FEDERAL AND INDIAN ADMINISTRATIVE APPEALS UPDATE

• Jurisdiction: United States

Federal and Indian Oil and Gas Royalty Valuation and Management Vol. 1
(Jan 1992)
CHAPTER 14C
FEDERAL AND INDIAN ADMINISTRATIVE APPEALS UPDATE
Howard W. Chalker
Office of the Solicitor Department of the Interior
Washington, D.C.

Remarks of Howard W. Chalker, Attorney, Branch of Royalty Management, Office of the Solicitor, United States Department of the Interior on Litigation and Regulatory Updates, sponsored by the Rocky Mountain Mineral Law Foundation and the Minerals Management Service, January 30, 1992.

The following is a summary of each side's position on several important appeals pending at the Interior Board of Land Appeals (IBLA). The first two appeals involve § 10 of the Outer Continental Shelf Lands Act, 43 U.S.C. § 1339. Under the provisions of this section, the Secretary of the Interior cannot approve a refund of an overpayment made in connection with an offshore lease unless a request for repayment of such overpayment is filed with the Secretary within two years after the making of the payment.

1. Mesa Operating Limited Partnership, IBLA 91-54, MMS-89-0165-OCS.

At issue is what constitutes a "request for a repayment" under the provisions of § 10 of the Outer Continental Shelf Lands Act, 43 U.S.C. § 1339. Mesa filed what it termed a "Protective Claim for Refund of Royalty Overpayments." It identified the offshore oil and gas leases to which the claim applied, but it provided no reason as to why a refund was sought. Rather, Mesa speculated that at some time in the future, it may be required to make adjustments to its royalty payments.

In Shell Offshore Inc., 96 IBLA 149 (1987), the IBLA established the minimum criteria of what constitutes a request for a repayment. Such a request must:

1. Be written;

2. Identify the claimant;

3. Identify the leases affected; and

4. State the reason a refund is sought.

The MMS argued that Mesa's filing was not a proper refund request because it did not identify why a refund was sought. Additionally, it did not comply with § 10's purpose of requiring a payor to promptly verify the correctness of its payments within the time provided by this section.

2. Chevron U.S.A., Inc., IBLA 90-425; MMS-89-0304-OCS; MMS-89-0305-OCS.

In this appeal, Chevron's refund request was transmitted but not received by MMS within the two year period set out in § 10. Chevron argued that transmittal of the refund request within the two year period complies with § 10's requirement that a refund request be filed...