Independent Petroleum Association of America, et al., Appellants
v.
Bruce Babbitt, Secretary of the Interior, et al., Appellees
No. 98-5131
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 1, 2000
Decided January 5, 2001
[Copyrighted Material Omitted]
Appeal from the United States District Court for the District of Columbia (No. 93cv02544)L. Poe Leggette argued the cause for appellants. With him on the briefs were Laura S. Morton and Stephen M. McNabb. E. Edward Bruce, Nancy L. Pell and Thad S. Huffman entered appearances.
Ronald M. Spritzer, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief were James F. Simon, Acting Assistant Attorney General, and Sean H. Donahue, Attorney.
Before: Sentelle, Randolph and Rogers, Circuit Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Sentelle, Circuit Judge:
In the consolidated cases of Independent Petroleum Association of America v. Babbitt and Samedan Oil Corp. v. Deer,
I. BACKGROUND
The instant appeal continues a long history of litigation focusing on whether the Department of the Interior ("DOI") should be permitted to collect royalties from gas-producing companies that lease land from DOI when those companies receive payments based on their take-or-pay settlement agreements with gas pipelines.1 DOI initially took the position that under its gross proceeds rule, see 30 C.F.R. §§ 206.151, .152(h), .153(h) (1987), gas producers owed royalties for receiving such payments. In 1988, the Fifth Circuit rejected this position, holding that "[r]oyalty payments are due only on the value of minerals actually produced, i.e., physically severed from the ground. No royalty is due on take-or-pay payments unless and until gas is actually produced and taken." Diamond Shamrock Exploration Co. v. Hodel,
In August 1993, the Independent Petroleum Association of America, an association of roughly 5,000 independent explorers and producers of natural gas and oil, responded to the letter by filing a suit seeking injunctive relief to prevent DOI from collecting royalties on unrecoupable take-or-pay settlement payments. IPAA's complaint argued, inter alia, that (1) DOI adopted a new rule through the May 1993 letter without following the notice-and-comment procedures required by the Administrative Procedure Act ("APA"), 5 U.S.C. § 553, and (2) DOI's efforts to collect royalties based on the settlement agreements violated the statutes governing the royalties owed under DOI leases. In 1994, in an effort to "simplify ... some of the procedural aspects of [ ] the IPAA Litigation," DOI and IPAA entered an agreement whereby MMS would issue up to 10 orders to companies to pay royalties based on their settlement agreements. Agreement, Independent Petroleum Ass'n of Am. v. Babbitt, No. 93-2544 (D.D.C. Feb. 4, 1994). The companies could then appeal these orders to an Assistant Secretary of DOI, who would issue decisions that could become "appropriate vehicles to seek judicial review on the merits of the May [1993] Letter." Id. at 5.
Later that year, MMS issued an order to Samedan Oil Corporation requiring it to pay royalties on settlement payments made by Southern Natural Gas Company. Samedan appealed the order to DOI's Assistant Secretary for Indian Affairs. The Assistant Secretary upheld the order based on the policies articulated in the May 1993 letter. See Samedan Oil Corp., MMS-94-0003-IND (Sept. 16, 1994). Samedan appealed to the District Court seeking judicial review of the Assistant Secretary's decision. Then, as we explained in IPAA I, "the District Court consolidated Samedan's challenge with IPAA's challenge to the May 1993 letter." IPAA I, 92 F.3d at 1255. After the District Court granted summary judgment for DOI in both cases, Samedan and IPAA appealed to this Court.
On appeal, we reversed the District Court's granting of summary judgment, holding that (1) the May 1993 letter was not a "rulemaking requiring APA notice-and-comment procedures," id. at 1256, and (2) the Assistant Secretary's Samedan decision was "arbitrary and capricious in light of DOI's adoption of the Diamond Shamrock holding," id. at 1260. Accordingly, we held that DOI was precluded from collecting royalty payments from Samedan. See id.
On remand, IPAA and Samedan filed motions with the District Court seeking an order implementing the "mandate of the court of appeals" and a permanent injunction against DOI from collecting royalties from Samedan. Independent Petroleum Ass'n of Am. v. Babbitt,
II. ANALYSIS
DOI contends that the issues raised by IPAA are not properly before this Court. Following the District Court's dismissal of its claim, IPAA filed a motion pursuant to Rule 59(e) of the Federal Rules of Civil Procedure asking the District Court to amend its judgment, arguing that "nothing in the law of the D.C. Circuit conflicts" with adopting a futility exception to the finality requirement. Independent Petroleum Ass'n of Am. v. Babbitt,
IPAA's Notice of Appeal states that IPAA appeals from the District Court's order "denying plaintiffs' motion to alter or amend the judgment dismissing the complaint." DOI points out that the arguments IPAA makes on appeal deal solely with the District Court's dismissal of its complaint, not its Rule 59(e) motion. Because IPAA's Notice of Appeal refers only to the District Court's denial of this motion without referencing the dismissal of its complaint, DOI suggests that, in light of Rule 3(c) of the Federal Rules of Appellate Procedure, IPAA's arguments concerning the dismissal of its claim are not properly before us.
Under Rule 3(c), a notice of appeal must "designate the judgment, order, or part thereof being appealed." Fed. R. App. P. 3(c)(1)(B). Nevertheless, a party's failure to designate the proper order it intends to appeal is "not necessarily fatal." Martin v. FERC,
We conclude that the arguments raised by IPAA concerning the District Court's dismissal of its complaint are properly before us. IPAA's intention to appeal from the actual dismissal is clear. In the Non-Binding Statement of Issues to be Raised, IPAA explicitly stated one issue as "[w]hether ... the district court erred in dismissing appellants' complaint with prejudice on the grounds that they had not complained of 'final' agency action within the meaning of 5 U.S.C. § 704." J.A. at 300. It is also worth underscoring that DOI does not claim that it was prejudiced by IPAA's referring to the wrong order in its Notice of Appeal. See Martin,
IPAA argues that its claim originally included a challenge to the Samedan decision and that in IPAA I we reversed the District Court's order granting summary judgment against IPAA in its challenge to Samedan. IPAA suggests the District Court ignored this mandate by refusing to enter a judgment in its favor and subsequently dismissing its complaint. According to IPAA, by reopening questions already determined in earlier phases of this litigation, the District Court violated the mandate rule. Further, IPAA contends that the Samedan decision constitutes a final agency action that provides the basis for a justiciable claim. In response to IPAA's arguments, DOI submits that (1) IPAA's complaint did not challenge final agency action; (2) IPAA does not have standing to challenge the Samedan decision; and (3) IPAA's claim is not ripe for review.
As we have explained before, "we have no difficulty dismissing a case based on one jurisdictional bar rather than another." Louisiana Envtl. Action Network v. Browner, 87 F.3d 1379, 1384 (D.C. Cir. 1996). We therefore need not identify every ground for holding that a claim is not justiciable. See id. at 1385. We conclude that the District Court properly dismissed IPAA's complaint because of the lack of final agency action. Cf. Public Citizen v. Office of the U.S. Trade Representatives,
Section 704 of the Administrative Procedure Act, 5 U.S.C. § 704, provides for judicial review of final agency action--that is, for a court to have jurisdiction over a case brought pursuant to § 704, the complaint must challenge a final action of an agency. See Public Citizen,
IPAA's complaint not only does not challenge final agency action, it is not at all clear what agency action IPAA purports to challenge. The complaint states that IPAA challenges DOI's "efforts to collect" royalties on take-or-pay settlement payments. What those "efforts" entail is less than clear. What is clear, however, is that these "efforts" are not final agency actions fit for judicial review.
At best, IPAA's characterization of DOI's "efforts" seems analogous to the National Wildlife Federation's ("NWF") attempt to challenge the Bureau of Land Management's ("BLM") "land withdrawal review program" in Lujan v. National Wildlife Federation,
constitute an identifiable action or event." (internal citations and quotations omitted)); Foundation on Econ. Trends v. Lyng,
IPAA itself seemed to recognize this shortcoming when it entered an agreement with DOI to "simplify ... some of the procedural aspects of [ ] the IPAA Litigation." Agreement, Independent Petroleum Ass'n of Am. v. Babbitt, No. 93-2544 (D.D.C. Feb. 4, 1994). That agreement recognized that MMS would issue up to 10 orders to companies to pay royalties based on their settlement agreements. The companies could then appeal these orders to an Assistant Secretary of DOI who would issue decisions that could become "appropriate vehicles to seek judicial review"--that is, those orders would provide the foundation for justiciable test cases. Id. at 5. Of course, the order issued to Samedan provided the basis for one of those cases. See Independent Petroleum Ass'n of Am.,
Now IPAA claims that it is challenging DOI's Samedan decision. That decision, however, is never mentioned in IPAA's complaint. Indeed, DOI issued the Samedan decision over a year after IPAA filed its complaint in this case. IPAA never amended its complaint to add a claim challenging that decision. Nor did IPAA seek to intervene when Samedan appealed the Assistant Secretary's decision. Although IPAA's case was later consolidated with Samedan's case, the two cases continued to be separate. See Cella v. Togum Constructeur Ensemleier en IndustrieAlimentaire, 173 F.3d 909, 912 (3d Cir. 1999) (noting consolidation does not merge suits into a single case). Simply because IPAA and Samedan were represented by the same counsel and filed a joint brief on appeal, their individual cases were not somehow merged into one--they remained separate and distinct.
Alternatively, IPAA avers that in IPAA I the parties litigated the Samedan decision by implied consent through their cross-motions for summary judgment. See Fed. R. Civ. P. 15(b). According to Rule 15(b), "[w]hen issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings." Id. The Rule's implied consent provision is normally invoked when evidence concerning an issue not addressed in the pleadings is introduced at trial without objection. See 6A Charles Alan Wright et al., Federal Practice and Procedure: Civil 2d § 1493 (2d ed. 1990). In such cases, we uphold a trial court's determination of whether parties impliedly consented to try an issue unless the court abused its discretion. See Kirkland v. District of Columbia,
It is an open question whether the Federal Rules permit parties to impliedly consent to "try" issues not raised in their pleadings through summary judgment motions. In Harris v. Secretary, U.S. Department of Veterans Affairs,
IPAA argues that the mandate rule precludes the District Court--and now this Court--from holding that it never challenged the Samedan decision. Specifically, IPAA points to language in our IPAA I decision suggesting that it had challenged the Agency's decision. Under the mandate rule, "an inferior court has no power or authority to deviate from the mandate issued by an appellate court." Briggs v. Pennsylvania R.R. Co.,
Although some portions of the IPAA I decision may be read to suggest that IPAA challenged the Samedan decision, the question of whether IPAA had challenged that decision was not before us, nor decided by us, even by implication. Any confusion read into our earlier opinion stems from the fact that this issue was not cleanly raised. Now that we are able to consider IPAA's claim standing alone, we are able to make a precise determination concerning its content and its justiciability. Indeed, as explained above, its content is clear, and it is not justiciable. Consequently, the District Court stood on firm ground in considering whether IPAA had challenged final agency action and holding that it did not. Like the District Court, we do no harm to the law of this Circuit nor the law of this case by considering this issue today, with the question placed squarely before us uncluttered by other claims or cases.
In a footnote buried on the nineteenth page of its reply brief, IPAA makes one last effort to litigate its claim, requesting leave to amend its complaint to include a challenge to the Samedan decision. See 28 U.S.C. § 1653. We deny this request. IPAA points out that this Court granted leave to amend following a motion made at oral argument in DKT Memorial Fund, Ltd. v. Agency for International Development,
While it is possible that, like the appellants in DKT, IPAA's failure to amend its pleading at an earlier stage in this litigation may have been "more inadvertent than deliberate," id. at 1239, unlike in DKT, IPAA fails to articulate what "interest of justice" would be served by allowing it to amend its complaint now, roughly seven years after it filed the original complaint and six years after DOI issued the Samedan decision. Additionally, in contrast to the DKT appellants, who merely sought to amend their claim to add a single factual allegation, IPAA seeks to add an entirely new claim. However, as we have said before, new claims "cannot set sail, initially, on appeal if courts are to operate with reasonable speed and efficiency." Shipbuilders Council of Am. v. United States,
Finally, we question whether IPAA's amendment would "convert their action into a justiciable case." Id. Instead, permitting IPAA to amend its claim likely would lead this Court into a jurisdictional morass. See, e.g., Abbott Labs. v. Gardner,
III. CONCLUSION
For the reasons stated above, the District Court's judgment is
Affirmed.
Notes:
Notes
For a detailed explanation of the statutes and regulations that form the basis for this litigation and the history of the take-or-pay settlements at issue, see Independent Petroleum Association of America v. Babbitt ("IPAA I"),
Originally, IPAA's current appeal was consolidated with Shell Offshore, Inc. v. Department of the Interior. Shell and DOI filed a joint motion to stay all proceedings in the Shell cases. On August 8, 2000, this Court granted the motion.