843 F.3d 982
D.C. Cir.2016Background
- In 2011 Henderson, NV entered a development agreement with Las Vegas National Sports Center; Henderson requested BLM convey 480 acres via a modified competitive sale to the developer to secure public benefits (jobs, tourism).
- Henderson nominated Silver State Land, LLC (affiliate of the developer) as the designated bidder with a right to match the highest bid; BLM published a Notice of Realty Action authorizing a modified competitive sale based on the Agreement’s promised public benefits.
- Silver State was the sole bidder on June 4, 2012, paid the required 20% deposit, its bid was accepted, and it transmitted the remaining purchase price on November 28, 2012.
- Hours after final payment, Silver State (via the developer) terminated the development Agreement; Henderson objected to issuance of a patent and sued in state court; the parties later settled with Silver State agreeing not to pursue development and to pay Henderson after patent issuance.
- BLM recommended and the Assistant Secretary decided to terminate the sale and not issue the patent because the Agreement— the sole basis for using a modified competitive sale—had been dissolved and the anticipated public benefits no longer existed.
- District Court granted summary judgment for the Secretary; the D.C. Circuit affirmed, holding the Secretary had authority to terminate the sale, FLPMA did not bar the decision, the decision was not arbitrary and capricious, and Silver State had no protected property interest for due process purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Secretary had authority to terminate the sale after acceptance and final payment | Silver State: statutory/regulatory scheme vested a ministerial duty to issue a patent after payment; Secretary lacked power to cancel post-payment | Secretary: plenary departmental authority over public lands includes canceling invalid sales prior to patent issuance | Held: Secretary had plenary authority to terminate sale where the basis for modified sale had been vitiated |
| Whether FLPMA §1713(g) (30‑day acceptance/rejection rule) barred termination after 30 days | Silver State: statute/regulation required acceptance/rejection within 30 days; after payment a patent was due | Secretary: statute governs withdrawal of land from sale, not termination of a particular sale to a buyer; the parcel remained available for disposition | Held: §1713(g) and related regs did not prevent termination here because the land was not "withdrawn" and the modified sale was no longer authorized under FLPMA |
| Whether the Secretary's decision was arbitrary and capricious | Silver State: decision relied on unproven fraud allegations, ignored state-court proceedings, failed to cite specific regulatory withdrawal bases, and the Agreement was terminable so not a sufficient ground | Secretary: decision rested on objective fact that the Agreement (the sole basis for modified auction) was terminated and settlement barred the promised public benefits | Held: Not arbitrary or capricious; termination was reasonable because the public‑benefits justification for the modified sale had dissipated |
| Whether Silver State had a property interest triggering due process protection | Silver State: payment vested an administrative right to the patent and thus property interest; lack of notice/hearing violated due process | Secretary: neither statute nor regulation conferred a property right; title remained with the United States until patent issued | Held: No protected property or liberty interest; no Due Process Clause violation |
Key Cases Cited
- Best v. Humboldt Placer Mining Co., 371 U.S. 334 (Supreme Court) (Department has plenary authority over administration of public lands)
- Cameron v. United States, 252 U.S. 450 (Supreme Court) (Secretary may review and eliminate invalid land claims prior to patent issuance)
- Knight v. United Land Ass'n, 142 U.S. 161 (Supreme Court) (Secretary may prevent issuance of patent when a fatal defect or newly discovered fact would require annulment)
- Boesche v. Udall, 373 U.S. 472 (Supreme Court) (administrative cancellation authority applies to leases and similar dispositions for invalidity)
- Michigan Land & Lumber Co. v. Rust, 168 U.S. 589 (Supreme Court) (title remains in the United States until patent issues; land subject to departmental jurisdiction)
- Corporation of the Catholic Bishop of Nesqually v. Gibbon, 158 U.S. 155 (Supreme Court) (plenary rule for Departmental authority may be constrained only by specific statutory provisions)
- American Manufacturers Mutual Insurance Co. v. Sullivan, 526 U.S. 40 (Supreme Court) (articulating that a protected property or liberty interest is required for procedural due process protection)