*2 * WALD, uncharacteristically Before LEVENTHAL and specific respect Cir **, Judges, Judge, cuit and NICHOLS Unit bidding procedures. The Secretary ed Court of States Claims. competitive bidding was directed to conduct by sealed bids under one of two alternative Opinion for the Court filed Circuit (a) formulas. He could solicit bids either *3 Judge LEVENTHAL. the basis of a cash bonus bid with a fixed (fixed royalty at no less than 12½% of the Concurring opinion by Judge filed Circuit gross lease), (b) revenue of the WALD. royalty rate bid with a fixed cash bonus LEVENTHAL, Judge: Circuit methods, payment.3 As between these two In this case we are to decide asked the discretion was not limited. bidding systems currently whether the em- recently, virtually all un- Until leases made ployed by Secretary of the Interior in through der the Act were OCS issued leasing government properties offshore alternative, cash gas development comply oil and natural the royalty set in advance of with the Outer Continental Shelf Lands 16 % (one-sixth) of the gross value of the Act,1 as substantially amended in 1978. production.4 procedure, Under that a lease Appellants challenge two court or- district quali- would responsible be awarded to the denying enjoin ders their request highest fied bidder with the cash bid on a Secretary conducting from further tract, assuming the bid deemed bidding systems sales until alternative are provide an adequate return to the Although say used. we cannot whether the government on the tract. Secretary implementing the amendments expeditiously possible, we critical during are con- Several events the mid- vinced that he has not contravened the let- 1970s necessitated a massive revision of the ter of the law. Accordingly, we affirm OCS Act.5 Most prominently, the nation’s both orders of the district court. increasing dependence foreign sources of
energy, laid embargo bare the oil of I. BACKGROUND many government caused in to turn to the Outer potential, Continental Shelf as a the enactment Since in 1953 of the Outer though unproven, supply American of (OCS Act), Continental Shelf Lands Act short-range energy At needs. same government federal actively has been en- time, prospects greater offshore oil gaged leasing private lands2 to OCS gas production—and companies the increased con- exploration for'the develop- protection ment of oil sciousness of environmental con- gas deposits. and natural The original cerns—spurred act delegated authority governments broad local and envi- Secretary implementing groups greater Interior for ronmental to seek a role in administering legislation, but it was regulating future ventures. OCS * Judge opinion Leventhal authored this but died “frontier areas” the Pacific and Atlantic generally before it was released. Oceans. See 1st Sess. 65-74 ** Sitting by designation pursuant to 28 U.S.C. p. 293(a). 1337(a) (1976). 3. 43 U.S.C. § (West seq. Supp. 1979).
1. 43 U.S.C.A. 1331 et 2. The term “Outer Continental Shelf” has been original passage 4. Between the of the OCS Act submerged lying defined as all lands seaward action, Secretary and the initiation of this (three miles), and outside State waters “and of gas had conducted 47 oil and lease sales in appertain which the subsoil and seabed 3,450 leases had been awarded. See subject jurisdiction United States and are to its Appendix (J.A.) Joint at 179. 1331(a). and control.” 43 U.S.C. With few exceptions, leasing most OCS to date has in- generally H.R.Rep.No.95-590, 5. See Only volved tracts in the Gulf of Mexico. recently government opened has the and the acceleration parties, interested directly point- developments more Other provi- Most gas development. bidding system inadequacies ed to bearing have no of the amendments lands. dramatic sions used us; however, few, are natural on the case price of oil and
increases in Congress expressly appeal. central to made evident previously bidding systems two bidding led to a situation retained the royalty system of authorized, specific other paid to the it added five royalties the total but wherein percentage any non-enumerated declining as a as well as government were alternatives use- reports to be proceeds on wells. Several determines gross begin- policies Comptroller General accomplish purposes issued ful to In- strong reserva- ning expressed in 1975 the amendments.8 sys- selecting tion that the cash bonus-fixed retains his terior a fair though bidding systems, tem could not assure among alternative *4 addition, those its leases.6 In by percent- return on extent to some he is restrained sys- cash bonus indicated that reports systems.9 certain the use of age limits on effects, leaving anticompetitive Secretary tem had addition, although the Interior In financial re- operations, Act, with fewer smaller lease sales under to conduct all is sources, compete, unable to relatively of Ener- Department of the Secretary is the payments cash bonus high front-end the Interior who, in consultation gy associated with many uncertainties regulations promulgate Secretary, must De- The Interior exploring untested areas. new particular each use of governing the. two oc- experimentation on partment’s own Energy Secretary of bidding system.10 system, royalty casions with the alternative Secretary with Interior annually, and the bidding, to confirm that cash bonus- seemed sale, to must each generate suf- royalty bidding did not fixed vari- of the concerning the use and nonuse adequate competition produce nor ficient Finally, a new bidding options.11 ous OCS government.7 to returns requiring Act added to the OCS section was prepare Interior Secretary of divergent Congress responded to gas leas- comprehensive maintain comprehensive with the stimuli for reform implement the different ing program to Act Amend- Lands Outer Continental Shelf must program That of the Act.12 policies reflect ments of 1978. These amendments out in principles spelled to several for environ- adhere competing concerns the often statute, considera- including a balanced among all protection, cooperation mental (a)(5)(B) (West 1337(a)(1), 110-11; S.Rep.No.95-284, §§ U.S.C.A. See id at 1979). 8(a)(5)(B) (1977); Supp. Cong., of the OCS Section 1st Sess. 60-68 J.A. 47-50. Secretary requires other use alternatives 7. See royalty bidding 20- than cash bonus-fixed 138-39 year acreage offered for each of all 60% and for the next then-Secretary testimony Congress, In years. five Rogers the Interior Morton conceded of might not be obtained fair market value 302(b)(2) Department of the 10. Under Section escalating prices: light of cash bonus leases in Act, Energy Organization 91 Stat. of Shelf, have we Outer Continental [0]n seq., responsibility U.S.C. 7101 et § 162/ n collecting percent of all of the been production. regula- promulgate Interior to say, very I You and think implementing OCS alternative tions systems say, high enough percent this is not a well transferred to the value, if, really get don’t true at because we 7152(b)(2) (West Supp. Energy. 42 U.S.C.A. bid, selling $5 is at the time the bonus is oil 1979). H.R.Rep.No.95-1474, 95th See $10. The 162/ n percent goes up and then it 77-78, (1978) (conference report). 2nd Sess. enough. royalty high We are exam is not ining that. 1337(a)(8), (9), 1343(2) §§ 11. See 43 U.S.C.A. Hearings on S.Res. 45 and S.Res. 222 Before (West 1979). Supp. on Interior and Insular the Senate Committee Senate on Com- Affairs and the Committee 12.Id. 1st Sess. 68 merce 94th 1337(a)(1) (West Supp. 8. 43 U.S.C.A. social, economic, royalty and environmental as well full investigation
tion of as a existing of a fair concerns and the assurance market leases and action corrective should government.13 they yield value on leased to the it be will not land demonstrated that a fair return government. to the out litigation grows This of the Interior partial complaint continued use of the The essence appellant’s royalty bidding system. royalty cash bonus-fixed that cash bidding, par- 16 %, ticularly Between the date of the effective OCS Act fixed at date yield generate amendments14 and the on which this cannot fair market value nor filed, adequate competition lawsuit was three lease sales as mandated Only through were In each instance the amended conducted. Sec- OCS Act. the is- retary chose suance regulations authorizing bid- and use of ding leased, part systems, notably tracts to be the prof- .the most using bidding system—a it-sharing while options, another cash can the (semi- objectives. However, bonus statutory with a non-linear achieve the logarithmic) sliding royalty15—for according appellants, scale issuance of those sales, other unduly delayed tracts. Four other lease sched- has been place “jurisdictional uled to take June squabble” between and No- between the De- vember of to utilize planned partments Energy the same the Interior.18 bidding systems. mix of alternative Bids 25, 1979, days prior On June four these, on the first of Lease were Sale opening scheduled on Lease of bids Sale *5 on opening Friday, scheduled for June appellants filed for a preliminary a motion 1979. injunction seeking prevent to further lease Appellants, consisting regulations of nine consumer sales “in the absence of estab- organizations, private citizen-taxpay- lishing range three the full of bid man- ers, governmental and two dated California enti- the Outer Continental Shelf Lands ties,16 litigation hearing commenced this Act.”19 A the Dis- on motion was held trict Court day, Judge for the District of Columbia on on June 27. Later that District Naming States, Aubrey Robinson, June the appellant’s United E. denied Jr. Interior, the Secretary preliminary injunction of and the Secretary motion. In its Mem- defendants, Energy appellants of sought Order, as orandum and the district court ruled declaratory injunctive leading plaintiffs relief to that a had not shown likelihood of the suspension leasing prevailing of all OCS “until the The statutory the merits.20 Energy promulgated of has regu- scheme laid out in 1978 amendments the lations of governing use all alternative was subsequent bid- not violated in lease sales ding systems Act], contrary, authorized to their the OCS enactment. To the [the amended, including systems as allowing partial court Secretary’s for found that the use the sharing of profits.”17 Appellants royalty system net of the cash bonus-fixed com- also injunction against plied asked for an fully statutory requirement further (16 %) under the cash bonus-fixed that a mix system of that with others be 1344(a). Machinists; Coalition; Energy Id. at § of Citizen/Labor Association; Texas M. Consumer James Dol- Sep- 14. The amendments became effective on ing; Casagrande; O’Reilly; Paul Kathleen F. tember Commission; California State Lands the City Beach, Long of California. pays percent- 15. Under this the lessee a age royalty on a schedule fixed in advance payment percentage the 17. J.A. 76. production increases of as the scale increases. 18. Pet.Br. at 13-14. appellants Energy 16. The fourteen are: Action Foundation; Educational of Consumer Federation 19. J.A. 129. America; Energy Consumer Council of America; Michigan Lobby; Citizens Arkansas Inc.; 20. J.A. 293. Research, Employees Consumer Service Union; International International Association 756 stay a applications this court be found to violate denied
used and could not of appeal award pending Act. court fur- of purposes of the OCS had under Sale 48. the defendants leases ther determined fail- arbitrarily capriciously acted not II. ANALYSIS yet re- promulgate
ing bidding sys- garding some of the procedural To some extent light complexity “in and sensi- tems of of scope case narrows our posture regu- such tivity preparation involved This has often observed court review. Finally, the court found ade- lations.”21 injunc preliminary grant or denial of safeguards against improper use of quate normally lies within the discre tion motion Congressional over- bidding options in the appellate An court’s judge. of the trial tion sight incorporated in the Act. scheme whether determining review is limited discretion, his “or judge abused the district appeal this order but Appellants did erroneous analysis upon his an rested 28 of that on June moved modification Nevertheless, the dis when premise.”25 from so as restrain defendants order interpreta court’s rests on an trict action awarding royalty leases law, interpreta applicable tion of day, The next as sched- under Sale 4S.22 fully and de novo in is reviewable tion uled, bids. Secretary opened Sale Inasmuch the district appellate court.26 thereafter, again Shortly appellants reading of the drew from his judge support seeking filed motion modification amendments, compelled we are order, maintaining results that the June meaning of the statute. examine on Lease Sale indicated acceptance the bids would contravene gainsaid that It cannot be competition require- fair market value and deeply assurance concerned order, Act. In a ments brief adequate competition market value and fair motion, reasoning district court denied this legislative histo leasing. Both the in OCS appellants had “still to show failed thems ry 1978 amendments *6 that of the cash bonus-fixed bid- utilization Further elves28 address those interests. with a 16 %fixed ding system royalty vio- more, may well be that cash bonus-fixed Lands lates Outer Continental Shelf likely bidding is less to maximize royalty Act.”23 that, conversely, profit-shar aims those bidding systems other appeal, expedited required ing This or statute,24 regard.29 court be more successful ensued. Both the district See, g., H.R.Rep.No.95-590, e. 95th 21. J.A. 294. 27. 47, (1977); S.Rep.No.95-284, 1st Sess. 54 request 296. moot 22. J.A. This was rendered 43, 46, (1977); 47 J.A. 51-56. 1st Sess. by appellees’ representation statute See, 1337(c), g., 1332(3), delayed days §§ 28. e. 43 U.S.C.A. awards would be least 30 1343, 1802(2) Supp. Attorney 1344(a)(4), (d), (West oppor- order to an afford General 1979). tunity compet- to conduct a review of the sale’s itive effects. J.A. 306 n.l. Appellants evidence to amassed substantial superiority profit-sharing of a J.A. 549. demonstrate system roy- over the cash bonus-fixed 1349(d) (West Supp. 24. 43 U.S.C.A. § alty option. They pointed to the successful experience profit-sharing of other Hickel, Group A v. 137 U.S. Action Quaker lessors, as the natural such State of Califor- 176, 180, 1111, (1969). App.D.C. 421 F.2d 1115 foreign 39-44. nia and several countries. J.A. Greeting See also Pub- National Ass’n Card They support government’s also found Service, U.S.App.D.C. lishers v. U.S. Postal 186 experiences systems and own with alternative 331, 363, 570, (1976); 602 Natural 569 F.2d profit-sharing sys- many its that a concessions Council, Morton, Resources 148 Defense Inc. v. receipt market could best assure the of fair tem 10, 827, (1972). U.S.App.D.C. 458 F.2d 832 40-41, competition for J.A. value tracts. 46, 52-53, Ry. escape This evidence not 26. Delaware & Hudson v. United 68-69. did Co. Union, S.Rep.No.95-284, Transportation U.S.App.D.C. legislators’ purview. See 450 F.2d addition, assume, arguendo, plied less per In we can to not than 20 centum and accuracy appellants’ per assertion not more than 60 centum of the total profit-sharing regulations has emergence year during area offered for each hampered by inter-agency disputes.30 been five-year period beginning on [the Nonetheless, bearing competing in mind the date of the enactmént of this section].32 policies underlying the amendments and the differently, Congress affirmatively Stated revisions, explicit language of the the real subsequent passage intended that of the question before us is whether the continued amendments, royalty cash bonus-fixed bid- partial use of cash bid- bonus-fixed ding was to be used in at least of all 40% ding—as planned by the for the near future year years. only leases each for five Secretary—violates statutory scheme. put option limitation on use of this was that We hold that it does not. it should not be used for more than 80% of the leases.
Congress provisions dealing enacted the exhaustively with lease after re- legislative reports accompanying viewing Secretary’s 25-year record of Congress’s amendments also reveal intent administering the Act. It cannot be preserve the cash bonus-fixed opportunity doubted that had the bidding option. Congress sought experi- royalty sys- discard among bidding systems, usually mentation Secretary’s tem or to restrain the through comparisons direct between cash essence, according it substantial use. In royalty bidding op- bonus-fixed and other it chose to do neither. tions, in order to obtain information reliable as to the advantages relative and disadvan- Congress declined to omit cash bonus- tages systems. of the enumerated It was royalty bidding 8(a) when it rewrote § testing hoped ultimately would Act. That section continues to enable the to utilize the provide bidding, “at the discre- options mix of emerged superior. tion of the Secretary,” may be on the basis The House conference notes: of cash royalty bidding or fixed Although requirement there ran- royalty bidding.31 bonus-variable is no Other selection, bidding options list, Secretary, setting dom were added to the though tracts, authorizing regulations systems forth for use on shall seek those promulgated must be to secure a in advance of fair selection of different their use. purpose methods on different tracts. The of such a selection is to that ade- assure But Congress did stop there. The quate as to rela- information is obtained choosing discretion in among al- disadvantages advantages tive *7 ternative bidding systems was limited in bidding systems, including various the respect. one crucial Elsewhere in that sec- systems, applied front-end bonus bid tion, 8(a)(5)(B), Congress mandated types different of tracts.33 that cash bonus-fixed royalty bidding be large percentage utilized in a of leases. Ac- The lease sales under attack in this cording express provi- terms of the independently together case and taken fall sion: well within percentages required by the bidding systems
The 8(a)(5)(B). than cash bo- One-half of the tracts to be [other royalty bidding] nus-fixed ap- shall be leased in Lease Sale 48 were offered on a deny 1337(a)(4)(B) (West Supp. The does not the basic 32. 43 U.S.C.A. 1979). thrust of this assertion which had its root in a 4, report Accounting June 1979 of the General entitled, Leasing Policy—Is Office “Federal the 95th 2nd Sess. Split Responsibility Working?” report The full 92 appears at J.A. 154-72. 1978, 1674, pp. H.R.Rep.No.95- 1691. See also 590, (1977); S.Rep.No. 1st Sess. 54 95-284, 1337(a)(1) (West 1979) Supp. 31. 43 U.S.C.A. § 1st Sess. (emphasis added). un- basis, Regulations governing bidding the with oth- 1979.39 bonus-sliding option the most profit-sharing system, half on a a er solicited cash der appellants, precede must public heavily by In the notice favored scale basis. Although 48, days.40 announcing Secretary the stated of a sale notice Sale argument appellees designed pressed to when at oral bidding plans that were profit- promise a date which analysis.”34 could a “valid statistical facilitate they will have sharing regulations emerge, Similarly, the announcement for Lease Sale regula- repeated that 1979, assurances 48, 30, July held on noted that both Department have returned to the tions been ex- again employed be for systems would and be out Energy from Interior should purposes.35 perimental the near future.” “in foregoing plain enough makes Con- an also legislative scheme contains roy- gress’s that cash bonus-fixed intention interdepartmental con- system of elaborate widely, conjunc- in alty be used and coordina- intergovernmental sultation systems. tion with use other The amend- example, For purposes. tion various reports replete are legislative ments General, Attorney in consultation demonstrating that Con- with other indicia Commission, Trade is accorded Federal well gress contemplated its continued use as to review the com- 30-day period in which delays implementation of alterna- bids under each petitive effects of systems. requires tive The statute bidding systems The section on sale.41 regulations implementing the new production the annual on promulgated in advance of their use. be with prepared in consultation is also to end, Energy Toward Attorney General. required with Interior to consult Sec- retary.36 year, Just this Commit- House Congress potential That was aware of new disapproval tee noted with ap- delays implementing the amendments regulations up years Act, could take to two 18 of the pears from Section OCS report, issue.37 Even the June 1979 GAO mandates added 1978.42 Section appellants which use to their document comprehensive preparation Energy-Interior jurisdictional pol- claim of the leasing program accordance with battles, cover- regulations Congress gave recommends Act. icies ing bidding systems be issued Secretary from the date of nine months January “no later We are enacting prepare than 1981.”38 the amendments regulations govern- Congress, informed it to proposed plan submitting General, ing bidding options—the systems Attorney governors three and the two addition, previously original In authorized under states affected lease sales.43 Act, receiv- bonus-sliding royal- days and cash scale must allow 90 ty employed ing plan, which had been on an comments and must submit on experimental July program basis—were issued and comments 30,779 (May 29, Fed.Reg. 34. 44 March Interior’s own Energy’s.” 171— are J.A. consistent 37,993 (June 30, 1979). Fed.Reg. 35. 44 1979, systems In the lease sales first two royalty bidding other than cash bonus-fixed *8 39. Govt.Br. 22. acreage were used in of the total offered. 37% J.A. 238. 1337(a)(6) (West Supp. 40. 43 U.S.C.A. 1337(a) (West 1979); Supp. 36. 43 U.S.C.A. § 10, supra. see note 1337(c). Id. at § 41. H.R.Rep.No.95-1835, Cong., 37. See 2nd 95th Id. at § 42. 1344. (1979). Sess. 25 added). (emphasis Comptrol- J.A. 171 38. The understanding 1344(c)(3). Id. at It is our 43. Energy’s ler General to went on note that “once Secretary’s plan timely that filed 1, 1981,” January are finalized April 1979. of the Interior should “issue
759 days approving it.44 completion President side time limits on the of each important, Congress stage. thoughts More made it clear With these in mind it is leasing legislative was to continue until the com- difficult to find a mandate to prehensive leasing program opera- support appellants’ forthright became contention 18(d)(3) expressly provides: tional. Section the continued use of the cash bonus- royalty system delay issuing leasing program ap- After the has been profit-sharing regulations are inconsistent proved by Secretary, eigh- or after with the 1978 amendments. teen following September months occurs, whichever first no lease Appellants base their case on the “unless shall be issued unless it is an area 8(a)(5)(B). clause” of subsection That sub- approved leasing program included in the bidding section mandates the use of provisions and unless it contains consist- other than cash bonus-fixed approved ent with the leasing program, leasing 20-60% of all “unless the Secre- except leasing permitted shall be to tary requirements determines that set program approved continue until such is subparagraph forth in this are inconsistent long and for so pro- thereafter as such purposes policies this sub- gram judicial is under or administrative chapter.” Appellants interpret this pursuant provisions review of this clause permit sys- to use subehapter tems other than cash bonus-fixed report The House bidding, profit-sharing, reiterated the clear such as in all lease meaning of hand, that subsection: Appellees, sales. on the other main- tain that this subsection enables the Secre- pre- committee also realized that to
[T]he tary to use cash royalty bidding pare, program in conformity with this in all leasing. legislative reports con- might up months, take to 18 and that tain leasing conflicting signals. Both earlier re- during should continue time. ports supported government’s reading There is intended to be delay no or inter- ruptions report, in lease of the clause. The for exam- During period sales. Senate ple, of time that saw the proposed leasing pro- “escape-hatch” clause as an gram being determined, is compliance considered and with the mandate to use other leasing is to continue as systems, heretofore . . . . recognition of the fact approved leasing program If the problems is under “there could be administrative in- judicial challenge, leasing can continue in implementing concepts volved new judicial until review complete.46 procedures.”48 is expressed Both houses con- compliance cern that percentage Thus, Congress expect changes did not develop- limits unduly retard OCS place take overnight. contrary, To the ment. fully anticipated optimal compre- that an leasing plan however, hensive took report, time—as much as The conference supports longer—to 18 months operation- appellants’ Though become view. it retains a hint al. Accordingly, it drafted a detailed sched- designed permit the clause was full instituting ule for the program, placing royalty bidding,49 out- use of cash bonus-fixed 1344(d)(1), (2). S.Rep.No.95-284, Cong., 44. Id. at § 48. 95th 1st Sess. 73 H.R.Rep.No.95-590, See also 95th 1344(d)(3). 45. Id. at (1977), Cong. 1st Sess. 139 U.S.Code & 1978, p. Admin.News requirement discusses a 1978, p. (“While 1557. See also id. at 48 a new “why Secretary explain statute that leasing program being prepared promul- bonus bid was used or is to be used in gated, continue.”): activities are to per actually more than 60 cent of the areas S.Rep.No.95-284, 1st Sess. 76-77 leased,” without reference to the situation in which cash bonus would be used in less *9 1337(a)(5)(B) (West Supp. 47. H.R.Rep.No.95-1474, 43 U.S.C.A. § than of tracts bid. 40% 1979). 2nd Sess. 93 difference, explore need percent- We not directly that the report states in either di- could be waived Nor age limits two standards. any, between these if rection: two is current which of the need we decide is the Interior on the For we cannot find ly operative. maxi- to waive the minimum discretion that the lease record us basis of the use of requirement for the mum either case violate sales involved this bidding, based than systems other bonus reason, we For cannot this formulation. mini- either the a determination that abused his judge conclude that district is not percentage level mum or maximum appel that when he discretion determined policies purposes with consistent of the “failed to that utilization lants show of the act.50 with cash do, that subsection Assuming, as we 16 n % purposes violates 8(a)(5)(B) limits which can be waived sets underlying the Act.”54 cases, appropriate by either direction discretion, appellants his Secretary within on' evidence judge The trial relied been has argue next discretion sought which by offered appellants’ position is It abused. sales com the contested lease prove 8(a)(5)(B) qualified—and thus the Sec is § Although contrary with the OCS Act. plied constrained—by is retary’s by appellants, evidence was introduced 18(a)(4) requirement mandatory of § 16 % that a believing a basis for there was and main leasing program prepared particular on these warranted prin with the tained in a mahner consistent “frontier” lands.55 risk that: leases of ciple leasing these inherent in to and uncertainties Leasing activities shall be conducted receipt of value for remote, assure fair market but nullifies unproven properties all rights conveyed the lands leased and the comparisons of impact appellants’ by the Federal Government.51 by California or these sales to those held recognize governments. We fur appel foreign As was virtually conceded market argument, weigh at oral the fair agency lants it is for the ther that 18(a)(4), appearing requirement value § initially we must restrain evidence compre section dealing in the new agency interfering a rational de from five-year leasing program, hensive does supported substan is termination comprehensive play come into until evidence.56 tial leasing program ultimately approved.52 is fortified ruling court The district Secretary’s understanding It is our that the noted, court factors. the trial additional As commencing program applies to lease sales by various public protected interest is affect those in March 1980 does not incor- Congressional oversight mechanisms challenge in suit. In the present under Yet rather than porated into OCS Act. meantime, ap standard appropriate post-amend- displeasure with the express a “fair pears to be leases must insure pro- administration of the equitable return.”53 ments (West Supp.1979). (conference 1802(2)(c) p. 53. 43 U.S.C.A. (emphasis added). report) 54. J.A. Id. 1st 55. See 1344(a)(4) (West Supp. 51. 43 U.S.C.A. Sess. 94 argued Appellants dis- also that the concerning by provisions was checked cretion 56. See of Suffolk v. Interi County pro-competitive purposes amend- the. ments, 1977), (2nd or, 562 F.2d Cir. cert. note 28 see supra. 55 L.Ed.2d denied, 434 U.S. 98 S.Ct. surprisingly report dis- 52. Not the conference only in cusses the fair market value concern analysis its connection with *10 gram, Congress recently merely directly took note consider more than it had 16 % previously occasion to whether implementing leasing of the schedule for for cash bo- years ahead.57 This ob- unduly Lastly, nus low. at some servation ex- reinforces our conclusion Secretary’s point delay time in issu- Congress plainly pressed earlier that intend- ing profit-sharing regulations failing and in Sig- ed to continue in the interim. experiment among nificantly, although major develop- several widely may more constitute a viola- ments coalesced to warrant the massive tion of the Act amendments. We can OCS overhaul of the Act in conditions say govern- not on this record changed relatively passage have little since ment’s actions to date have run afoul of the of the amendments. We see no occasion legislative scheme. yet say was under a endeavor, Secretary’s In view of the duty “escape to use the hatch” in order to interest, expedite explora- the national plan deviate from the basic laid out in the appropriate tion under leases we think it amended Act. although technically observe that the dis- many We also cannot be oblivious to the trict court has retroactively latitude to rem- conflicting policies often purposes un- (should edy already those sales concluded derlying the OCS Act amendments. inclination), reverse its earlier on the facts Though competition the attainment of unlikely before us it is that such course fair market value were of undoubted con- judicial would constitute a sound exercise of legislators, cern to the primary their inter- discretion. The district court re- would be lay ests in insuring expeditious gas quired appellants to balance the harm to development in a manner consistent against that suffered protection.58 environmental It should come completed and the successful bidders surprise as no that a scheme which man- lease sales. If the Secretary is forced to experimentation dates among alternative completed reschedule sales the attendant systems should on occasion fall short of disruption development of OCS would sure- perfection in achieving legislative some ly priorities disserve by Congress. set All goals.59 previously successful bidders would find wasted far, outlays capital they the enormous Thus only district court has de- prior invested in bidding, and all would be preliminary injunction. nied a At a trial on disadvantaged by the public disclosure of merits, the district court is free to con- Furthermore, original their bids. sider the light intervening case in the government, public, and derivatively the developments. It can all reconsider matters disclosure, injured by would prior be injunc- raised in the motion preliminary thereby destroying the essence secret tive relief. It may explore also several bidding procedures. previously matters not before it. For ex- ample, it could Affirmed. examine the rea- using sons for bid- WALD, concurring: Judge, Circuit ding bid, on as much as 50% of the tracts rather falling than on some lesser basis still Judge opinion I concur in Leventhal’s but guidelines. within the statutory separately points Or it write to underscore a few H.R.Rep.No.95-1835, Cong., discussing procedures utilizing 95th 2nd Sess. 59.In (1979). bidding systems, various the Senate con- ceded: 58. See 95th 1st may “perfect These alternatives Sess. 53 However, they solution.” . . . are cer- (“The p. purpose basic [the tainly trying experimental worth on an basis. swift, promote is to or- amendments] S.Rep.No.95-284, derly exploitation and efficient of our almost untapped domestic oil and resources Shelf.”); S.Rep.No.95-284, Outer Continental 1st Sess. 42-43 *11 case, necessary regulations to the importance promulgate in which of extreme this may any in the course of trial possible implement be considered in to order rapidly on the merits. goals.* Congress’ reform to The 1978 amendments the Outer Conti- the important trust been to An has compre- Act aimed at nental Lands Shelf here, through inordinate since defendants leasing reform of traditional oil hensive be purpose of the Act could delay the entire legisla- the The practices of United States. meantime, according in the frustrated and act their by tors were motivated to concern by the disturbing to estimates submitted nearly of the the exclusive use tradi- ultimately and plaintiffs, the royalty bidding sys- tional cash bonus-fixed of losing be hundreds taxpayers may the operating in best interest tem was not the revenues of dollars future millions They goals of in the public. the three indi- are also troublesome each sale. There here, goals prac- new relevant which in Act delay which in this record that the cations they expected tice conflict but which the already only is to occurred due has by Secretary of to be accommodated pro- task discretion; complexity of defendants’ leasing a of Interior’s fast, provide juris- but to a exploita- mulgating regulations, which would efficient new resources, tion a fair market energy of our squabble agencies over dictional between people value return for the of the United leasing off- process control of the of our States, among improved competition and fields. shore oil and clearly Act envisioned lessees. The concur, majority opinion, in which I of prompt experimentation variety with a pos- and in this concludes that at this time leasing see which best methods of to would case, Secretary of the of Interior ture operate practice goals. to meet all three letter of the law.” not contravened “the has 1337(a)(1). few of these U.S.C. A Nevertheless, may approaching the time be had tried sporadically methods been under by continuing grant to Secretary, when Others, primarily profit Act. old panoply of the of sharing option, promise but had leases without utilization showed never been tried the United States. bidding systems authorized experimental required statute specifically Act, frustrating experi- is the essential of Interior to develop and submit purpose abusing mental Act and thus Congress comprehensive 5-year leasing granted him. which has been the discretion program within nine months after the Act record, point, delay is not At this on this effective, 1344(c)(3), became U.S.C. § unreasonable, clearly but the more sales it is a fair inference intended promulgation which held leases are without pick he be- should able choose necessary new are regulations leasing tween the various methods authoriz- pro- congressionally-mandated before the ed new possible in the Act as soon as after gram get underway, can reform plan approved was to “assure order appears. As delay more unreasonable receipt of fair market value for the lands points out in its conclud- opinion the Court’s 1344(a)(4). leased.” In the course of this leases submitted for ing paragraph, once experimentation, considerable bids, impos- granted, virtually much less are necessarily would be vested withdraw, how no matter detrimen- sible variety goals policies. to balance a public they turn out tal interest very But no terms the Act mean- bidding procedures Certainly be. these new ingful experimentation begin can until the complicated, energy program is are but our regulations under which the new highest priority, a matter of the operate promulgat- methods will have been ago. ed. over a responsibility passed year Defendants’ immediate new was well * 6, 1979, just hearings prior ing On new December to issuance of to cover one opinion, rulemaking bidding—fixed proposed net notice method: cash bonus 70,390 published, inviting profit sharing. Fed.Reg. comment and announc-