# Opposition Brief — Pennzoil Co. v. United States, 24 Cl. Ct. 167 (1991) (No. 91-34)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1991

## Text

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Supreme Court,
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Nos. 91:1and 91:34 AUG 30 199

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Iu the Supreme Court of the United States

OCTOBER TERM, 1991

PHILLIPS PETROLEUM Co., ET AL., PETITIONERS
Vv.

UNITED STATES OF AMERICA

PENNZOIL COMPANY, ET AL., PETITIONERS
Vv.

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

KENNETH W. STARR
Solicitor General

BARRY M. HARTMAN
Acting Assistant Attorney General

MARGARET M. SWEENEY

Dirk D. SNEL

ELIZABETH ANN PETERSON
Attorneys
Department of Justice
Washington, D.C. 20530
(202) 514-2217

QUESTION PRESENTED

Under 43 U.S.C. 1339(a), the Secretary of the In-
terior is authorized to refund certain royalty pay-
ments if a request for a refund “‘is filed * * * within
two years after the making of the payment.” The
question presented in this case is whether the two-
year period runs from the date the payment is made,
or from a later date when the payor determines, on
the basis of a judicial ruling, that the amount of the
payment was incorrect.

(1)

A

TABLE OF CONTENTS

Page
i ceniaedanlonpcnalincinsiannins 1
eee he evenbimiaaiuesheennncsunbireiion 2
NT od snhlsniasonen ss sNissatetciateaihedonne aaaaniaiee 2
a a hanesgeied omnanlannniceneGkenseubes 7
Sadia SE ae aa 15
TABLE OF AUTHORITIES
Cases:
Block v. North Dakota, 461 U.S. 273 (1983) ......... 10
Interstate Natural Gas Ass’n of America V. FERC,
716 F.2d 1 (D.C. Cir. 1983), cert. denied, 465
RS SE LE 3
Office of Personnel Management v. Richmond, 110
a cesnnisinavnonnrcecnaceers 10
Phillips Petroleum Co., 39 1.B.L.A. 393 (1979) ...... 4
United States v. Dalm, 110 S. Ct. 1361 (1990) ...... 8
United States v. Ron Pair Enters., Inc., 489 U.S.
De cuaceseniateenteidinassnases 7
United States v. Wurts, 303 U.S. 414 (1938) ........ 5
Statutes:
Act of Dec. 11, 1919, ch. 5, § 2, 41 Stat. 366 ....... 12
Act of June 27, 1930, ch. 642, 46 Stat. 822 _....... 12
Natural Gas Policy Act of 1978, 15 U.S.C. 3301-
a endnseniionatooennne 3
Outer Continental Shelf Lands Act, 43 U.S.C.
1331 et seq.:
48 US.C. 1881 (a) .......... Jee tN eR NRT 2
48 U.S.C. 1881-1866 ........:...................... abba 2
| ea 12
es BOE ..-cc-...-..-..... SOE MELAS OE 2
rts BET EE) TE) CA) ....0ncccecccccccccceeseceessnnwe 2
is sds ssamennducwumnssoianaeaine 9,10
43 U.S.C. 1980(a@) .................. 2, 4, 5, 7, 8, 11, 12, 13, 14
Es cncunbantnbetenancberoatons 8
I Tn, a. cs camssenwumereanvovsubeicworaviness 2

Miscellaneous: Page

48 Fed. Reg. 56,448 (1978) ........................-2---ce0.---00- 3
Refunds and Credits Under the Outer Continental
Shelf Lands Act, 88 Interior Dec. 1090 (1981) ..4, 9, 11,
14
Refunds Resulting from Btu Measurement Adjust-
ments, FERC Order No. 399, 49 Fed. Reg. 37,735
ea RS Se ae hc Tr Rae Pte 8 Poet ORE tae 3

Iu the Supreme Court of the United States

OCTOBER TERM, 1991

No. 91-1
PHILLIPS PETROLEUM Co., ET AL., PETITIONERS

Vv.

UNITED STATES OF AMERICA

No. 91-34
PENNZOIL COMPANY, ET AL., PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App.’ la-
8a) is reported at 923 F.2d 830. The decision of the
United States Claims Court (Pet. App. 13a-24a) is
reported at 17 Cl. Ct. 537. The decision of the
Interior Board of Land Appeals (Pet. App. 25a-55a)
is reported at 96 I.B.L.A. 149. The decision of the

1 References in this brief to “Pet. App.” refer to the ap-
pendix to the petition in No. 91-34.

(1)

2

Minerals Management Service (Pet. App. 64a-67a)
is unreported.

JURISDICTION

The judgment of the court of appeals was entered
on January 16, 1991. Fet. App. la. A timely pe-
tition for rehearing was denied on April 4, 1991.
Pet. App. 10a-lla. The petitions for a writ of cer-
tiorari were filed on June 28, 1991 (No. 91-1), and
July 3, 1991 (No. 91-34). The jurisdiction of this
Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

1. Pursuant to the Outer Continental Shelf Lands
Act (OCSLA), 43 U.S.C. 1331-1356, the Minerals
Management Service (MMS) in the Department of
the Interior leases lands under the control of the
federal government on the outer Continental Shelf *
to oil and gas producers. 43 U.S.C. 1387. Pursuant
to the statute, the leases typically provide for pay-
ment of a royalty to the United States of at least
12.5% of the “amount or value of the production
saved, removed, or sold.” 43 U.S.C. 1337(a) (1) (A).
Section 1339(a) sets forth the circumstances under
which a producer may seek to recover amounts erro-
neously paid to the Secretary as royalties:

2 Section 1331 (a) defines the outer Continental Shelf as

all submerged lands lying seaward and outside of the
area of lands beneath navigable waters as defined in
section 1301 of this title, and of which the subsoil and
seabed appertain to the United States and are subject
to its jurisdiction and control.
As relevant to this case, the “lands beneath navigable waters”
excluded from the outer Continental Shelf under this defi-
nition generally are lands within three miles of the coast
line of each State. See 43 U.S.C. 1301 (a) (2).

3

[W]hen it appears to the satisfaction of the
Secretary that any person has made a pay-
ment to the United States in connection with
any lease under this subchapter in excess of the
amount he was lawfully required to pay, such
excess shall be repaid without interest to such
person or his legal representative, if a request
for repayment of such excess is filed with the
Secretary within two years after the making of
the payment, or within ninety days after August
7, 1953.

2. Petitioners are various oil and gas producing
companies that lease federal lands on the outer Con-
tinental Shelf from MMS. In 1978, the Federal En-
ergy Regulatory Commission (FERC) issued regu-
lations pursuant to the Natural Gas Policy Act of
1978, 15 U.S.C. 3301-3432, that changed the method
of measuring and valuing natural gas production. 43
Fed. Reg. 56,448. As applied to petitioners, the new
regulations generally entitled them to charge a higher
price for the natural gas produced under their off-
shore leases; accordingly, petitioners paid higher roy-
alties to the United States. A group of natural gas
purchasers sought judicial review of FERC’s regu-
lations and eventually succeeded in having them
overturned. Interstate Natural Gas Ass’n of
Amercia v. FERC, 716 F.2d 1 (D.C. Cir. 1983),
cert. denied, 465 U.S. 1108 (1984) (INGAA). <Ac-
cordingly, petitioners were required to refund to the
purchasers the excess amounts they had charged
under the invalidated FERC regulations. See Re-
funds Resulting From Btu Measurement Adjust-
ments, FERC Order No. 399, 49 Fed. Reg. 37,735
(1984).

3. Petitioners, in turn, sought a refund from
MMS of the excess royalties they had paid to the

4

United States while the FERC regulations were in
effect. Relying on Section 1339(a), MMS generally
determined that refunds were not available to the
extent that petitioners sought refunds for amounts
paid more than two years before they filed their re-
fund claims. Pet. App. 64a-67a.° MMS relied heav-
ily on a previously published opinion of the Solicitor
of the Interior, which had concluded that the two-
year period described in Section 1339(a) runs from
the date of payment in situations like this. See Re-
funds and Credits Under the Outer Continental
Shelf Lands Act, 88 Interior Dec. 1090 (1981)
(OCSLA Refunds & Credits). Relying on Phillips
Petroleum Co., 39 I.B.L.A. 393 (1979), the Solicitor
explained in OCSLA Refunds & Credits that the pur-
pose of Section 1339 is “to require lessees to verify
their accounts promptly.” 88 Interior Dec. at 1100.
He also considered the “special case * * * presented
by a retroactive change in the regulated price of oil
or gas” and concluded that where FERC agrees to
lower the price retroactively, “[t]he two-year limit
still applies from the date of payment; but the lessee
can interrupt the period by notifying the Depart-

ent in writing of the challenge.” /d. at 1101-1102.
Consistent with that interpretation, MMS concluded
in the instant case that “[a] payor may not post
facto toll the statute by waiting judicial resolution
to notify the Department.” Pet. App. 66a.

® MMS did determine that the two-year period described
in Section 1339(a) was tolled by a letter it issued on Novem-
ber 9, 1983, announcing that it would issue instructions for
seeking refunds based on INGAA. Accordingly, the only
claims at issue in this case are for royalties paid before No-
vember 9, 1981, with respect to which the two-year period
already had run before MMS issued its November 9, 1983,
letter. See Pet. App. 32a-33a, 49a-50a.

5

4. The Interior Board of Land Appeals rejected
petitioners’ challenge to MMS’s interpretation of Sec-
tion 1339(a). Pet. App. 25a-55a. The Board ex-
plained:

The statute conditions the authority of the Sec-
retary to make repayment upon a request being
filed “within two years after the making of the
payment.” A payment is made when it is tend-
ered to the appropriate agency. There is no am-
biguity in the wording of the statute; the terms
of the Act cannot be varied simply because [pe-
titioners] may for other reasons appear to de-
serve refunds.

Pet. App. 40a (citations omitted) .*

5. The Claims Court disagreed with the Board’s
interpretation and held that petitioners’ requests for
refunds are not time-barred. Pet. App. 138a-24a. The
court acknowledged that the language of Section
1339(a) requiring a refund request to be filed within
two years of payment “would appear to support” the
government’s interpretation. Pet. App. 18a. But the
court nevertheless accepted petitioners’ argument that
because Section 1339(a) provides for the refund of
“excess” payments, the two-year period did not begin
to run until the D.C. Circuit held the FERC regu-
lations invalid. Only then, the court reasoned, did
petitioners make excess payments. Pet. App. 19a. In
addition, relying on United States v. Wurts, 303 U.S.
414, 418 (1938), the court concluded that the statute

4The Board also reversed certain aspects of MMS’s ruling
related to the types of information producers must supply
in order to receive refunds. See Pet. App. 50a-5la. That
portion of the Board’s ruling was not challenged in the Claims
Court or the court of appeals and thus is not before this
Court.

6

should be construed so that “the limitations period
did not begin to run until after the right had ac-
crued.” Pet. App. 20a. Here, the court believed that
the right to a refund did not accrue until the D.C.
Circuit rendered its decision in INGAA. Pet App.
20a-21a.

6. A panel of the Court of Appeals for the Fed-
eral Circuit unanimously reversed. Pet. App. la-8a.
The court noted that the “language requires lessees
to request the refund of any excess payment ‘within
two years after the making of the payment,’” and
concluded that “[b]y its terms, this phrase requires
a request within two years from the time a lessee
makes its original royalty payment.” Jd. at 5a. In
response to the Claims Court’s conclusion that_a pay-
ment was not made until it was found to be exces-
sive, the court explained (id. at 6a):

The statute does not state that a lessee must re-
quest a refund “within two years after discov-
ery that a payment was excessive.” Nor does
the statute state that a lessee must request a
refund “within two years after a judicial de-
termination rendering a payment excessive.”
The statute requires a request “within two years
after the making of the payment.” By interpret-
ing the OCSLA otherwise, the Claims Court
erred. ;

The court of appeals further held that petitioners
were aware prior to the decision in INGAA of the
basis for claiming that the amounts of their royalty
payments were incorrect, because they were aware
that gas purchasers would challenge the FERC regu-
lations to which their royalty rates were tied. /d.
at 7a.

7
ARGUMENT

The decision of the court of appeals, which turns
on the particular—and unambiguous—language of
43 U.S.C. 1339(a), is correct and does not conflict
with the decision of any other court of appeals.
Petitioners were fully on notice that the FERC
regulations that affected the amount of their roy-
alty payments were being challenged by gas pur-
chasers; indeed, a number of the petitioners were
parties to the proceedings: in the D.C. Circuit in
INGAA. Yet petitioners failed to avail themselves
of the procedures established by MMS that permitted
them to preserve their refund claims pending the res-
olution of INGAA simply by filing a notice to that
effect with MMS. The decision below therefore does
not result in any unfairness to petitioners. Although
petitioners assert that the MMS procedures will re-
sult in a flood of unnecessary protective refund re-
quests in circumstances such as these, the experience
of the decade since the Solicitor of the Interior ren-
dered the formal decision approving these procedures
and MMS adopted them does not support that asser-
tion, or suggest that the common-sense application of
Section 1339(a) by the agency responsible for its im-
plementation is impracticable. Further review there-
fore is not warranted.

1. This is a case in which the language of the
statute should be both the beginning and the end of
the inquiry. Cf. United States v. Ron Pair Enters.,
Inc., 489 U.S. 235, 241 (1989). The statute bars the
Secretary from making refunds unless a refund re-
quest is filed with the Secretary “within two years
after the making of the payment.” Petitioners failed
to file a request for refund of the payments at issue
here within two years of when they were made. They
therefore have no right to receive a refund.

—_—— 8

Inasmuch as the statute imposes a condition on a
waiver of the sovereign immunity of the United
States, the courts “must be careful not to interpret
it in a manner that would extend the waiver be-
yond that which: Congress intended.” United States
v. Dalm, 110 S. Ct. 1361, 1868 (1990) (internal quo-
tation marks omitted); see id. at 1369 (“If any
principle is central to our understanding of sovereign
immunity, it is that the power to consent to such suits
is reserved to Congress.”). Here, petitioners’ argu-
ment (91-1 Pet. 13; 91-34 Pet. 13-14) that a “pay-
ment” is ‘‘made” only when a court later determines
that the payment was excessive is at best unnatural.
Especially in light of the established rule against
broad interpretations of waivers of sovereign im-
munity, petitioners’ strained reading of Section
1339(a) should be rejected.

Indeed, just two Terms ago in Dalm, this Court
rejected a substantially identical claim with re-
spect to the limitations period in 26 U.S.C. 6511(a).
Section 6511(a) requires a taxpayer to file certain
claims for a refund of overpayment of a tax “within
3 years from the time the return was filed or 2 years
from the time the tax was paid, whichever of such
periods expires the later.” In 1976, Dalm filed a gift
tax return and paid a gift tax of approximately
$19,000. After the Internal Revenue Service de-
termined in 1984 that the same transaction was sub-
ject to the income tax, rather than to the gift tax,
Dalm promptly filed a claim for a refund of the gift
tax. 110 8S. Ct. at 1363-1364. Dalm contended that
her claim was timely because “the gift tax was not
paid for the purposes of § 6511(a) until 1984, when
it was determined that she owed income tax on the
same transaction under an inconsistent theory. So,
she assert[ed], her cause of action for refund of gift

9

tax did not arise until that time.” Jd. at 1369 n.7.
This Court firmly rejected that argument (ibid.):

We disagree. The most sensible interpretation
of § 6511(a) is that a tax is paid when the tax-
payer tenders payment of the tax to the IRS,
not when the taxpayer discovers that the pay-
ment was erroneous. The very purpose of stat-
utes of limitation in the tax context is to bar
the assertion of a refund claim after a certain
period of time has passed, without regard to
whether the claim would otherwise be meritor-
ious. That a taxpayer does not learn until after
the limitations period has run that a tax was
paid in error, and that he or she has a ground
upon which to claim a refund, does not operate
to lift the statutory bar.'”!

In this case, just as in Dalm, the most sensible in-
terpretation is that a payment is made when the
payor tenders payment, not when the payor later
concludes that the amount of the payment was cal-
culated incorrectly. There is no basis for an ex-
ception to that rule here simply because the L.C. Cir-
cuit, more than two years after the payments were
made, overturned the FERC orders that had set the
ceiling price to which the royalty rates were tied.
Here, as in Dalm, the “very purpose” of the limita-
tions period is to establish repose and protect the fisc
by barring claims against the Treasury after pass-
age of the specified period, even if subsequent events
show a payment to have been excessive. There ac-
cordingly is no need for this Court to review the

5In light of the close historical relation between Section
1339 and the refund provisions of the tax laws, see OCSLA
Refunds & Credits, 88 Interior Dec. at 1096-1098, this Court’s
interpretation of the refund provisions of the tax laws is
especially relevant in applying Section 1339.

10

judgment of the court of appeals applying the un-
ambiguous language of Section 1339.

2. Implicitly recognizing that the language of the
statute Congress enacted forecloses their claim, pe-
titioners rely heavily on the principle that statutes
of limitations should be construed so that they do not
commence to run until the cause of action has ac-
erued. 91-1 Pet. 14-19; 91-34 Pet. 14, 16-20. But
none of the cases cited by petitioners has any rel-
evance to the situation presented here, because—un-
like Dalm, which strongly supports the decision be-
low—none involved actions against the United
States. Accordingly, in none of those cases did this
Court consider the rule “that when Congress attaches
conditions to legislation waiving the sovereign im-
munity of the United States, those conditions must
be strictly observed, and exceptions thereto are not to
be lightly implied.” Block v. North Dakota, 461
U.S. 273, 287 (1983). This rule has special force
in cases such as this, involving claims for public
funds. Cf. Office of Personnel Management v. Rich-
mond, 110 S. Ct. 2465, 2471-2473 (1999). The rule
cited by petitioners is simply another “competing
canon of statutory construction” regarding statutes
of repose and limitation, which must give way before
the longstanding judicial policy of strictly interpret-
ing waivers of sovereign immunity. Block, 461 U.S.
at 288.

In any event, petitioners overstate their case when
they claim that the Federal Circuit’s decision ‘‘is
squarely inconsistent with the established principle
that statutes of limitations do not begin to run until
the plaintiff could bring a claim,” 91-1 Pet. 17, or
“with the presumption that statutes of limitation be-
gin to run when the rights subject to the bar have
accrued,” 91-34 Pet. 14. As the court of appeals

11

noted, petitioners had a fully adequate opportunity
to file their claims in a timely manner. In 1981, the
Solicitor of the Interior issued a formal opinion ap-
proving procedures pursuant to which producers
faced with the problem that confronted petitioners
could file requests for refunds pending resolution of
a challenge to rates promulgated by FERC. See
OCSLA Refunds & Credits, 88 Interior Dec. at
1099-1102. Indeed, at least one producer in peti-
tioner’s situation (Texaco) filed such a claim and
avoided the two-year bar with respect to royalties
paid in reliance on FERC’s revised pricing regula-
tions. Admin. Record, Doc. 26, App. G, Shell Off-
shore Inc. v. United States, No. 391-87L (Cl. Ct.
1989). Petitioners, by contrast, failed to do so. Be-
cause petitioners do not challenge the procedures for
filing refund requests in these circumstances, and be-
cause they therefore concededly could have filed their
claims at any time after they made payment, their
right to seek a refund accrued at the time of pay-
ment. There accordingly is nothing anomalous about
applying the statutory language as it is written and
holding that the two-year filing period set forth in
Section 1339(a) began to run when petitioners first
could have filed their refund requests.

3. Petitioners also argue (91-1 Pet. 20-25; 91-34
Pet. 15-16, 25-26) that the court of appeals errone-
ously failed to defer to the views of the Comptroller
General. In their view, Congress’s 1953 enactment
of OCSLA implicitly incorporated into Section
1339(a) the Comptroller General’s 1941 interpreta-
tion of a prior statute, see Pet. App. 79a-89a. The
short answer to this argument is that the Comp-
troller General’s interpretation was not passed by
both Houses of Congress and signed by the Presi-

12

dent; it is the text of the statute Congress enacted
that controls. As discussed above, petitioners’ argu-
ments are inconsistent with that text.

Even if we assume arguendo, however, that the
Comptroller General, and not the Secretary, has the
power to issue authoritative interpretations of
OCSLA,* the Comptroller General’s interpretation in-
volved a statute significantly different from Section
1339(a) and thus sheds little light on the question at
hand.’ The statute at issue was Section 2 of the Act
of Dec. 11, 1919, ch. 5, 41 Stat. 366, which provided
that any claim for a refund of excess sums paid for
the purchase of public lands must be filed not within
two years of the date of payment, but “within two
years after the patent has issued for the land em-
braced in such payment.” See Pet. App. 8la. There-
after, the Act of June 27, 1930, ch. 642, 46 Stat.
822, extended the refund provisions of the 1919 Act
to “all payments in excess of lawful requirements
* * * under any statute relating to the * * * lease
* * * of the public lands.”

Interpreting these provisions, the Comptroller
General noted that “serious difficulty arises” in ap-
plying the two-year bar to matters (like leases or li-
censes ) arising under the 1930 statute, because no “pat-
ent” issues in connection with most of them. Pet. App.

® But see 43 U.S.C. 13834(a) (“The Secretary shall admin-
ister the provisions of [OCSLA] relating to the leasing of
the ouver Continental Shelf, and shall prescribe such rules
and regulations as may be necessary to carry out such pro-
visions.”) ; 43 U.S.C. 18339(a) (providing that refunds are
available “when it appears to the satisfaction of the Secretary
that [a person is entitled to a refund]”’).

7For discussion of this same point by the Interior Board
of Land Appeals, see Pet. App. 40a.

13

84a. Moreover, reliance on the date on which the lease
or license was issued would be unfair, “for under such
a ruling a repayment of any excess paid after the
second year of the life of the permit would auto-
matically be barred.” Jbid. The Comptroller Gen-
eral noted that it would be “convenient to hold that
the 2-year period begins on the date the excess pay-
ment is made,” but decided that “a ruling of this
type would be more in the nature of legislation than
interpretation.” Jd. at 85a. Recognizing the need
to adopt some rule, the Comptroller General pro-
ceeded in these circumstances to adopt a rule that
generally imposed a two-year bar running from the
date the payment is made, but allowed the two-year
period to be extended in certain cases until! the res-
olution of contingencies that affect the appropriate
amount of payment. See id. at 89a. We agree with
the Comptroller General’s conclusion that a ruling
establishing a bright-line, two-year bar commencing
on the date of payment is in the nature of legisla-
tion. Because that is precisely the legislation Con-
gress enacted in Section 1339(a), the Comptroller
General’s opinion interpreting a statute that did not
contain such a bar is of no relevance here.*

8 Petitioners also err in relying (91-1 Pet. 23-24; 91-34 Pet.
25-26) on the analysis of the Comptroller General and the
Secretary with regard to a 1974 refund claim by Union Oil
Company of California. See Memorandum from Frederick
N. Ferguson, Assistant Solicitor of the Interior—Minerals,
Division of Public Lands, to Director, Geological Survey (Oct.
12, 1972) (Pet. App. 68a-71a) ; Letter from Elmer B. Staats,
Comptroller General, to Henry M. Jackson, Chairman, Senate
Committee on Interior and Insular Affairs (July 8, 1974)
(Pet. App. 72a-78a). In that case, the Department of the
Interior itself retroactively altered the provisions of a uniti-
zation agreement with Union Oil in a way that decreased

14

4. Finally, petitioners contend (91-34 Pet. 22-29)
that the court of appeals accorded undue deference
to the Secretary’s interpretation of Section 1339(a),
arguing (91-34 Pet. 23) that “an agency’s interpre-
tation of a statute will not be upheld when it con-
flicts with a longstanding presumptive rule of statu-
tory construction.” This contention is meritless be-
cause, for the reasons discussed above (see pages 10-
11, supra), the “longstanding presumptive rule” on
which petitioners rely—that statutes of limitations
generally do not run until the plaintiffs’ right ac-
crues—has no applicability here and is, in any event,
satisfied, because petitioners’ right to request a re-
fund accrued immediately upon payment.

the amount of oil revenues Union Oil should have received
during the preceding years; it thus indirectly reduced the
amount Union Oil should have paid the United States as
royalties.

Both the Department and the Comptroller General agreed
that the period in Section 1339(a) had been tolled during
the period the Department was considering alteration of the
unitization agreement. They relied on the general rule that
payments made “under protest” toll the two-year period
because they sufficiently put the Department on notice that
a refund request will be filed. See Pet. App. 70a, 73a-74a.
There was no such notice here. As the Solicitor of the In-
terior acknowledged a decade ago (OCSLA Refunds & Credits,
88 Interior Dec. at 1101 n.12):

Taken out of context, some remarks in [the Union Oil
decision] might seem to conflict with [the Depart-
ment’s] interpretation * * * . This would misinterpret
[Section 1339], which sets the date of payment as the
starting date. In the instances discussed by the Comp-
troller General, the statute was tolled on the date of
the earliest payment. Thus, no time had yet run when
the statute resumed following the decision.

In light of the Solicitor’s long-standing explanation, peti-

tioners err in relying on the disposition of the Union Oil

matter.

15

\

In any event, as the court of appeals made clear, its de-
cision did not rest on deference to the administrative
construction of ambiguous provisions of federal law;
it rested on the court’s independent determination
that the agency’s construction was the only one that
accorded with the statute’s “clear meaning.” Pet.
App. 5a. Further review therefore is not warranted.

CONCLUSION

The petition for a writ of certiorari should be
denied.

Respectfully submitted.

KENNETH W. STARR
Solicitor General

BARRY M. HARTMAN
Acting Assistant Attorney General

MARGARET M. SWEENEY

DirRK D. SNEL

ELIZABETH ANN PETERSON
Attorneys

AUGUST 1991

WU. S. GOVERNMENT PRINTING OFFICE; 1991 282061 45050

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_2328%3A2. Public record. Not legal advice.