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Marathon Oil Co. v. United States

ELR Citation: 31 ELR 20405
Nos. 97-5146, 236 F.3d 1313/(Fed. Cir., 12/28/2000)

The court, on remand from the U.S. Supreme Court, affirms a Court of Federal Claims' decision awarding two oil companies restitution of the full amount of bonus payments they made to the U.S. government for 10-year renewable rights to explore for and develop oil and gas resources on tracts of the outer continental shelf offshore of North Carolina. After the companies paid for the leases, the U.S. Congress passed the Outer Banks Protection Act, which required the U.S. Department of the Interior to delay lease implementation. The companies sued for restitution, and the Court of Federal Claims awarded full restitution. After reversal by the Federal Circuit, the Supreme Court reversed the Federal Circuit and held that the U.S. government repudiated its agreements with the companies and, thus, must give back the bonus payments. The court first rejects the U.S. government's argument that any restitution should be offset by the asserted reduction in the market value of the leases due to the reduced price of oil and gas at the time of the government's breach. The Supreme Court previously held that reduction in market value is irrelevant to the nonbreaching party's right to restitution of the full amount paid.

A prior decision in this litigation is published at 29 ELR 20332.]

Counsel for Plaintiffs
Carter G. Phillips
Sidley & Austin
1722 I St. NW, Washington DC 20006
(202) 736-8271

Counsel for Defendant
Mark A. Melnick
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before Plager* and Rader, JJ.