Recent 10th Circuit Decision Raises Concerns Over Timing of Lawsuits Against Federal Agencies

Impact Energy Resources, LLC v. Salazar

693 F.3d 1239 (per curiam)

A recent decision by the Tenth Circuit Court of Appeals confirms the fundamental importance of ensuring that a lawsuit challenging an adverse regulatory decision is filed within the timeline provided by an applicable statute of limitations. At the same time, the Tenth Circuit's analysis in Impact Energy Resources, LLC v. Salazar, 693 F.3d 1239 (per curiam) raises concerns over whether a federal agency may start the clock for the filing of a lawsuit without anyone else knowing about it, thereby increasing the likelihood that parties adversely affected by an agency's decision may ultimately be unable to obtain judicial review.

In Impact Energy, several energy companies filed a lawsuit against Interior Secretary Ken Salazar over the Secretary's decision to withdraw previously-approved oil and gas leases on federal land parcels in Utah. While the Bureau of Land Management had approved the leases in December 2008, Secretary Salazar reversed course less than two months later, signing an internal memorandum on February 6, 2009, that directed the Bureau to withdraw the leases. The Bureau did not mail the energy companies letters regarding the withdrawn leases until February 12.

The energy companies filed suit against Secretary Salazar and the Bureau on May 13, 2009, alleging that the decision to withdraw the approved oil and gas leases violated the Mineral Leasing Act, the Federal Land and Policy Management Act, and the Administrative Procedure Act. Because the Bureau's letters regarding the withdrawn leases were not mailed to the energy companies until February 12, the energy companies claimed that their May 13 lawsuit complied with the Mineral Leasing Act's statute of limitations, which provides that "[n]o action contesting a decision of the Secretary involving oil and gas lease shall be maintained unless such action is commenced within ninety days after the final decision by the Secretary in this matter." 30 U.S.C. § 226-2.

The Tenth Circuit, however, disagreed. In a per curiam opinion, the court held that the Secretary's February 6 internal memorandum constituted the agency's final decision and that because the energy companies' lawsuit was filed more than 90 days after February 6, it was time-barred. As the court remarked, the energy companies' "risking [of] their claims on the court's acceptance of their statute of limitations theory . . . did not pay off."

Judge Lucero and Judge Seymour jointly issued the court's per curiam opinion but offered different explanations for why the 90-day period began on February 6. According to Judge Lucero, February 6 was the appropriate starting point for the 90-day period because "it is clear that [the Secretary's] decision was final when he sent the February 6 memorandum" to the Bureau. Judge Lucero further noted that the Mineral Leasing Act "very clearly starts the clock on the date of 'the final decision of the Secretary,' not when notice of that decision is received." Judge Seymour concurred with this conclusion, explaining that since the February 6 internal memorandum was final agency action, the 90-day period for the filing of lawsuits began on that date.

Judge Tymkovich dissented from the court's decision to bar the energy companies' lawsuit under the Mineral Leasing Act's statute of limitations. Although Judge Tymkovich agreed that the Mineral Leasing Act's statute of limitations could only begin upon the exercise of final agency action, Judge Tymkovich concluded that the final agency action occurred on February 12, when the Bureau informed the energy companies by mail that the leases had been withdrawn. Critiquing his colleagues' emphasis on the February 6 internal memorandum, Judge Tymkovich opined that "[t]he fact that the BLM did not issue an order to the parties until February 12—and even then, did not notify them of the February 6 memo, is 'behavior' inconsistent with a February 6 date of finality."

The Tenth Circuit's decision in Impact Energy provides a useful reminder that, in terms of complying with a statute of limitations, the sooner a lawsuit is filed, the better. Yet underlying the court's analysis is the troubling notion that the clock for filing a lawsuit against a federal agency may start without the aggrieved party even knowing it.

Under the Tenth Circuit's analysis, federal agencies may start a limitations period by rendering regulatory decisions internally; the agencies may then notify affected parties of the decision days or weeks later, thus increasing the chances that the limitations period will pass before a lawsuit is filed. Indeed, Judge Tymkovich warned in his dissent that "the potential for agencies intentionally abusing the per curiam opinion's holding—by keeping 'final decisions' secret for some time, or by failing to disclose the precise dates such decisions were made internally—cannot be ignored," and that "[t]he notion that undisclosed—even secret—documents trigger a statute of limitations is contrary to the notion of open and accountable administrative decisionmaking."

This may not be the last time we hear of the Impact Energy litigation—the energy companies have requested that the Tenth Circuit rehear this case en banc, and the court has ordered that the federal government and environmental intervenors file responses to this request by November 13. At the very least, however, the court's decision serves as a cautionary tale for a party who expects to receive an adverse regulatory decision, as the clock for filing a lawsuit over the decision may have already begun.

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