Reply Brief — BP America Production Co. v. Burton

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No. 05-669 ) mite D4 os

IN THE

Supreme Court of the Anited States

BP AMERICA PRODUCTION COMPANY AND

ATLANTIC RICHFIELD COMPANY,

Petitioners,

V.

REJANE BURTON,

ACTING ASSISTANT SECRETARY OF THE INTERIOR

FOR LAND AND MINERALS MANAGEMENT, et al.,

Respondents.

On Writ of Certiorari

to the United States Court of Appeals

for the District of Coiumbia Circuit

REPLY BRIEF FOR PETITIONERS

MICHAEL L. HOMEYER STEVEN R. HUNSICKER

BP AMERICA INC. Counsel of Record

501 West Lake Park Blvd. JEFFREY A. LAMKEN

Houston, TX 77079 MICHAEL G. PATTILLO, JR.

(281) 366-3772 STEPHANIE DOURADO

GUILLERMO S. CHRISTENSEN

BAKER Botrs L.L.P.

1299 Pennsylvania Ave., NW

Washington, D.C. 20004-2400

(202) 639-7700

Counsel for Petitioners

WiLSON-EPES PRINTING CO., INC. — (202) 789-0096 — WASHINGTON, D.C. 20001

TABLE OF CONTENTS

Page

A. The Terms “Action” And “Complaint”

Encompass Administrative Adjudications ............ 2

B. The Government’s Construction Renders An

Entire Subsection Of Section 2415

I a niscecininiitiscenietinteitininipinciavatsiatinlaiaitoipasins 9

C. Excluding Administrative Proceedings From

Section 2415(a) Renders Its Effects Illusory........ 11

D. The Canon Of “Strict Construction” Does

Not Counsel A Contrary Resullt..............:cccssscsssees 16

E. Amendments To The Mineral Leasing Act

Do Not Support The Government’s View.............. 18

TABLE OF AUTHORITIES

CASES

Andrus v. Shell Oil Co., 446 U.S. 657 (1980) .......... 6

Beach v. Ocwen Fed. Bank, 523 U.S. 410

Geese liacerensctieeninteiiicienbcecischeiindlasiniarinsdatiiipiasiauiwineedsnises 10

Bowers v. New York & Albany Lighterage

Cor, SEB TB. BOG CORT) cssceccosscccccscesosocsnioceves 1, 16,17

Citizens Bank of Md. v. Strumpf, 516 U.S.

aT iivhesnsinipsettiiiintbsineinintiaphibebienitiesciiniindieaninetes 12

Crown Coat Front Co. v. United States, 386

SI: EE TD ncadibiericiiinactcinieitabinistiennstiniadiniicsetotels 15

Duncan v. Walker, 533 U.S. 167 (2001)..............0++ 9

Glenn Elec. Co. v. Donovan, 755 F.2d 1028

Ge Cs Se crccstnseseripientniiincintesnncindictatelaipescivinins 19

Griffin v. Oceanic Contractors, Inc., 458

Se ne I cstnciishcncicintisititneteintsedsutntetindncitiptptiicee 13

Gutierrez v. Ada, 528 U.S. 250 (2000).........cececeesees 18

(i)

“i

TABLE OF AUTHORITIES—Continued

Page

In re Enter. Mortgage Acceptance Co. Sec.

Litig., 391 F.3d 401 (2d Cir. 2004)... ceeseeees 20

Mackey v. Lanier Collection Agency &

Serv., Inc., 486 U.S. 825 (1988) ......cscscesesesessseeees 11

Neder v. United States, 527 U.S. 1 (1999)...........0 13

OXY USA, Inc. v. Babbitt, 268 F.3d 1001

EEG SI eictechiiecthinintiainlinaasiibiiaiiahitesaninibantigs 1,9

Pennsylvania v. Delaware Valley Citizens’

Council for Clean Air, 478 U.S. 546

Phillips Petroleum Co. v. Johnson, No. 93-

1377, 1994 WL 484506 (5th Cir. Sept. 7,

a a 19, 20

Pioneer Inv. Servs. v. Brunswick Assocs.,

Pe re clic sitar satinaiiaiintncs 7

SEC v. C_M. Joiner Leasing Corp., 320 U.S.

el RARE SEE 2 BER Rena ne ae a 16

Samedan Oil Corp. v. Deer, No. Civ. A. 94-

2123, 1995 WL 431307 (D.D.C. June 14,

I cssiischiusinitiikithidetiadiichebiondeteilacscapniibnandaseaianinandlisa 19, 20

Sullivan v. Hudson, 490 U.S. 877 (1989) ........s0s000 7

TRW Inc. v. Andrews, 534 U.S. 19 (2001)............... 9

Tex. & Pac. Ry. Co. v. Abilene Cotton Oil

a TI a See bacdicctenetnititcectecinsininttiiccnent 12

Unexcelled Chemical Corp. v. United

pt eee 7,8

United States v. Hanover Ins. Co., 82 F.3d

I ie 9,19

United States v. Hartwell, 73 U.S. (6 Wall.)

ESSERE ETE Saracens ae Rees aC 16

ili

TABLE OF AUTHORITIES—Continued

Page

United States v. LaF ranca, 282 U.S. 568

Goel cidietitindeacentouinenhasinininctscnstipinivipetetndetiiininainess 11

United States v. Nordic Village, Inc., 503

ee I sitiiccdladeiinesdtscesdendusiinbanspelapiitactissciinanvininiae 16

West v. Gibson, 527 U.S. 212 (1999).........ccccecescereeees 7

STATUTES AND REGULATORY MATERIALS

Es RO siete siisiciictintseictisininie 2

BE Sy BND cecrerntcensinscstisciotuensintptratemrcenintin 2

4 Gait NRE SES Se ACNE Deane CRA RP 15

SEPT MEINE (incr screasencidinieaamenisdntisieimaniniiaiiin passim

ae a I icsiicccitinittestesivtnaistniniapitsteitanaiiie passim

Be are liaat SP OMNOTEE tcndicinntnictpedetnivcenintteindscnsmistiiaulinis 1,11

es ee aciblichesicinkibinsbdintacesiptestesnduviphipinaicteapinipaie 4

Portal-to-Portal Act Of 1947, Pub. L. No.

80-49, 61 Stat. 84, codified as amended at

29 U.S.C. § 251, et:seq.

ee a Ea hininsteiciincbiciitiicetinsesiteninchaialitibcaine 7

or Nee A eiicantashctinsneiutschiattigsiithiiebiibicsatigiicines 8

nee SmI ines silssinlincnsncindincisieiissitintellbbiteciagahinables 6

aia Ae ARIE ic ttcintnstisinitseemsnctnteuincanonshtesanenininilas 18

eet Se Satchincibitecinienssiistidanlibitainbibiantanniiaina 6, 19

i eee ichaitassshininntiemthetiabicetncetistnindenninticnsekniniicen 18

TN | __._, RE SES Saas Cate De ee ae 14

Sy Ce eeiciihciibdidasiicsitpliinlsctdlininiipinitegtpbiniiatitataheamnibiaaie 4

OE aes PE iti shishiindaniinlectecttliiiicdssanasnctieinantinsia 15

a i itisdsiaicnissidictritiincocnietiainishnpthighaaisaiiiini 5

Be Raney cat We as rcepatenssiiintidsciiisnnintintwiesiatisebsii 4

iv

TABLE OF AUTHORITIES—Continued

Page

Sr eis ee cil tipiianiseitchecsiabcictttecices tails cRiaid 5

ake Bef, sees eee 2

MISCELLANEOUS 7

Black’s Law Dictionary (8th ed. 2004)...........00++ 4,5,6

Effect of Statute of Limitations on

Administrative Collection of United

States Claims, Mem. Op. Off. of Legal

Counsel (Sept. 29, 19778) .........ccsccccsssrscsscsosecsseesees 12

Federal Oil & Gas Royalty Simplification

and Fairness Act of 1995: Report of the S.

Comm. on Energy and Natural Res.,

104th Cong., 2d Sess. (1995) .........cccccseereesereeeees 19

Sen. Rep. No. 378, 97th Cong., 2d Sess. (1982)...... Y

Sen. Rep. No. 1328, 89th Cong., 2d Sess.

III: scsstskcchcodsnehsiaiailita dade cidaclithad ee inate 11, 13, 16

Seven-Year Balanced Budget Reconciliation

Act of 1995: Report of the House Comm. on

the Budget, 104th Cong., 1st Sess. (1995) .......... 20

REPLY BRIEF FOR PETITIONERS

The government in essence argues that the phrase

“felvery action” in Section 2415(a) does not really mean

“every action.” Rather, the government urges that the

phrase includes some actions—adjudicative actions before a

court—but excludes others—adjudicative actions before an

agency. That argument contravenes not only the statute’s

“patently broad” text, OXY USA, Inc. v. Babbitt, 268 F.3d

1001, 1005 (10th Cir. 2001) (en banc), but fundamental

canons of construction as well. It renders an entire sub-

section of the statute—Section 2415(i)’s exception for ad-

ministrative offsets—superfluous. It is at war with Section

2415’s structure, and destroys Congress’s careful calibra-

tion of record-retention and limitations periods.

More important, that construction would all but deprive

Section 2415(a) of practical effect. In the government’s

vie~ Section 2415(a) limits the time to pursue claims in

cou .n the first instance, but permits the very same claims

to be pursued administratively in perpetuity and in court

thereafter within one year of final administrative decision.

That eliminates both the repose and the incentive for dili- .

gent prosecution that Section 2415(a) was supposed to pro-

vide. Courts should not “rewrite a statute in hopes of better

achieving one of Congress’s purposes.” Gov't Br. 40-41.

But nor should they disregard a textually proper construc-

tion in favor of one that is so crabbed that it not only

subverts the statutory purpose, but also converts the

statute into a virtually meaningless gesture.

The government’s reliance on “strict construction” is

misplaced. Even when strictly construing a limitations

period, this Court must give effect to statutory text; avoid

rendering provisions superfluous; and ensure that it does

not undermine the statute’s intended effect. Just like the

construction this Court rejected in Bowers v. New York &

Albany Lighterage Co., 273 U.S. 346 (1927), the govern-

ment’s construction here would contravene each of those

requirements.

2

A. The Terms “Action” And “Complaint” Encom-

pass Administrative Adjudications

Section 2415(a)’s breadth is evident from its text: It

applies to “every action for money damages brought by the

United States or an officer or agency thereof which is

founded upon any contract.” 28 U.S.C. § 2415(a).

1. The government does not deny that, in modern

usage, the word “action” is sufficiently broad to encompass

both judicial and administrative actions for money, such as

the one at issue here.' Nor does it dispute that dozens of

statutes and regulations use the term “action” in precisely

that fashion. Pet. Br. 19-23 & nn. 3-7; Gov’t Br. 20. None-

theless, the government asserts that the words “every

action,” when used by themselves, do not encompass admin-

istrative actions. Noting the many statutes and regulations

that use phrases like “administrative or civil action,” the

government asserts that, when Congress “intends a phrase

that includes the word ‘action’ to govern administrative pro-

ceedings, it says so expressly.” Gov't Br. 20-21.

That position is unfounded. Congress and agencies often

use the word “action” by itself to encompass administrative

and judicial actions alike; context then proves that the word

“action” is used in that sense. For example, the FDCA au-

thorizes an “[ajction by the Secretary” for money penalties

before the agency and, in the alternative, an “[ajction by the

Attorney General” in court. 21 U.S.C. § 335b(b)(1)(A), (B).

It then limits both by declaring that “/n/jo action may be

initiated under this section” more than 6 years after the

facts become known to the government or 10 years after the

events take place. Jd. § 335b(b)(3) (emphasis added); see

also 31 C.F.R. § 501.703(b) (declaring that agency rules for

adjudication must be construed to promote “just, speedy,

and inexpensive determination of every action”). The MMS

itself, in formal orders, often uses the word “action” without

' The government declines to contest in this Court that the instant action

is “for money damages” and is “founded upon [a] contract.” See Pet. Br.

45-50; Gov't Br. 41 n. 14; contrast Br. in Opp. 18-19.

3

elaboration to encompass adversary administrative actions,

including the action to recover royalties at issue here. See

Pet. Br. 21 & n.8; Gov’t Br. 21 n.4. That ordinary usage by

the relevant agency is surely probative of ordinary

meaning. The government’s argument, moreover, is based

on heads-I-win, tails-you-lose illogic.” It is also backwards:

Where Congress wishes to exclude administrative actions, it

does so expressly, using modifiers unique to the judicial

process. Pet. Br. 24-25 & nn.12-14 (citing examples). The

absence of such limiting language here speaks volumes.

Besides, the fact that the word “action” is regularly used

to encompass administrative proceedings—even in phrases

such as “civil or administrative action” or “action or pro-

ceeding before a[n] * * * administrative agency,” Pet. Br.

19-21 & nn.3-7—makes clear that “administrative actions”

are a subset of the more general category “actions.” If, as

the government posits, the term “action” excluded adminis-

trative actions, putting the word “administrative” in front of

“action” could not expand its scope. Here, moreover, Con-

gress did not need the word “administrative” to make

Section 2415’s all-encompassing scope clear. Congress

declared that Section 2415(a) applies to “every action.” It is

nonsensical to argue that, because Congress and regulators

identify “administrative actions” as a subset of “actions” in

many contexts, administrative actions are not encompassed

within the phrase “every action” in Section 2415(a).°

*The government demands proof that Congress and agencies use the

word “action” to encompass administrative actions. But, when confron-

ted with myriad statutes and regulations that do precisely that, see Pet.

Br. 18-21, the government rejects them because context, definitions, or

modifiers make it clear that Congress used “actions” to encompass

administrative actions. If we cited statutes or regulations lacking those

features, the government would of course dismiss those as ambiguous.

*The government also argues that Section 2415 should be limited to

judicial proceedings because “Section 2415 is located within Title 28” of

the U.S. Code, “which is entitled ‘Judiciary and Judicial Procedure’—not

‘Administrative Procedure.’” Gov't Br. 24. But Section 2415 belongs in

Title 28 because it governs both judicial and administrative actions. Title

4

2. The government likewise errs in asserting (Br. 16)

that the word “complaint” forecloses Section 2415(a)’s appli-

cation to actions before agencies. The government does not

dispute that such actions are often initiated by “complaint.”

Gov't Br. 21. Instead, it argues that Congress meant to

exclude administrative actions because agency “procedures

vary substantially,” with some employing “different termi-

nology tailored to specific contexts.” /bid. But that is back-

wards: Congress used the broad, generic term “complaint”

in Section 2415(a) to refer to any document that commences

proceedings by “stat[ing] * * * the basis for the plaintiff’s

claim, and the demand for relief.” Black’s Law Dictionary

303 (8th ed. 2004). As one regulation explains, “[c]omplaint

means any document initiating an adjudicatory proceeding,

whether designated a complaint *** or otherwise.” 17

C.F.R. § 10.2(f). The government concedes that the term

“complaint” includes not only instruments bearing that for-

mal label but also any “functionally similar document.”

Gov't Br. 21. Not all adjudications begin with a document

labeled “complaint.” But they all begin with a document

that is “functionally similar.”

No less than agencies, courts use a variety of terms for

what is often referred to as a complaint. In Oklahoma, it is

denominated a “petition”; at common law, it was called a

“declaration.” See Pet. Br. 24 n.11. Yet no one would argue

that a federal limitations period regulating when a “com-

plaint” asserting a federal claim must be filed is without

effect in Oklahoma courts simply because proceedings in

those courts are commenced by “petition.” Jbid. Likewise

here, the fact that some administrative agencies use “differ-

ent terminology” for the complaint—referring to the sub-

mission of a “claim,” for example, Gov't Br. 22 (quoting 41

28 includes other provisions applicable to both judicial and admini-

strative procedure. For example, the Federal Tort Claims Act, codified

in Title 28, sets forth procedures for the “[a]dministrative adjustment of

claims” against the United States. See 28 U.S.C. § 2672.

5

U.S.C. § 602 and 42 U.S.C. § 9612(d))—cannot mean that

Section 2415(a) lacks application to agency actions.

For the same reasons, the government errs in asserting

that, “even if some administrative pleadings were governed

by the limitations period, MMS’s orders would not be,” be-

cause “[t]here is no ‘complaint’ in [MMS’s] scheme.” Gov't

Br. 22, 24. The government argues that the MMS order to

pay that began these proceedings does not function as a

complaint because “[a] complaint seeks relief,” while “an

order imposes it.” Jd. at 23. But an MMS order to pay does

not fall within the traditional understanding of administra-

tive orders, which are “issued by a government agency after

an adjudicatory hearing.” Black’s Law Dictionary, supra,

at 1130 (emphasis added). In MMS practice, the order to

pay precedes the adjudication, which takes place during the

so-called “appeal” under 30 C.F.R. § 290.100, et seq. As the

Assistant Secretary’s sweeping opinion in this case demon-

strates, the “appeal” that follows an MMS order to pay is in’

fact a plenary proceeding to resolve the merits in the first

instance. See Pet. App. 68a-97a. Both factual and legal

issues are adjudicated during the “appeal”; its scope is not

constrained by limitations characteristic of appellate

review.‘ Thus, while an MMS order may purport to “com-

mand the payment of royalties,” Gov’t Br. 23, it (like a

complaint) initiates, rather than resolves, MMS’s claim.

The contrary position is difficult to reconcile with the

Federal Oil and Gas Royalty Simplification and Fairness

Act of 1996 (“FOGRSFA”), which established a statute of

limitations for oil and gas (but not other minerals) extracted

from federal (but not Indian) lands after September 1, 1996.

That provision declares that any “judicial proceeding or

demand which arises from * * * [a lease] obligation shall be

commenced within seven years” of when “the obligation

* The government points out that an “informal process” often precedes

the issuance of the order. There are no guidelines or regulations gov-

erning that process, however, and lessees are not afforded anything

resembling an adjudicatory hearing to present a full defense.

6

becomes due.” 30 U.S.C. § 1724(b) (emphasis added). It

defines “demand” to include “an order to pay issued by the

Secretary” where there is “a reasonable basis to conclude

that the obligation in the amount of the demand is due and

owing.” 30 U‘S.C. § 1702(23)(A). FOGRSFA thus recogni-

zes that a so-called MMS “order to pay,” far from conclud-

ing the action, in fact “eommence/s]” it. Id. § 1724(b). The

definition confirms that such orders are not merits dispo-

sitions but preliminary “demands” issued if there is a “rea-

sonable basis” (probable cause) to conclude money is owed.

Id. § 1702(23)(A). Whether money is in fact owed is left for

later adjudication. Congress’s use of the word “demand” is

also telling, since a complaint is a type of “demand.” See

Black’s Law Dictionary, supra, at 303.

The government’s argument also yields absurd results.

Under it, an agency can opt out of a statutory limitations

period by renaming the document that initiates its adjudica-

tions. The Mireral Leasing Act does not require that the

Department of Interior proceed by “order” or “complaint.”

Yet, by historical accident, the agency sometimes uses one

label and sometimes another. In Andrus v. Shell Oil Co.,

446 U.S. 657 (1980), for example, the Bureau of Land

Management sought to cancel several mineral patents by

“issu[ing] administrative complaints.” Id. at 660 (emphasis

added). Under the government’s theory, the agency could

avoid Section 2415’s limitations period by renaming all ad-

ministrative complaints “orders.” As noted above (at pp. 4-

5, supra), the government cannot evade federal! limitations

periods by filing its lawsuit in a jurisdiction where proceed-

ings are initiated by “petition” or “declaration” rather than

“complaint.” Likewise, federal agencies cannot avoid the

limitations period in Section 2415(a) by choosing to com-

mence proceedings not with a complaint but with an order.

3. This Court’s opinions confirm what ordinary usage

suggests—that “action” and “complaint” are sufficiently

broad to encompass administrative actions like the action

for royalties at issue here. Pet. Br. 17-19. Despite the gov-

7

ernment’s protestations, Pennsylvania v. Delaware Valley

Citizens’ Council for Clean Air, 478 U.S. 546 (1986), and

West v. Gibson, 527 U.S. 212 (1999), did indeed “construe[]

the term ‘action’ to encompass administrative actions.” Gov't

Br. 18 (quoting Pet. Br. 17). As this Court later stated, “[iJn

Delaware Valley, we rejected the contention that the word

‘action’ * * * should be read narrowly to exclude all proceed-

ings which could be plausibly characterized as ‘non-

judicial.’” Sullivan v. Hudson, 490 U.S. 877, 888 (1989).

The government’s contrary construction rests largely on

the entries for “action” and “complaint” in Black’s Law Dic-

tionary. See Gov’t Br. 9, 14, 15, 16, 17, 23. But this Court is

“not bound to accept Black’s * * * as the authoritative expos-

itor of American Law.” Pioneer Inv. Servs. v. Brunswick

Assocs., 507 U.S. 380, 403 (1993) (O’Connor, J., dissenting).

That is particularly true where, as here, the definition does

not correspond to current, prevailing usage reflected in

court opinions, statutes, regulations, and agency decisions.

The cited definition of “action” dates at least to the 1910

second edition (p. 25)—before administrative agencies be-

came commonplace, and well before the APA regularized

the trial of adversary actions before them. But the trial of

actions before agencies is now common, and Black’s failure

to update an entry cannot turn back the clock.

The government’s reliance on Unexcelled Chemical

Corp. v. United States, 345 U.S. 59 (1953), is likewise mis-

placed. That decision does not “h{ojld * * * that commenc-

ing an ‘action’ by filing a ‘complaint’ refers, in its ‘ordinary

sense,’ to filing a complaint in court, not to initiating an

administrative proceeding.” Gov't Br. 17. The primary

question in Unexcelled was whether the two-year limi-

tations period in the Portal-to-Portal Act, 29 U.S.C. § 255,

applied to a judicial action for liquidated damages. The

Court held that it did. 345 U.S. at 63-64.

in a single paragraph, Unexcelled responded to the gov-

ernment’s alternative argument that its suit was filed within

the two-year limit. The Portal-to-Portal Act provides that

8

an action is commenced for the purposes of [the statute]

* * * on the date when the complaint is filed.’” 345 U.S. at

66 (quoting 29 U.S.C. § 256) (emphasis added). The govern-

ment argued that its suit, although filed after the two-year

period, was timely because the action was “commenced”

three years earlier, with che Secretary of Labor’s “issuance

of a formal complaint in the [separate] administrative pro-

ceedings.” /bid. The Court rejected that argument, stating

that “[clommencement of an action by the filing of a com-

plaint has too familiar a history and the purpose of §§ 6 and

7 was too obvious for us to assume that Congress did not

mean to use the words in their ordinary sense.” /bid.

Properly understood, that does not mean that admini-

strative actions were exempt from the statute of limitations.

That was not at issue, since the administrative proceedings

were brought within the two-year period.’ The question

was whether the timely filing of the administrative com-

plaint could be said to “commence” the later, distinct judi-

cial action so as to make it timely. (Unlike Section 2415(a),

the Portal-to-Portal Act lacked a relevant provision to toll

the limitations period during administrative proceedings.)

Invoking the purpose of the provisions at issue, this Court

answered that question in the negative, consistent with the

“familiar * * * history” that an action is “commenced” when

the complaint in that proceeding is filed, not when a com-

plaint in some earlier, separate proceeding is filed. 345 U.S.

at 66. Each action subject to a statute of limitations—

administrative or judicial—must be filed within the speci-

see

* The text of the Portal-to-Portal Act, moreover, made it clear that it was

limited to judicial proceedings. The section at issue in Unexcelled speci-

fically refers to “the court in which the action is brought” and “the court

in which the action was commenced.” Portal-to-Portal Act of 1947, § 7,

61 Stat. 88, currently codified at 29 U.S.C. § 256 (emphasis added).

Similarly, the provision of the Walsh-Healy Act at issue allowed liquida-

ted damages in “suits brought in the name of the Attorney General.”

Unexcelled, 345 U.S. at 65-66 n.4 (emphasis added). In contrast, Section

2415(a) applies to “every action,” and contains no references to “court”

or “suit” that might limit its scope. See p. 2, supra; Pet. Br. 24-26.

9

fied period. The administrative complaint thus may have

“commenced” the administrative action. But it could not

be said to have commenced the separate judicial action so

as to make it timely. For that, a complaint had to be filed in

court within the limitations period. Jbid. That unexcep-

tional ruling sheds no light on the issue before this Court.

B. The Government’s Construction Renders An En-

tire Subsection Of Section 2415 Superfluous

To the extent Section 2415(a)’s scope is in doubt, the re-

mainder of the statute erases any question. It is a “‘cardi-

nal principle of statutory construction’ that ‘a statute ought, ~

upon the whole, to be so construed that, if it can be prevent-

ed, no clause, sentence, or word shal] be superfluous, void,

or insignificant.” T’'RW Inc. v. Andrews, 534 U.S. 19, 31

(2001) (quoting Duncan v. Walker, 533 U.S. 167, 174

(2001)). In this case, Subsection (i) of Section 2415 express-

ly exempts “administrative offsets” from the limitations

period that Section 2415(a) otherwise establishes. That ex-

ception for administrative offsets would be entirely unne-

cessary if the limitations period did not apply to administra-

tive proceedings in the first place. Pet. Br. 26-30. Court

after court, including the D.C. Circuit, has acknowledged as

much. Pet. App. 18a; OXY, 268 F.3d at 1006; United States

v. Hanover Ins. Co., 82 F.3d 1052, 1055 (Fed. Cir. 1996).

To evade that “cardinal principle,” the government in-

vokes legislative history, urging that Congress added Sub-

section (i) merely “to ‘clarify[|’ that the limitations period

does not apply to administrative offsets.” Gov't Br. 31.

Even if isolated references to “clarification” in a Senate

Report, Gov't Br. 31 (quoting Sen. Rep. No. 378, 97th Cong.,

2d Sess. 2, 16 (1982)), could trump the rule against super-

fluity—and they cannot—the Senate Report’s substance is

to the contrary. The Report begins by observing that

“(Subsection (i)] allows collection of delinquent debt owed

the government by administrative offset beyond the six-

year statute of limitations.” Sen. Rep. No. 378, supra, at 16

(emphasis added). It explains that “(t]he Justice Depart-

ee

10

ment has determined that the six-year statute of limita-

tions prevents the government from collecting debts by

means of offset, thus, the government will be unable to

collect a just debt from many debtors because the statute of

limitations has run out.” Ibid. (emphasis added); see id. at

16-17 (noting the need to amend because, under the then-

existing version of Section 2415, “if more than six years

passes * * *, the government will be unable to set off the

~employee’s retirement pay”). Finally, it summarized that

“(t]his revision to Section 2415 would allow administrative

offset of delinquent debts owed the government * * * be-

yond the six-year statute of limitations.” Jd. at 17 (empha-

sis added). That such a “revision” was thought necessary to

“allow” the pursuit of administrative offsets “beyond the

six-year statute of limitations,” id. at 16-17, shows that

Subsection (i) had the substantive effect of affirmatively

excepting administrative offsets from an otherwise appli-

cable limitations period.

The government also urges that excluding administra-

tive actions from Section 2415(a) would not convert the

administrative-offset exception into surplusage:

If the debt * * * could otherwise be enforced only

through an affirmative action in court, and an action

in court on that debt would be barred by Section

2415(a), Section 2415(i) clarifies that such an offset is

not time-barred. The question whether an otherwise

time-barred claim can be used defensively as an offset

in that manner arises whether or not Section 2415(a)

limits only court actions or both court actions and ad-

ministrative proceedings brought by the government.

Gov’t Br. 32. That argument, to the extent it makes sense,

contradicts the government’s observation that “a statute of

limitations extinguishes only the remedy, not the underly-

ing right.” Gov’t Br. 13 (citing Beach v. Ocwen Fed. Bank,

523 U.S. 410, 416-417 (1998)). If Section 2415(a) barred

only actions in court, it would be perfectly clear that agen-

11

cies could pursue otherwise barred claims by administrative

offset even absent Section 2415(i)’s exception.°

The government likewise errs when it dismisses Section

2415(i)’s relevance by urging that “‘[t]he views of a subse-

quent Congress form a hazardous basis for inferring the

intent of an earlier one.’” Gov’t Br. 30 (quoting Mackey v.

Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 840

(1988)). To the contrary, even where a provision is added

by amendment, this Court interprets the resulting statute

as if it had read that way from the outset. United States v.

LaF ranca, 282 U.S. 568, 576 (1931); Pet. Br. 30 (citing

additional authority). It thus is not our view that Subsec-

tion (i) “expand[ed] the statute’s coverage to other adminis- -

trative proceedings.” Gov’t Br. 30; see also id. at 11, 33. It

is that, regardless of how one might read Section 2415(a) in

_ isolation, the statute as a whole—including Subsection (i)—

makes it clear that Section 2415(a) extends to admini-

strative actions except where, as in Section 2415(i) itself,

Congress provides otherwise.

C. Excluding Administrative Proceedings From

Section 2415(a) Renders Its Effects Illusory

The government, moreover, largely ignores one of the

most fundamental defects in its construction—that it

deprives Section 2415(a) of practical effect.

1. The government urges that, even if judicial actions

founded on contract are barred by the limitations period, it

may pursue precisely the same claims administratively in

perpetuity. But that converts Section 2415(a) into a

meaningless gesture. Section 2415’s primary purpose is to

provide the repose Congress thought “required by modern

standards of fairness and equity.” Sen. Rep. No. 1328, 89th

Cong., 2d Sess. 2 (1966); see Pet. Br. 35-37. Under the

* Indeed, once the government took such an administrative offset, the

claimant could sue for any money withheld as a result. The government

then could assert its claim as an offset in that judicial action without

regard to the limitations period. See 28 U.S.C. § 2415(e). The govern-

ment’s construction thus makes Section 2415(i) doubly superfluous.

12

government’s theory, however, Section 2415(a) would pro-

tect against actions in court after six years, but leave indi-

viduals exposed to the same liabilities for the same claims

before the agency in perpetuity. That is no repose at all.

Worse still, the individual could also be liable for decades of

interest, based on a disputable “clarification.” See Pet. Br.

38-40. As the Office of Legal Counsel observed when inter-

preting Section 2415(a), “if the United States could adminis-

tratively collect time-barred debts where no claim was filed

against it, this would result in a completely ineffective

statute of limitations” and “the repose intended by § 2415

would be illusory.” Effect of Statute of Limitations on

Administrative Collection of United States Claims, Mem.

Op. Off. of Legal Counsel 7-8 (Sept. 29, 1978).

Far from denying that result, the government embraces

it—and urges that it can bring judicial actions in perpetuity

as well. According to the government, “administrative pro-

ceedings * * * trigger the limitations period; they are not

‘actions’ governed by it.” Gov’t Br. 15 (emphasis added).

The government thus does not merely claim that it can col-

lect contract damages at any point in the future through an

administrative action. It also claims that it can wait until

the limitations period expires, file an administrative action,

and then file a judicial action one year after the administra-

tive action terminates. The government thus argues that,

despite the six-year limitations period, it has forever to

bring administrative actions, and forever plus a year to file

in court. “It is an elementary rule of construction that ‘the

act cannot be held to destroy itself.’” Citizens Bank of Md.

v. Strumpf, 516 U.S. 16, 20 (1995) (quoting Tex. & Pac. Ry.

Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 446 (1907)). Yet

that is precisely the effect of the government’s construction.

2. The government’s construction also destroys the

other “salutary effect(s}”’ Congress intended Section

2415(a) to have. Pet. Br. 4 (quoting Sen. Rep. No. 1328,

supra, at 2). A statute of limitations increases government-

al efficiency by forcing agencies to pursue claims “at a

13

sufficiently early time so that necessary witnesses, docu-

ments, and other evidence are still available * * * .” Sen.

Rep. No. 1328, supra, at 12. It avoids “judicial hostility to

old claims” and “minimizes * * * collection problems arising

with respect to debtors who have died, disappeared, or gone

bankrupt.” Jbid. If agencies know they can recover admin-

istratively indefinitely—with interest~any incentive for

prompt prosecution is lost. Thus, while amici stress that

Indian Tribes “rely on MMS to perform its royalty enforce-

ment duty consistent with the United States’ trust responsi-

bility,” Br. Amici Jicarilla Apache Nation, et al. 26-27

(“Jicarilla Br.”), Congress determined that the government

performs that duty best when confronted with the discipline

provided by an enforceable limitations period.

Implicitly acknowledging that its construction defeats

Section 2415(a)’s purposes, the government asserts that ap-

peals to “general policies of fairness and repose” cannot

overcome statutory text. Gov’t Br. 35 (quoting Pet. App.

20a). But the issue is not policy. It is statutory meaning.

The government asks this Court to reject a proper textual

construction adopted by two courts of appeals in favor of

one that defeats every single one of Congress’s stated

purposes in enacting the statute. The rules of construction

will not tolerate that result. See Griffin v. Oceanic Contrs.

Inc., 458 U.S. 564, 575 (1982) (“absurd results are to be

avoided” where “alternative interpretations consistent with

the legislative purpose are available”); Neder v. United

States, 527 U.S. 1, 15 (1999) (Court is “entitled to stand back

and see” the practical impact of its decisions).

For related reasons, the government’s claim that “[pleti-

tioners mostly avoid Section 2415(a)’s legislative history,”

Gov’t Br. 29, is misdirected. That history—which carefully

documents each purpose underlying Section 2415(a)—is

discussed in detail in our opening brief. Pet. Br. 3-4, 35-38.

And, as we explained, the government’s construction is at

14

war with each purpose identified in the legislative history.

Id. at 35-38. On that issue, little more need be said.”

3. The government’s construction, moreover, wreaks

havoc with Section 2415’s structure. Throughout Section

2415, Congress established stricter limits for the offensive

assertion of government claims (claims to extract money

from others) than for their defensive assertion (to avoid

paying money) by an offset or otherwise. Pet. Br. 31-32.

The government’s construction, however, would set that

careful structure on its head. Under it, offensive judicial

actions to extract money would be subject to a six-year limi-

tations period, 28 U.S.C. § 2415(a); administrative offsets to

withhold money otherwise payable would be subject to a

longer 10-year statute of limitations, 31 U.S.C. § 3716(e)(1)

(expressly referenced in 28 U.S.C. § 2415(i)); but offensive

administrative actions to extract money would be subject to

no limitations period whatsoever. See Pet. Br. 31-32. The

government never explains why Congress would have

adopted that irrational structure.®

The government’s construction also destroys the congru-

ence that Congress, on two separate occasions, established

between the limitations period and the record-retention

period for oil and gas lessees. See Pet. Br. 32-33. The gov-

* Rather than examine the legislative history, the government cherry-

picks references to “suits” or “civil actions.” Gov't Br. 27-29. Those

references prove that Congress understood Section 2415(a) to cover

judicial actions, but they do not prove that Congress meant to exclude

administrative actions; nor does anything else. In any event, to the

extent legislative history is relevant, it must give courts an under-

standing of the problem Congress confronted and the legislation’s

purposes. The government’s position cannot be reconciled with either.

* The government hypothesizes that “affirmative administrative actions”

sometimes “may be limited by context-specific limitations periods.”

Gov’t Br. 33 n.9 (emphasis added). But Section 2415(a) was designed as

a catch-all for situations in which Congress has not enacted context-

specific limitations periods—it applies “except as otherwise provided.”

28 U.S.C. § 2415(a) (emphasis added). The government never explains

why that structure is rational in a catch-all either.

15

ernment does not dispute that its construction-has that

effect. Instead, it dismisses the notion that lessees will feel

bound to retain pre-1996 records in perpetuity, asserting

that “the lawful destruction of records would make the

issuance of an order to pay unlikely.” Gov't Br. 40. That

attempted reassurance provides little comfort where, as

here, liability can run into the tens or hundreds of millions

of dollars; where, as here, the government claims the ability

to detect underpayments well into the past; and where, as

here, older claims are more valuable to the government

because it can collect decades of interest. Pet. Br. 38-40.

The government’s effort at reassurance, in any event, is

hardly license to adopt a construction that destroys the co-

herence and symmetry of the statutory scheme—including

the matching of record retention obligations and limitations

perioas—-that Congress intended.

Finally, the government’s construction destroys the sym-

metry Section 2415 sought to establish between the govern-

ment and private litigants. Section 2415 is “a statute aimed

at equalizing the litigative opportunities between the Gov-

ernment and private parties.” Crown Coat Front Co. v.

United States, 386 U.S. 503, 521 (1967). Yet the govern-

ment would construe Section 2415(a) to give private entities

six years to bring their claims, 28 U.S.C. § 2401; 41 U.S.C.

§ 605(a), while giving the government forever to bring its

claims administratively. The government argues that sym-

metry “has little application to administrative proceedings

that only the agency can initiate, and in which the agency is

charged with interpreting then-governing statutes and

regulations.” Gov't Br. 36. That might be true for genuine

“regulatory” proceedings, such as rulemakings or discipli-

* MMS retains certain reports on royalties “indefinitely,” Jicarilla Br. 14

n.9, and the government itself asserts that “audits ean detect systematic

underpayment dating back more than six years,” Gov't Br. 37. Of

course, what the government calls a “systemic underpayment” may

merely result from MMS’s after-the-fact “clarification” of how it inter-

prets its rules. See Pet. Br. 39-40.

16

nary proceedings. But Section 2415 addresses “action{s] for

money damages *** founded upon *** contract.” 28

U.S.C. § 2415(a). When the government pursues an action

for money damages, its claims “are almost indistinguishable

from claims made by private litigants.” Sen. Rep. No. 1328,

supra, at 2. Yet the government would destroy the sym-

metry between private parties and the government that

Congress sought to establish.

D. The Canon Of “Strict Construction” Does Not

Counsel A Contrary Result

Ultimately, the government concedes that “the statutory

terms ‘action’ and ‘complaint’ are sometimes used to refer

to administrative proceedings.” Gov't Br. 18. It urges,

however, that “the canon requiring strict construction of

limitations periods against the government counsels against

giving those terms a broader reading here.” Jbid. But

“strict construction” does not require this Court to ignore

the inherent breadth of a statutory term:

“The rule of strict construction is not violated by

permitting the words of the statute to have their full

meaning, or the more extended of two meanings * * *;

but the words should be taken in such a sense, bent

neither one way nor the other, as will best manifest

the legislative intent.”

SEC v. C.M. Joiner Leasing Corp., 320 U.S. 344, 355 (1943)

(quoting United States v. Hartwell, 73 U.S. (6 Wall.) 385,

396 (1867)). “[S}trict construction” simply means that the

scope of a statute cannot be “enlarged * * * beyond what

the language requires.” United States v. Nordic Village,

Inc., 503 U.S. 30, 34 (1992).

This Court has for that reason rejected strict construc-

tion arguments in circumstances nearly indistinguishable

from those here. In Bowers v. New York & Albany Light-

erage Co., 273 U.S. 346 (1927), the Court addressed whether

a statute of limitations barring the United States from initi-

ating a “suit or proceeding for the collection of * * * taxes”

after five years applied to the government’s use of the

17

administrative procedure of “distraint.” Jd. at 348 & n.1.

The government argued that the statute of limitations did

not apply to distraint because “the word ‘proceeding’ refers

only to a proceeding in court.” Jd. at 349. The government

also asserted that, under the canon of “strict construction,”

“any ambiguity in the clause under consideration must be

resolved in [its] favor.” Jbid.

The Court agreed that it was required to apply a strict

construction, but rejected the government’s reading. The

Court observed that the language at issue was sufficiently

broad “and commonly used to comprehend steps taken in”

both “judicial proceeding{s]” and “executive proceeding{s].”

273 U.S. at 349. The Court further noted that the govern-

ment’s reading of the statute was “inconsistent” with statu-

tory text because it would render another provision of the

statute superfluous. /d. at 351. And finally, the Court not-

ed that, even in the context of “strict construction,” it was

required to examine “the terms and purpose of the statute”:

The purpose of the enactment was to fix a time beyond

which * * * collection might not be initiated. The

repose intended would not be attained if suits only

were barred, leaving the collector free at any time to

proceed by distraint. *** The mischiefs to be

remedied by setting a time limit against distraint are

the same as those eliminated by bar against suit.

Id. at 349. Accordingly, the Court held that “the meaning of

‘proceeding’ * * * cannot be restricted to steps taken in a

suit; it includes as well steps taken for collection of taxes by

distraint.” Jd. at 352.

Each of the reasons the Court gave for rejecting the

government’s argument in Bowers applies with equal force

here. Here, as in Bowers, the relevant terms are commonly

used in reference to both administrative and judicial

actions. Here, as in Bowers, the government’s proposed

construction would render a provision of the statute super-

fluous. And here, as in Bowers, excluding administrative

proceedings from the scope of the statute of limitations

18

would completely undermine Congress’s purpose in enact-

ing the statute, which was to provide repose. Simply recog-

nizing that the text and purpose of Section 2415 encompass

administrative proceedings in addition to judicial proceed-

ings does not violate the canon of “strict construction.” -

E. Amendments To The Mineral Leasing Act Do Not

Support the Government’s View

1. The government and its amici also argue that two

amendments to the Mineral Leasing Act (“MLA”)—

FOGRMA in 1982 and FOGRSFA in 1996—“{dJemonstrate

that Section 2415(a) [djoes not [a]pply to MMS [o]rders to

[pjay [rjoyalties.” Jicarilla Br. 11; Gov’t Br. 36-39. They

first assert that FOGRMA “was intended to provide [] more

rigorous enforcement,” Jicarilla Br. 12, and directed MMS

to “audit and reconcile, to the extent practicable, all current

and past leases of oil or gas and take appropriate actions.”

30 U.S.C. § 1711(c)(1); Gov't Br. 36. They thus assert that

FOGRMA “hardly manifests an intent to limit liability.”

Gov't Br. 36. But amendment of the MLA to provide more

“rigorous enforcement” in 1982 provides no insight into the

scope of a general statute of limitations enacted in 1966.

FOGRMA does not address Section 2415(a), or the limi-

tations period for administrative actions for royalties.’

Where the “later law[] * * * ‘dofes] not seek to clarify an

earlier enacted general term’ and ‘dofes] not depend for

[its] effectiveness upon clarification * * * of an earlier stat-

ute,” that later law is “‘beside the point’ in reading the first

enactment.” Gutierrez v. Ada, 528 U.S. 250, 257-258 (2000).

The direction to the MMS to “audit and reconcile” accounts,

moreover, is limited by the phrase “to the extent practica-

ble.” It hardly licenses MMS to bring stale actions that,

because of a time bar, are clearly impracticable.

° Both the government and amici note that FOGRMA established a

limitations period for penalties, 30 U.S.C. § 1755, but not “orders

directing a lessee to pay past-due royalties.” Gov't Br. 37 n.11; see

Jicarilla Br. 13. But that shows that Congress saw no need to address

royalty payments, which were already covered by Section 2415(a).

19

The government’s concerns about “rigorous enforce-

ment” boil down to the complaint that six years is not

enough time because it must conduct audits before com-

mencing actions. Gov't Br. 38-39. That assertion, better

addressed to Congress, is meritless. Six years is a generous

period; when Congress enacted a prospective limitations

period for certain MMS actions in FOGRSFA, it gave the

government just one more year, for a total of seven. 30

U.S.C. § 1724(b)(1). That belies the government’s current

claim that “rigorous enforcement” requires it to have infin-

ite time. Infinite time horizons are, in any event, the enemy

of rigorous enforcement, because they give the government

no reason to proceed with appropriate diligence.

2. The Jicarilla Tribe also argues that FOGRSFA’s

amendment to the Mineral Leasing Act to create a prospec-

tive limitations period for certain MMS orders “indicates

that Congress in 1996 did not unverstand the general stat-

ute of limitations in Section 2415(a) to apply to MMS admin-

istrative orders.” Jicarilla Br. 15; see p. 5-6, supra. That

inference is unfounded. When Congress enacted that provi-

sion, the courts were divided on whether Section 2415(a)

applied to administrative actions.'' By acting prospectively,

Congress at most declined to resolve that dispute.

Far from agreeing with the MMS and those courts that

held Section 2415(a) to be inapplicable, Congress found

“serious problems with the way” those “courts and conse-

quently the MMS have interpreted the time within which

collection of amounts due * * * can be undertaken.” Feder-

“ Contrast Hanover Ins. Co., 82 F.3d at 1055 (“Section 2415(a) applies to

administrative actions”), and Glenn Elec. Co. v. Donovan, 755 F 2d 1028,

1031 (3d Cir. 1985) (observing that the district court’s “well-reasoned

opinion” had held that “the proper limitation period” for the admini-

strative actions “was the general six-year period prescribed in 28 U.S.C.

§ 2415(a)”), with Phillips Petroleum Co. v. Johnson, No. 93-1377, 1994

WL 484506 (5th Cir. Sept. 7, 1994) (limitations period inapplicable to

administrative action), and Samedan Oil Corp. v. Deer, No. Civ. A. 94-

2123, 1995 WL 431307 (D.D.C. June 14, 1995) (same).

20

al Oil & Gas Royalty Simplification and Fairness Act of

1995: Report of the S. Comm. on Energy and Natural Res.,

104th Cong., 2d Sess. 14 (1995). Cases like Samedan and

Phillips, which “held no statute of limitations applies,”

Congress declared, “compel enactment” of a new limitations

period. Seven-Year Balanced Budget Reconciliation Act of

1995: Report of the House Comm. on the Budget, 104th

Cong., 1st Sess. 571 (1995). That Congress enacted a pro-

spective limitations period for oil and gas leases to rectify

the “serious problems” created by court and MMS decisions

hardly suggests that Congress agreed with those decisions.

Congress’s decision to act prospectively, moreover, is

consistent with the expectation that this Court would even-

tually hold that Section 2415(a) does apply here. By acting

prospectively, Congress avoided the constitutional issues

that arise when a new, longer limitations period is enacted

and made applicable to claims that, under the prior limita-

tions period, were already barred. See, e.g., Jn re Enter.

Mortgage Acceptance Co. Sec. Litig., 391 F. 3d 401, 410 (2d

Cir. 2005) (holding that “the resurrection of previously

time-barred claims” is “impermissibl[y] retroactive”). Be-

sides, where there is no limitations period for past claims,

Congress generally makes the new statute of limitations

applicable to those claims too, while protecting claimholders

by deeming such claims to have accrued on the day the new

statute of limitations is enacted. That is precisely what

Congress did when it enacted Section 2415(a). Pet. Br. 6,

44. That Congress did not do likewise in FOGRMA is

evidence that such claims were already subject to a limita-

tions period—not that Congress intended those claims (but

not later-accruing claims) to persist in perpetuity.

se *#

For the foregoing reasons and those set forth in

petitioner’s opening brief, the judgment of the D.C. Circuit

should be reversed.

aE OO ——

Respectfully submitted.

MICHAEL L. HOMEYER STEVEN R. HUNSICKER

BP AMERICA INC. Counsel of Record

-s West — a JEFFREY A. LAMKEN

ouston, Texas MICHAEL G. PATTILLO, JR.

(281) 366-3772 STEPHANIE DOURADO

GUILLERMO CHRISTENSEN

BAKER Botts L.L.P.

1299 Pennsylvania Ave., NW

Washington, D.C. 20004-2400

(202) 639-7700

Counsel for Petitioner

SEPTEMBER 2006