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Marathon Oil Co. v. Babbitt

Citation: 28 ELR 20430
(01/02/1998)

The court holds that the issue of whether a six-year statute of limitations for actions brought by the United States applies to Minerals Management Service (MMS) administrative orders to pay oil and gas royalties is moot. The MMS issued an order on May 17, 1994, finding that an oil company's predecessor had underpaid royalties due on natural gas leases and directing the oil company to recalculate the royalty rate and pay additional royalties. The oil company sued. While that suit was pending, the MMS subsequently withdrew the order because a related administrative appeals decision invalidated the legal basis on which the order was issued.

The court first holds that the government's withdrawal of the order is sufficient to moot the controversy between the oil company and the MMS. The court next holds that the parties' disagreement regarding the applicability of a six-year statute of limitations to the MMS' orders does not satisfy the "capable of repetition yet evading review" exception to the mootness doctrine. Though the MMS' actions may delay review of the oil company's statute of limitations argument, because the oil company will have to challenge the MMS' position in another action involving a different order, review will not be evaded as envisioned by the exception to the mootness doctrine simply because the order was withdrawn. The court next rejects the oil company's contention that the MMS' withdrawal of the order constitutes voluntary cessation of illegal conduct. The MMS withdrew the order because the legal basis on which it had issued the order was negated. Moreover, the withdrawal of the order eliminates the controversy over the applicability of the statute of limitations to the order. The court further holds that this litigation does not present a live controversy regarding the MMS' policy that the six-year statute of limitations does not apply to MMS' orders. When litigation has focused almost exclusively on one specific agency action, passing references to an allegedly illegal policy will not prevent the mooting of the entire case. Last, the court holds that the oil company's 14 similar pending administrative appeals, which are not before the court, do not allow it to fashion declaratory relief.

Counsel for Plaintiff
Allan L. Hale
Hale, Pratt, Midgley, Laitos, Green & Hackstaff
1675 Broadway, Ste. 2000, Denver CO 80202
(303) 592-8700

Counsel for Defendants
Lois Schiffer
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before Anderson and Henry, JJ.