# Petition — Western Oil & Gas Ass'n v. Alaska > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1322%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1978 - **Citation:** 439 U.S. 922 ## Text ai Supreme Court ut, US, ts Fe ST i JUL 6 1978 ee orn rege JR., CLERK | IN THE an Supreme Court of the United States OcroBER TERM, 1978 No 678-45 WesteRN Ort & GaAs ASSOCIATION, ET AL., Petitioners, v. STATE OF ALASKA, ET AL., Respondents, PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT kK. Epwarp BrucE Mark D. Nozerre Covington & Burling 888 Sixteenth Street, N.W. Washington, D.C. 20006 WiLuiAM M. Meyers J. Berry St. JOHN Liskow & Lewis One Shell Square New Orleans, Louisiana 70139 Attorneys for Western Oil & Gas Association, et al. July 1978 tare Re ten tel Aon ks. Se _ TABLE OF CONTENTS Page nc tehabidrnasebedobaseneneteenas 2 nde lo dcnasendeesanwherssesocuneees 2 IID 3s cinlly Svnew isk sbesesesamaaes os 2 OD nae c ees wdebercctsnesnenegeests 3 SraTeMenT op THB Case ...........ccccceess idee 4 REASONS FOR GRANTING THE WRIT ..............-005- 11 EE Secichok Srakephetepelesonbeceddninwels so 23 TABLE OF CASES A. L. Mechling Barge Lines, Inc. v. United States, 368 EE nin cn Kae ewente senna date ba 19, 23 Aetna Life Insurance Co. v. Haworth, 300 U.S. 227 a ath a ik ke big Ci nw sack oc w0s 18 Boesche v. Udall, 373 U.S. 472 (1963) ............... 13 County of Suffolk v. Secretary of the Interior, 562 F.2d 1368 (2d Cir. 1977), cert. denied, —— U.S. ——, ee fo er eee 10, 14 Golden v. Zwickler, 394 U.S. 103 (1969) ............. 18 Gulf Oil Corp v. Morton, 493 F.2d 141 (9th Cir. 1973) . 14 Maryland Casualty Co v. Pacific Coal @ Oil Co., 312 i chk ieah bie betccodataes< esses 18 Powell v. McCormick, 395 U.S. 486 (1969) ........... 18 Sierra Club v. Morton, 510 F.2d 813 (5th Cir. 1975) .. 14 Union Oil Co. v. Morton, 512 F.2d 743 (9th Cir. 1975) .9, 17 United States v. Maine, 420 U.S. 515 (1975) ......... ll Western Oil & Gas Association et al. v. Andrus, No. Sy Ms CUE GID cance ecehancccccccces 11 ii Table of Cases Continued Page STaTurEs: Outer Continental Shelf Lands Act, 43 U.S.C. ea ee te ae piveda na skis 3, 14, 17 SNES RORY Be Dy 6 ctr Sms 15 EE PRRs. bk boy bb sab 6 bA WER b Ob ht Che uecr es 2 EE ok ko sas cas 5 4 ao deinen cae ebees 4,12 Te ee 15 National Environmental Policy Act, 42 U.S.C. NE i a ua aa oe ets OR oe + Mineral Leasing Act of 1920, 30 U.S.C. ae) ice Cer hays caceth dvekacke 13 ED oa foods coh buvickue sewedee eames 2 Leotsuative History: H.R. Rep. No. 95-590, Ad Hoe Select Committee on the OCS, 95th Cong., 1st Sess. 8 (1977) ............ 19, 21 S. Rep. No. 85-284, OCS Lands Act Amendments, 25th I ON nod ae Vaca ess ce 'Se'e 12 S. Rep. No. 411, 83rd Cong., Ist Sess. 36 (1953) ...... 16 Hearings on H.R. 1614, Ad Hoc Committee on the OCS, House of Representatives, 95th Cong., 1st Sess. Ra pi ORI lara cain ten 20 MEE BONA, OO Gite, ook. occ ccccccccccoce cee 19, 20 Nel ieboawedens 19, 20 99 Cong. Rec. 12,747 (1958) .......cccccccccececece. 16 123 Cong. Ree. 8. 11,986 (daily ed. July 15, 1977) .19, 20, 22 124 Cong. Ree. H. 414 (daily ed. January 31,1978) ... 21 124 Cong. Rec. at S3964, H2269 (daily ed. March 17, eh san Wal. «cay badiew datos ockcre ke, 22 Table of Cases Continued Page Oruer AUTHORITIES: ; 42 Fed. Reg. 36,273 .......seeeeeeereceeerceseececes ‘ BG2T4 cc ccccscccscecccccececscescecss GEGTT ccccccecvccccvcccssseceveccecees 9 3 Williams & Meyers, Oil and Gas Law, GGOLL at VB ...ccccrcccrccccescccecressereres 2 . ~~ GOOLE at 7 wcrc rcccvcvvccvrcvccversccseveesere aan ove IN THE Supreme Court of the United States OcroBerR TERM, 1978 No. WESTERN Or & Gas ASSOCIATION, ET AL., Petitioners, Vv. STaTe OF ALASKA, ET AL., Respondents, PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT The Western Oil & Gas Association (WOGA) and the eleven WOGA members who appeared as appellees and as intervening defendants below’ petition this Court for a writ of certiorari to review a decision en- tered by the United States Court of Appeals for the District of Columbia Circuit on February 24, 1978. ‘The other eleven petitioners here are Amoco Production Co., Champlin Petroleum Co., Cities Service Co., Continental Oil Co., Exxon Corp., Gulf Oil Corp., Mobil Oil Corp., Murphy Oil Corp., Ocean Production Co., Shell Production Co., and Sun Oil Co. 2 OPINIONS BELOW The opinion of the United States Court of Appeals for the District of Columbia Circuit is not yet reported. A copy of that opinion appears in the Appendix at pages la-48a. The order of the Court of Appeals deny- ing petitioners’ motion for rehearing appears in the Appendix at page 50a, and its judgment appears at page 49a. The memorandum opinion and judgment en- tered by the United States District Court for the Dis- trict of Columbia on August 13, 1976, is not officially reported, but is reproduced in the Appendix at pages 51a-66a. JURISDICTION The judgment of the United States Court of Appeals for the District of Columbia was entered on February 24, 1978. Petitioners’ timely motion for rehearing was denied on April 24, 1978. The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1). QUESTIONS PRESENTED (1) Whether the court of appeals erred in con- struing Section 8 of the OCS Lands Act, 43 U.S.C. § 1337, which provides that all Outer Continental Shelf oil and gas leases issued by the Secretary of the In- terior ‘‘shall... be for a period of five (5) years and as long thereafter as oil and gas may be produced... ,’’ as allowing the issuance of leases that can be termi- nated at any time without compensation to the lessee? (2) Whether the court of appeals erred in issuing a declaratory judgment so construing the OCS Lands Act, in the light of the facts that (a) the question of this construction of the OCS Lands was not treated as a major issue by the parties; AEE a Ty ita cl Seth le sn 3 (b) after oral pa, sma in the court of appeals, the court was informed that the Secretary had changed his position and agreed with the plain- tiffs, although not with WOGA, that he could terminate OCS leases without payment of compen- sation; and (c) Congress is considering bills, which have assed both Houses, that would modify the OCS nds Act in a fashion contrary to the construc- tion of the court of appeals? STATUTES INVOLVED Section 5(a)(1) of the OCS Lands Act, 43 U.S.C. § 1334(a) (1), provides as follows: ‘The Secretary shall administer the provisions of this subchapter relating to the leasing of the outer Continental Shelf, and shall prescribe such rules and regulations as may be necessary to carry out such provisions. The Secretary may at any time prescribe and amend such rules and regula- tions as he determines to be necessary and proper in order to provide for the prevention of waste and conservation of the natural resources of the outer Continental Shelf, and the protection of correlative rights therein, and, notwithstanding any other provisions herein, such rules and regulations shall apply to all operations conducted under a lease issued or maintained under the provisions of this subchapter. In the enforcement of conservation laws, rules, and regulations the Secretary is au- thorized to cooperate with the conservation agen- cies of the adjacent States. Without limiting the generality of the foregoing provisions of this sec- tion, the rules and regulations prescribed by the Secretary thereunder may provide for the assign- ment or relinquishment of leases, for the sale of royalty oil and gas accruing or reserved to the United States at not less than market value, and, 4 in the interest of conservation, for unitization, pooling, drilling agreements, suspension of opera- tions or production, reduction of rentals or royal- ties, compensatory royalty agreements, subsurface storage of oil or gas in any of said submerged lands, and drilling or other easements necessary for operations or production.” Section 8(b)(2) of the OCS Lands Act, 43 U.S.C. § 1337(b) (2) provides as follows: ‘An oil and gas lease issued by the Secretary pursuant to this section shall... be for a period of five years and as long thereafter as oil or gas may be produced from the area in paying quanti- ties, or drilling or well reworking operations as approved by e Secretary are conducted there- ee STATEMENT OF THE CASE This case was originally brought under the National Environmental Policy Act (NEPA), 42 U.S.C. § 4321, to prevent, and was subsequently pursued to nullify, the Secretary of the Interior’s sale of oil and gas leases on that portion of the Outer Continental Shelf (OCS) known as the Northeast Gulf of Alaska, The sale of these leases—styled OCS Sale No. 39 *—was ultimately upheld by both the district court and the court of appeals. WOGA strongly urged as an inter- vening defendant below that Sale No. 39 be sustained, * Although referred to as ‘‘sales,’’ OCS transactions of the type at issue here involve the issuance of leases which give lessees the right to explore for and then develop and produce oil or gas under- lying their tracts. These leasehold rights are sold for substantial cash bonuses via a competitive bidding system, They also entail the obligation of paying the federal government annual rentals and substantial royalties, ee ee ——— 5 and it therefore does not seek to have this Court review this aspect of the decision below. The court of appeals, however, also entered a declar- atory judgment which drastically alters the Secretary’s administration of OCS leasing by authorizing him to issue leases, in which tens or even hundreds of millions of dollars may be invested, that he can subsequently take back without the payment of any compensation. Accordingly, petitioners have been compelled to in- voke this Court’s certiorari jurisdiction to review this aspect of the decision below. A. Pre-Sale Developmenis As part of the program to expand OCS production of oil and gas to reduce the Nation’s dependency on foreign imports (App. 61a-62a), the Department of the Interior in late 1974 focused on leasing OCS tracts in the Gulf of Alaska. After publication of a draft impact statement and the conduct of public hearings on the draft, a final environmental impact statement (EIS) for a proposed Gulf of Alaska leasing of 1.8 million acres was published in late 1975. The publication of this EIS led to extensive con- sultation between the lead plaintiff here, the State of Alaska, and various federal agencies—Interior, the Council on Environmental Quality (CEQ), the En- vironmental Protection Agency (EPA), and the Na- tional Oceanographic and Atmospheric Administra- tion (NOAA)—as to a possible reshaping of the sale in response to information contained in the EIS. As a result of this consultation, the leasing proposal was reduced by approximately 40% to 1.1 million acres and the Secretary took a number of other actions respon- sive to the concerns voiced by Alaska and the federal 6 environmental agencies.’ (App. 57a). Moreover, just prior to the sale, the Secretary eliminated an addi- tional 92,000 acres, which were of particular concern to the State. (App. 57a). Thus, as a result of the NEPA process, the scope of Sale No. 39 was significantly reduced and the sale was conditioned to mitigate substantially its environ- mental impacts. Indeed, the chairman of CEQ ‘‘com- mended the Department’’ of the Interior for ‘‘im- prov[ing] the substance and process of OCS decision making’’ by engaging in the consultative process which led to the reduction of the proposed sale area and the conditioning of the sale to deal with CEQ’s and others’ environmental concerns: ‘‘(T }he council has also been impressed with the Department’s clear commitment to incorporate the best and most recent environmental information available into the preparations for or decision on this lease sale. The Department appears to us to be approaching this matter even-handedly and a number of environmentally protective alin are being considered in the decision-making process.’’ (JA 234). The State of Alaska and several other Alaskan plaintiffs nonetheless sued in the United States Dis- trict Court for the District of Columbia to enjoin Sale No. 39 several weeks before it was scheduled to * Specifically, the OCS operating orders; which regulate in detail all aspects of OCS operations, were revised to incorporate in ‘‘sub- stantial measure’’ the recommendations made by CEQ and EPA; a two-year moratorium upon the leasing of any additional portions of OCS acreage in the Gulf of Alaska was imposed; and EPA’s suggestion that lessees provide state and local governments with needed information for onshore planning was adopted, (App. 57a). re i Ok ee 7 take place.‘ Plaintiffs’ principal claim was that the Secretary should have awaited the compilation of ad- ditional information as to the environmental impact of the sale before authorizing it. However, their com- plaint also charged (as part of a list of 13 other alleged EIS defects) inadequate discussion of the al- ternative of including a provision in OCS leases al- lowing their termination for unforeseen environmental hazards. Reflecting their lack of emphasis of this issue, plaintiffs’ preliminary injunction memorandum failed even to mention the claim that OCS leases should con- tain such termination clauses. On April 8, 1976, the district court denied plaintiffs’ motion for a preliminary injunction. Four days later, the court of appeals denied plaintiffs’ request for an injunction pending appeal, and the sale took place the next day, on April 13, 1976, as scheduled. B. The Sale and Post-Sale Developments Although leases covering approximately one million acres were offered at Sale No. 39, about 400 thousand acres were actually leased for bonus payments of nearly $560 million. Thereafter in August, 1976, the parties submitted the case on the merits to the district court. Although once again stressing other matters, plaintiffs did de- vote a short section of their trial brief (pp. 29-30) to the contention that the Secretary should have con- sidered the alternative of issuing leases with clauses * In addition to the state, the City of Yakutat, United Fishermen ase and the Cordova District Fisheries Union joined in the tigation 8 permitting him to cancel leases without compensation to lessees. On August 13, 1976, the district court en- tered final judgment for the federal and WOGA de- fendants. (App. 65a-66a). When plaintiffs returned to the court of appeals to seek review of the district court’s final judgment, they proclaimed that they sought appellate action ‘‘to declare [Sale No. 39] invalid.’’ (Br. 3). In their briefs and oral argument in support of their contention that Sale No. 39 should be invalidated, plaintiffs once again focused principally upon whether the information in the EIS was sufficient to permit the Secretary to pro- ceed with Sale No. 39 and secondarily upon the claim that the EIS insufficiently discussed the Gulf of Alaska OCS operating orders (see p. 6, n. 3, supra). Plaintiffs devoted significantly less attention to their several other claims, Thus, the contention that the KIS was deficient because it did not consider the al- ternative of utilizing terminable leases received only two and one-half pages of discussion in plaintiffs’ 70-page opening brief.’ This issue was similarly down- played in the oral argument which was presented to the court of appeals on January 17, 1977. Although the termination issue thus received little attention from the parties, the Department of the Interior’s subsequent actions apparently caused the D.C. Cireuit to give heightened attention to this ques- tion. The Secretary, like WOGA, had argued in his appellate brief that the OCS Lands Act does not au- thorize the use of clauses in OCS leases that would allow their termination without compensation to the * In the light of plaintiffs’ treatment of the issue, WOGA allotted only four of the 68 pages of its brief to the termination question. ea ct 9 lessee. However, on July 14, 1977, Interior published a notice of proposed rulemaking (which plaintiffs promptly filed with the D.C. Circuit) in which the Department repudiated the view taken in its brief with respect to the Secretary’s termination authority. See 42 Fed. Reg. 36,273; 36,277. While receiving this notice, the court of appeals invited no further com- ment from the Secretary (and none was o.fered by him) to explain this change in position. On February 24, 1978, the court of appeals handed down its decision on the merits. In an opinion written by Judge Bazelon, the court rejected plaintiffs’ chief contention that the Secretary should not have gone forward with Sale No. 39 without undertaking further environmental study of the sale area. Of significance here, however, the court of appeals went on in a lengthy section of its opinion (App. 32a- 42a) to hold that the Secretary could, under the OCS Lands Act, issue leases containing clauses that would allow him to terminate operations without compensa- tion to lessees upon the discovery of unforeseen en- vironmental hazards. Having so construed the OCS Lands Act, the court also held that under NEPA the *The variation between the position taken by the Department in the brief filed with the court of appeals in late 1976 and the view taken in the July 1977 regulations is vividly illustrated by their conflicting attitudes toward Union Oil Co, v. Morton, 512 F.2d 743 (9th Cir, 1975). In its appellate brief, the government argued that under Union Oil the Secretary had no authority to condition OCS leases to inake them terminable upon the subsequent discovery of environmental hazards, (Fed. Br, 49). In the July 1977 proposed regulations, the Department took the position that the Union Oil case permitted the Secretary to so condition OUS leases, See 42 Fed. Reg, at 36,274. 10 Secretary should have considered the use of terminable leases in the EIS as an alternative to the proposed action.’ In so ruling, however, the court recognized that the use of termination clauses constituted only a ‘‘partial alternative’ to Sale No. 39—<.e. ‘‘a different, pre- sumably less environmentally harmful means, of con- ducting such sale.’’ (App. 44a). For this reason and also because inserting termination clauses in the $560 million worth of Sale No. 39 leases that had already been issued ‘‘would create grave legal tangles’’ (App. 46a), the court declined to hold that the ‘‘defect’’ in the EIS, which it had identified, affected the validity of the Secretary’s decision to proceed with Sale No. 39. Instead of thus dismissing this aspect of plaintiffs’ complaint against Sale No. 39, the court of appeals proceeded to render a declaratory judgment that the OCS Lands Act empowers the Secretary to insert termination clauses into OCS leases and that the Sec- retary must consider the use of leases with such clauses in conducting all future OCS sales. WOGA filed a timely petition for rehearing as to that portion of the court’s opinion dealing with the termination issue and identified important develop- ments that had occurred after oral argument which "The court of appeals also found that the EIS contained inade- quate discussion of the operating orders and remanded that portion of the case for further consideration by the Secretary. However, the court rejected plaintiffs’ request to invalidate Sale No, 39 on this basis, noting that the operating orders could be changed after the lease sale had been held, See County of Suffolk v, Secretary of the Interior, 562 F.2d 1368, 1381-82 (2d Cir. 1977), cert. denied, —— U.S. ——, 98 S.Ct. 1238 (1978). Petitioners do not seek review of this aspect of the court of appeals’ decision. a re Se a a ee ee Se a as ae at et a Ea a 11 demonstrated that the court should have modified its decree: First, that the Department of the Interior’s July 1977 proposed termination regulations had been adopted on October 4, 1977, and were being challenged by WOGA in litigation devoted solely to the proper construction of the OCS Lands Act (Western Oil & Gas Association, et al., v. Andrus, No. 77-3987—L.E.W. (C.D. Cal.)); Second, that both Houses of Congress had passed amendments to the OCS Lands Act which would provide for environmentally motivated lease cancellation, ableit unlike the scheme envisioned by the court of appeals, with compensation to the lessee. On April 24, 1978, the court of appeals denied WOGA’s petition for rehearing. REASONS FOR GRANTING THE WRIT The D.C. Circuit has construed the OCS Lands Act as authorizing the use of leases which are terminable without compensation in situations where the lessee is entirely without fault. From the time of its enact- ment in 1953 until the submission of this case to the court of appeals nearly 25 years later, the OCS Lands Act had been consistently construed by the Depart- ment of the Interior to require the issuance of leases that could not be so terminated except upon the gov- ernment’s payment of just compensation to the lessee. Pursuant to this interpretation of the Act, Interior had, as of 1975, conducted over thirty OCS lease sales ‘‘in which 1,940 leases, embracing over eight million acres, have been issued.’’ I/nited States v. Maine, 420 U.S. 515, 527 (1975). As of 1977, the federal govern- ment had received more than 18 billion dollars in 12 bonuses, rental payments and royalties from OCS lessees." The court of appeals’ construction of the OCS Lands Act would thus radically modify OCS leasing. Be- cause that construction of the Act is so patently at variance with its terms and legislative history, and because the court of appeals rendered a declaratory judgment with respect to this issue in a case, at a time, and under circumstances which called for restraint, as opposed to judicial revision of a statute, petitioners submit that the issues raised in this petition make it a compelling vehicle for the exercise of this Court’s certiorari jurisdiction. I The central mechanism underlying the OCS pro- gram, and the one which most clearly reflects the finely- tuned legislative scheme established by Congress, is the OCS lease itself. Section 8(b)(2) of the OCS Lands Act, 43 U.S.C. § 1337(b) (2), specifies the lease- term provisions required to be inserted in every OCS lease : ‘‘An oil and gas lease issued by the Secretary pursuant to this section shall ... be for a period of five (5) years and as long thereafter as oil and gas may be produced from the area in paying uantities, or drilling or well reworking opera- tions as approved by the Secretary are conducted thereon, . . .’’ (emphasis supplied). * See, Outer Continental Shelf Lands Act Amendments of 1977, S. Rep. No. 95-284, 95th Cong., Ist Sess, p. 49 (1977). et at tea 13 This language is mandatory, not discretionary; the Secretary is required to issue leases for a minimum period of five years and must extend the leases unde. carefully defined circumstances. In adopting the language of Section 8(b), Congress was simply directing the Secretary to follow what has long been common practice in the issuance of mineral leases.’ This lease form, which is typical of ‘virtually all contemporary [mineral] leases,’ 3 Williams & Meyers, Oil and Gas Law, § 601.4, at 7, was evolved after decades of experience and reflects the accommo- dation of the interests of both lessees and lessors. The short initial term benefits the lessor by compelling the lessee to begin production as soon as possible, id., while the ‘‘habendum”’ or ‘“‘thereafter”’ clause guaran- tees the lessee the opportunity to realize a return on his investment, id. at § 601.1, at 2-3. The interpretation of the Act proposed by the court below upsets this careful balance. For the court of appeals has now, in effect, revised the statute so as to * The lease form prescribed by Section 8(b) was essentially de- rived from the Mineral Leasing Act of 1920, 30 U.S.C. § 226(e) : ‘Competitive leases issued under this section shall be for a primary term of five (5) years and noncompetitive leases for & primary term of ten (10) years, Each such lease shall con- tinue so long after its primary term as oil or gas is produced in paying quantities... .’’ The court of appeals relied on Boesche v, Udall, 373 U.S, 472 (1963), a case decided under the Mineral Leasing Act. (App. 38a- 39a). But that decision held that the Secretary of the Interior had authority to cancel leases administratively for technical errors in their issuance, In so holding, this Court carefully distinguished be- tween technical defects of that nature and ‘‘post-lease events’’ 373 U.S. at 478 (emphasis in original). The subsequent discovery of environmental hazards is, of course, a classic example of a ‘‘post- lease event’’ not at issue in Boesche. 14 vest the Secretary with discretion to cancel OCS leases for reasons wholly outside the control of the lessee, without any obligation to pay the lessee compensation for a lease in which millions of dollars may have been invested. The lower court’s reliance upon Section 5(a) (1) of the Act, 43 U.S.C. § 1334(a)(1), does not excuse its failure to adhere to the terms of Section 8(b). That section merely gives the Secretary general authority to regulate OCS operations after leases are issued. See, County of Suffolk v. Secretary of Interior, supra, 562 F.2d at 1381-82; Sierra Club v. Morton, 510 F.2d 813 (5th Cir. 1975). Moreover, the very terms in which Section 5(a) spells out the contours of the Secretary’s regulatory authority show that Congress did not arm him with the termination power the court below now suddenly finds in his arsenal: ‘Without limiting the generality of the foregoing provisions of the section, the rules and regulations prescribed by the Secretary thereunder may pro- vide for the assignment or relinquishment of leases, for the sale of royalty oil and gas accruing or reserved to the United States at not less than market value, and, in the interest of conservation, for unitization, pooling, drilling agreements, sus- pension of operations or production, reduction of rentals or royalties, compensatory royalty agree- ments, subsurface storage of oil or gas in any of said submerged lands, and drilling or other ease- ments necessary for operations or production.”’’ (emphasis supplied).”° Tt is now settled that the Secretary of the Interior has the authority to suspend OCS operations—i.e. to order their cessation for a limited period of time—upon the discovery of environmental hazards. See Gulf Oil Corp. v. Morton, 493 F.2d 141 (9th Cir. 1973). a ee 15 Congress’ use of the term ‘‘suspension,”’ as opposed to ‘‘termination’’ or ‘‘cancellation’’ was not inadver- tent. Indeed, the very next section of the Act, 43 U.S.C. § 1334(b) (1), outlines the circumstances—all of which involve fault on the part of the lessee and thus do not support the decision below—when termination is per- missible : ‘*Whenever the owner of a nonproducing lease fails to comply with any of the provisions of this subchapter, or of the lease, or of the regulations issued under this subchapter and in force and effect on the date of the issuance of the lease... such lease may be cancelled by the Secretary... .’’ (emphasis supplied). Moreover, the legislative history of the Act shows clearly that Congress knew what it meant when it authorized ‘‘suspension,’’ but not ‘‘termination’’ or ‘cancellation’ of leasehold rights in Section 5(a). As the bills underlying the 1953 Act went into con- ference, the predecessor of Section 12 (43 U.S.C. § 1341) provided that ‘‘in time of war or where neces- sary for national defense’’ the Secretary could ‘‘termi- nate any lease,’’ albeit with liability ‘‘to the lessee for just compensation.’’ In conference, the section was modified into its present form for reasons which show the clear distinction recognized by the conferees be- tween ‘‘suspension’’ and ‘‘termination:”’ ‘‘No AUTHORITY TO TERMINATE LEASES.”’ “On page 42 appears amendment No. 21, in line 10, and again in line 13. That amendment strikes out the language which would give the Secretary of the Interior, upon a recommendation of the Secretary of State, during a period of war or national emergency, the right to terminate leases. He would still have the right to suspend operation under leases, but not to terminate leases; 16 and the words ‘or to terminate,’ in line 10, are stricken out; and in lines 13 and 14 the words ‘or whose lease thus terminated’ are also stricken out.’’ 99 Cong. Ree. 10,474 (1953) (emphasis added). Not only does this change in the statute show that Congress was acutely aware of the distinction between termination and suspension, but also it shows a strong aversion to vesting termination authority in the Sec- retary. Since Congress was unwilling to sanction no- fault termination in times of national emergency—the most compelling circumstance for the exercise of such a termination power—it surely did not contemplate termination for the reasons identified by the D.C. Circuit, This conclusion is further reinforced by other parts of the Act’s legislative history. Thus, the Report of the Senate Committee on Interior and Insular Affairs accompanying the OCS Act states: ‘*Both Senate and House Bills authorize the Secretary to make new oil and gas leases, The House bill establishes a permanent procedure, with detailed provisions (House Bill, see. 10); the Senate bill is designed only to meet ‘the present emergency’ and imposes a minimum of restrictions on the complete discretion of the Secretary (S. 1901, sec. 8). It is believed that a permanent pro- cedure is preferable; the practice of limiting the Secretary's discretion as to leasing procedure and lease provisions follows the precedent of the Min- eral Leasing Act, and is not objectionable.” 8. Rep. No. 411, 83rd Cong., 1st Sess. 36 (1953). (em- phasis supplied). The court below, contrary to this legislative history, grants broad discretion to the Secretary as to leasing 17 provisions. In embracing such a discretionary view of the Act, the D.C. Circuit brought itself into direct conflict with the view of the statute previously articu- lated by the Ninth Circuit in construing the scope of the Secretary’s regulatory authority under Section 5(a) of the OCS Lands Act—Union Oil Co. v. Morton, 512 F.2d 743 (9th Cir. 1975). In Union Oil, a lessee challenged the Secretary’s de facto termination of a lease by virtue of his refusal to permit installation of a drilling platform on an OCS tract. The court ruled against the Secretary in terms which clearly conflict with the D.C. Circuit’s view that the Secretary has broad discretion to place termina- tion clauses in OCS leases: “TA)lthough 43 U.S.C. § 1334(a)(1) authorizes regulations providing not only for suspensions but for any other action affecting operations which the Secretary determines ‘necessary and ttl for ‘conservation of natural resources,’ Congress clearly did not intend to grant leases so tenuous in nature that the Secretary could terminate them, in whole or in Fw at will,’’ 512 F.2d at 750 (emphasis added) (footnote omitted). The decision below permits the Secretary to do pre- cisely what Union Oil says Congress prohibited—i.e., to use his powers under Section 5 of the OCS Lands Act to grant leases which are ‘‘so tenuous in nature that the Secretary could terminate them, ... at will.’ II We have demonstrated in Part I above that the D.C. Circuit fundamentally misconstrued the OCS Lands Act. The circumstances leading up to this mis- construction of the Act help to explain how the court of appeals might have made such a mistake. They also 18 demonstrate, as an independent basis for the issuance of the writ of certiorari which WOGA here seeks, that the D.C. Circuit ignored settled principles established by this Court to assure that declaratory relief is pro- vided only in cases where it is clearly warranted. See Powell v. McCormick, 395 U.S. 486 (1969) ; Golden v. Zwickler, 394 U.S. 103 (1969) ; Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270 (1941) ; Aetna Life Insurance Co. v. Haworth, 300 U.S. 227 (1937). As noted in the statement of the case (pp. 7-8, supra) the termination issue received little attention from the parties in their presentation of this case to the court of appeals. Moreover, the court of appeals re- fused to apply its construction of the Act to the sole issue before it in this litigation (the validity of the Secretary’s Sale No. 39 decision), and the Department changed position with respect to the termination issue and came into agreement with the plaintiffs on this question. Thus, this was not a case where the parties had the necessary ‘‘adverse legal interests, of sufficient immediacy and reality’’ to support the issuance of a declaratory judgment." There is, moreover, a further compelling reason for reversing the lower court’s declaratory judgment. As WOGA pointed out in its petition for rehearing in the court of appeals, at the very time this case was under submission, the Congress was (as it still is) giving focused attention to the question of how best to deal with the discovery of unanticipated environmental haz- ards on OCS leases. That fact should have been, but was not, considered by the court of appeals in issuing '* Maryland Casualty Co. v. Pacifie Coal & Oil Co., supra, 312 U.S, at 273, Debt we Se RE A Bini et Ot eee Sem ees