Aera Energy LLC v. Salazar

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 24, 2011 Decided April 29, 2011

No. 10-5101

AERA ENERGY LLC,

APPELLANT

v.

KENNETH LEE SALAZAR, SECRETARY, UNITED STATES

DEPARTMENT OF THE INTERIOR AND UNITED STATES

DEPARTMENT OF THE INTERIOR,

APPELLEES

Consolidated with 10-5110

Appeals from the United States District Court

for the District of Columbia

(No. 1:08-cv-01614)

Steven J. Rosenbaum argued the cause for appellants.

With him on the briefs was Joshua D. Greenberg.

Mary Gabrielle Sprague, Attorney, U.S. Department of

Justice, argued the cause for federal appellees. With her on

the brief were William B. Lazarus and David C. Shilton,

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Attorneys. R. Craig Lawrence, Assistant U.S. Attorney,

entered an appearance.

Before: ROGERS and TATEL, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

Opinion for the court filed by Circuit Judge TATEL.

TATEL, Circuit Judge: In 1999, the Pacific Regional

Director of the Interior Department’s Minerals Management

Service caused four oil and gas leases off the California coast,

for which appellants had originally paid the United States

over $140 million, to expire. The Regional Director later

testified that he based his decision solely on political

considerations and that absent such considerations he would

have instead extended the leases. Reviewing the matter de

novo, however, the Interior Board of Land Appeals, acting

without regard to political considerations and on the basis of

scientific evidence, affirmed the original decision. The district

court upheld that ruling, and appellants now appeal, arguing

that in order to cure the Regional Director’s original decision

of political taint, the Board should have adopted the decision

the Regional Director says he would have made absent

political influence. Because we agree with the district court

that appellants received all they were entitled to—i.e., an

agency decision on the merits without regard to extra-

statutory, political factors—we affirm.

I.

Under the Outer Continental Shelf Lands Act of 1953,

the federal government has jurisdiction and control over the

outer continental shelf, a zone which extends from the edge of

state coastal waters to the border of international waters—

generally from 3 to 200 miles offshore and covering a total

area of some 1.76 billion acres. See 43 U.S.C. §§ 1331(a),

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1332; Minerals Management Service, Report to Congress:

Comprehensive Inventory of U.S. OCS Oil and Natural Gas

Resources 3 (Feb. 2006), available at

http://www.boemre.gov/revaldiv/PDFs/FinalInventoryReport

DeliveredToCongress-corrected3-6-06.pdf. In recent years,

crude oil extracted from the outer continental shelf has

represented an increasingly large share of America’s domestic

oil production, rising from under ten percent in 1981 to nearly

thirty percent in 2010. Energy Information Administration,

Crude Oil Production (2011). Although the vast majority of

outer continental shelf oil production occurs in the Gulf of

Mexico, a limited amount also takes place off the California

coast. Id. California’s small share is attributable at least in

part to two circumstances: that the last California outer

continental shelf lease sale occurred in 1984; and that since

fiscal year 1991, Congress and the President have imposed a

series of moratoria on any new sales. Samedan Oil Corp. v.

Minerals Mgmt. Serv., IBLA 2000-142 at 16 (Dec. 5, 2006)

(“ALJ Op.”) (included at J.A. 717). Because all current and

future oil and gas production on the California outer

continental shelf must in all probability come from leases sold

before 1984, the fate of those leases has become quite

important to both proponents and opponents of oil and gas

drilling off the California coast.

The Outer Continental Shelf Lands Act empowers the

Secretary of the Interior to sell and administer oil and gas

leases on the outer continental shelf, an authority that the

Secretary largely delegated (at all times relevant to this case)

to the Minerals Management Service (“MMS”), which in turn

delegated most of this authority to its regional offices. 43

U.S.C. §§ 1334(a), 1337(b); 30 C.F.R. § 250.104 (1999);

Dep’t of Interior, Departmental Manual, Part 118, § 5.8 (Apr.

15, 2003); Dep’t of Interior, Department Manual, Part 118,

§ 5.9 (Dec. 9, 1996). The Secretary has since abolished the

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Minerals Management Service and transferred its Outer

Continental Shelf Lands Act responsibilities. Sec’y of

Interior, Secretarial Order 3299 (May 19, 2010). But because

that reorganization occurred after the relevant events in this

case, we shall refer to MMS’s authority as it existed before

the reorganization.

Exercising that authority, MMS grants exclusive rights to

explore for, develop, and produce oil and natural gas in

exchange for an up-front bonus, annual rentals, and royalties

on oil and natural gas actually produced for a “primary term”

of either five or ten years. 43 U.S.C. § 1337(a), (b). During

the exploration stage, production or other operations on the

lease may be “suspended” either at the request of the

leaseholder or at the Service’s direction, which has the effect

of extending the lease’s term for the suspension period. 43

U.S.C. §§ 1334(a)(1); 1337(b)(5); 30 C.F.R. §§ 250.110,

256.73 (1999). Leaseholders may voluntarily join multiple

leases together into “units” by signing “unitization”

agreements that must be approved by the Service. 43 U.S.C.

§ 1334(a)(4); 30 C.F.R. §§ 250.1300, 250.1301(a) (1999).

The regulations in effect when the units at issue in this case

were created required a unit to

include the minimum number of leases or

portions of leases required to permit one or

more reservoirs or potential hydrocarbon

accumulations to be served by an optimal

number of artificial islands, installations, or

other devices necessary for the efficient

exploration or development and production of

oil and gas or other minerals.

30 C.F.R. § 250.50(b) (1986). In other words, for a lease to

belong in a particular unit, the lease must overlie “one or

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more [mineral] reservoirs or potential hydrocarbon

accumulations.” In re Samedan Oil Corp., 173 IBLA 23, 39–

40 (2007) (“IBLA Op.”). Once a unit has been approved, all

leases within the unit are generally extended as one. 30 C.F.R.

§ 250.1301(g) (1999); MMS’s Answer to Aera’s Statement of

Reasons 4–5, Feb. 26, 2001 (included at J.A. 295–96)

(agreeing with Aera that in practice suspension requests have

been handled at the unit, rather than the lease level). During

the exploration stage, the Service also has authority to

“contract” a unit by excluding all or part of one or more leases

based on better understandings about the dimensions and

qualities of the underlying mineral reservoir. IBLA Op., 173

IBLA at 36, 40 (justifying that interpretation of the

appropriate legal criteria for excluding leases from a unit

based (1) on the regulations in effect when the units at issue in

this case were formed, 30 C.F.R. § 250.50(b) (1987); (2) on

the two corresponding unit agreements; and (3) especially on

the preamble to the applicable regulations, Oil and Gas and

Sulphur Operations in the Outer Continental Shelf, 45 Fed.

Reg. 29,280, 29,281 (May 2, 1980), which states in relevant

part, “After exploration has been completed, a better

delineation of the mineral reservoir will be available, and

adjustments prior to development and production may be

warranted. In keeping with the minimum area standard, the

portions of leased areas that do not overlie the more precisely

delineated reservoir should be excluded from the unit area in

an adjustment.”). If a completely excluded lease’s primary

term has ended and if no other basis for extending that term

applies, then that lease expires upon exclusion from the unit.

30 C.F.R. § 2501.1301(f) (1999). To summarize, a lease’s

lifecycle begins with its primary term, during which it might

be joined together with other leases into a unit, after which all

leases within the unit might have operations “suspended” (and

so have their terms extended), perhaps even multiple times,

until, in some cases, the original lease is excluded—at which

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point, assuming both the primary term and any subsequent

suspensions have ended, the lease expires. Although this is

hardly the only path a lease might follow—indeed many

leases are extended by production—it is essentially what

happened to the four leases involved in this case.

Their story begins in the early 1980s when Appellant

Aera Energy paid $141 million for three of the leases, and

Appellant Noble Energy’s predecessor paid $1.65 million for

the fourth. All four leases were later unitized—Aera’s leases

became part of the Santa Maria Unit and Noble’s became part

of the Gato Canyon Unit. Prior to 1999, both units had

operations suspended several times, first at the companies’

request and then between 1992 and 1999, at the Regional

Office’s direction as part of a study known as the California

Offshore Oil and Gas Energy Resources (“COOGER”) study.

The COOGER study “was designed to help MMS evaluate

the operators’ exploration and development plans, as well as

to provide local governmental entities in California with

information regarding activities on the leased properties.”

Amber Resources Co. v. United States, 538 F.3d 1358, 1365

(Fed. Cir. 2008). During the study period, Dr. J. Lisle Reed,

MMS’s Pacific Regional Director, ordered the simultaneous

suspension of operations for all forty undeveloped California

leases—with the last COOGER suspension expiring in

August 1999.

Anticipating the end of the COOGER study, Reed

informed both Aera and Noble in December 1998 that if they

wished to extend their units, they would need to submit new

suspension requests, which they did. Then in June 1999,

setting in motion the events at issue in this case, Reed told

both companies that his office would be evaluating whether

any units should be “contracted.” Over the ensuing months,

Aera and Noble made their case against contraction by

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presenting scientific and historical data to the Regional staff.

Reed then notified Aera and Noble of his decision: “we have

determined that the geological and geophysical data and

interpretation no longer support inclusion of [the four leases]

within the Santa Maria [and Gato Canyon] Unit[s].”

Accordingly, Reed excluded the four leases, causing them to

expire. Simultaneously, he granted suspension requests for the

remaining leases in each unit.

While Reed was considering the suspension requests,

“[California’s] Governor, other State and local officials,

including California Coastal Commission members, and

various Congressional members expressed opposition to or

concern over development of the 40 undeveloped California

[outer continental shelf] leases, with some advocating for

their termination.” ALJ Op. at 16–17 (included at J.A. 717–

18). For example, on June 16, 1999, Senator Diane Feinstein

wrote to the Secretary of the Interior to “indicate my strong

opposition to any extension by the Minerals Management

Service of leases for the 40 undeveloped underwater tracts off

the coasts of California . . . and [to] urge [the Secretary] to

terminate these leases without any further extensions.”

Suspecting that politics had influenced Reed’s decision

and disagreeing with the negative assessment of the leases’

production potential, Aera and Noble appealed to the Interior

Board of Land Appeals (“IBLA”)—“Interior's review

authority charged with deciding, on behalf of the Secretary,

matters relating to the use and disposition of public lands and

their resources.” Orion Reserves Ltd. P'ship v. Salazar, 553

F.3d 697, 700 n.1 (D.C. Cir. 2009) (citing 43 C.F.R.

§ 4.1(b)(3)). The companies offered seven “independent

reasons” that Reed’s decision “should be reversed as a matter

of law” including that the decision was “unduly tainted by

impermissible political considerations,” that they had received

8

inadequate notice “that the decision on [their] latest [unit-

wide] suspension request[s] would entail a re-evaluation of

the prospectivity of individual leases,” and that “[t]he [four]

leases are highly prospective.” Aera and Noble also asked the

IBLA to order an evidentiary hearing before an administrative

law judge if it found the record inadequate to evaluate these

arguments.

The IBLA decided that Reed’s “conclusory findings”

were “fundamental[ly] flaw[ed].” In re Samedan Oil Corp.,

163 IBLA 63, 69 (Sept. 7, 2004). But because it also found

that the record required further factual development, it

referred Aera and Noble’s appeals to an administrative law

judge for an independent evidentiary hearing covering not just

the evidence considered by MMS at the time of Reed’s

decision, but also any evidence available to the agency at that

time. Id. at 70–71; In re Samedan Oil Corp., IBLA 2005-166,

IBLA 2005-167, at 2–4 (May 11, 2005). MMS moved for

reconsideration, arguing against holding a hearing and

suggesting instead a remand to the Pacific Regional Director

to issue a new decision. In response, Aera and Noble pressed

the IBLA to proceed as planned and to issue a de novo

decision based on the administrative law judge’s proposed

fact findings, which the IBLA ultimately agreed to do.

The administrative law judge held a thirteen day hearing,

which focused primarily on the potential for commercial

production of oil and gas from the four excluded leases but

which also included evidence regarding political influence

over the original decision making process. Most significantly

for our purposes, Reed testified that his decision was based

not on the merits, but on politics. According to Reed, his

immediate supervisor told him that it “would be politically

very important to cancel some of the tracts” as a show of

“good faith to California officials” who vocally opposed

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drilling off the California coast. Reed Dep. 10:04:18–36, Mar.

24, 2005 (included at J.A. 362). Excluding the four leases

“would help her in carrying on the credibility of the region

and her work in Washington.” Reed Dep. 11:21:20–26

(included at J.A. 374–75). In particular, she hoped it would

“appease[]” California politicians, helping her to preserve the

remaining thirty-six undeveloped leases. Reed Dep. 11:22:28–

:23:16 (included at J.A. 375–76).

In addition, Reed explained that absent these political

considerations, he would have reached the opposite

decision—i.e., he would have left the four leases in their units

and granted Aera and Noble’s suspension requests. Reed Dep.

9:58:12–46, 10:06:10–52, 11:39:46–52 (included at J.A. 361,

363, 379). In saying this, Reed acknowledged that his

subordinates, unaware of any political pressure and primarily

responsible for analyzing the relevant scientific data, had

concluded “that the excluded leases did not qualify for

continued inclusion in their respective units . . . [and] that the

excluded leases were ‘marginal.’ ” ALJ Op. at 19 (included at

J.A. 720). Even so, Reed testified “that regardless of the

degree of marginality, he would not have removed the leases

from their respective units.” Id. Explaining why he disagreed

with his subordinates, Reed said that “cancellation of the

leases would result in lost rental revenue for the Government

and a lost opportunity for development of possible

hydrocarbon accumulations, given his opinion that . . . there

was little hope of leasing the tracts again for years in light of

the leasing moratorium and political climate.” Id. In addition,

Reed insisted “that the [geological] data was susceptible to

different interpretations.” Id. at 18 (included at J.A. 719).

The administrative law judge found Reed’s testimony

about whether political considerations played a role in the

exclusion decision “convincing[,] . . . unrebutted[,] and . . .

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credible.” Id. But with respect to the leases’ geological

potential and the propriety of excluding them, the

administrative law judge found Reed to be a less reliable

witness than his subordinates. Id. at 19 (included at J.A. 720).

The administrative law judge offered three reasons for this

credibility determination: first, “no rule or written policy . . .

permits unitization based upon [two of Reed’s rationales—]

the fact that the Government may lose rental revenue or that a

lease may not be released for many years,” id.; second, “the

purpose of unitization is not to extend leases,” id.; and third,

Reed “was less qualified than [his subordinates] by training

and relative familiarity with the relevant data to render an

opinion on whether the excluded leases should have been

removed from their respective units,” id. In addition, the

administrative law judge made extensive findings regarding

the exploration histories of the four leases, the companies’

future exploration and development plans, and the likelihood

that the leases contained potential hydrocarbon

accumulations. He concluded that the companies’ exploration

efforts on the four leases had essentially ended and that based

on data collected during that now-completed exploration

period, it was unlikely that any of the leases contained

potential hydrocarbon accumulations.

The IBLA then issued a final decision in which it adopted

the administrative law judge’s fact findings. The “key issue”

the Board addressed, which had been “the focal point of the

hearing proceedings, was whether the evidence available to

MMS at the time of the decisions formed a reasonable basis

for the decisions to remove the leases from their respective

units.” IBLA Op., 173 IBLA at 38–39. To answer that

question, the IBLA laid out the proper legal criteria for unit

contractions. Notably, the IBLA rejected two criteria that

Aera and Noble had championed and that Regional Director

Reed had testified he would have considered but for politics:

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“the potential loss of rental revenue and the minimal

likelihood of tract releasing.” Id. at 37. Instead, the IBLA

explained that once exploration is complete, as it essentially

was for these four leases, “contraction of a unit area is

appropriate if the evidence does not show the requisite strong

possibility of the presence of a hydrocarbon accumulation on

the excluded leases.” Id. at 41. Because “[t]he [administrative

law] judge’s factual findings and the record as a whole clearly

demonstrate that the excluded leases do not contain potential

hydrocarbon accumulations” the IBLA upheld the exclusion

decision. Id. at 44 (emphasis added).

The IBLA also considered whether the exclusion

decisions “were unduly tainted by impermissible political

considerations.” Id. at 38. The Board first observed that “Dr.

Reed did not review or evaluate the data himself, but relied on

the analysis of his staff who were not instructed that the

excluded leases needed to be terminated or that any particular

result was desired and who reached the decision that the

leases should be excluded based strictly on the seismic, well

log, and other geological and geophysical data” and that

“MMS’s technical staff was more qualified than Dr. Reed by

training and relative familiarity with the relevant data.” Based

on those observations, the Board concluded “that the

decision-making process and actual decision-makers [i.e.,

Reed’s subordinates] were sufficiently insulated from the

political pressure to obviate the need to set aside the MMS’s

decisions.” Id. In addition, the IBLA concluded that “the

record developed during the hearing process clearly supports

MMS’s decisions to exclude the leases from their respective

units.” Id. (emphasis added). In other words, as discussed

above, because Aera and Noble had failed to show a “strong

possibility” of hydrocarbon accumulation on the excluded

leases based on a fresh and politically untainted evidentiary

record, the decision to exclude those leases was correct.

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Seeking to overturn the IBLA’s decision—which,

significantly for the issue in this case, represents Interior’s

final agency action for the purposes of judicial review, Orion

Reserves Ltd., 553 F.3d at 707–08—Aera and Noble brought

suit in the United States District Court for the District of

Columbia under the Administrative Procedure Act, 5 U.S.C.

§ 706. Although their complaint included both a political

influence claim and allegations that the IBLA’s factual

findings and choice of legal criteria were arbitrary, capricious,

an abuse of discretion, and contrary to law, the companies

pursued only the political influence claim at summary

judgment. The district court agreed with Aera and Noble that

Reed, not his subordinates, was the MMS’s actual

decisionmaker and that the IBLA therefore erred when it

concluded that MMS’s original decision had been insulated

from improper political influence because that influence did

not extend to those subordinates. Aera Energy LLC v. Salazar,

691 F. Supp. 2d 25, 33–34 (D.D.C. 2010); Noble Energy, Inc.

v. Salazar, 691 F. Supp. 2d 14, 21–22 (D.D.C. 2010).

Treating that error as harmless, however, the district court

granted summary judgment to the Secretary, reasoning that

the IBLA, which was not subject to improper political

influence, had “authority to stand in the shoes of the Secretary

and to review decisions de novo when it finds that those

decisions are not properly supported.” Aera Energy, 691 F.

Supp. 2d at 36; Noble Energy, 691 F. Supp. 2d at 24; see also

5 U.S.C. § 706. By exercising that authority and finding

“ ‘that the leases were properly excluded from the units

because they lack the potential hydrocarbon accumulations

necessary for continued inclusion in the units[,]’ ” the IBLA

cured the Regional Director’s decision of its improper

political taint. Aera Energy, 691 F. Supp. 2d at 36 (quoting

IBLA decision); Noble Energy, 691 F. Supp. 2d at 24 (same).

Accordingly, the district court upheld the IBLA’s exclusion

decision.

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Aera and Noble now appeal. We review the district

court’s decision to grant summary judgment de novo. Novicki

v. Cook, 946 F.2d 938, 941 (D.C. Cir. 1991).

II.

In support of the claim that they are entitled to have their

four leases reinstated, Aera and Noble advance three principal

arguments. First, they claim that our precedent required the

IBLA to adopt the decision Reed would have made absent

political considerations. Second, they contend that under

Department regulations and past Board decisions, the IBLA

“neither can nor does substitute its judgment and discretion

for that of the administrative decision maker—here, the MMS

Regional Director,” Dr. J. Lisle Reed. Pet’r’s Br. 48. Finally,

the companies argue that the IBLA erred when it treated

Reed’s subordinates instead of Reed as MMS’s actual

decisionmaker.

We agree with Aera and Noble that Reed was the

relevant decisionmaker for MMS’s original decision and that

in concluding otherwise, the IBLA erred. But the Board

offered an independent basis for rejecting the companies’

political influence claims, and if that alternative is adequate,

then, as the district court found, the Secretary’s error was

harmless. See 5 U.S.C. § 706. We thus turn to Aera and

Noble’s first two arguments, which challenge the adequacy of

the alternative basis for the Board’s decision.

The Secretary urges us to bar Aera and Noble from

pursuing either argument because “[d]uring the administrative

appeal proceeding, [the companies] expressly and repeatedly

requested an evidentiary hearing before an [administrative

law judge] and a de novo decision by the IBLA.” Resp’t’s Br.

57. We agree with the Secretary that because Aera and Noble

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successfully convinced the IBLA, over MMS’s objections, to

order an evidentiary hearing and make a de novo decision and

failed to offer an alternative argument about the scope of the

Board’s authority, it would be unfair to allow Aera and Noble

now to advance the clearly inconsistent theory that the IBLA

lacked de novo decision making authority. See New

Hampshire v. Maine, 532 U.S. 742, 749 (2001) (“Where a

party assumes a certain position in a legal proceeding, and

succeeds in maintaining that position, he may not thereafter,

simply because his interests have changed, assume a contrary

position . . . .” (internal quotation marks omitted)); id. at 750

(explaining that judicial estoppel may be appropriate when a

party’s “later position [is] clearly inconsistent with its earlier

position[,] . . . the party has succeeded in persuading a court

to accept that party’s earlier position[, and] the party seeking

to assert an inconsistent position would derive an unfair

advantage or impose an unfair detriment on the opposing

party if not estopped” (internal citations and quotation marks

omitted)). In any event, we are dubious about that theory

given that the Secretary has expressly “reserved” authority to

take over and render a final decision about matters arising

under the Outer Continental Shelf Lands Act, 43 C.F.R.

§ 4.5(a)(1); that Department regulations authorize the IBLA

to “decide [administrative appeals] as fully and finally as

might the Secretary,” 43 C.F.R. § 4.1 (emphasis added); and

that the IBLA “may, on its own motion, refer any case to an

administrative law judge for a hearing on an issue of fact,” 43

C.F.R. § 4.415 (2004).

That said, the Secretary gives us no basis for barring the

companies from pursuing their first theory—that to remove

political taint from Reed’s decision, the IBLA should have

reinstated the four leases, rather than evaluating whether to

exclude them from their units. From the very beginning of the

administrative appeal process, Aera and Noble identified

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improper political influence as an “independent reason” to set

aside Reed’s exclusion decision. Aera’s Statement of Reasons

1 (included at J.A. 273) (emphasis added). Indeed, the IBLA

itself treated the companies’ political influence claim as a

separate and distinct issue. IBLA Op., 173 IBLA at 38. That

theory is thus best understood as an alternative argument, and

a party that presents two “alternative arguments . . .

abandon[s]” neither. See Busse Broad. Corp. v. FCC, 87 F.3d

1456, 1461 (D.C. Cir. 1996).

With these threshold matters behind us, this case boils

down to one issue: when politics has impermissibly infected

an agency decision, what steps must the agency take to cure

the taint? On this subject, we have several key cases, from

which three related principles emerge.

First, political pressure invalidates agency action only

when it shapes, in whole or in part, the judgment of the

ultimate agency decisionmaker. Thus, in our first political

influence case, D.C. Federation of Civic Ass’ns v. Volpe, we

asked whether “extraneous pressure intruded into the [agency

decisionmaker’s] calculus of consideration.” 459 F.2d 1231,

1246 (D.C. Cir. 1971). Similarly, in ATX, Inc. v. U.S.

Department of Transportation, we explained that “judicial

evaluation of pressure must focus on the nexus between the

pressure and the actual decision maker” rather than on the

pressure alone. 41 F.3d 1522, 1528 (D.C. Cir. 1994). Volpe is

representative of this principle. There, we overturned the

Department of Transportation’s approval of the much

debated, never-built Three Sisters Bridge between

Washington, D.C. and Virginia because Transportation

Secretary Volpe had approved the bridge only after

Representative Natcher, Chairman of the Subcommittee on

the District of Columbia of the House Appropriations

Committee, threatened to withhold money for the construction

16

of the City’s subway system unless the bridge was built.

Volpe, 459 F.2d at 1245–49.

Second, even where political considerations have tainted

agency action, we have consistently given the agency an

opportunity to issue a new, untainted decision. For example,

in Volpe we expressly rejected the notion that “remand would

be futile . . . since the agency can only repeat the process it

purports already to have undertaken: namely, considering the

project solely on its merits,” id. at 1247 n.84, and instead sent

the case back to the agency for a new decision. Likewise, in

Koniag, Inc., Village of Uyak v. Andrus, we concluded that a

letter from Congressman Dingell to the Secretary of the

Interior had compromised the appearance of impartiality in

the Secretary’s determination that several Native Alaskan

villages were ineligible to take land and revenues under the

Alaska Native Claims Settlement Act. 580 F.2d 601 (D.C.

Cir. 1978) (“Koniag I”). Yet we rejected the remedy that the

district court had ordered—reinstatement of “the last

untainted decision” within the agency. Id. at 604. “[A] remand

to the Secretary, rather than a reinstatement of the [untainted]

decisions, is the proper remedy,” we explained, because even

“[a]ssuming the worst—that the letter contributed to the

Secretary’s decision in these cases—we cannot say that 3 ½

years later, a new Secretary in a new administration is thereby

rendered incapable of giving these cases a fair and

dispassionate treatment.” Id. at 611.

We have applied these two principles in cases where

politics threatened to or did, as here, intrude on intermediate

agency decisions. In such situations, so long as the agency

successfully insulated its final decisionmaker from the effects

of political pressure, we have allowed the agency’s final

decision to stand—as though we had reviewed, reversed, and

remanded the intermediate decision and then received a new

17

petition for review from the agency’s subsequent decision.

For example, in Press Broadcasting Co. v. FCC, we upheld a

Commission decision notwithstanding that the Mass Media

Bureau, the office that first decided the issue, was exposed to

ex parte contacts from a congressional staffer. 59 F.3d 1365

(D.C. Cir. 1995). As we explained, because the Mass Media

Bureau had recused itself and because the full Commission,

which had not been subjected to any improper influence, then

rendered a fresh decision, that decision was free of taint. Id. at

1369–70.

Third, our political influence cases emphasize the value

of “establish[ing] ‘a full scale administrative record which

might dispel any doubts about the true nature of [the

agency’s] action.’ ” ATX, 41 F.3d at 1528 (quoting Volpe, 458

F.2d at 1249) (second alteration in the original). We first

made this point in Volpe, explaining that the agency could

“insulate itself from extraneous pressures unrelated to the

merits of the question . . . perhaps by compiling a full-scale

administrative record, utilizing fully intra-agency review

procedures, and consulting with other agencies and planning

groups.” Volpe, 458 F.2d at 1239 n.84. Likewise, in ATX, we

upheld the Department of Transportation’s denial of an

application to operate a new airline because the agency’s

decisionmakers, though aware of vociferous congressional

opposition to the application, had “insulated [their] own

decision making process” by ordering an evidentiary hearing

before an administrative law judge and by “issu[ing] a lengthy

opinion based on . . . [and] fully supported by the

[administrative] record.” 41 F.3d at 1528. These steps ensured

the “decision was clear [and] open to scrutiny.” Id.

Applied to this case, these principles require that we

reject Aera and Noble’s challenge. Notwithstanding that

political considerations concededly drove Reed’s decision,

18

Aera and Noble have offered no evidence that political

pressure affected the Department’s ultimate decisionmaker—

the IBLA—or the administrative law judge who issued the

proposed fact findings on which the IBLA based its decision.

See Orion Reserves Ltd., 553 F.3d at 700 n.1 (noting that an

IBLA decision is the Department’s final decision). Moreover,

at Aera and Noble’s urging, the IBLA took just the sort of

steps to cure even the appearance of political impropriety that

we have encouraged or credited in our previous cases—

namely, ordering a formal evidentiary hearing based on

evidence known to MMS’s Regional office, as well as

evidence available at the time of the decision, and then

issuing a de novo decision based on that factual record.

Granting Aera and Noble the relief they seek—the decision

Reed would have made absent political pressure rather than

the decision the IBLA did make—would thus thwart the

Department’s effort to cure the political taint that infected

Reed’s original decision.

Aera and Noble argue that this case differs from the

decisions discussed above in two critical respects. First, the

companies point out that none of those cases contains explicit

evidence of political taint whereas here Reed himself admits

he would have reached the companies’ preferred decision

absent political considerations. But because the same legal

principles apply regardless of whether the political taint is

admitted or inferred, it is irrelevant that the evidence of

political influence is more direct here than in our previous

decisions. And in any event, in several cases the evidence was

adequate to convince us that political pressure warranted, or

could have warranted, invalidating agency decisions. See

Press Broad., 59 F.3d at 1370 & n.9 (noting “we might well

have” reversed the agency because of “congressional ex parte

interference in the administrative process” had the agency not

corrected its mistake by issuing a new and untainted

19

decision); see also Koniag I, 580 F.2d at 610–11 (remanding

to the agency, in part, because political pressure

“compromised the appearance of the Secretary’s

impartiality”); cf. Volpe, 459 F.2d at 1245 (stating the position

of the opinion’s author (but only for himself) that “the impact

of th[e] [political] pressure [was, in that case,] sufficient,

standing alone, to invalidate the Secretary’s action”).

Second, Aera and Noble insist that this case is unique

because without political influence the IBLA never would

have had the opportunity even to consider “contracting” the

companies’ units. Given that only “adversely affected” parties

can appeal a Regional Director’s decision, there would, they

emphasize, have been no party to appeal had Reed left the

leases in their units and granted the companies’ suspension

requests. 30 C.F.R. § 290.2. In contrast, our other cases have

all had “parties on both sides,” making it “inevitable that . . .

the lower level official’s decision would . . . be appealed” to

higher level decisionmakers within the agency. Reply Br. 19

(contrasting this case with Koniag I). Moreover, the

companies explain that unlike the suspension decisions, which

came in response to requests from Aera and Noble, the

“contraction” decision was discretionary—that is, Reed had

no obligation even to consider it and likely would never have

done so but for politics. This too distinguishes our other cases

in which “an application for Government approval had been

submitted; a decision had to be rendered; and the question

was whether political influence tainted the decision.” Reply

Br. 16 (contrasting this case with Press Broadcasting and

ATX). The companies thus contend that unlike aggrieved

parties in our previous cases, they cannot be placed in a

politically untainted position unless the agency gives effect to

the decision Reed would have made.

20

Aera and Noble are correct that the circumstances

presented here are in certain respects unlike those in our

previous cases. But we are unconvinced that these differences

warrant adopting a wholly new approach to curing political

interference in agency decision making. We have never even

hinted that to cure a decision of political taint, an agency must

determine, and give effect to, the decision that would have

been made had politics not intruded. Indeed, even though

Koniag I lacks the unique features of this case, the district

court there took an approach very much like that advocated by

Aera and Noble—namely, reinstatement of a subordinate

official’s untainted decision—out of concern over the

lingering effects of past political interference. See Koniag,

Inc. v. Kleppe, 405 F.Supp. 1360, 1370–73 (D.D.C. 1975).

Although we could have either affirmed the district court or

ordered a remedy analogous to the one Aera and Noble now

seek—by requiring the Department of the Interior to ascertain

and implement the decision the previous Secretary would

have made absent politics—we instead gave the new

Secretary a chance to issue a fresh untainted decision. See

Koniag I, 580 F.2d at 610–11. Likewise, in Volpe we required

an agency redo, rather than an investigation into a politically

untainted alternative universe. See Volpe, 459 F.2d at 1247

n.84.

This approach makes sense. Were we to adopt the

companies’ position, anyone believing that politics had

influenced an agency decision would presumably demand an

evidentiary hearing to determine not only whether politics

actually did influence the decision, but also what the decision

would have been absent political interference. Such hearings

would be both complex and burdensome. More troubling,

such an approach would effectively empower officials no

longer responsible for the original, politically driven

decision—and as in this case perhaps no longer even

21

employed by the agency—to control agency policy.

Undoubtedly, some officials would take such an opportunity

to offer a revisionist history, and determining what would

have happened but-for political interference would be no easy

task. Consider, for example, that applying Aera and Noble’s

rule in Koniag would have meant asking a former Secretary

from a different administration who failed to insulate his

decision from political influence to dictate the case’s

outcome, instead of handing the task to the then-incumbent

Secretary.

Moreover, accepting the companies’ argument would

mean forcing the IBLA to adopt a “special” procedure

exclusively for political influence cases. After all, the IBLA

ordinarily has de novo review authority (or, at least, Aera and

Noble are estopped from arguing otherwise, see supra 13–14),

and “de novo” review ordinarily means that an appellate body

provides its own answers to questions presented on appeal

rather than ones based on what the original decisionmaker

would have done. Requiring the IBLA to mechanically

impose Reed’s hypothetical decision would thus deviate from

the Board’s ordinary practice. But we have never required a

special procedure and instead have encouraged agencies to

adapt established internal procedures to render fresh untainted

decisions. See, e.g., Press Broad., 59 F.3d at 1370

(concluding that the FCC had cured an earlier, tainted

decision because the Commission issued a de novo decision

after the tainted agency staff had been recused); ATX, 41 F.3d

at 1528 (observing that the Secretary of Transportation’s

decision to order a full-evidentiary hearing was

“unobjectionable;” indeed, it “was an appropriate response to

[congressional] pressure”). Indeed, in Koniag we expressly

rejected judicial tinkering with the procedures an agency

normally uses to correct its own errors. 580 F.2d at 610–11

(concluding that remand to the Secretary for a new decision

22

rather than reinstatement of the last, untainted decision within

the agency was appropriate).

Finally, applying Aera and Noble’s framework would in

some cases mean an agency would have to adopt a decision

the agency itself considers unlawful. This very case illustrates

the problem. The IBLA determined not only that exclusion

was appropriate under the correct legal standard, but also that

two of the criteria Reed would have relied on to maintain the

leases—“potential loss of rental revenue” and “the minimal

likelihood of tract releasing”—were impermissible

considerations. IBLA Op., 173 IBLA at 37; ALJ Op. at 19

(included at J.A. 720). Accordingly, were the IBLA to impose

Reed’s decision, it would effectively be embracing the very

factors it believed were impermissible, a decision we would

normally find arbitrary and capricious. Cf. Allentown Mack

Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 374 (1998) (“It is

hard to imagine a more violent breach of th[e] requirement [of

reasoned decision making] than applying a rule of primary

conduct or a standard of proof which is in fact different from

the rule or standard formally announced.”); Alaska Prof’l

Hunters Ass'n v. FAA, 177 F.3d 1030, 1034 (D.C. Cir. 1999)

(requiring an agency to conduct notice and comment

rulemaking before significantly revising a definitive

interpretation of the agency’s regulations). Yet that is exactly

what Aera and Noble would have us require as a matter of

law.

Resisting the significance of the IBLA’s determinations,

Aera and Noble point out that the Board made no “explicit

finding” that Reed’s hypothetical decision would have been

unlawful and point to purportedly “ample bases for his

conclusions” in his testimony. Pet’r’s 28(j) Letter 1–2, Jan.

28, 2011. But even assuming some of Reed’s rationales would

have been appropriate, the companies do not dispute that

23

Reed would have based his politically untainted decision on

considerations the IBLA subsequently determined were

inappropriate. In any event, we think it hardly surprising that

the IBLA made no “explicit finding” about the lawfulness of a

decision Reed never made, particularly given that our case

law nowhere even hints that de novo review must include

such an inquiry. That said, because the Board made no

“explicit finding,” we have highlighted the flaws in Reed’s

decision not as a basis to affirm, but merely to illustrate the

bizarre results that embracing the companies’ theory could

produce.

Of course, this might well have been a different case had

the companies also advanced traditional Administrative

Procedure Act claims alleging, for example, that the

Department violated its own procedural or substantive

requirements for “contracting,” or even considering whether

to contract, a unit. Certainly, courts reviewing agency

decisions involving political interference must be attuned to

the heightened possibility that political influence will have

caused agencies to cut corners. In this case, Aera and Noble

made several such arguments to the IBLA, including that

there was sufficient evidence that each lease contained

mineral deposits to warrant their continued inclusion and that

the companies had received inadequate notice that the

Regional office would be considering whether to “contract”

the units. The Board rejected these arguments. Significantly,

it also implicitly rejected any argument that evaluating

whether to contract the units at that time would have been

improper, explaining that once exploration is essentially

complete, as in the case of these four leases, it is appropriate

under agency regulations to assess the available scientific

evidence to determine whether leases should continue to be

included in their units. But because Aera and Noble failed to

challenge these conclusions on appeal, we must assume the

24

procedural and substantive soundness of the Department’s

decision. Given that assumption, Aera and Noble were

entitled to nothing more than what they received—an agency

decision on the merits uninfluenced by political

considerations.

III.

We are keenly aware that administrative agencies making

important and sometimes controversial decisions are often

buffeted by political pressure. Indeed, public advocacy plays a

healthy role in our system. Accordingly, “we have never

questioned the authority of congressional representatives to

exert pressure, and we have held that congressional actions

not targeted directly at [agency] decision makers—such as

contemporaneous hearings—do not invalidate an agency

decision.” ATX, 41 F.3d at 1528 (citing Volpe, 459 F.2d at

1249 and Koniag, 580 F.2d at 610) (emphasis added). But

sometimes political pressure crosses the line and prevents an

agency from performing its statutorily prescribed duties.

When that occurs, we have repeatedly declined to stand in the

agency’s shoes and take over its decision making function.

Instead, we have directed the agency to use the traditional

administrative tools at its disposal to render a politically

untainted decision. Such an approach follows from the

distinct roles Congress has assigned to administrative

agencies and the courts: for agencies, to reach reasoned

decisions based on the relevant statutory factors; and for the

courts, to ensure that those agencies properly carry out their

statutory responsibilities. Having found that the IBLA

fulfilled its role, we have fulfilled ours and so affirm.

So ordered.