Term: 2006
Docket: 05-669
Bp America Production Company, Successor In Interest To Amoco Production Company, Et Al. v. Rejane Burton, Acting Assistant Secretary, Land And Minerals Management, Department Of The Interior, Et Al.
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05-669 BP AMERICA PRODUCTION CO. V. BURTON DECISION BELOW:410 F3d 722 LIMITED TO QUESTION 2 PRESENTED BY THE PETITION. CHIEF JUSTICE ROBERTS AND JUSTICE BREYER TOOK NO PART. Cert. Granted 4/17/2006 QUESTIONS PRESENTED: The Mineral Leasing Act of 1920 ("MLA"), 41 Stat. 437, codified as 30 U .S.C. § 181 et. seq., provides for the payment of royalties on oil and gas from federal leases based on the "value of production removed or sold from the lease." 30 U.S.C. § 226(b)(I)(a). This case concerns the proper construction of that provision and the agency regulations promulgated thereunder. It also concerns the scope of the statute of limitations codified at 28 U.S.C. § 2415(a), which applies to "every action for money damages brought by the United States or an officer or agency thereof which is founded upon any contract * * * ." The questions presented are: 1. Whether the MLA, or the agency regulations promulgated thereunder, require lessors to pay royalties based on the value of production as determined at the leasehold location of production, or instead based on the enhanced value of production after it has been transported away from the lease and conditioned to a higher quality at off-lease treatment plants. 2. Whether -- contrary to the decision below but consistent with decisions of the Tenth and Federal Circuits -- the limitations period in 28 U.S.C. § 2415(a) applies to federal agency orders requiring the payment of money claimed under a lease or other agreement. LOWER COURT CASE NUMBER: 04-5006, 04-5007
The U.S. Supreme Court case BP America Production Company v. Rejane Burton, 2006, involved a dispute over royalty payments for oil and gas leases on federal lands. The Department of the Interior had ordered BP (formerly Amoco) to pay additional royalties based on an interpretation of lease terms that differed from previous interpretations. BP challenged this order arguing it was issued after the six-year limitations period set by law had expired and therefore should be invalidated. However, the lower courts ruled in favor of the Department of Interior stating that because it is an administrative agency rather than a court, its orders are not subject to statutory time limits unless explicitly stated so by Congress which wasn't done here. On appeal, however, the Supreme Court reversed these decisions holding that general statutes limiting government actions apply equally to both judicial proceedings and administrative orders unless Congress provides otherwise.
In the dissenting opinion for BP America Production Company v. Burton, it was argued that the majority's interpretation of the statute in question was incorrect and overly narrow. The dissenters believed that Congress intended a broader reading of the statute, one which would allow for more time to file claims against oil companies for underpayment of royalties on federal and Indian lands. They pointed out that this broad interpretation is consistent with other similar statutes and with general principles of statutory construction. Furthermore, they noted that this case involves significant amounts of money owed to taxpayers and Native American tribes, making it even more important to interpret the law in a way that allows these groups to recover what they are due. Therefore, according to them, BP should not be allowed off so easily simply because some administrative deadlines were missed.
