Dunn-McCampbell Royalty Interest, Inc. v. National Park Service

REVISED United States Court of Appeals, Fifth Circuit.

DUNN-McCAMPBELL ROYALTY INTEREST, INC., a Texas Corporation; Dunn-Padre Corporation, a Texas Corporation; McCampbell Minerals, Inc., Plaintiffs-Appellants, v. NATIONAL PARK SERVICE, an Agency of the United States Department of Interior; Butch Farabee, in his official capacity as Superintendent for the Padre Island National Seashore, Defendants- Appellees.

No. 95-40770.

May 23, 1997.

Appeal from the United States District Court for the Southern District of Texas.

Before JONES, DUHÉ and EMILIO M. GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Plaintiffs Dunn-McCampbell Royalty Interest, Dunn-Padre

Corporation, and McCampbell Minerals (collectively "Dunn-

McCampbell") appeal the district court's grant of summary judgment

in the companies' action challenging the regulatory authority of the National Park Service.

I

P.F. Dunn once owned both the land and mineral rights to a

long stretch of barrier islands in Texas, now known collectively as

Padre Island. In 1926, Dunn severed the two estates, conveying the

surface estate to third parties and reserving the subsurface

mineral rights for himself. Dunn conveyed the mineral estate to

plaintiffs Dunn-McCampbell, and the companies leased the mineral 1 estate for exploration and development, primarily to the Sun Oil

Company.

Pursuant to the Padre Island National Seashore Enabling

Legislation, 16 U.S.C. § 459d et seq., the National Park Service

acquired a seventy-mile stretch of the barrier island surface

estate and established the Padre Island National Seashore ("PINS"),

the longest stretch of undeveloped ocean beach in the United

States. In 1978, the National Park Service issued its Non-Federal

Oil and Gas Rights regulations, 36 C.F.R. § 9B ("9B regulations"),

which "control all activities within any unit of the National Park

System in the exercise of rights to oil and gas not owned by the

United States where access is on, across or through federally owned

or controlled lands or waters." 36 C.F.R. § 9.30 (1995). These

regulations apply to all mineral rights that must be accessed

through national parks, including Dunn-McCampbell's mineral estate

under Padre Island.

Among other things, the 9B regulations require that mineral

developers submit a plan of operations to the National Park Service

for approval before extracting subsurface minerals. Since the

regulations took effect in 1979, Dunn-McCampbell's lessees have

submitted fifty-two plans of operations to the Park Service, and

the Park Service has approved each plan. The Park Service has

never denied a plan of operations there.

Between 1986 and 1989, Dunn-McCampbell secured releases of

most of Sun Oil's interests on Padre Island. Dunn-McCampbell has

never sought to exercise its regained mineral rights and has never 2 submitted a plan of operations to the Park Service. Dunn-

McCampbell has declared by affidavit, however, that the severity of

the 9B regulations has deterred oil companies from leasing these

mineral rights. They contend that such chilling is remediable in

this court.

Dunn-McCampbell brought this action on March 8, 1994,

asserting both facial and "as applied" challenges to the 9B

regulations. The companies claimed federal question jurisdiction

under 28 U.S.C. § 1331 , as well as jurisdiction under the Mandamus

Act, 28 U.S.C. § 1361 , and the Administrative Procedure Act ("APA")

5 U.S.C. § 704 . Specifically, Dunn-McCampbell contended that (1)

Texas law, under which the mineral estate is dominant to the

surface estate, precludes the Park Service from regulating or

blocking mineral development, (2) the National Park Service has

exceeded its constitutional and statutory authority in passing the

9B regulations, and (3) the 9B regulations amounted to an

uncompensated taking under the Fifth Amendment.

The district court granted the Park Service's motion for

summary judgment, holding that, although Dunn-McCampbell had

standing to sue, the companies failed to pursue their facial and

applied challenges within the six-year statute of limitations

applied to civil claims under 28 U.S.C. § 2401 (a). The district

court also addressed and dismissed Dunn-McCampbell's substantive

claims as being without merit. Finally, the court severed Dunn-

McCampbell's takings claim and transferred it to the Court of

Federal Claims. Dunn-McCampbell filed this timely appeal.

3 II

The district court held that Dunn-McCampbell's challenges

were time barred and that the companies' substantive claims were

without merit. We review the district court's grant of a summary

judgment motion de novo. Nose v. Attorney General of the United

States, 993 F.2d 75, 78 (5th Cir.), reh'g denied, 998 F.2d 1015

(1993). Summary judgment is appropriate when "there is no genuine

issue as to any material fact and ... the moving party is entitled

to a judgment as a matter of law." FED. R. CIV. P. 56(c). When

ruling on summary judgment motions, we credit the evidence of the

nonmovant and draw all justifiable inferences in his favor.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 , 106 S.Ct. 2505,

2513 , 91 L.Ed.2d 202 (1986). However, we must affirm summary

judgment if there is no need for trial. O'Hare v. Global Natural

Resources, Inc., 898 F.2d 1015 , 1017 (5th Cir.1990).

As a preliminary matter, we note that neither the National

Park Service organic statute, 16 U.S.C. § 1 et seq., nor the Padre

Island National Seashore Enabling Legislation, 16 U.S.C. § 459d,

provides directly for judicial review, and neither creates a

private right of action. Federal courts are courts of limited

jurisdiction, and they may not hear claims without jurisdiction

conferred by statute. Veldhoen v. United States Coast Guard, T.A., 35 F.3d 222, 225 (5th Cir.1994). However, even absent a statutory

cause of action, Dunn-McCampbell may challenge the agency's

authority under the APA. See 5 U.S.C. § 704 ("Agency action made

reviewable by statute and final agency action for which there is no 4 other adequate remedy in a court are subject to judicial review.").

Dunn-McCampbell may therefore challenge the National Park Service's

9B regulations under the APA, and this court will have federal

question jurisdiction under 28 U.S.C. § 1331 . Veldhoen, 35 F.3d at

225 .

Accordingly, Dunn-McCampbell's APA challenge is governed by

the general statute of limitations provision of 28 U.S.C. §

2401 (a), which provides that every civil action against the United

States is barred unless brought within six years of accrual.1

Under established principles of sovereign immunity, the United

States is immune from suit unless it consents, and the terms of its

consent circumscribe our jurisdiction. United States v. Dalm, 494

U.S. 596, 608 , 110 S.Ct. 1361, 1368 , 108 L.Ed.2d 548 (1990). The

applicable statute of limitations is one such term of consent, and

failure to sue the United States within the limitations period is

not merely a waivable defense. It operates to deprive federal

courts of jurisdiction. Sisseton-Wahpeton Sioux Tribe v. United

States, 895 F.2d 588, 592 (9th Cir.), cert. denied, 498 U.S. 824 , 111 S.Ct. 75 , 112 L.Ed.2d 48 (1990).

A

Dunn-McCampbell asserts both facial and applied challenges to

the Park Service regulations. The companies assert that the 1 Although an administrative proceeding is not a civil action, a complaint filed in federal court seeking review of an administrative decision is. Wind River Mining Corp. v. United States, 946 F.2d 710, 712 (9th Cir.1991); N.V. Philips' Gloeilampenfabrieken v. Atomic Energy Comm'n, 316 F.2d 401 , 405-06 (D.C.Cir.1963).

5 regulations exceeded National Park Service authority under the

Padre Island National Seashore Act, 16 U.S.C. § 459d et seq. We

need not reach the merits of that claim here. On a facial

challenge to a regulation, the limitations period begins to run

when the agency publishes the regulation in the Federal Register.

Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384 , 68 S.Ct. 1,

3 , 92 L.Ed. 10 (1947); Nutt v. Drug Enforcement Administration, 916 F.2d 202, 203 (5th Cir.1990); Friends of Sierra Railroad, Inc.

v. Interstate Commerce Comm'n, 881 F.2d 663, 667-68 (9th Cir.1989),

cert. denied, 493 U.S. 1093 , 110 S.Ct. 1166 , 107 L.Ed.2d 1069

(1990); see also 44 U.S.C. § 1507 (filing a document in the

Federal Register is sufficient to give notice of the contents to

any person subject to or affected by it). Dunn-McCampbell failed

to mount a facial challenge to the regulations within six years of

their publication in 1979, and the companies' cause of action falls

outside the limitations period for civil actions against the United

States in § 2401(a).

It is possible, however, to challenge a regulation after the

limitations period has expired, provided that the ground for the

challenge is that the issuing agency exceeded its constitutional or

statutory authority. To sustain such a challenge, however, the

claimant must show some direct, final agency action involving the

particular plaintiff within six years of filing suit. The Ninth

Circuit, for example, has held that a challenger may contest an

agency decision as exceeding constitutional or statutory authority

after the limitations period, but only by petitioning the agency to 6 review the application of the regulation to that particular

challenger. Wind River Mining Corp. v. United States, 946 F.2d

710, 715 (9th Cir.1991). Although the Wind River Court never said

so explicitly, the court treated the agency's denial of that

petition as a "final agency action" sufficient to create a new

cause of action under the APA.

Similarly, in Public Citizen v. Nuclear Regulatory Commission,

the D.C. Circuit held that it had jurisdiction to hear a

substantive challenge after the limitations period had run. 901

F.2d 147, 152 (D.C.Cir.), cert. denied, 498 U.S. 992 , 111 S.Ct.

536 , 112 L.Ed.2d 546 (1990). In that case, the claimant filed a

petition with the agency to rescind regulations, then challenged

the agency's denial of the petition in federal court. Id. Indeed,

we have held that when an agency applies a rule, the limitations

period running from the rule's publication will not bar a claimant

from challenging the agency's statutory authority. Texas v. United

States, 749 F.2d 1144, 1146 (5th Cir.), reh'g denied, cert. denied, 472 U.S. 1032 , 105 S.Ct. 3513 , 87 L.Ed.2d 642 (1985).

These cases do not create an exception from the general rule

that the limitations period begins to run from the date of

publication in the Federal Register. They merely stand for the

proposition that an agency's application of a rule to a party

creates a new, six-year cause of action to challenge to the

agency's constitutional or statutory authority.

If Dunn-McCampbell were able to point to such an application

of the regulations here, or if they had petitioned the National 7 Park Service to change the 9B regulations and been denied, this

court might have jurisdiction to hear that case. Dunn-McCampbell

has failed to make such a showing. Accordingly, we hold that the

applicable statute of limitations bars Dunn-McCampbell's facial

challenge to the 9B regulations.

B

An "as applied" challenge must rest on final agency action

under the APA. 5 U.S.C. § 704 ("Agency action made reviewable by

statute and final agency action for which there is no remedy in a

court are subject to judicial review."). But absent some "final"

action, the APA will not provide a cause of action to challenge

agency decisions. Lujan v. National Wildlife Federation, 497 U.S.

871, 882 , 110 S.Ct. 3177, 3185 , 111 L.Ed.2d 695 (1990); Veldhoen, 35 F.3d at 225 . The Supreme Court has identified four factors for

determining when agency action is final: (1) whether the

challenged action is a definitive statement of the agency's

position, (2) whether the action has the status of law with

penalties for noncompliance, (3) whether the impact on the

plaintiff is direct and immediate, and (4) whether the agency

expects immediate compliance. Abbott Laboratories v. Gardner, 387

U.S. 136, 149-53 , 87 S.Ct. 1507, 1516-17 , 18 L.Ed.2d 681 (1967),

overruled on other grounds, Califano v. Sanders, 430 U.S. 99, 105 , 97 S.Ct. 980, 984 , 51 L.Ed.2d 192 (1977).

Under this standard, Dunn-McCampbell arguably might challenge

a Park Service denial of a proposed plan of operations. Dunn-

McCampbell might even be able to challenge action that the Park 8 Service took to block the companies' access to their mineral

estate. We need not reach those questions here, however, since it

is undisputed that neither of these events has occurred. The

National Park Service has taken no action against Dunn-McCampbell

that demands immediate compliance. It is a tautology that Dunn-

McCampbell may not challenge the 9B regulations as applied until

the Park Service applies the regulations to Dunn-McCampbell.2 III

In addition to federal question jurisdiction, Dunn-McCampbell

has asserted jurisdiction under the Mandamus Act. This statute

requires exceptional showings that Dunn-McCampbell has not met.

The statute provides that: "The district courts shall have

original jurisdiction of any action in the nature of mandamus to

compel an officer or employee of the United States or any agency

thereof to perform a duty owed to the plaintiff." 28 U.S.C. §

1361 .

Mandamus is an extraordinary remedy, available only where

government officials clearly have failed to perform

nondiscretionary duties. Pittston Coal Group v. Sebben, 488 U.S.

105, 121 , 109 S.Ct. 414, 424 , 102 L.Ed.2d 408 (1988); Carter v.

Seamans, 411 F.2d 767, 773 (5th Cir.1969), cert. denied, 397 U.S.

941 , 90 S.Ct. 953 , 25 L.Ed.2d 121 (1970). In order for mandamus to

issue, Dunn-McCampbell must demonstrate that a government officer 2 Relatedly, we need not decide whether Dunn-McCampbell would have standing to contest the Park Service's regulation of the companies' lessee Sun Oil, because the last such regulation occurred more than six years before this action was filed.

9 owes the companies a legal duty that is a specific, ministerial

act, devoid of the exercise of judgment or discretion. Richardson

v. United States, 465 F.2d 844, 849 (3d Cir.1972), rev'd on other

grounds, 418 U.S. 166 , 94 S.Ct. 2940 , 41 L.Ed.2d 678 (1974). The

legal duty must be set out in the Constitution or by statute,

Giddings v. Chandler, 979 F.2d 1104, 1108 (5th Cir.1992), and its

performance must be positively commanded and so plainly prescribed

as to be free from doubt. Id.

Dunn-McCampbell has established none of the above. The

companies have not identified which duty they are owed. They have

not pointed to a statutory or constitutional basis for any duty.

We therefore cannot, and need not, decide whether such a duty would

be mandatory or discretionary. Dunn-McCampbell's general claims of

agency overreaching are simply insufficient to create a legal duty

under the Mandamus Act.

IV

In sum, Dunn-McCampbell is time barred from asserting a facial

challenge, and the Park Service has not yet applied the regulations

to the companies, so the companies may not challenge the 9B

regulations under the APA. They have not identified a statutory or

constitutional duty meriting relief under the Mandamus Act.

For these reasons, we hold that the district court was not in

error in granting the Park Service's motion for summary judgment.

Accordingly, we AFFIRM.

EDITH H. JONES, Circuit Judge, dissenting:

With due respect to my colleagues, I am not convinced that the 10 statute of limitations has run against Dunn-McCampbell in this

case. I would reverse and remand for further proceedings that

would elicit when Dunn-McCampbell first began to be injured by the

cost of compliance with the regulations.

It is important to clarify, as the majority has not done, that

under Texas law, Dunn-McCampbell was prevented in two ways from

being able to challenge the Park Service regulations while it

remained simply a lessor/overriding royalty owner, whose mineral

interest was being developed by other operators. Its interest was

a non-possessory interest with a possibility of reverter when the

leases terminated. First, the holder of an overriding royalty in

Texas bears no portion of the production costs; its interest is

based on gross production from the wells. Hence, Dunn-McCampbell

could not have been charged for any increased operating costs

caused by the Park Service regulations and suffered no injury that

could confer standing to sue the government. Additionally, the

lease operator in Texas is responsible for prudently developing and

maintaining the mineral lease, a responsibility which includes the

obligation to pursue administrative remedies to benefit the lease.

Amoco Production Co. v. Alexander, 622 S.W.2d 563, 570 (1981); R.

Hemingway, Texas Law of Oil & Gas, § 819(D) (3d ed.1991). It fell

to the lessee, Sun, rather than Dunn-McCampbell as lessor to

maintain a lawsuit against the Park Service while Sun was operator,

but as noted, such a lawsuit could produce immediate monetary

damages only for Sun.

Because of the parties' state law and contractual positions, 11 which surely should not be ignored for standing purposes, Dunn-

McCampbell could not have sued the Park Service before it began to

reacquire its leases in 1986-89. Limitations on certain challenges

to the regulations could not begin to run against Dunn-McCampbell

until that time.

The only legal question, then, is what kind of claims Dunn-

McCampbell could advance after 1986-89 against the Park Service,

when it acquired standing to sue. I agree with the majority that

by the time Dunn-McCampbell achieved standing, it could not

challenge the "procedural" basis for the Park Service's 1979

regulations. According to terminology developed in the D.C.

Circuit, "procedural" challenges address the agency's compliance

with rulemaking requirements such as notice and comment, while

"substantive" challenges attack the regulation's compliance with

statutory authority or other substantive deficiency. See generally

N.L.R.B. Union v. FLRA, 834 F.2d 191, 195-97 (D.C.Cir.1987).

Because it is imperative to the administrative process that

procedural challenges be posed at the onset of a newly-promulgated

regulation, a number of agency statutes set very short deadlines,

e.g. 60 days, on initiating such claims. See, e.g., id. The Park

Service lacks such organic statutory protection, however, so the

six-year general federal limitations statute governs procedural

challenges in this case, and no party, including Dunn-McCampbell,

could pursue these challenges after 1985.

It is equally well settled, however, that if an agency 12 regulation is not authorized by its governing statute,3 a party

injured by application of the regulation may raise the issue

outside the statutory limitations period; a regulation initially

unauthorized by statute cannot become authorized by the mere

passage of time. The point that divides the majority and me is

their insistence that the agency's lack of statutory authority

could be raised by Dunn-McCampbell only in defense against an

agency enforcement action or if the company petitions to rescind or

amend the Park Service regulations and receives an adverse

decision. I differ with the majority over what kind of "injury"

from agency "action" is necessary to precipitate the claim. In my

view, it is a waste of time to require as a prerequisite to suit

that Dunn-McCampbell manufacture "agency action" by petitioning the

Park Service to revoke its regulations and suffering—at some time

in the possibly remote future—the inevitable rebuff. Dunn-

McCampbell claims that the existence of Park Service regulations

renders it uneconomic for new operators even to bid on

reinstituting production from its Padre Island mineral rights.4 3 While nearly all the courts that have decided these questions analytically distinguished between "procedural" and "substantive" challenges, as I have done, the majority identifies only "facial" and "as applied" challenges to the regulations. The majority's terminology is unnecessarily confusing. A "facial" challenge could attack the procedure, the substantive basis, or the regulation's subservience to its governing statute, and under prevailing law, only the first type of challenge is absolutely barred within fixed periods after the statute has been promulgated. Despite the majority's failure to conform to the more common analytical distinction, I do not understand their opinion to disagree with those cases. 4 For this reason, it is not material that Dunn-McCampbell has not approached the Park Service with plans to develop the leases.

13 The company seeks declaratory judgment relief from the regulation's

onerous effect. This claim may or may not be well-founded, but it

definitely alleges injury occasioned by agency action, consisting

of the overlay of numerous Park Service regulations and the

constantly changing and thus unpredictable nature of the

regulations. Consequently, if Dunn-McCampbell filed suit within

six years after it effectively reacquired its leases, its action is

timely.

We must recall the essence of Dunn-McCampbell's legal

claim—that when Padre Island Park was transferred to the federal

government, Texas reserved the right to regulate oil and gas

production from Dunn-McCampbell's mineral interests, which were

never transferred to federal jurisdiction. If this claim is

correct, the Park Service has not had jurisdiction to regulate at

all. Dunn-McCampbell poses a straightforward, albeit complex,

legal issue readily amenable to judicial review. Under the

particular facts of this case, it is perverse for the majority to

require Dunn-McCampbell to spend a lot of time and money

petitioning the agency to reconsider its authority simply to lay

the predicate for a future lawsuit.5 If Dunn-McCampbell has sued

According to its allegations, to do so would require an operator to invest considerable resources in making a good-faith estimate of the costs of its operations and the hindrances caused by Park Service regulations—and all this would be done simply to precipitate a lawsuit. Under these circumstances, Dunn- McCampbell's claim is ripe for adjudication. 5 See Public Citizen v. Nuclear Regulatory Comm'n, 901 F.2d 147, 152 (D.C.Cir.1990) ("were we to hold in this case that Public Citizen's challenge to the lawfulness of the NRC's action was untimely, Public Citizen could file a petition for rulemaking and 14 within six years of the dates it began effectively reacquiring

leases, I would allow this suit to go forward.

then raise its claim of unlawfulness when the Commission denied the petition. Such a requirement would be a waste of everyone's time and resources.")

15