Continental Resources, Inc. v. Sally Jewell , 846 F.3d 1232 ( 2017 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 25, 2016 Decided January 31, 2017
No. 15-5333
CONTINENTAL RESOURCES, INC.,
APPELLANT
v.
SALLY JEWELL, SECRETARY, UNITED STATES DEPARTMENT OF
THE INTERIOR, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:14-cv-00065)
L. Poe Leggette argued the cause for Appellant. With him
on the briefs were Rosario C. Doriott Domínguez and Alexander
K. Obrecht.
Tamara N. Rountree, Attorney, U.S. Department of Justice,
argued the cause for Appellees. With her on the brief were John
C. Cruden, Assistant Attorney General, and David Gunter,
Attorney.
Before: BROWN and SRINIVASAN, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.
2
Opinion for the Court filed by Senior Circuit Judge
RANDOLPH.
RANDOLPH, Senior Circuit Judge: The district court
dismissed as untimely an action Continental Resources, Inc.
brought for judicial review of a decision of the Department of
the Interior. Cont’l Res., Inc. v. Jewell, 134 F. Supp. 3d 231,
237 (D.D.C. 2015). The question on appeal is whether, as the
district court ruled, Continental filed its action more than 180
days after its “receipt of notice” of Interior’s “final decision.”
30 U.S.C. § 1724(j) & (h)(2)(B).
Continental extracts gas from leased federal land and pays
royalties to the Interior Department. On May 5, 2010, an agency
within the Interior Department began an administrative
proceeding against Continental by issuing an order demanding
more than $1.7 million in additional royalties. Continental took
an administrative appeal to the agency’s director. From the date
of the agency’s order, the Secretary or a designee had thirty-
three months to reach a final decision in this matter. See 30
U.S.C. § 1724(h)(1) & (2); Murphy Exploration and Production
Co. v. U.S. Dep’t of Interior, 252 F.3d 473, 480-82 (D.C. Cir.
2001). Under § 1724(h)(2)(B), if the Secretary fails to reach a
final decision within that time, the Secretary “shall be deemed
to have issued a final decision” against the lessee when the
amount in controversy is $10,000 or more, as it was here. 30
U.S.C. § 1724(h)(2)(B).
“The 33-month period may be extended by any period of
time agreed upon in writing by the Secretary and the appellant.”
Id. § 1724(h)(1). In July 2010, Continental and the Interior
agency entered into such an extension agreement, placing
Continental’s appeal “on hold from June 12, 2010 through
December 13, 2010, pending completion of settlement
discussions.” Joint Appendix 151. Extension agreements are
3
apparently common. See Agency’s Mot. for Recons. 7-10,
Cont’l Res., Inc. v. Jewell, No. 1:14-cv-00065-RDM (D.D.C.
Sept. 25, 2013), ECF No. 21-3. Continental’s written agreement
also stated that the parties extended “for the same number of
days the 33-month time frame for processing appeals as set out
in 30 U.S.C. 1724(h)(1),” but that either party could terminate
the agreement. Joint Appendix 151. Approximately three
weeks later, on August 18, 2010, the Interior agency informed
Continental that it had decided not to enter into settlement
negotiations.
In April 2013, Continental received an unfavorable decision
from the agency’s director. The company filed an
administrative appeal to the Interior Board of Land Appeals.
The Board, concerned about its jurisdiction, issued a show-cause
order questioning whether the “deemed final” provision had
already been triggered, thus ending all administrative
proceedings with a final decision of the Secretary. In response,
Continental argued that the August 2010 letter from the Interior
agency terminated their extension agreement and that the
deadline for the Secretary’s decision therefore passed on June
15, 2013.1 Interior argued that the letter had not terminated the
extension agreement and that the deadline would not be reached
1
The Board would find for Continental and hold that the deadline
passed on June 17, 2013. That June 15, 2013, was a Saturday may
explain this discrepancy. See FED. R. CIV. P. 6(a). But this
discrepancy, like others in the parties’ proposed chronologies, does
not affect the outcome of this appeal.
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until August 12, 2013.2 In a five-page opinion, the Board ruled
that the deadline passed on June 17, 2013, at which time the
Secretary’s non-decision became “deemed final.”3 Cont’l Res.,
Inc., 184 IBLA 59, 64 (2013). The Board issued its opinion on
July 29, 2013.
Under 30 U.S.C. § 1724(j), Continental had 180 days from
“receipt of notice” of the final agency action to file its
complaint. Continental filed the complaint in the district court
on January 16, 2014. Interior moved to dismiss it, arguing that
the complaint was untimely because more than 180 days had
passed from the date of the Secretary’s “deemed final decision,”
which Interior identified as June 17, 2013, the date given in the
opinion of the Board of Land Appeals. The district court agreed
and dismissed Continental’s complaint. Cont’l Res., 134 F.
Supp. 3d at 237.
2
This proposed deadline created another discrepancy in the
record. Interior argued for the August 12 deadline by adding 154 days
to the 33-month period, but it later conceded that under its own theory
of the case, the extension was for 184 days. See Agency’s Mot. for
Recons. 5 n.3, Cont’l Res., Inc. v. Jewell, No. 1:14-cv-00065-RDM
(D.D.C. Sept. 25, 2013), ECF No. 21-3.
3
As the Board recognized, the thirty-three months plus extension
should have been calculated from the time Interior issued its order
requiring Continental to pay up (May 5, 2010), rather than from the
time Continental took an appeal from that order (June 10 or 11, 2010).
Cont’l Res., Inc., 184 IBLA 59, 62 n.3 (2013). See also 30 U.S.C.
§ 1702(18); Murphy Exploration, 252 F.3d at 480-82. This error does
not affect the outcome of the appeal.
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Did the 180-day period begin on June 17, 2013, as Interior
argued and the district court decided, or on July 29, 2013, the
date of the Board’s decision, as Continental argued? If June 17,
Continental’s complaint is time-barred;4 if July 29, the
complaint is timely.
In answering this question we understand that the 180-day
period for seeking judicial review did not run from the date of
final agency action. The 180-day period ran instead from the
date Continental received notice of that action. Section 1724(j)
is quite clear about this. The provision states that “a judicial
proceeding challenging the final agency action” is “timely so
long as such judicial proceeding is commenced within 180 days
from receipt of notice by the lessee or its designee of the final
agency action.” 30 U.S.C. § 1724(j).
So when did Continental receive notice of the Secretary’s
“deemed final” decision? The date of notice could not possibly
have been earlier than the ruling of the Board of Land Appeals
on July 29, 2013. Until then neither Continental nor Interior
could know what date the Board would designate as the date of
the Secretary’s final decision. Both sides had presented
colorable arguments to the Board. Needless to say, one cannot
be on notice of final agency action while the date of that action
has not yet been determined. Only when the Board ruled on July
29, 2013, did Continental learn that § 1724(h) had converted
4
The district court treated this as a matter of “subject-matter
jurisdiction.” Cont’l Res., 134 F. Supp. 3d at 233. United States v.
Kwai Fun Wong, 135 S. Ct. 1625 (2015), decided five months before
the district court decision, makes it doubtful that the 180-day period
is jurisdictional, but nothing in our opinion turns on the point.
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Interior’s inaction into a “final decision in favor of the
Secretary” on June 17, 2013. The Board’s ruling, and
Continental’s “receipt of notice” of that ruling, triggered the
running of the 180-day period under § 1724(j). It follows that
Continental commenced this action within the 180-day period.
The company filed its complaint on January 16, 2014, 171 days
after the Board’s ruling of July 29, 2013.
The district court decided that the 180-day period ran from
June 17, 2013, the date of the Secretary’s deemed-final decision.
But as we have pointed out, § 1724(j) provides that the 180-day
period runs not from the date of the final decision, but from the
lessee’s “receipt of notice” of the final decision. To explain the
discrepancy, the district court stated that “although the plaintiff
did not receive notice of final agency action until July 29, 2013,
the plaintiff received notice by operation of law that the
Secretary had not issued a decision within the 33 month period.”
Cont’l Res., 134 F. Supp. 3d at 237. “Operation of law”?5 What
“law”? The “law” here is § 1724(h)’s 33-month provision and
§ 1724(j), pursuant to which the 180-day period runs “from
receipt of notice.” If the district court believed that § 1724(h)
5
When courts have interpreted “receipt of notice” in other
contexts, the discussion has often focused on a question not presented
here – namely, who must receive the mailed notice. We have held that
in some instances the litigant must personally receive the notice, Bell
v. Brown, 557 F.2d 849, 857 (D.C. Cir. 1977), while receipt by the
litigant’s attorney sufficed in others, Rao v. Baker, 898 F.2d 191, 198
(D.C. Cir. 1990). See also Irwin v. Dep’t of Veterans Affairs, 498 U.S.
89, 91-93 (1990); Christmas v. Spellings, 404 F. Supp. 2d 239, 240-41
(D.D.C. 2005) (collecting cases). We have never held that a party
received notice by “operation of law” and we are not aware of any
decision to that effect in the other courts of appeals.
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somehow triggered § 1724(j), it offered no basis for that belief.
It instead relied on the “operation of law,” and thereby read
§ 1724(j)’s “receipt of notice” requirement out of the statute.
We do not decide what level of notice is required in other
situations. This case does not involve, for instance, the
§ 1724(h) conversion deadline passing without dispute or the
Secretary issuing a timely decision on the merits. We hold only
that because Continental could not have known the date of final
agency action until July 29, 2013, receipt of notice could not
have occurred before then. Continental’s complaint was
therefore timely. The judgment of the district court is reversed
and the case is remanded for further proceedings.
So ordered.