Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-08-02260/USCOURTS-ca10-08-02260-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

---

UNITED STATES COURT OF APPEALS 

 TENTH CIRCUIT

POTASH ASSOCIATION OF NEW 

MEXICO, 

 Plaintiff–Appellant, 

v. 

UNITED STATES DEPARTMENT OF 

THE INTERIOR; KENNETH SALAZAR,

in his official capacity as Secretary of the 

United States Department of the Interior; 

OFFICE OF HEARING AND APPEALS, 

INTERIOR BOARD OF LAND APPEALS; 

UNITED STATES BUREAU OF LAND 

MANAGEMENT, an agency within the 

Department of the Interior; LINDA 

RUNDELL, in her official capacity as State 

Director of the New Mexico State Office of 

the Bureau of Land Management, 

 Defendants–Appellees. 

------------------------------ 

POGO PRODUCING COMPANY; YATES 

PETROLEUM CORPORATION, 

 Intervenors–Appellees.

No. 08-2260

(D.C. No. 1:06-CV-01190-MCA-ACT)

(D. N.M.)

 

 Pursuant to Fed. R. App. P. 43(c)(2), Kenneth Salazar is substituted as 

Defendant–Appellee for former Secretary of the United States Department of the Interior 

Dirk Kempthorne. 

FILED 

United States Court of Appeals 

Tenth Circuit 

March 2, 2010

Elisabeth A. Shumaker 

Clerk of Court

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 1 
- 2 - 

ORDER AND JUDGMENT

Before LUCERO, McKAY, and HARTZ, Circuit Judges. 

 

This proceeding was commenced by the Potash Association of New Mexico 

(“PANM”) by filing suit in the United States District Court for the District of New 

Mexico seeking review of an opinion of the Interior Board of Land Appeals (“IBLA”). 

Concluding that it lacked subject matter jurisdiction over PANM’s suit because the IBLA 

opinion did not constitute final agency action under the Administrative Procedure Act 

(“APA”), the district court denied relief. See 5 U.S.C. § 704. Exercising jurisdiction 

under 28 U.S.C. § 1291, we affirm. 

I 

 “Potash” refers to potassium compounds that are used principally as an element in 

fertilizer. Certain lands in New Mexico administered by the Bureau of Land 

Management (“BLM”) known as the Potash Area contain both potash deposits and oil 

and gas. Some of this oil and gas is located in fields below potash deposits. In order to 

exploit the petroleum resources, drilling through the potash is necessary. This renders 

potash near the well inaccessible. Drilling for oil and gas in the vicinity of potash mines 

  This order and judgment is not binding precedent, except under the doctrines of 

law of the case, res judicata, and collateral estoppel. This court generally disfavors the 

citation of orders and judgments; nevertheless, an order and judgment may be cited under 

the terms and conditions of 10th Cir. R. 32.1. 

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 2 
- 3 - 

also raises concerns that well casings will leak hydrocarbons into potash mines. PANM 

argues the leaks are damaging and potentially explosive. Because of these risks, potash 

producers and the oil and gas industry have long been at odds over the proper 

development of the Potash Area. 

In 1986, the Secretary of the Interior published an order setting forth regulations to 

govern both potash and oil and gas development in the Potash Area. See Oil, Gas and 

Potash Leasing and Development Within the Designated Potash Area of Eddy and Lea 

Counties, New Mexico, 51 Fed. Reg. 39,425 (Oct. 28, 1986) (the “1986 Order”), 

corrected 52 Fed. Reg. 32,171 (August 26, 1987). The 1986 Order articulated four 

“stipulations” that must be included in all leases for oil and gas drilling within the Potash 

Area. Three stipulations are relevant to this appeal: 

1. Drilling for oil and gas shall be permitted only in the event that the 

lessee establishes to the satisfaction of the authorized officer, Bureau 

of Land Management, that such drilling will not interfere with the 

mining and recovery of potash deposits, or the interest of the United 

States will best be served by permitting such drilling. 

2. No wells shall be drilled for oil or gas at a location which, in the 

opinion of the authorized officer, would result in undue waste of 

potash deposits or constitute a hazard to or unduly interfere with 

mining operations being conducted for the extraction of potash 

deposits. 

*** 

4. The drilling or the abandonment of any well on said lease shall be 

done in accordance with applicable oil and gas operating regulations 

(43 CFR 3160), including such requirements as the authorized 

officer may prescribe as necessary to prevent the infiltration of oil, 

gas or water into formations containing potash deposits or into mines 

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 3 
- 4 - 

or workings being utilized in the extraction of such deposits. 

51 Fed. Reg. at 39,425. Procedures were also established by the 1986 Order for 

identifying “potash enclaves” in which “potash ore is known to exist in sufficient 

thickness and quality to be mineable under existing technology and economics.” Id. 

With certain exceptions, the 1986 Order established a policy “to deny approval of most 

applications for permits to drill oil and gas test wells from surface locations within the 

potash enclaves.” Id.

 In the early 1990s, Yates Petroleum Corporation, Pogo Producing Company, and a 

third operator filed dozens of Applications for Permits to Drill (“APDs”), seeking 

permission to drill in the Potash Area. The BLM denied the APDs on the ground that 

drilling would “render the mining of potash unsafe and ultimately uneconomic, thereby 

constituting an undue waste of the potash resource and violating the rules for oil, gas, and 

potash leasing and development within the designated Potash Area.” Yates Petroleum 

Corp., 131 I.B.L.A. 230, 231 (1994). This decision was appealed to the IBLA, which set 

aside the denials and referred the matter for a hearing before an administrative law judge 

(“ALJ”). See id. at 240. It directed further inquiry on two issues: (1) “whether the 

APD’s [sic] encompass lands within areas qualifying as potash enclaves”; and (2) 

“whether approving the APD’s [sic] would result in undue waste of potash deposits or 

constitute a hazard to or unduly interfere with mining operations being conducted for the 

extraction of potash deposits.” Id. at 235-26 (quotation omitted). 

 Eighty days of hearings followed in 1996 and 1997, during which seventy-two 

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 4 
- 5 - 

APDs were considered. Testimony was received from thirty-seven witnesses. PANM 

participated in the hearing as an intervenor. In July 2003, the ALJ delivered a 15,000-

page transcript, along with a 247-page final order—In re Yates Petroleum Corp., IBLA 

92-612 (July 7, 2003) (“ALJ Decision”). She concluded that the BLM misapplied the 

stipulations contained in the 1986 Order and remanded most of the APDs at issue to the 

BLM for reconsideration and fact finding.1 All parties appealed to the IBLA, which 

affirmed the ALJ’s order. See IMC Kalium Carlsbad, Inc., 170 I.B.L.A. 25, 55 (2006). 

PANM then filed suit in federal district court challenging the IBLA’s opinion 

pursuant to the APA. The district court sua sponte concluded that it lacked jurisdiction 

because the IBLA’s opinion did not constitute “final agency action.” See 5 U.S.C. § 704. 

PANM timely appealed. 

II 

We review de novo a district court’s dismissal for lack of subject matter 

jurisdiction. See High Country Citizens Alliance v. Clarke, 454 F.3d 1177, 1180 (10th 

Cir. 2006). Under the APA, federal courts have jurisdiction to review “final agency 

action.” 5 U.S.C. § 704; see Colo. Farm Bureau Fed’n v. U.S. Forest Serv., 220 F.3d 

1171, 1173 (10th Cir. 2000). For agency action to be “final,” it: (1) “must mark the 

consummation of the agency’s decision-making process”; and (2) “must be one by which 

rights or obligations have been determined, or from which legal consequences will flow.” 

 1

 The disposition of the remaining APDs is not relevant to this appeal. 

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 5 
- 6 - 

Bennett v. Spear, 520 U.S. 154, 177-78 (1997) (quotation omitted). 2

PANM apparently asserts that both the IBLA order as a whole and a specific 

portion of that order, which it calls the “Safety Ruling,” constitute final agency action. 

We disagree as to both. 3

A

 With respect to the entire IBLA opinion, PANM advances several arguments in 

support of its “final agency action” position. First, PANM argues that IBLA decisions 

categorically constitute “final agency action.” It correctly notes that 43 C.F.R. § 4.403 

provides: “A decision of the [IBLA] shall constitute final agency action and be effective 

upon the date of issuance, unless the decision itself provides otherwise.”4

 

 2

 PANM contends the district court erred because it failed to apply the proper 

standard to determine if all or part of the IBLA opinion constitutes final agency action. 

On appeal, we affirm the district court’s order applying the standard urged by all parties 

and therefore need not determine if the standard applied by the district court was 

incorrect. Cf. Colo. Prop. Acquisitions, Inc. v. United States, 894 F.2d 1173, 1175 n.5 

(10th Cir. 1990). 

3

 PANM asserts that none of the parties argued the finality issue before the district 

court. However, “[f]ederal courts have an independent obligation to determine whether 

subject-matter jurisdiction exists, even in the absence of a challenge from any party, and 

thus a court may sua sponte raise the question of whether there is subject matter 

jurisdiction at any stage in the litigation.” 1mage Software, Inc. v. Reynolds & Reynolds 

Co., 459 F.3d 1044, 1048 (10th Cir. 2006) (quotations omitted). 

4

 PANM further notes that 43 C.F.R. § 4.1 authorizes the IBLA to determine “as 

fully and finally as might the Secretary, matters within the jurisdiction of the 

Department” and to “decide[]finally for the Department appeals to the head of the 

Department from decisions rendered by Departmental officials relating to . . . [t]he use 

and disposition of public lands and their resources.” 43 C.F.R. § 4.1, 4.1(b)(3). Within 

Continued . . . 

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 6 
- 7 - 

However, the IBLA opinion is not final agency action because it “provides 

otherwise.” Specifically, the IBLA opinion does not consummate the agency’s decisionmaking process with respect to the APDs at issue.5

 Bennett, 520 U.S. at 177-78. We 

have specifically held that an agency action is not final—and thus not reviewable—if it 

serves to “initiate further proceedings” necessary for a final determination of the parties’ 

rights. Mobil Exploration & Producing, U.S., Inc. v. Dep’t of Interior, 180 F.3d 1192, 

1198 (10th Cir. 1999). Several of our sibling circuits have similarly held that a remand 

within an agency does not consummate agency action when the agency has not 

definitively resolved the merits of the case. See Exxon Chems. Am. v. Chao, 298 F.3d 

464, 467 (5th Cir. 2002); Dir., Office of Workers’ Comp. Programs v. Bath Iron Works 

Corp., 853 F.2d 11, 14 (1st Cir. 1988) (construing an analogous finality requirement 

found in 33 U.S.C. § 921(c)); Wash. Metro. Area Transit Auth. v. Dir., Office of 

Workers’ Comp. Programs, 824 F.2d 94, 95 (D.C. Cir. 1987) (same). 

In the present case, the IBLA affirmed the ALJ’s order remanding the APDs for 

reconsideration and necessary fact finding. IMC Kalium Carlsbad, Inc., 170 I.B.L.A. at 

55. This will require the BLM to engage in further fact finding before it can make final 

determinations regarding the APDs. PANM will have the opportunity to argue that the 

 

the Department of the Interior, appeals are not available from IBLA decisions. 43 C.F.R. 

§ 4.21(d). 

5

 Because the IBLA order fails the first step of the Bennett analysis, we need not 

address whether legal consequences will flow from the order and thus whether it 

succeeds at the second step of Bennett. 

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 7 
- 8 - 

APDs should not be granted, and the BLM may deny the APDs once again. Because the 

IBLA opinion did not consummate the agency’s decision-making process with respect to 

the APDs, the district court lacked jurisdiction to consider PANM’s appeal from the 

IBLA opinion.

B

 We further conclude that a portion of the IBLA order that PANM refers to as the 

“Safety Ruling” does not constitute final agency action in and of itself because it does not 

consummate the agency’s decision-making process. 

 PANM identifies the following portion of the IBLA opinion as the Safety Ruling6

:

Collectively considering the first, second, and fourth oil and gas lease 

stipulations, we conclude that APDs may be denied if BLM determines that 

contamination will occur (i.e., infiltration caused by oil and gas drilling 

cannot be prevented) and then determines that the physical presence of this 

contamination will interfere with potash mining, result in undue potash 

waste, or constitute a hazard to potash mining. 

IMC Kalium Carlsbad, Inc., 170 I.B.L.A. at 52 (footnote omitted). PANM asserts that 

the Safety Ruling consummates a distinct agency decision-making process because it 

articulates a new policy misinterpreting the 1986 Order by altering the burden and 

standard of proof used in evaluating APDs. 

 We disagree. First, we reject PANM’s implication that we may read the Safety 

Ruling in isolation from the remainder of the IBLA’s opinion. “[A] court does not 

 6

 Other parties to this appeal object to PANM’s characterization. We use PANM’s 

phrase by way of shorthand only. 

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 8 
- 9 - 

review language in a judicial or administrative opinion divorced from formal orders. We 

review judgments (and orders), not words.” CH2M Hill Cent., Inc. v. Herman, 131 F.3d 

1244, 1247 (7th Cir. 1997). The Safety Ruling concludes a section of the IBLA opinion 

discussing various provisions of the 1986 Order and the agency’s interpretation of it. 

Construing a single paragraph detached from its context risks misinterpreting it. 

 Second, PANM’s challenge is unlike Pennaco Energy, Inc. v. U.S. Department of 

the Interior, 377 F.3d 1147 (10th Cir. 2004), a case upon which PANM heavily relies. In 

Pennaco, we recognized that an IBLA remand to the BLM consummates the agency’s 

decision-making process when the remand includes a “definitive statement of [the 

agency’s] position” that completes a “distinct decision-making process.” Id. at 1155. 

There, the BLM issued three oil and gas leases after concluding that two existing 

analyses satisfied the obligations of the National Environmental Policy Act (“NEPA”). 

Id. at 1152. A pair of environmental groups filed a formal protest with the BLM arguing 

that NEPA required the agency to prepare a new environmental impact statement. Id. at 

1152-53. After the BLM rejected their challenge, the groups appealed to the IBLA, 

which ruled that the BLM’s analysis was insufficient under NEPA. Id. at 1153-54. The 

IBLA remanded to the BLM to conduct the required analysis. Id. at 1150. Thus the 

environmental groups initiated a distinct decision-making process by filing a formal 

complaint. Id. at 1152-53. At the time suit was filed in the district court, that distinct 

process was complete. The environmental groups had obtained their requested relief—a 

remand to the agency with directions to comply with NEPA. 

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 9 
- 10 - 

 PANM argues that the Safety Ruling is final despite the remand to the BLM 

because IBLA holdings bind the BLM. Although this argument could show that the 

Safety Ruling was a “definitive statement of [the IBLA’s] position,” it does not address 

the requirement that the ruling mark “the consummation of a distinct decision-making 

process.” Id. at 1155. PANM has entirely failed to identify any distinct process that led 

to the Safety Ruling. To the contrary, the record is clear that the Safety Ruling was 

simply a small step in the much larger process of determining whether to grant the APDs 

at issue: When the BLM denied those APDs, the jilted applicants appealed to the IBLA, 

which eventually remanded to the BLM for further fact finding. Because the BLM has 

yet to act on that remand, the administrative process is not yet complete—we do not yet 

know whether the APDs will be granted. Accordingly, PANM has not demonstrated that 

the Safety Ruling marks “the consummation of a distinct decision-making process” such 

that it may be treated as final agency action. Id. at 1155.7

 

 Third and finally, PANM argues that if the BLM ultimately denies the APDs, then 

it will not have the opportunity to challenge the Safety Ruling. But that is precisely the 

point: This argument demonstrates that the Safety Ruling is not final. We do not review 

agency action if it “does not itself adversely affect complainant but only affects his rights 

 7

 Our reasoning here does not contravene the rule that we have jurisdiction to 

review an administrative order remanding a case within an agency when the order is 

subject to the collateral order doctrine. See Osage Tribal Council ex rel. Osage Tribe of 

Indians v. U.S. Dep’t of Labor, 187 F.3d 1174, 1179-80 (10th Cir. 1999). In this case, 

none of the parties has argued the collateral order doctrine applies. 

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 10 
- 11 - 

adversely on the contingency of future administrative action.” Am. Airlines, Inc. v. 

Herman, 176 F.3d 283, 287 (5th Cir. 1999) (quoting Rochester Tel. Corp. v. United 

States, 307 U.S. 125, 130 (1939)). If the BLM denies the APDs on remand, PANM will 

not be aggrieved. See City of Colo. Springs v. Climax Molybdenum Co., 587 F.3d 1071, 

1079 (10th Cir. 2009) (plaintiff must suffer an injury that is “concrete and particularized” 

and “actual or imminent” (quotation omitted)). If, however, the BLM approves the APDs 

based on a reading of the 1986 Order that is arbitrary, capricious, an abuse of discretion, 

or otherwise not in accordance with law, see 5 U.S.C. § 706(2)(A), PANM may challenge 

the final order in federal court.8

 Any PANM injury would be contingent on future BLM 

decisions, thus demonstrating the lack of finality in this case.9

III 

 For the foregoing reasons, we AFFIRM the district court’s determination that it 

 8

 PANM also contends that if the BLM grants the APDs, the case may become 

moot if PANM is unable to obtain an order enjoining the BLM’s approval. That the case 

may become moot in the future due to the hypothetical actions of the agency and another 

court, however, does not bear on the question of whether the Safety Ruling is final 

agency action. 

9

 PANM also asserts that the Mineral Leasing Act’s ninety-day statute of 

limitations demonstrates that the IBLA opinion completes an agency decision-making 

process. See 30 U.S.C. § 226-2. However, that statute applies only to “final decision[s] 

of the Secretary.” Id. Thus, the statute has no bearing on the question of finality—

PANM would only have to file a challenge to the Safety Ruling within ninety days of the 

IBLA opinion if it constituted a final agency decision regarding an oil and gas lease. 

Because we have concluded that neither the Safety Ruling nor the IBLA opinion 

constitutes a final agency decision, § 226-2’s deadline does not apply. 

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 11 
- 12 - 

lacks subject matter jurisdiction to review the IBLA’s order remanding the APDs to the 

BLM. 

ENTERED FOR THE COURT 

Carlos F. Lucero 

Circuit Judge 

Appellate Case: 08-2260 Document: 01018376192 Date Filed: 03/02/2010 Page: 12