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08/07/84 Stephen Thompson, v. William P. Clark

August 7, 1984

STEPHEN THOMPSON, APPELLANT

v.

WILLIAM P. CLARK, SECRETARY OF THE INTERIOR, ET AL. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA (CIVIL ACTION NO. 82-00535). 1984.CDC.210



UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

APPELLATE PANEL:

Robinson, Chief Circuit Judge, Scalia, Circuit Judge, and McGowan, Senior Circuit Judge. Opinion for the Court filed by Circuit Judge Scalia.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SCALIA

Appellant Stephen Thompson, an independent oil and gas developer, seeks review of the District Court's dismissal of his application for declaratory and injunctive relief against the appellees, Secretary William P. Clark and the Department of the Interior. Thompson v. Watt, Civ. Action No. 82-0535 (D.D.C. Mar. 17, 1982). In that action appellant challenged the validity of a final rule, promulgated by the Secretary, increasing the application and rental fees charged for certain noncompetitive federal oil and gas leases. The principal question presented on appeal is th scope of judicial review of agency action under the Regulatory Flexibility Act of 1980, 5 U.S.C. §§ 601-612 (1982). I

The Secretary of the Interior ("the Secretary") administers the disposal of federal onshore oil and gas lands (i.e., rights to the oil and gas deposits) under authority delegated to him by the Mineral Lands Leasing Act of 1920, 41 Stat. 437, as amended, 30 U.S.C. § 181 et seq. (1982), and the Mineral Leasing Act for Acquired Lands, 61 Stat. 913 (1947), as amended, 30 U.S.C. § 351 et seq. (1982): The law establishes two basic regimes for allocating onshore oil and gas lands: "competitive leases" with five-year terms, for land located within a known geological structure of a producing oil and gas field, 30 U.S.C. § 226(b), (e); and "noncompetitive leases" with ten-year terms, for other lands, 30 U.S.C. § 226(c), (e). Only the latter is at issue in this case.

The noncompetitive leasing program consists of two subprograms (established by regulation): the so-called "Over-The-Counter" and "Simultaneous Oil and Gas" Offer systems. The former applies to federal lands which have never been previously leased; the latter to lands whose leases have been cancelled, relinquished, terminated or allowed to expire. 43 C.F.R. Subparts 3111, 3112 (1983). OTC leases are made on a first-come, first-served basis; SOG leases are allocated by lottery. Applications for both must be accompanied by a nonrefundable filing fee, and successful applicants pay an annual per acre rental fee.

Filing and rental fees have traditionally been established by regulation, see, e.g., 11 Fed. Reg. 12952, 12953-54, 12960 (1946), with the latter subject to certain statutory minima, see, e.g., 30 U.S.C. 226(d). Prior to 1981, the filing and rental fees for all noncompetitive leases had been set at $10 and $1 per acre, respectively. 43 C.F.R. 3103.1-3, 3103.3-2(a) (1980). As a part of the Omnibus Budget Reconciliation Act of 1981, 95 Stat. 357, Congress established a statutory minimum of $25 for the filing fee (which the Secretary promptly implemented, see 46 Fed. Reg. 45887 (1981)), and directed that any increases above $25 be established by regulation. 95 Stat. 748, 1401(d)(1). The Act also instructed the Secretary to report to Congress on the feasibility of raising the rental fee on OTC and SOG leases from the levels which the regulations currently provided. Id. at 748-49 1401 (d)(2). On October 29, 1981, the Department published a Notice of Proposed Rulemaking to increase the filing fee for all noncompetitive leases from $25 per application to $75; and the rental fee for SOG leases from $1 per acre for each year in the life of the lease to $1 per acre for each of the first five years and $3 per acre for each of the last five. 46 Fed. Reg. 53645 (1981).

Sections 603 and 604 of the Regulatory Flexibility Act of 1980, 5 U.S.C. §§ 603, 604, require that when an agency proposes (§ 603) and promulgates (§ 604) a rule subject to § 553 of the Administrative Procedure Act, 5 U.S.C. § 553 (1982), it shall prepare and make available to the public an initial (§ 603) and final (§ 604) "regulatory flexibility analysis," describing inter alia the impact of the rule on small entities. The requirement can be eliminated, however, by the agency head's certification, under § 605(b), that the rule "will not . . . have a significant economic impact on a substantial number of small entities." *fn1 The Director of the Bureau of Land Management certified to this effect, based upon a report prepared by his agency. U.S. Department of the Interior, Bureau of Land Management, Determination of Effects of Rules (Oct. 22, 1981), Administrative Record at 1. The NPRM, which was signed by the Assistant Secretary of the Interior with authority over the Bureau of Land Management, included a statement to the same effect. 46 Fed. Reg. at 53645. *fn2

Upon publication of this proposed regulation to increase fees and rentals, the Department received 1,854 written comments, which it considered and purported to summarize in its statement promulgating the final rule on January 20, 1982. 47 Fed. Reg. 2864. This published notice included the Assistant Secretary's statement that the agency had determined the rule would not have a significant economic effect on a substantial number of small entities. On February 19, 1982, the rule became effective; five days later, appellant filed this action in district court for declaratory judgment and injunction, under the venue provision of the Administrative Procedure Act governing cases in which no special statutory review proceeding has been provided, 5 U.S.C. 703.

In his complaint, appellant alleged in successive counts that appellees (1) had violated § 558(b) of the Administrative Procedure Act *fn3 by issuing this regulation in a manner not authorized by § 605(b) of the Regulatory Flexibility Act; (2) had violated § 558(b) of the Administrative Procedure Act by issuing this regulation without compliance with the requirements of § 553(c) of that Act; *fn4 and (3) by both of the aforesaid violations, had denied appellant his due process rights under the Fifth Amendment. The District Court dismissed the complaint, concluding that the Department had complied with § 553(c) of the Administrative Procedure Act and that the court lacked jurisdiction to review compliance with §§ 603-605 of the Regulatory Flexibility Act. The Memorandum Opinion did not separately address appellant's due process claim. Thompson now appeals the denial of his Administrative Procedure Act and Regulatory Flexibility Act claims. II

Appellant's assertion that appellees failed to comply with § 605(b) of the Regulatory Flexibility Act rests upon two contentions, the first directed to substance and the second to procedure: First, that insufficient evidence exists in the record to support the agency's certification that the regulation will have no significant economic effect on a substantial number of small entities. And second, that appellees have disregarded the procedural requirements of § 605(b), primarily by failing to publish the requisite succinct statement of reasons which explains the certification.

The threshold issue raised by both contentions is whether (or to what extent) judicial review is precluded by the Regulatory Flexibility Act. See 5 U.S.C. § 70l(a)(1). As the Supreme Court has most recently expressed the test that guides our inquiry: "Where substantial doubt about the congressional intent exists, the general presumption favoring judicial review of administrative action is controlling," but that presumption is overcome whenever "congressional intent to preclude judicial review is 'fairly discernible' in the detail of the legislative scheme." Block v. Community Nutrition Institute, 467 U.S. 340, 104 S. Ct. 2450, 81 L. Ed. 2d 270, 52 U.S.L.W. 4700 (1984), quoting Data Processing Service v. Camp, 397 U.S. 150, 157, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1970).

The express language of the Regulatory Flexibility Act leaves little to the imagination on the issue of judicial review. Section 611 provides as follows:

(a) Except as otherwise provided in subsection (b), any determination by an agency concerning the applicability of any of the provisions of this chapter to any action of the agency shall not be subject to judicial review. (b) Any regulatory flexibility analysis prepared under sections 603 and 604 of this title and the compliance or noncompliance of the agency with the provisions of this chapter shall not be subject to judicial review. When an action for judicial review of a rule is instituted, any ...


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