Amicus Curiae Brief — BP America Production Co. v. Burton

Swine oul, Uo. '

= FILED

ay JU; 13 2006

No. 05-669 OFFICE OF (HE CLERK

In The

Supreme Court of the Anited States

r

BP AMERICA PRODUCTION COMPANY

and ATLANTIC RICHFIELD COMPANY,

Petitioners,

V.

REBECCA W. WATSON, Assistant Secretary of

the Interior for Land and Mineral Management, et ai.,

Respondents.

¢

On Writ Of Certiorari To The

United States Court Of Appeals

For The District Of Columbia Circuit

S

AMICUS CURIAE BRIEF OF

MOUNTAIN STATES LEGAL FOUNDATION

IN SUPPORT OF PETITIONERS

o

WILLIAM PERRY PENDLEY*

*Counsel of Record

JOEL M. SPECTOR

MOUNTAIN STATES LEGAL FOUNDATION

2596 South Lewis Way

Lakewood, Colorado 80227

(303) 292-2021

Attorneys for Amicus Curiae

\

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

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QUESTION PRESENTED

Whether - contrary to the decision below, but consis-

tent with the decisions of the Tenth ard Federal Circuits —

the limitations period in 28 U.S.C. § 2415(a) applies to

federal agency orders requiring the payment of money

claimed under a lease or other agreement?

TABLE OF CONTENTS

Page

TTL A OO RAFT icc insisescsscostecsesasse iii

IDENTITY AND INTEREST OF AMICUS CURIAE... 1

OPINIONS BELOW AND JURISDICTION............-.-+. 2

STATEMENT OF THE CASE...........cccccssecssesesesesesesenees 2

SUMMARY OF THE ARGUMENT ...........:ceccce0eseseseeees 4

FREE A ee CPR Re CONE ETD 4

I. THE TEXT OF 28 U.S.C. § 2415(a) PLAINLY

MEANS, WHEN AIDED BY THE CANON IN

PARI MATERIA, THAT AGENCY ORDERS

FALL WITHIN THE PURVIEW OF THE

STATUTE OF LIMITATIONS. ...............:ccceeeceeees 6

Il. THE HOLDING OF THE D.C. CIRCUIT

COURT OF APPEALS YIELDS AN ABSURD

RESULT AND OUGHT TO BE REVERSED.... 8

Ill. THE STATUTE OF LIMITATIONS, 28 U.S.C.

§ 2415(a)} SHOULD NOT BE STRICTLY

CONSTRUED IN FAVOR OF THE GOVERN-

A. The Purpose Of The Canon Of Construc-

tion Was Rejected By Congress When 28

U.S.C. § 2415(a) Was Debated, Thus The

Canon Ought Not Be Applied In This In-

PRON cinciscinininiintsLivinniciigtnhacmaibpimisistgeiesiietiiininn 10

B. The Canon Of Construction Whereby Stat-

utes Of Limitations Are To Be Strictly

Construed In Favor Of The Government,

Is [logical And Should Not Be Applied

Under Any Circumstances...............::ss0s00 12

CONCLUSION .............. sesvsesseseneseconssnsneeneenennsanenscnceneanes 15

TABLE OF AUTHORITIES

Page

CASES

Agostini v. Felton, 521 U.S. 203 (1997).........:cccscseerreeeeees 13

Albrecht v. Herald Co., 390 U.S. 145 (1968) ............ceccceeee 13

Amoco Production Co. v. Baca, 300 F.Supp.2d 1

IRN MII sins is init dschicinc ince pabetbstinknne ieghamaocbanadesbineniabeeeadin 3

Amoco Production Co. v. Watson, 410 F.3d 722 (D.C.

SK See iciticcicsicdcclieisisininniindndsdbdnenebeitgipivicapesdadeaiinahiaiiiee 4,6

Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438

SE RR aE Ie MET i haem eS SCA RE Bat Ng Sp eres Bala Ai 4, 6,7

Bell v. Morrison, 26 U.S. (1 Pet.) 351 (1828) .................... 10

Bendix Autolite Corp. v. Midwesco Enterprises, Inc.,

a eoinctctncctidetimirithitnmndniinn 11

Board of Regents of University of State of N.Y. v.

Tomanio, 446 U.S. 478 (1980) ........scecsereessenereeneneneenens 11

Booth v. Maryland, 482 U.S. 496 (1987).........ccccsecseeeeees 13

Bowers v. Hardwick, 478 U.S. 186 (1986).....................2.6 12

Branch v. Smith, 538 U.S. 254 (2008)...0...........ceeceeeee eee 5, 7

Connecticut Nat. Bank v. Germain, 503 U.S. 249

Sa Cachchdecinkinsstibipdshidsiedlinlasadhiehidseithscitediedetidabdntaiieiidtinshddéathdeoied 9

Dickerson v. U.S., 530 U.S. 428 (2000) .................ccceeeeeeee 12

E.L. DuPont de Nemours & Co. v. Davis, 264 U.S.

PR I covdinsistcnstoiticdeaidnto dipbulnnbetnithiinieiiabantndasniadhbeighanendatnes 6

Germantown Pass. Ry. Co. v. Citizens’ Pass. Ry. Co.,

24 A. 1103, 151 Pa. 138 (Pa. 1892)..................scecccesesseres 14

Gunn v. Principal Cas. Ins. Co., 605 So.2d 741

SN, THIN \iehicisdivadsicrtinupcvpidiirinsdpsntcnandadaiinnnnbchebnanibibaenin 14

iv

TABLE OF AUTHORITIES - Continued

Page

Household Credit Services, Inc. v. Pfennig, 541 U.S.

LR Ra RR Ue ee MY PTE ER Fen SERRE Te 9

K Mart Corp. v. Cartier, Inc. , 486 U.S. 281 (1988).......... 5, 7

Lawrence v. Texas, 539 U.S. 558 (2003)..................000 12, 13

Order of Railroad Telegraphers v. Railway ites

Agency, Inc., 321 U.S. 342 (1943) .........:cscscsssesseeneceenes 10

OXY USA, Inc. v. Babbitt, 268 F.3d 1001 (10th Cir.

TET nites cavitwoscessscedp:chelerciiastiniiedidedipsneliieliiadingashs itis Gadde mi 8,9

Payne v. Tennessee, 501 U.S. 808 (1991)......... cece eee 13

Smith v. City of Jackson, Miss., 544 U.S. 228 (2005)....... 12

South Carolina v. Catawba Indian Tribe, Inc., 476

a Be CD nincinsichchntvtinad incinssisatiteiessteiiteatichinilpsiaichdiasititinile 12

South Carolina v. Gathers, 490 U.S. 805 (1989)............... 13

State Oil Co. v. Khan, 522 U.S. 3 (1997).......c.cesesssseseseseees 13

Stenberg v. Carhart, 530 U.S. 914 (2000) ............. ce eeeeeeeeees 5

U.S. v. Freeman, 3 How. 556, 11 L.Ed. 724 (1845) ............. 5

U.S. v. Hanover Insurance Co., 82 F.3d 1052 (Fed.

Sie, SP cciidickéssiinntipsitcainiiicishtaneneiialbiliaidctaia alas alia ditatiieis 7,12

U.S. v. Menasche, 348 U.S. 528 (1955) ..............ccccecceeseeeeeee 7

U.S. v. Nashville, C. & St. L. Ry. Co., 118 U.S. 120

CBD sceciccicnociinsicheisveislniptiniicsabibsindisatadamsinomtnlst etal 11

U.S. v. Riverside Bayview Homes, Inc., 474 U.S. 121

CIID inc icnissibiicsnisoctsibaiacipcetpihttacesieidbionehcandnicasaiad deiiiiatialtaieahialoniaiietaaae 7

U.S. v. Seckinger, 397 U.S. 203 (1970)...........:cccesseesseeeeees 14

Walker v. Armco Steel Corp., 446 U.S. 740 (1980)............ 10

Watt v. Alaska, 451 U.S. 259 (1981).........cccecesereeeserseeeneens 5

TABLE OF AUTHORITIES - Continued

Page

STATUTES

EIR Ws SERPS CSW eae EASON e passim

aes ocine teen ceatinlnceninencenneumniningeis 3,7

I I a oi senemllnapensbnbasoincasetebaiibs 3, 5

ESTEE OO a OTE eS 13

I i dalle nici dh tigdemmemnnntineniiieiceti dente

Mineral Leasing Act, 30 U.S.C. § 181 ef seq. .......0...ccceeeeeees 2

RULES

Supreme Court Rule 37(2)(a) ........cccccccccecesseesesereeneeesennenerss 1

Supreme Court Rule 3716) ........ccccrcccccscrcccsssesessecesescscossesees 1

OTHER AUTHORITIES

Antonin Scalia, A Matter of Interpretation: Federal

Courts and the Law 28 (Princeton University

ITI th nsicesittcteiiahhnandaategittnananianiptivedainanisdiimteesentisicts 15

Black’s Law Dictionary 328 (7th ed. 1999) ..............ccccccees 14

Farnsworth on Contracts § 12.8, at 871 (2d ed. |

Re ERS EI ES Rea a eG Cnn ORT oe 8

Larry A. DiMatteo, Equity’s Modification of Con-

tract: An Analysis of the Twentieth Century's Eq-

uitable Reformation of Contract Law, 33 New

Eng. L. Rev. 265, n.584 (Winter 1999) .000..........ccccceeeees 14

Restatement (Second) of Contracts § 206 (1981).............. 14,

Victor E. Schwartz, et al., Prosser, Wade &

Schwartz’s Torts Cases and Materials 613-619

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1

AMICUS CURIAE BRIEF OF MOUNTAIN

STATES LEGAL FOUNDATION

IN SUPPORT OF PETITIONERS

Mountain States Legal Foundation (“MSLF ”) respect-

fully submits this amicus curiae brief in support of Peti-

tioners. Pursuant to Supreme Court Rule 37(2)a), this

amicus curiae brief is filed with the written consent of all

the parties.’

S

IDENTITY AND INTEREST OF AMICUS CURIAE

MSLIF is a non-profit, public interest legal foundation

organized under the laws of the State of Colorado. MSLF

is dedicated to bringing before the courts those issues vital

to the defense and preservation of private property rights,

individual liberties, limited and ethical government, and

the free enterprise system. MSLF’s members include

businesses and individuals who live and work in nearly

every state of the country.

Many of MSLF’s members own natural gas operations

pursuant to federal leases that are subject to royalty

payments like those at issue in this case. Because MSLF

and its members have a significant interest in the outcome

of this case, MSLF respectfully submits this brief in

support of Petitioners.

¢

* A copy of Respondents’ consent letter has been filed with the Clerk

of the Court; and Petitioners filed a blanket consent. In compliance with

Supreme Court Rule 37(6), MSLF represents that no counsel for any

party authored this brief in whole or in part and that no person or entity,

other than the amicus curiae, its members, or its counsel made a

monetary contribution to the preparation or submission of this brief.

2

OPINIONS BELOW AND JURISDICTION

Amicus hereby adopts Petitioners’ description of the

opinions below and statement of jurisdiction. See Petition

for Writ of Certiorari at 1-14.

¢

STATEMENT OF THE CASE

In 1920, Congress enacted the Mineral Leasing Act

(“MLA”), 30 U.S.C. § 181, et seg., to authorize the U.S.

Department of the Interior (“DOI”) to issue and administer

oil and gas leases for federal lands. 30 U.S.C. §§ 181-287.

To operate oil and gas leases on federal lands, lessees are

required to pay a royalty to the Mineral Management

Service (“MMS”), a division of the DOI, that is based on

the value of the gas.

Petitioners own such leases and have consistently

been subject to the royalty payment requirement. On April

22, 1996, the MMS issued a “Dear Operator/Payor” Letter

to producers of coalbed methane (“CBM”) gas in the

vicinity of New Mexico’s San Juan Basin. The 1996 Payor

Letter provided new “guidelines” to producers on how to

report and pay these royalties. Specifically, the MMS

claimed a royalty entitlement based on the enhanced value -

of CBM after transportation to downstream treatment

facilities and treatment in those facilities to meet mainline

pipeline quality requirements. The 1996 Payor Letter

asserted that, for royalty purposes, the CBM’s “value” may

not be reduced to account for the costs of placing it in

marketable condition, and that the CBM was not in

marketable condition until it was transported to and

treated in gas treatment plants to meet the quality specifi-

cations of mainline pipelines.

3

On May 27, 1997, the MMS issued an order directing

Petitioners to pay additional royalties of $4,117,607

because, according to the MMS, Petitioners had calculated

and paid royalties improperly dating back to 1989. The

order also imposed penalties of up to $10,000 per day for

failure to comply with the order.

Petitioners believe that such a demand violates 28

U.S.C. § 2415(a), which provides, in part:

Subject to the provisions of section 2416 of this

title, and except as otherwise provided by Con-

gress, every action for money damages brought

by the United States or an officer of agency

thereof which is founded upon any contract ex-

press or implied in law or fact, shall be barred

unless the complaint is filed within six years af-

ter the right of action accrues or within one year

after final decisions have been rendered in appli-

cable administrative proceedings ce scestea by

contract or by law, whichever is later .

This statute of limitations was not included initially

in the MLA, but was added in 1966 and then amended in

1982 to include the phrase, “|t)he provisions of this section

shall not prevent the United States or an officer or agency

thereof from collecting any claim of the United States by

means of administrative offset, in accordance with section

3716 of title 31.” 28 U.S.C. § 2415(i).

After exhausting administrative remedies, Petitioners

filed suit in the United States District Court for the

District of Columbia, which concluded that the statute of

limitations does not apply to agency efforts to impose and

collect additional royalties through agency proceedings.

Amoco Production Co. v. Baca, 300 — 1, 21 (D.D.C.

2003).

4

The United States Court of Appeals for the District of

Columbia affirmed this decision, holding that “an adminis-

trative order assessing additional royalties” cannot rea-

sonably be understood to be an “action for money

damages” initiated by the filing of a complaint. Amoco

Production Co. v. Watson, 410 F.3d 722 (D.C. Cir. 2005).

Thereafter, Petitioners filed their Petition for Writ of

Certiorari with this Court, which was granted on April 17,

2006.

S

SUMMARY OF THE ARGUMENT

Agency orders, such as the MMS’s order to Petition-

ers, fall within the plain meaning of 28 U.S.C. § 2415(a),

and, therefore, this Court should reverse the holding of the

D.C. Circuit Court. This conclusion is supported by this

Court’s doctrine that eschews absurd results, such as

concluding that administrative agencies may attempt to

collect money though the administrative process while

being barred from collecting that money through litiga-

tion. In addition, the D.C. Circuit wrongly adhered to a

canon of construction, which provides that statutes of

limitations are to be strictly construed in favor of the

government, that is inapplicable both in this specific

instance and universally. As a result, this Court should

reverse the decision of the D.C. Circuit and hold that

administrative orders do fall within the purview of the

statute of limitations.

¢

ARGUMENT

Statutes must be interpreted based on the plain

meaning of the statutory text. Barnhart v. Sigmon Coal

5

Co., Inc., 534 U.S. 438, 450 (2002) (“As in all statutory

construction cases, we begin with the language of the

statute.”); Stenberg v. Carhart, 530 U.S. 914, 983 (2000)

(Scalia, J., concurring in judgment in part and dissenting

’ in part). “In ascertaining the plain meaning of [a] statute,

the court must look to the particular statutory language at

issue, as well as the language and design of the statute as

a whole.” K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291

(1988). The textual canon in pari materia may be applied

to aid in the construction of the statutory text by examin-

ing the language and design of the statute as a whole.

Under this doctrine, “if divers statutes relate to the same

thing, they ought all to be taken into consideration in

construing any one of them.” Branch v. Smith, 538 U.S.

254, 281 (2003), citing U.S. v. Freeman, 3 How. 556, 564-

565, 11 L.Ed. 724 (1845). If, however, the plain meaning of

the statutory text would lead to an absurd result, this

Court has concluced that other factors may be taken into

consideration. See, e.g., Watt v. Alaska, 451 U.S. 259, 285

n.8 (1981).

This case hinges on the interpretation of 28 U.S.C.

§ 2415(a):

Subject to the provisions of section 2416 of this

title, and except as otherwise provided by Con-

gress, every action for money damages brought

by the United States or an officer or agency

thereof which is founded upon any contract ex-

press or implied in law or fact, shall be barred

unless the complaint is filed within six years af-

ter the right of action accrues or within one year

after final decisions have been rendered in appli-

cable administrative proceedings required by

contract or law, whichever is later... .

6

To determine the applicability of this statute to

Petitioners, the D.C. Circuit affirmed the District Court’s

decision in favor of the MMS because it concluded that

“the government’s demand for additional royalties is not

an. action for money damages initiated by the filing of a

complaint.” Amoco Production Co., 410 F.3d at 735. The

court ruled in favor of the MMS, in part, because “statutes

of limitations against the sovereign are to be strictly

construed [in favor of the government)].” Jd. at 734; see also

E.L. DuPont de Nemours & Co. v. Davis, 264 U.S. 456, 462

(1924) (In the absence of congressional enactment clearly

imposing a statute of limitations on the government, a

statute of limitations is to be strictly construed in favor of

the government. ).

Here, a textual interpretation of the plain meaning of

the statute, aided by the canon in pari materia, mandates

that this Court reverse the opinion below. This Court’s

precedent, which eschews absurd results, supports this

conclusion, particularly when the statute of limitations, is

fairly and reasonably construed.

I. THE TEXT OF 28 U.S.C. § 2415(a) PLAINLY

MEANS, WHEN AIDED BY THE CANON IN

PARI MATERIA, THAT AGENCY ORDERS FALL

WITHIN THE PURVIEW OF THE STATUTE OF

LIMITATIONS.

The plain meaning of 28 U.S.C. § 2415(a), when aided

by the canon in pari materia, is unambiguously clear:

administrative orders fall within the purview of the

statute of limitations. Any statutory construction begins

with its plain meaning. Barnhart, 534 U.S. at 450. This

analysis requires a careful examination of both the statu-

tory text, as well as the “language and design of the

7

statute as a whole.” K Mart Corp., 486 U.S. at 291. This

Court has applied the textual canon in pari materia to

help interpret the language and design of the statute as a

whole. Under this doctrine, “if divers statutes relate to the

same thing, they ought all to be taken into consideration

in construing any one of them.” Branch, 538 U.S. at 281,

citing U.S. v. Freeman, 3 How. 556, 564-65, 11 L.Ed. 724

(1845). Further, the various provisions within one statute

should all be taken into account when interpreting a

statute. See, e.g., U.S. v. Riverside Bayview Homes, Inc.,

474 U.S. 121, 139 n.11 (1985). Applying this principle,

“when Congress includes particular language in one

section of a statute but omits it in another section of the

same Act, it is generally presumed that Congress acts

intentionally and purposely in the disparate inclusion or

exclusion.” Barnhart, 534 U.S. at 452 (internal citations

omitted).

An amendment to the statute, 28 U.S.C. § 2415(i),

expressly exempts administrative offsets from the statute of

limitations period set forth in 2415(a). An “administrative

offset” is not a judicial action. Therefore, if § 2415(a) were

limited solely to judicial actions, there would have been no

need to legislate a specific exemption for administrative

offsets, and such an exemption would yield statutory

surplusage, which is disfavored by this Court. See, e.g., U.S.

v. Menasche, 348 U.S. 528, 538-39 (1955). Notably, the

doctrine of in pari materia mandates that § 2415(i) be used

to help interpret § 2415(a). Therefore, “[e]xamination of the

language and the structure of section 2415 leaves the

conviction that, absent an express exception, Congress

intended that agencies assert their claims within six years

or lose the right to enforce them.” U.S. v. Hanover Insur-

ance Co., 82 F.3d 1052, 1055 (Fed. Cir. 1996).

fl. THE HOLDING OF THE D.C. CIRCUIT COURT

OF APPEALS YIELDS AN ABSURD RESULT

AND OUGHT TO BE REVERSED.

This Court’s precedent that eschews absurd results

further leads to the conclusion that the decision below

should be reversed. The MMS’s order, dated May 27, 1997,

demands royalty payments of $4,117,607. It also warns

that failure to pay such royalty payments could result in

penalties of up to $10,000 per day. Petition for Writ of

Certiorari, Appendix H. Should Petitioners refuse to make

any royalty payments older than six years, the MMS

would likely have to file a complaint with a court to collect

this money.

Oil and gas leases have long been recognized as

“contracts.” See, e.g., OXY USA, Inc. v. Babbitt, 268 F.3d

1001, 1006 (10th Cir. 2001). Furthermore, an award of

“damages” is the relief sought as a result of a breach of

contract. See, e.g., id. at 1008 (referencing Farnsworth on

Contracts § 12.8, at 871 (2d ed. 1990)). Therefore, for the

MMS to collect, the complaint would have to allege a

breach of contract resulting in money damages.

Once the complaint is filed to collect the royalties, the

statute of limitations would bar any claim for contract

damages beyond the six-year limitations period. By hold-

ing that the statute of limitations does not apply to agency

actions, the D.C. Circuit’s decision effectively permits the

MMS to attempt administratively what it would be unable

to accomplish judicially. This inconsistency could not

possibly have been the intent of Congress in enacting 28

U.S.C. § 2415(a), the purpose of which was to “establish a

general statute of limitations on contract claims asserted

9

by the government or a government agency.” OXY USA,

Inc., 268 F.3d at 1005. “An interpretation of § 2415 permit-

ting federal agencies to avoid the limitation period by

utilizing administrative orders to collect monies owed

under contract obviously would thwart this purpose.” Jd.

at 1006.

A similarly absurd result would exist if the MMS were

to file a complaint to compel Petitioners to pay only the

penalties for noncompliance. Though, theoretically, the

statute of limitations for the penalties would begin to run

the moment the penalties were assessed, it makes little

sense to permit the MMS to collect penalties for failure to

make a payment that the MMS is barred from collecting.

Such a result would not give the parties finality on stale

claims. Because this result would be absurd, this Court’s

ewn precedent suggests that § 2415(a) should be inter-

preted more reasonably.

Ill. THE STATUTE OF LIMITATIONS, 28 U.S.C.

§ 2415(a), SHOULD NOT BE STRICTLY CON-

STRUED IN FAVOR OF THE GOVERNMENT.

When statutes are ambiguous, this Court has relied

occasionally upon other methods of construction, such as

legislative intent and non-textual canons of construction.

See, e.g., Household Credit Services, Inc. v. Pfennig, 541

U.S. 232 (2004) (courts must give effect to the unambigu-

ously expressed intent of Congress); Connecticut Nat.

Bank v. Germain, 503 U.S. 249, 253-54 (1992) (legislative

history and other canons of construction are useful inter-

pretive tools when a statute is ambiguous). Here, these

10

additional construction tools further support the conclu-

sion that the decision below should be reversed.

Though this Court should conclude that the plain

meaning of the statute unambiguously includes adminis-

trative orders, the D.C. Circuit relied, in part, on the

canon of construction that provides that statutes of limita-

tions should be strictly construed in favor of the govern-

ment. First, this canon conflicts with the intent of

Congress, and, therefore, should not be applied in this

instance. Second, the foundation underlying this canon is

weak and the canon ought to be overturned in all in-

stances.

A. The Purpose Of The Canon Of Construction

Was Rejected By Congress When 28 U.S.C.

§ 2415(a) Was Debated, Thus The Canon

Ought Not Be Applied In This Instance.

Statutes of limitations exist to prevent limitless and

open-ended liability, see generally Victor E. Schwartz, et

al., Prosser, Wade & Schwartz’s Torts Cases and Materials

613-619 (10th ed. 2000), and to provide finality to parties’

legal obligations and relations, including contracts with

the government, as recognized by § 2415(a).’ This Court

* See also Bell v. Morrison, 26 U.S. (1 Pet.) 351, 360 (1828) (Story,

J.) (statutes of limitations guard against “stale demands, after the trust

state of the transaction may have been forgotten.”); Walker v. Armco

Steel Corp., 446 U.S. 740, 751 (1980) (“The statute of limitations

establishes a deadline after which the defendant may legitimately have

peace of mind; it also recognizes that after a certain period of time it is

unfair to require the defendant to attempt to piece together his defense

to an old claim.”); Order of Railroad Telegraphers v. Railway Express

Agency, Inc., 321 U.S. 342, 348-49 (1943) (statutes of limitations

“promote justice by preventing surprises through the revival of claims

(Continued on following page)

11

has concluded that “it is obvious that [statutes of limita-

tions] are an integral part of the legal system and are

relied upon to protect the liabilities of persons and corpo-

rations active in the commercial sphere.” Bendix Autolite

Corp. v. Midwesco Enterprises, Inc., 486 U.S. 888, 893

(1988).

Statutes of limitations also serve valid legal purposes:

Statutes of limitations are not simply technicali-

ties. On the contrary, they have long been re-

spected as fundamental to the well-ordered

judicial system ... The process of discovery and

trial ... is obviously more reliable if the witness

or testimony in questions is relatively fresh.

Thus ... there comes a point at which the delay

of a plaintiff in asserting a claim is sufficiently

likely either to impair the accuracy of the fact-

finding process or to upset the settled expecta-

tions that a substantive claim will be barred...

Board of Regents of University of State of N.Y. v. Tomanio,

446 U.S. 478, 486 (1980).

Balanced against these valid, important purposes of

statutes of limitations is the canon of construction that

provides that, in the absence of a congressional enactment,

such statutes are to be strictly construed in favor of the

government. The purpose for such a canon was to protect

the public from the prejudice that could result from the

negligence of governmental officers in their untimely filing

of claims. U.S. v. Nashville, C. & St. L. Ry. Co., 118 U.S.

120 (1886).

that have been allowed to slumber until evidence has been lost,

memories have faded, and witnesses have disappeared.”).

12

With regard to § 2415(a), however, this public purpose

was rejected by Congress, which enacted § 2415(a) “to

promote fairness ... notwithstanding whatever prejudice

might accrue thereby to the Government as a result of the

negligence of its officers.” Hanover Insurance Co., 82 F.3d

at 1055. Therefore, specifically with regard to § 2415(a),

the canon ought to be rejected, and the statute should not

be strictly construed in favor of the government. See, e.g.,

Smith v. City of Jackson, Miss., 544 U.S. 228, 262 (2005)

(Rehnquist, J., dissenting from denial of certiorari to,

instead, expressly affirm the decision, below) (“Even

venerable canons of construction must bow, in an appro-

priate case, to compelling evidence of congressional in-

tent.”); South Carolina v. Catawba Indian Tribe, Inc., 476

U.S. 498, 507 n.16 (1986) (“A canon of construction is not a

license to disregard clear expressions of ... congressional

intent.”). Instead, the aforementioned justifications war-

rant a statutory interpretation whereby the protections

provided by the statute are not limited by the canon of

construction in favor of the government.

B. The Canon Of Construction Whereby Stat-

utes Of Limitations Are To Be Strictly Con-

strued In Favor Of The Government, Is

Illogical And Should Not Be Applied Under

Any Circumstances.

“The doctrine of stare decisis is essential to the respect

accorded to the judgments of this Court and to the stabil-

ity of the law,” Lawrence v. Texas, 539 U.S. 558, 577 (2003)

(wherein the Court expressly overruled Bowers v. Hard-

wick, 478 U.S. 186 (1986)). However, that doctrine is “not

an inexorable command [)}.” Dickerson v. U.S., 530 U.S.

13

428, 443 (2000) (quoting State Oil Co. v. Khan, 522 US. 3,

20 (1997) (expressly overruling Albrecht v. Herald Co., 390

U.S. 145 (1968)); Agostini v. Felton, 521 U.S. 203, 235

(1997) (abandoning a strict application of stare decisis).

Instead, it is a mere “principle of policy.” Lawrence, 539

U.S. at 577. Therefore, “[iJn prior cases, when this Court

has confronted a wrongly decided, unworkable precedent

calling for some further action by the Court, {the Court

has] chosen not to compound the original error, but to

overrule the precedent.” Payne v. Tennessee, 501 U.S. 808

(1991) (Souter, J., concurring) (wherein the Court partially

overruled Booth v. Maryland, 482 U.S. 496 (1987) and

South Carolina v. Gathers, 490 U.S. 805 (1989)). The

canon of construction upon which the D.C. Circuit par-

tially relied, which provides that statutes of limitations

are to be strictly construed in favor of the sovereign, is

absurd and poorly reasoned and ought to be overruled.

Many statutes of limitations are imposed by the

legislature on individuals. See, e.g., 28 U.S.C. § 2244(d)(1)

(imposing a statute of limitations on the filing of a habeas

corpus petition). These statutes, which limit the rights of

action available to individuals, are not strictly construed

in favor of the individual, despite that the individuals had

no influence in the statutes’ enactment. Yet pursuant to

the canon of construction, statutes that limit the rights of

action available to the government are strictly construed

in favor of the government even though the limitation is

self-imposed.

This makes little sense. Because Congress has the

power to protect itself from the limitations imposed by a

statute of limitations, it can repeal an enacted statute of

limitations or reject it before it becomes law. In other

words, should Congress believe that a particular statute of

14

limitations overly restricts the rights of the government to

seek redress, Corigress may amend or repeal that statute.

Individuals, on the other hand, have no such power.

Therefore, the canon that provides for a strict construction

of statutes of limitations in favor of the government cannot

be justified.

A similar theory, known as “contra proferentem,” is

commonly applied in contract law, though it has been used

occasionally in statutory construction. See, e.g., German-

town Pass. Ry. Co. v. Citizens’ Pass. Ry. Co., 24 A. 1103,

1104, 151 Pa. 138, 140 (Pa. 1892); Larry A. DiMatteo,

Equity’s Modification of Contract: An Analysis of the

Twentieth Century’s Equitable Reformation of Contract

Law, 33 New Eng. L. Rev. 265, n.584 (Winter 1999) (“The

concept of strict construction against the drafter can be

found throughout Anglo-American Jurisprudence in both

statutory and non-statutory interpretations.”). The doc-

trine provides that “In interpreting documents, ambigui-

ties are to be construed unfavorably to the drafter,” Black’s

Law Dictionary 328 (7th ed. 1999); see also Restatement

(Second) of Contracts § 206 (1981), “because the drafter is

the party in a position to correct the ambiguity.” Gunn v.

Principal Cas. Ins. Co., 605 So.2d 741, 746 (Miss. 1992);

see also U.S. v. Seckinger, 397 U.S. 203, 216 (1970) (doc-

trine of contra proferentem is given “considerable empha-

sis” in construing a government contract “because of the

government’s vast economic resources and stronger bar-

gaining position.”). Following this same reasoning, an

ambiguous statute of limitations that restricts the right of

the government to seek redress should not be strictly

construed in favor of the government and, if anything,

should be strictly construed against the government.

15

Ultimately, such a canon of construction, which

creates preferential rules and presumptions, obfuscates

the statutory interpretation process. “It is hard enough to

provide a uniform, objective answer to the question

whether a statute, on balance, more reasonably means one

thing than another. But it is virtually impossible to expect

uniformity and objectivity when there is added, on one or

the other side of the balance, a thumb of indeterminate

weight.” Antonin Scalia, A Matter of Interpretation: Fed-

eral Courts and the Law 28 (Princeton University Press

1997). Given these considerations, this Court should reject

the canon of construction that mandates a strict construc-

tion of statutes of limitations in favor of the government,

and reverse the decision below.

¢

CONCLUSION

Agency orders, such as the MMS’s order to Petition-

ers, fall within the purview of 28 U.S.C. § 2415(a), when

textually construed, and therefore this Court should

reverse the holding of the D.C. Circuit Court. This “plain

meaning” interpretation is supported by this Court’s

doctrine that eschews absurd results. Here, the D.C.

Circuit Court’s conclusion that the text of § 2415(a) places

a time limitation only on judicial actions leads to an

absurd result whereby an administrative agency could

attempt to collect money though the administrative

process while being barred from judicial enforcement of

this administrative decision. Additionally, a reversal is

supported both by the purpose of § 2415(a) and by logic,

which mandates that this Court reject the canon of con-

struction, which construes statutes of limitation in favor of

the government, that underlies the erroneous decision of

16

the court below. Therefore, Mountain States Legal Foun-

dation respectfully requests that this Court reverse the

decision of the D.C. Circuit Court and hold that § 2415(a)

does apply to administrative orders.

Respectfully submitted:

WILLIAM PERRY PENDLEY*

*Counsel of Record

JOEL M. SPECTOR

MOUNTAIN STATES LEGAL FOUNDATION

2596 South Lewis Way

Lakewood, Colorado 80227

(303) 292-2021

Attorneys for Amicus Curiae

Dated June 13, 2006