UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
W.A. MONCRIEF, JR., )
)
Plaintiff, )
)
v. ) Civil Case No. 17-609 (RJL)
)
UNITED STATES DEPARTMENT )
OF INTERIOR, )
> F I L E D
and )
) sEP 2 4 2018
JAMIE E. CONNELL, ) .
Cl k,U.S.D| &B k t
in her official capacity as State Director, ) Cog:ts for the hilr:t:rtlct o?%orlillr’n‘t:)¥a
Mom‘aml Dakotas Ojjice, Bureau of Land )
Management, )
)
Defendants. )
¢~`
MEMoRANDUM oPINIoN
september§f, 2018 [## 19, 21, 241
Plaintiff W.A. Moncrief, Jr. (“Moncrief’), the holder of a federal oil and gas lease
in Montana, brings suit against the United States Department of Interior (“Interior”) and
the Director of the Montana Bureau of Land Management (“BLM”) (collectively, “federal
defendants” or “the Government”) relating to the Governrnent’s cancellation of his lease
after suspending all oil and gas drilling and extraction activity on that lease for more than
thirty years. See Compl. [Dkt. # l] 111[ 9_ll, 48_59. Plaintiff seeks declaratory and
injunctive relief, including that this Court vacate the cancellation and reinstate the lease,
based on federal defendants’ alleged violations of the Administrative Procedure Act
(“APA”), 5 U.S.C. § 551 et seq. See Compl. 1[1] 60-86. Before this Court are the parties’
Cross-l\/lotions for Summary Judgment. See Pl.’s Motion for Summary Judgment [Dl.7
IlI. Even Assuming lnterior Had Authority to Cancel the Lease, Plaintiff
Moncrief Is a Bona Fide Purchaser Within the lVleaning of the APA
The arbitrary cancellation of Moncriefs lease, without notice, also violates his
rights a hona_/ide purchaser under the l\/lLA, 30 U.S.C. § 184(h)(2)_; 43 C.F.R. § 3108.4,
because Plaintiff l\/[oncrief “[1] acquired his interest in good faith, [2] for valuable
consideration, and [3:| without notice of the [alleged] violation,” Sw. Petroleu/n Corp. v.
Udall, 361 F.2d 650, 656 (10th Cir. 1966).
Defendants claim that only a violation of the l\/lLA itself, not violations of NEPA,
NHPA, or other statutes, warrants honafide purchaser protection Defs.’ l\/lot. at 20. But
that argument is entirely circular! Defendants cannot at once argue that a violation of
NEPA and NHPA renders a lease “subject to cancellation” under its regulations, see 43
7 l also note that defendants apparently ignored the discretion with which agencies apply
procedural statutes like NEPA and NHPA as part of the consultation process. See, e.g.,
Winter v. Natural Resources Defense Council, lnc., 555 U.S. 7, 24 (2008) (noting that the
issuance of a detailed, 293-page EA served the same purpose as an EIS oftaking a “hard
look at environmental consequences”); Myersville Citizens/`or a Rural Cnuy., [nc. v.
F.E.R.C., 783 F.3d 1301, 1322-26 (D.C. Cir. 2015) (upholding “[the] Commission's
consideration of the [proposed] alternative in its Environmental Assessment [as]
adequate”); Duncan ’s Point Lot Owners Ass ’n [nc., 522 F.3d at 377 (noting that our
Circuit “has upheld agency determinations not to prepare an ElS” in several instances)_;
City ofGrapevine, Tex. v. Dep’t ofTransp., 17 F.3d 1502, 1509 (D.C. Cir. 1994) (finding
no violation of the NHPA where agency approved a project before consulting with the
ACHPA because the project “was expressly conditioned upon completion of the § 106
process”). However, l need make no finding on whether there was in fact compliance
with NEPA or NHPA. Regardless ofthe lawfulness of the lease’s issuance thirty years
ago, the agency’s rescission of the lease must still comply with the APA. See, e.g., A/n.
Wild Horse Pres. Ca)npaign, 873 F.3d at 928 (“we cannot condone the correction ofone
error by the commitment of another”) (quoting Gray v. Mississippi, 481 U.S. 648, 663
(1987)) (internal quotation marks omitted).
15
C.F.R. §3108.3(d), and at the same time deprive plaintiffofthe the exception in those same
regulations prohibiting cancellation “to the extent that such an action adversely affects the
title or interest ofa hona_fide purchaser.” 43 C.F.R. § 3108.4. That is too clever by half.
Neither a literal, nor a logical, reading of the agency’s regulations could support such a
result.
Plaintiffl\/loncriefeasily qualifies for bona fide purchaser status because he tendered
valuable consideration to his predecessor-in-interest, ARCO. See MoncriefDecl. [Dkt. #
19-2] 11 2. There is no evidence that he did not acquire his interest in good faith. And as
for notice, notice of continued suspensions while an ElS was conducted on APDs on other
leases is hardly notice that his lease was void for the reasons already outlined above.
lndeed, l\/loncrief`s predecessor, ARCO, requested the suspension on the understanding
that it would “terminate upon completion of the Environmental lmpact Statement for [the]
pending application[s].” see 6/1/88 DOl Letter to ARCO, J.A. Vol. l at 68 (BLl\/[-
1\/1000746); Pl.’s l\/lot. at 11. And the suggestion ofvoidness is further rebutted by lnterior’s
failure to cancel the lease to remedy the supposed violation for more than thirty years.
Because 1 find a violation of the APA on the grounds above, l need not reach
Moncrief`s additional arguments that the Secretary’s cancellation violated his due process
rights and was time barred by the statute of limitations
CONCLUSION
For the reasons outlined above, l find that federal defendants’ decision to cancel the
1\/loncrief lease was arbitrary and capricious '1`hus, for all of the reasons outlined in this
Opinion, plaintiffs Motion for Summary Judgment [Dkt. #19] is GRANTED, defendants’
16
Cross-Motion for Summary Judgment [Dkt. #21] and defendant-intervenor’s Cross-
Motion for Summary Judgment [Dkt. #24] are DENIED, and this case is remanded to the
Department of lnterior with the order that the Moncrief lease be REINSTATED.
United States District Judge
17