canceled by BLM after Bayou Petroleum’s prior valid lease was found to encumber the lands.
BLM canceled Griffin leases under 43 C.F.R. § 3108.3(d) after the Interior Board of Land Appeals found Griffin leases void ab initio because Bayou’s lease remained in effect.
IBLA affirmed BLM’s cancellation, holding Bayou’s lease valid at the time Griffin leases were issued and that Griffin leases conveyed no valid leasehold interest.
Plaintiffs filed suit in 2010; government moved to dismiss or for summary judgment on liability and damages; the court treated the 12(b)(1)/(6) challenges as summary-judgment motions.
The court holds jurisdiction, grants in part and denies in part summary judgment on liability, and defers damages assessment, scheduling further briefing on damages.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Court has subject-matter jurisdiction over the contract claim.	Griffin asserts Tucker Act jurisdiction to recover contract damages.	Government contends IBLA deems leases void; reviewing that finding is beyond this Court's scope.	Jurisdiction exists; Court may adjudicate contract claim notwithstanding IBLA rulings.
Whether the Griffin leases were valid contracts.	Leases were valid contracts with a binding obligation.	IBLA found leases void ab initio due to Bayou’s encumbrance.	Griffin leases were valid contracts despite IBLA’s void-ab-initio ruling as to conveyance.
Whether BLM breached by failing to convey a valid leasehold interest.	BLM promised a valid leasehold and failed to convey it.	No breach if leases were void; no obligation to convey a void interest.	BLM breached by failing to convey a valid leasehold interest.
Whether cancellation of the Griffin leases was a breach.	Cancellation without lawful basis breached the contract.	Cancellation was authorized by 43 C.F.R. § 3108.3(d) and Board rulings.	Cancellation was not a breach of contract.
What is the proper damages measure for a contract breach here.	Recover expectation/reliance/restoration as appropriate.	Damages should be limited to restitution if leases were invalid.	Damages will be determined with a flexible consideration of expectation, reliance, and restitution; damages issues to be briefed.

United States v. Mitchell, 463 U.S. 206 (U.S. 1983) (Tucker Act; sovereign immunity waiver for contract damages)
Jan's Helicopter Serv., Inc. v. Fed. Aviation Admin., 525 F.3d 1299 (Fed. Cir. 2008) (requires independent substantive right for Tucker Act claims)
Kam-Almaz v. United States, 682 F.3d 1364 (Fed. Cir. 2012) (elements of a valid government contract include authority to bind)
Suess v. United States, 535 F.3d 1348 (Fed. Cir. 2008) (contract formation and government binding authority)
Kellogg Brown & Root Servs., Inc. v. United States, 728 F.3d 1348 (Fed. Cir. 2013) (void-ab-initio contract rule; fraud/illegality distinctions)
Freese v. United States, 221 Ct. Cl. 963 (1979) (limits of IBLA review on contract claims)
Aulston v. United States, 823 F.2d 510 (Fed. Cir. 1987) (agency decisions on mineral/land disputes; APA review scope)
San Carlos Irrigation & Drainage Dist. v. United States, 877 F.2d 959 (Fed. Cir. 1989) (damages framework for government contract claims)
Cal. Fed. Bank v. United States, 395 F.3d 1263 (Fed. Cir. 2005) (expectation versus reliance damages in contract)
Glendale Fed. Bank, FSB v. United States, 239 F.3d 1374 (Fed. Cir. 2001) (measurement of contract restitution and damages)
Krygoski Constr. Co. v. United States, 94 F.3d 1537 (Fed. Cir. 1996) (termination for convenience damages principles)