Medco Energi U S L L C v. Haaland

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAKE CHARLES DIVISION

MEDCO ENERGI U S L L C CASE NO. 2:23-CV-01755

VERSUS JUDGE JAMES D. CAIN, JR.

DOUG BURGUM ET AL MAGISTRATE JUDGE CAROL B.

WHITEHURST

MEMORANDUM RULING

Before the court are cross-motions for summary judgment filed, respectively, by

plaintiff Medco Energi US LLC (“Medco”), as predecessor in interest to Sanare Energy

Partners, LLC (“Sanare”) (referred to collectively as “Plaintiff”) and by defendants Doug

Burgum, Secretary of the United States Department of the Interior (“DOI”), and Howard

Cantor, Director of DOI’s Office of Natural Resources Revenue (“ONRR”). Docs. 25, 27.

Both motions are opposed. Docs. 27, 29. Also before the court is a Motion to Admit Exhibit

5 [doc. 32] filed by plaintiff, with opposition [doc. 34] from the government.

I.

BACKGROUND

A. 2017 and 2018 Fee Assessment Background

This suit arises from inspection fees assessed by ONRR to plaintiff, a lessee on

multiple offshore federal mineral leases in the Gulf of Mexico, in 2017 and 2018. Three

leases give rise to the facility inspection fees at issue: Lease OCS-G 04909 (“MP 64”);

Lease OCS-G 05692 (“MP 65”); and Lease OCS-G 05392 (“EC 317”). Nineteen

installations form the MP 64 lease block. AR 229. One of these, referred to as the “A, AQ

Platform,” consists of two installations containing processing and metering equipment and

a separate, smaller installation containing a well (#2). /d. The three facilities are in close

proximity and connected via walkways:

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AR 240. The A, AQ platform is surrounded by eighteen individual wells that tie back to

this central structure via subsea flowlines. AR 229-30. These eighteen wells are supported

by caissons that protrude above the waterline and contain drive pipes and small work decks

for accessing the wells. /d. They range in distance from one third of a mile to over one mile

from the A, AQ platform. AR 239. The following map depicts the arrangement of Medco’s

wells in relation to the A, AQ platform (circled in blue) within the MP 64 lease:

Page 2 of 21

AR 238. Two views of caissons from the MP 64 block are shown below, with other caissons

visible in the distance:

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AR 241.

Beginning with Fiscal Year 2010, Congress directed DOI to offset its appropriations

with inspection fees. AR 227. From that time forward, Medco was assessed fees annually

for BSEE’s inspection of 23 to 26 facilities—including the MP 64 block facilities at issue

Page 4 of 21

here. AR 527–80. At no time did ONRR or BSEE ever treat the MP 64 block as a single

installation for the purposes of assessing inspection fees. See id.

B. ONRR Director Decision

Medco appealed the 2017 and 2018 fee demands to the ONRR director, who

consolidated the appeals. AR 96. There it asserted that (1) ONRR lacked authority to issue

the invoices under the 2017 and 2018 Continuing Resolutions and (2) ONRR incorrectly

categorized the well installations as separate facilities.1 AR 104–27. The ONRR director

denied this appeal on January 28, 2020. AR 226. To this end ONRR determined that the

2017 and 2018 Continuing Resolutions preserved its authority to collect inspection fees,

and that even if the Continuing Resolutions had not preserved this authority, the subsequent

Consolidated Appropriations Acts “cured any such defect” by “specifically directing the

Secretary to assess and collect the fees for fiscal years 2017 and 2018.” AR 232–33.

Finally, ONRR determined that BSEE properly exercised its discretion to categorize

Medco’s well installations as separate “facilities,” despite their subsea attachments. AR

233–34. It noted that, in cases where the facilities were not connected by a walkway, “a

BSEE inspector is required to locate such structures and to take a boat to separately inspect

each structure,” which “results in a more complex, and time- and resource-intensive

inspection and a separate inspection fee is [therefore] warranted.” AR 234. Accordingly,

the director decided that characterization of the caissons as separate facilities was

1 Medco also appealed inspection fees assessed on the East Cameron 318 lease block and on a Main Pass 55

installation. ONRR consolidated the matters and granted the appeal as to the East Cameron 318 and Main Pass 55

fees. AR 235–36. Those portions of the appeal are not at issue here.

“consistent with BSEE’s long-standing practice” and that the decision must be upheld. AR

235.

C. IBLA Appeal

Medco then sought review of ONRR’s decision from the Interior Board of Land

Appeals (“IBLA”). IBLA issued a decision on July 14, 2021, reversing ONRR as to

BSEE’s authority to collect fees under the Continuing Resolutions.2 Doc. 25, att. 1 (IBLA

199). It stated:

It is true that the continuing appropriations acts for fiscal years 2017

and 2018 authorized funding at levels sufficient to allow the Department of

the Interior to operate as it did under the previous year’s consolidated

appropriations act. But each of the prior consolidated appropriations acts

directed the Secretary to collect inspection fees for facilities subject to

inspection under the OCSLA only for a single fiscal year. For example, the

fiscal year 2016 consolidated appropriations act stated: “In fiscal year 2016,

the Secretary shall collect a nonrefundable inspection fee, which shall be

deposited in the ‘Offshore Safety and Environmental Enforcement’ account,

from the designated operator for facilities subject to inspection under 43

U.S.C. 1348(c).” The fiscal year 2017 consolidated appropriations act used

identical language, except specific to fiscal year 2017. In these acts, Congress

expressly limited the Secretary’s authority to collect inspection fees to a

single fiscal year, and the continuing appropriations acts did not extend the

Secretary’s authority into the next fiscal year.

As Medco notes in its appeal, Congress could have provided authority

to the Secretary to collect inspection fees in fiscal years 2017 and 2018 by

including language in each of the applicable continuing appropriations acts

specifically authorizing this action. But Congress did not do so. Accordingly,

the continuing appropriations acts did not provide authority to the Secretary

to collect the fees in ONRR’s orders for fiscal years 2017 and 2018. It was

not until Congress enacted the consolidated appropriations acts for fiscal

years 2017 (in May 2017) and 2018 (in March 2018) that it provided the

Secretary with the authority to collect inspection fees for those fiscal years.

2 All documents in this case that post-date the ONRR director’s decision are not part of the administrative record, but

the parties have agreed that the IBLA decisions and Interior Solicitor’s M-Opinion may be cited because they are

publicly available legal sources and provide necessary background to the case.

Id. at 10–11 (IBLA 208–09) (emphasis in original). The IBLA also concluded, contrary to

the ONRR director, that the 2017 and 2018 Consolidated Appropriations Acts did not

“cure” ONRR’s lack of authority to make fee demands because the statutes lacked the

express language required to indicate that they should operate retroactively. Id. at 12 (IBLA

210).

D. DOI Solicitor’s M-Opinion

The DOI Solicitor then issued Memorandum Opinion M- 37071 (“M-Opinion”) to

the Secretary on October 12, 2021, addressing the IBLA’s decision in Medco Energi LLC,

No. 2020-184 and its conclusion “that the BSEE fee collection lapsed during the period of

a Continuing Resolution (CR), as the authority purportedly had been limited to the prior

fiscal year by the applicable appropriations act.” Doc. 25, att. 2 (M-Opinion), p. 1. The

solicitor characterized this decision as “an incorrect reading of applicable law [that] may

not be relied upon by any employee of the Department.” Id. In support, the solicitor

explained that BSEE’s inspection program is a “project[] or [a]ctivit[y]” under the

Continuing Resolutions and must therefore be continued under the same “conditions and

authority” as the prior years’ Appropriations Acts. Id. at 6–7. Because those Acts provided

the Department with authority to assess fees to offset its inspection activity, the Continuing

Resolutions extended that authority. Id. at 7–9.

E. IBLA Vacatur

After issuance of the M-Opinion, ONRR sought reconsideration from the IBLA.

Doc. 25, att. 3 (IBLA Decision to Vacate). The IBLA granted the motion, vacated its prior

decision in a ruling issued on May 23, 2022, and retained jurisdiction over the matter for

the purposes of “issu[ing] a final decision or order consistent with the M-Opinion that

addresses the merits of Medco’s appeal.” Id. at 2. The matter languished for over a year,

however, and the IBLA failed to issue a new merits decision within the agency’s 33-month

deadline for deciding appeals of ONRR orders under 30 U.S.C. § 1724(h)(1). See doc. 25,

att. 4 (IBLA Dismissal Order). Accordingly, the board dismissed the appeal for lack of

jurisdiction on June 22, 2023. Id.

F. District Court Litigation

Plaintiff then sought judicial review of DOI’s final decision through a Complaint

for Declaratory and Injunctive Relief filed in this court. Doc. 1. In addition to the arguments

it raised before ONRR regarding lack of statutory authority and excessive inspection fees,

it asserts that (1) the ONRR director decision is arbitrary, capricious, an abuse of discretion,

and otherwise not in accordance with the law and (2) the ONRR director decision

constitutes a legislative rule issued in violation of the APA’s rulemaking procedures. Id.

The parties have now filed cross-motions for summary judgment, addressing these

arguments. Docs. 25, 27. At the court’s instruction, plaintiff has also filed a Motion to

Admit Exhibit 5 [doc. 32] relating to the Statement of Reasons provided by Medco to the

IBLA on August 21, 2020, as part of its appeal of the ONRR director decision. See doc.

25, att. 5 (Medco SOR). In its Motion for Summary Judgment, plaintiff requested that the

court take judicial notice of this document even though it was not part of the administrative

record. The government opposes plaintiff’s request. Doc. 34.

II.

SUMMARY JUDGMENT STANDARD

Under Rule 56(a), “[t]he court shall grant summary judgment if the movant shows

that there is no genuine dispute as to any material fact and the movant is entitled to

judgment as a matter of law.” The moving party is initially responsible for identifying

portions of pleadings and discovery that show the lack of a genuine issue of material fact.

Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995). He may meet his burden by

pointing out “the absence of evidence supporting the nonmoving party’s case.” Malacara

v. Garber, 353 F.3d 393, 404 (5th Cir. 2003). The non-moving party is then required to go

beyond the pleadings and show that there is a genuine issue of material fact for trial.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To this end he must submit

“significant probative evidence” in support of his claim. State Farm Life Ins. Co. v.

Gutterman, 896 F.2d 116, 118 (5th Cir. 1990). “If the evidence is merely colorable, or is

not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at

249 (citations omitted).

A court may not make credibility determinations or weigh the evidence in ruling on

a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S.

133, 150 (2000). The court is also required to view all evidence in the light most favorable

to the non-moving party and draw all reasonable inferences in that party’s favor. Clift v.

Clift, 210 F.3d 268, 270 (5th Cir. 2000). Under this standard, a genuine issue of material

fact exists if a reasonable trier of fact could render a verdict for the nonmoving party.

Brumfield v. Hollins, 551 F.3d 322, 326 (5th Cir. 2008).

III.

LAW & APPLICATION

A. Request for Judicial Notice/Motion to Admit

In addition to the extra-record documents that the parties have agreed the court may

consider, supra note 2, plaintiff requests that the court take judicial notice of a Statement

of Reasons provided by Medco to the IBLA on August 21, 2020, as part of its appeal of

the ONRR director decision. See doc. 25, att. 5 (Medco SOR); doc. 32. The government

objects, arguing that (1) the SOR and its attachments are not amenable to judicial review

because they contain unverifiable and contested factual information and (2) the SOR is a

post-decisional document to the ONRR director decision. Although the last merits decision

was the one made by the ONRR director, plaintiff argues that it should not be limited to

the record up to that point. To do so, it maintains, would reward IBLA for sitting on its

hands and failing to timely issue a merits decision after it reversed course based on the

solicitor’s M-Opinion.

“Agency action is to be upheld, if at all, on the basis of the record before the agency

at the time it made its decision.” Indep. Turtle Farmers of La., Inc. v. United States, 703

F.Supp.2d 604, 610 (W.D. La. 2010) (quoting Louisiana ex rel. Guste v. Verity, 853 F.3d

322, 327 n. 8 (5th Cir. 1988)). This principle is known as the record rule and prevents the

reviewing court from conducting a de novo trial. Id. Certain exceptions exist, however, and

the Fifth Circuit has allowed supplementation of the administrative record when: “(1) the

agency deliberately or negligently excluded documents that may have been adverse to its

decision, . . . (2) the district court needed to supplement the record with “background

information” in order to determine whether the agency considered all of the relevant

factors, or (3) the agency failed to explain administrative action so as to frustrate judicial

review.” Texas v. U.S. Dep’t of Homeland Sec., 2023 WL 2842760, at *1 (S.D. Tex. Apr.

7, 2023) (quoting Medina Cnty. Envir. Action Ass’n v. Surface Transp. Bd., 602 F.3d 687,

706 (5th Cir. 2010)). Courts in this circuit have also “routinely permitted extra-record

evidence” in several circumstances, including “[i]n cases where evidence arising after the

agency action shows whether the decision was correct or not” Id. (citing Texas v. Biden,

2021 WL 4552547, at *2 (N.D. Tex. Jul. 19, 2021)).

The SOR could fit into both the “background information” and “evidence arising

after agency action” exceptions. The parties’ joint scheduling plan, however, set a deadline

for addressing issues concerning the administrative record. Specifically, this plan (adopted

through order of the magistrate judge) provided:

(2) The parties shall attempt to amicably resolve any issues concerning the

scope or content of the administrative record before moving the Court for

relief. Federal Defendants shall initially present the administrative record to

Plaintiff on Friday, July 14, 2024, and the parties will first work to resolve

any issues informally. Any issues which the parties cannot resolve among

themselves shall be presented to the Court by motion submitted by Plaintiff

within 14 days of the lodging of the administrative record.

Doc. 16, p. 2. The deadline for federal defendants to lodge the administrative record was

subsequently extended, by consent motion, to July 19, 2024. Docs. 20, 21. The government

met this deadline but plaintiff did not raise any issue with the record until its request in this

motion for summary judgment motion filed nearly two months later, on September 17,

2024. Plaintiff now attempts to categorize Exhibit 5 as “motion evidence” under Rule 56

rather than part of the administrative record. It also maintains that the facts in the SOR are

not seriously disputed by the government, and that the court should take judicial notice of

them. The government disagrees, noting that plaintiff is repeatedly citing its own witness’s

declaration for the truth of the matter asserted therein—namely, his opinion on the

complexity of BSEE’s inspections and the total inspection time onboard a caisson during

the relevant fiscal years when his statements only pertain to inspections occurring after the

years at issue.

To the extent plaintiff seeks to supplement the administrative record under some

exception, its request is time-barred and will not be considered. Otherwise, “the use of

judicial notice is highly restricted in the context of APA claims.” Am. Health Care Ass’n

v. Burwell, 217 F.Supp.3d 921, 928 (N.D. Miss. 2016). Because APA review is limited to

the administrative record before the agency at the time of the decision, “judicial notice of

an adjudicative fact not part of the administrative record generally is irrelevant to the

court’s analysis of the merits.” Dist. Hosp. Partners, L.P. v. Sebelius, 971 F.Supp.2d 15,

32, n. 14 (D.D.C. 2013), aff’d sub nom. Dist. Hosp. Partners, L.P. v. Burwell, 786 F.3d 46

(D.C. Cir. 2015) (emphasis in original). The government has pointed out serious disputes

to the main factual assertions in Exhibit A, which was executed after the ONRR decision,

and as for the remainder the court finds no reason to consider matters outside the

administrative record. Although this evidence was before a subsequent body, it was not at

issue in the decision under review and the court must generally confine its review to the

record before ONRR. To the extent plaintiff would have this evidence before the court

through a supplement to the administrative record, it should have complied with the parties’

scheduling order. If it now wishes to obtain court action based on consideration of this

opinion and exhibits, it must present it to the agency through a new appeal.

B. Motions for Summary Judgment

“Disputes arising under the APA are commonly resolved on summary judgment,

where district courts sit as an appellate tribunal to decide legal questions on the basis of the

administrative record.” Nat’l Assoc. for Gun Rights, Inc. v. Garland, 741 F.Supp.3d 568,

596 (N.D. Tex. 2024) (citing Amin v. Mayorkas, 24 F.4th 383, 391 (5th Cir. 2022)).

Thereunder, courts may decide “as a matter of law, whether an agency’s action is supported

by the administrative record and consistent with the APA standard of review.” Delta

Talent, LLC v. Wolf, 448 F.Supp.3d 644, 650 (W.D. Tex. 2020). The APA requires a

reviewing court to “hold unlawful and set aside agency action, findings, and conclusions

found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance

with law” or “in excess of statutory jurisdiction, authority, or limitations, or short of

statutory right.” 5 U.S.C. § 706(2)(A), (C).

Plaintiff argues that ONRR’s decision must be set aside on the following grounds:

(1) ONRR arbitrarily and capriciously increased its inspection fees to bill well caissons at

the same rate as large platforms; (2) ONRR modified existing regulations without

undertaking notice-and-comment rulemaking; and (3) ONRR assessed the demands

without statutory authority. Doc. 25.

1. Arbitrary and capricious

The APA’s arbitrary and capricious standard “requires that agency action be

reasonable and reasonably explained.” FCC v. Prometheus Radio Project, 592 U.S. 414,

423 (2021). The court “must set aside any action premised on reasoning that fails to account

for relevant factors or evinces a clear error of judgment.” Texas v. United States, 40 F.4th

205, 226 (5th Cir. 2022) (internal quotations omitted). Put another way, the reviewing court

must ensure that “the agency has acted within a zone of reasonableness and, in particular,

has reasonably considered the relevant issues and reasonably explained the decision.”

Prometheus Radio Project, 592 U.S. at 423. In reviewing an agency’s action, the court may

only consider the reasoning articulated by the agency itself and may not credit post hoc

rationalizations. Wages and White Lion Investments, LLC v. USDA, 16 F.4th 1130, 1136

(5th Cir. 2021) (citing Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto.

Ins. Co., 463 U.S. 29, 53 (1983)).

Plaintiff maintains that it was arbitrary, capricious, and outside of the agency’s

statutory authority for BSEE to treat each caisson as a separate facility, thereby drastically

increasing the inspection fees. The government argues that this interpretation complies

with BSEE regulations, which reasonably and consistently interpreted ONRR’s statutory

authority under the Consolidated Appropriations Act.

The 2016 and 2017 Consolidated Appropriations Acts directed the Secretary to

“collect a nonrefundable inspection fee . . . for facilities subject to inspection under 43

U.S.C. 1348(c)” of OCSLA. Consolidated Appropriations Act 2016, PL 114-113, 129 Stat.

2242, 2549; Consolidated Appropriations Act 2017, PL 115-31, 131 Stat. 135, 459.

Qualifying facilities are subject to the following annual inspection fees: (1) $10,500.00 for

facilities with no wells but with processing equipment or gathering lines; (2) $17,000.00

for facilities with one to ten wells; and (3) $31,500.00 for facilities with more than ten

wells. Id. Plaintiff’s eighteen caissons on the M 64 Unit were each treated as individual

facilities subject to the $17,000.00 annual fee. See AR 001–05.

OCSLA provides, in relevant part:

Onsite inspection of facilities

The Secretary and the Secretary of the Department in which the Coast

Guard is operating shall individually, or jointly if they so agree, promulgate

regulations to provide for--

(1) scheduled onsite inspection, at least once a year, of each facility

on the outer Continental Shelf which is subject to any environmental or

safety regulation promulgated pursuant to this subchapter, which inspection

shall include all safety equipment designed to prevent or ameliorate

blowouts, fires, spillages, or other major accidents; and

(2) periodic onsite inspection without advance notice to the operator

of such facility to assure compliance with such environmental or safety

regulations.

43 U.S.C. § 1348(c). BSEE’s regulations implementing OCSLA define the term “facility”

in multiple contexts. 30 C.F.R. § 250.105. For inspections, the term means “installations

permanently or temporarily attached to the seabed of the OCS.” Id. A “group of OCS

installations” only qualifies as a “single facility” if it is “interconnected with walkways”

or “includes a central or primary installation with processing equipment and one or more

satellite or secondary installations.” Id. The regulations also provide, however, that “[t]he

Regional Supervisor may decide that the complexity of the individual installations justifies

their classification as separate facilities.” Id.

Plaintiff maintains that the treatment of its caissons as separate facilities is arbitrary

and capricious because they are connected to a central installation—the A, AQ platform—

containing all processing and metering equipment. AR 229. In return the government relies

on a declaration from BSEE Regional Supervisor for District Field Operations, Michael

Saucier. Mr. Saucier states, in relevant part:

Where secondary or satellite installations are attached to the primary facility

via subsea tiebacks, but the installations rise above the waterlines some

distance from the primary facility without a walkway connection, BSEE

considers these secondary or satellite structures to be separate facilities,

because the installation arrangement results in more complex, and time- and

resource-intensive inspections.

In determining the number of Medco facilities in the Main Pass 64 lease

block, pursuant to this longstanding practice, my staff and I decided that

Medco’s above-water secondary or satellite single-well caisson installations

attached to its primary A, AQ facility only via subsea flowline, and without

a walkway, are separate facilities.

Characterization of such caissons as separate facilities is consistent with

BSEE’s longstanding practice. Changing course on BSEE’s practice and this

longstanding application of regulations could have significant operational

and financial impacts on BSEE.

AR 242–43, ¶¶ 7–9. Plaintiff maintains that because the regulation only permits the

supervisor to make a determination based on “the complexity of the individual

installations,” he may not consider their arrangement or its impact on the time needed for

inspections. But as BSEE notes, the regulation allows the regional supervisor to consider

the “complexity of the individual installations” rather than “the complexity of an individual

installation.” Given the impact of the arrangement on inspection time and cost, this factor

is directly relevant to the director’s determination. His declaration reflects that he

considered the fact that the caissons were “some distance” from the platform and that this

arrangement “results in more complex, and time- and resource-intensive inspections.”

Additionally, plaintiff fails to refute the director’s statement that this treatment “is

consistent with BSEE’s longstanding practice.” An agency’s decision to follow

longstanding practice in a case is the antithesis of arbitrary and capricious. Accordingly,

plaintiff’s arguments under this APA standard fail.

2. Rulemaking violation

Plaintiff also argues that ONRR was required to engage in notice-and-comment

rulemaking to conform its longstanding interpretations to the regulation. As the

government notes, Medco waived this claim by failing to raise it with the ONRR Director.

See Healthy Gulf v. U.S. Army Corps of Eng’rs, 81 F.4th 510, 521 (5th Cir. 2023) (“Under

ordinary principles of administrative law a reviewing court will not consider arguments

that parties failed to raise in timely fashion before an administrative agency.”) (cleaned

up). But even if the argument were properly before the court, it is without merit. Plaintiff

maintains that the regional supervisor’s determination amounts to a new legislative rule,

because the applicable regulation indicates that installations that “include[] a central or

primary installation with processing equipment and one or more satellite or secondary

installations” should ordinarily be treated as one facility. The regulation, however, goes on

to grant the regional supervisor broad authority to classify installations as separate facilities

based on “the complexity of the individual installations.” 30 C.F.R. § 250.105. While

plaintiff argues that the supervisor merely relied on longstanding practice without

“consider[ing] the factors that would make an installation more complex,” it points to

nothing in the regulations limiting the supervisor’s discretion beyond the word “complex.”

And the supervisor addressed the complexity in his determination that the arrangement of

facilities in the platform required “more time- and resource-intensive inspections.” AR

242–43. The regional supervisor’s declaration thus indicates that this discretion was

exercised within the bounds of his regulatory authority, rather than as the creation or

extension of a rule.

3. Statutory authority

Finally, plaintiff argues that BSEE exceeded its statutory authority by assessing

inspection fees for 2017 and 2018 while still operating under Continuing Appropriations

Acts. The 2016 Consolidated Appropriations Act provided:

(a) In fiscal year 2016, the Secretary shall collect a nonrefundable inspection

fee, which shall be deposited in the “Offshore Safety and Environmental

Enforcement” account, from the designated operator for facilities subject to

inspection under 43 U.S.C. 1348(c).

(b) Annual fees shall be collected for facilities that are above the waterline,

excluding drilling rigs, and are in place at the start of the fiscal year. Fees for

fiscal year 2016 shall be:

(1) $10,500 for facilities with no wells, but with processing equipment

or gathering lines;

(2) $17,000 for facilities with 1 to 10 wells, with any combination of

active or inactive wells; and

(3) $31,500 for facilities with more than 10 wells, with any

combination of active or inactive wells.

PL 114-113, 129 Stat. 2242, 2549. The 2017 Continuing Appropriations Act, in effect at

the time the 2017 fee demands were issued, then provided:

Such amounts as may be necessary, at a rate for operations as provided in the

applicable appropriations Acts for fiscal year 2016 and under the authority

and conditions provided in such Acts, for continuing projects or activities

(including the costs of direct loans and loan guarantees) that are not

otherwise specifically provided for in this Act, that were conducted in fiscal

year 2016, and for which appropriations, funds, or other authority were made

available in the following appropriations Acts:

. . . .

(7) The Department of the Interior, Environment, and Related Agencies

Appropriations Act, 2016 (division G of Public Law 114-113).

PL 114-223, 130 Stat. 857, 908. The 2017 Consolidated Appropriations Act then passed,

with an identical allowance for inspection fees (changing fiscal year 2016 to 2017). PL

115-31, 131 Stat. 135, 459. The 2018 Continuing Appropriations Act likewise provided:

Such amounts as may be necessary, at a rate for operations as provided in the

applicable appropriations Acts for fiscal year 2017 and under the authority

and conditions provided in such Acts, for continuing projects or activities

(including the costs of direct loans and loan guarantees) that are not

otherwise specifically provided for in this Act, that were conducted in fiscal

year 2017, and for which appropriations, funds, or other authority were made

available in the following appropriations Acts:

. . . .

(7) The Department of the Interior, Environment, and Related Agencies

Appropriations Act, 2017 (division G of Public Law 115–31), except that the

language under the heading “FLAME Wildfire Suppression Reserve Fund”

in the Departments of Agriculture and the Interior shall be applied by adding

at the end the following . . . .

PL 115-56, 131 Stat. 1129, 1139–40.

Plaintiff maintains that assessment of fees under the Continuing Resolutions was

inappropriate, because the resolutions only referred to Appropriations Acts authorizing the

collection of fees for their respective fiscal years. In considering whether an agency has

exceed its statutory authority, the court no longer applies Chevron3 deference and instead

“independently interpret[s] the statute and effectuate[s] the will of Congress subject to

constitutional limits.” Loper Bright Enterps. v. Raimondo, 603 U.S. 369, 395 (2024). To

this end the reviewing court must determine the “best reading” of the statute rather than “a

merely permissible reading.” Mayfield v. U.S. Dep’t of Labor, 117 F.4th 611, 617 (5th Cir.

2024) (internal quotations omitted). But statutory interpretation still begins with the text,

3 See Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) (setting forth two-step framework of

determining if agency action exceeded statutory authority, which required court deference to an agency’s permissible

construction of an ambiguous statute).

“and ends there as well if the text is unambiguous.” BedRoc Ltd., LLC v. United States,

541 U.S. 176, 183 (2004), quoted in Texas v. U.S. Dep’t of Labor, __ F.Supp.3d __, 2024

WL 4806268, at *13 (E.D. Tex. Nov. 15, 2024).

Both the 2017 and 2018 Continuing Appropriations Acts continued funding “under

the authority and conditions” provided in the previous years’ Consolidated Appropriations

Acts. They therefore appear to unambiguously provide for Interior to collect funds under

the same conditions as the prior year. As the government notes, Interior’s annual inspection

program qualifies as a “project[] or activit[y]” for which “appropriations, funds, or other

authority” were made available in the prior year’s Appropriations Act through both

Congressional appropriations and authority granted to the Department to offset those

amounts through fees. See 129 Stat. at 2535; 131 Stat. at 446. The Continuing Resolutions

both contain broad language indicating that the status quo should be maintained and the

inspection program, in place since 2010, was not an ad hoc venture. And as the government

notes, all appropriations in the respective Consolidated Appropriations Acts are limited to

their respective fiscal years before being broadly continued by the ensuing Continuing

Appropriations Acts. Even if the text is ambiguous, plaintiff’s argument presents the more

strained reading of the statute. Accordingly, there is no basis for invalidating ONRR’s fee

demands.

IV.

CONCLUSION

For the reasons stated above, Plaintiff's Motion for Summary Judgment [doc. 25]

and Motion to Admit [doc. 32] will be DENIED and the government’s Motion for

Summary Judgment [doc. 27] will be GRANTED.

THUS DONE AND SIGNED in Chambers on the 26th day of February, 2025.

. JAMES D. CAIN, °

UNITED STATES DISTRICT JUDGE

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