Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-00-05218/USCOURTS-caDC-00-05218-0/pdf.json

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

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 8, 2001 Decided June 19, 2001

No. 00-5218

Murphy Exploration and Production Company,

Appellant

v.

United States Department of the Interior and

Gale A. Norton,

Appellees

Appeal from the United States District Court

for the District of Columbia

(No. 99cv00570)

Stephen M. McNabb argued the cause for appellant. With

him on the briefs was L. Poe Leggette.

Ronald M. Spritzer, Attorney, U.S. Department of Justice,

argued the cause for appellees. With him on the brief were

Lois J. Schiffer, Assistant Attorney General, and Jeffrey

Dobbins, Attorney.

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Before: Ginsburg, Sentelle and Rogers, Circuit Judges.

Opinion for the Court filed by Circuit Judge Sentelle.

Dissenting opinion filed by Circuit Judge Rogers.

Sentelle, Circuit Judge: Murphy Exploration and Production Co. ("Murphy") appeals the District Court's dismissal, for

lack of jurisdiction, of its claim that the Department of the

Interior ("DOI") failed to reimburse it for mining royalty

overpayments. Murphy's lawsuit invokes the Federal Oil and

Gas Royalty Simplification and Fairness Act ("FOGRSFA"),

which confers jurisdiction on courts to consider challenges to

"administrative proceedings" that the agency fails to resolve

within 33 months after they are commenced. Murphy proposes that it commenced such an "administrative proceeding"

when it submitted a refund request to DOI. Because we

conclude that FOGRSFA's 33-month deadline period begins

to run when a party submits a refund request, we hold that

the district court erroneously concluded that it lacked jurisdiction to hear Murphy's claim.

I. BACKGROUND

Several acts of Congress confer on DOI the authority to

issue leases to mining companies that wish to extract minerals from lands administered by the federal government. See,

e.g., the Mineral Leasing Act, 30 U.S.C. s 181 et seq., the

Mineral Leasing Act for Acquired Lands, 30 U.S.C. s 351 et

seq., and the Outer Continental Shelf Lands Act, 43 U.S.C.

s 1331 et seq. As a condition of their leases, lessees must

pay the government royalties based on the value of the

minerals they produce.

In response to a series of court decisions between 1988 and

1998, DOI's Minerals Management Service ("MMS") altered

the method it uses to calculate the royalties that producers

must pay when they extract gas from its lands. See Diamond Shamrock Exploration Co. v. Hodel, 853 F.2d 1159 (5th

Cir. 1988); Independent Petroleum Ass'n of Am. v. Babbitt,

92 F.3d 1248 (D.C. Cir. 1996); In re Century Offshore Mgmt.

Corp., 111 F.3d 443 (6th Cir. 1997). Royalties now are based

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on a company's "gross proceeds." A gas producer's "gross

proceeds" include "buydowns" (moneys paid by a purchaser

to reduce the price at which gas covered by an initial contract

will be sold in the future), but do not include "buyouts"

(payments by a gas purchaser to terminate a contract), or

"take-or-pay payments" (payments a purchaser is obliged to

make even if it does not take the gas it contracted to buy).

Mobil Exploration and Producing U.S., Inc., MMS-94-0151-

OCS (1998); Antelope Prod. Co., MMS-96-0068-O&G (1998).

A producer may challenge an MMS order to pay royalties

in two ways. First, it may pursue an administrative appeal.

30 C.F.R. Pt. 290. Second, the producer is entitled to immediate judicial review if the agency fails to resolve the royalties

dispute timely. The latter type of challenge is authorized by

FOGRSFA. Enacted in 1996, FOGRSFA requires DOI's

Secretary to "issue a final decision in any administrative

proceeding, including any administrative proceedings pending

on August 13, 1996, within 33 months from the date such

proceeding was commenced or 33 months from August 13,

1996, whichever is later." 30 U.S.C. s 1724(h)(1). If the

Secretary fails to do so within the allotted time, she "shall be

deemed to have issued a final decision in favor of the Secretary ... and the appellant shall have a right to judicial review

of such deemed final action in accordance with Title 5." Id.

s 1724(h)(2)(B). FOGRSFA further defines "administrative

proceeding" as "any Department of the Interior agency process in which a demand, decision or order issued by the

Secretary ... is subject to appeal or has been appealed." Id.

s 1702(18). In other words, DOI's failure to resolve an

"administrative proceeding" relating to a royalties dispute

within 33 months triggers the right to immediate judicial

review.

In 1999, DOI promulgated regulations interpreting

FOGRSFA's 33-month deadline. 64 Fed. Reg. 26,240 (1999).

As the agency sees it, s 1724(h)'s reference to "any administrative proceedings" includes only administrative appeals--or,

to say the same thing, the 33 months begin to run only when

a party files a notice of appeal with the agency. "For appeals

involving Federal oil and gas leases covered by this new

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provision, DOI has 33 months from the date a proceeding is

commenced to complete all levels of administrative review."

Id. at 26,240 (emphasis added). If DOI fails to "decide the

appeal within 33 months, the appeal is deemed decided for or

against DOI, depending on the type of order and the monetary amount at issue in the appeal." Id. (emphasis added).

FOGRSFA's deadline is not triggered, for example, "on the

date that an MMS order is received by the recipient." Id. at

26,248.

On February 3, 1989, Murphy--a producer that holds oil

and gas leases on a number of DOI-administered lands--

submitted a refund request claiming that the agency owed it

some $4.1 million for past royalty overcharges. Murphy's

claim was not resolved for nearly ten years. On November 3,

1998, MMS issued an order instructing Murphy to pay it

nearly $368,000 in outstanding royalties. The agency determined that Murphy had overpaid by nearly $990,000 on

certain contracts, but that it owed $1.3 million in royalties on

certain others. Murphy appealed administratively on December 4, 1998.

On March 5, 1999, with its administrative appeal still

pending, Murphy challenged the November 3 order in the

United States District Court for the District of Columbia.

Murphy's lawsuit cited FOGRSFA for the proposition that

DOI's failure to resolve timely its refund request was a final

agency action entitling it to immediate judicial review. Because, Murphy argued, its refund request set in motion an

"agency process" that could result in the Secretary issuing "a

demand, decision or order" that "is subject to appeal," 30

U.S.C. s 1702(18), it therefore was an "administrative proceeding" within the meaning of FOGRSFA. And because its

request had been pending for more than 33 months when the

statute was enacted, the company was entitled to immediate

judicial review. Murphy also argued that, even assuming the

validity of DOI's interpretation of the statute, it was entitled

to immediate judicial review of one portion of its refund

request--a December 1993 DOI order that it had appealed

and that the agency later rescinded. Finally, Murphy argued

that, quite apart from FOGRSFA, the expiration of nearly ten

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years from the filing of its refund request to DOI's November

1998 order constituted an unreasonable delay under Telecommunications Research & Action Center v. FCC, 750 F.2d 70

(D.C. Cir. 1984).

The district court on January 27, 2000 dismissed Murphy's

suit for lack of jurisdiction, on the grounds that FOGRSFA's

33-month deadline had not yet expired. Murphy Exploration & Prod. Co. v. Dep't of the Interior, No. 99-570 (D.D.C.

Jan. 27, 2000). The court analyzed the statute according to

the two-step framework established in Chevron U.S.A. Inc. v.

NRDC, 467 U.S. 837 (1984). At step one, the court found

FOGRSFA to be ambiguous on the question whether a refund

request (or any other proceeding that is not an appeal) is one

of the "any administrative proceedings" that triggers the

statute's 33-month deadline. Because "Congress cannot be

said to have spoken directly to the specific issue at hand," the

court proceeded to step two and deferred to DOI's interpretation that FOGRSFA's 33-month period applies only to administrative appeals. Murphy Exploration, slip op. at 13. The

court also rejected Murphy's alternative claim that the passage of ten years since it filed its refund request was an

unreasonable delay, and hence a reviewable action: "[w]hile

the ten-year delay in this case is indeed worrisome, it does

not constitute final agency action." Id. at 10.

II. ANALYSIS

A. Procedural issues

DOI identifies two procedural hurdles which it contends

prevent this Court from considering Murphy's argument that

the district court had jurisdiction to hear its suit. Both are

easily cleared. The agency first claims that Murphy did not

preserve this issue for appeal since its complaint did not

expressly dispute the lawfulness of DOI's regulations. In

fact, Murphy's claim that the district court had jurisdiction is

properly before us. The complaint's failure to specifically

attack the regulations is irrelevant, since Murphy's suit was

not a facial challenge. Rather, the company sought an order

to compel DOI to refund what it claimed were royalties

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overpayments. It was not until the agency challenged the

district court's jurisdiction--on the grounds that FOGRSFA's

33-month deadline had not yet expired--that the validity of

the regulations became an issue. In response to DOI's

motion to dismiss, Murphy explained its view that, agency

regulations notwithstanding, FOGRSFA gives it the right to

immediate judicial review. Murphy therefore has preserved

this issue for appeal.

DOI further proposes that Murphy waived its challenge to

the agency's interpretation of FOGRSFA because it did not

advance that view during the rulemaking process. To be

sure, in Ohio v. EPA, 997 F.2d 1520 (D.C. Cir. 1993), we

declined to consider an argument that the parties had waived

"by failing to raise it during rulemaking proceedings before

the agency." Id. at 1528. But Ohio is distinguishable. In

that case, the parties had participated in the promulgation of

an EPA rule that they then judicially challenged. Because

they had taken part in that prior proceeding, it made sense to

speak of "the States' failure to raise [their argument] below."

Id. By contrast, the record here does not reveal that Murphy participated in the rulemaking that produced DOI's

regulations. Because Murphy had no role in the rulemaking,

it cannot be said to have "waived" its argument by failing to

advance it during those proceedings.

B. Chevron and the Standard of Review

The basic issue in this case is one of statutory construction.

Does FOGRSFA's definition of "any administrative proceeding," the commencement of which triggers the statute's 33-

month deadline, embrace the filing of a refund request? Or

is "any administrative proceeding" limited to administrative

appeals? Because our task is to measure DOI's regulations

against FOGRSFA's text, this case might seem to be an

appropriate one for analysis under the rubric of Chevron.

Under Chevron, a court must first determine "whether Congress has directly spoken to the precise question at issue."

467 U.S. at 842. If so, that "is the end of the matter; for the

court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Id. at 842-43. If

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not--that is, if "the statute is silent or ambiguous with

respect to the specific issue"--we will defer to "a reasonable

interpretation made by the administrator of an agency." Id.

at 843, 844.

We conclude, however, that Chevron deference is inappropriate in this case. Chevron does not apply to statutes that,

like s 1724(h), confer jurisdiction on the federal courts. It is

well established that "[i]nterpreting statutes granting jurisdiction to Article III courts is exclusively the province of the

courts." Ramey v. Bowsher, 9 F.3d 133, 136 n.7 (D.C. Cir.

1993); see also Reeb v. Economic Opportunity Atlanta, Inc.,

516 F.2d 924, 926 (5th Cir. 1975) ("The courts, however, have

to make their own determination whether the district court

has jurisdiction, rather than defer to the [agency] in the first

instance."); cf. Crandon v. United States, 494 U.S. 152, 177

(1990) (Scalia, J., concurring in the judgment) (arguing that

Chevron deference is inapplicable to criminal statutes, which

are "not administered by any agency but by the courts"). As

the Supreme Court has explained, when Congress has "established an enforcement scheme" that gives a party "direct

recourse to federal court," it is "inappropriate to consult

executive interpretations of [the jurisdiction-conferring statute] to resolve ambiguities surrounding the scope of [the

party's] judicially enforceable remedy." Adams Fruit Co.,

Inc. v. Barrett, 494 U.S. 638, 650 (1990).

A principal reason why courts pay agencies no deference on

jurisdiction-conferring statutes is that such statutes do not

grant powers to agencies. As the Supreme Court has explained, "a congressional delegation of administrative authority" is a "precondition to deference under Chevron." Id. at

649. Unless the agency is the recipient of congressionally

delegated power, there is no reason to defer to its interpretations of the statute that does the delegating. The typical

Chevron case involves Congress extending an administrative

power to an agency--for instance, an act that grants DOI the

authority to administer federally owned lands, or a statute

empowering the Environmental Protection Agency to regulate nitrogen-oxide emissions. A jurisdiction-conferring statute, by contrast, grants judicial power to the courts--namely

the power to hear certain cases or controversies. Because

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jurisdiction-conferring statutes do not delegate authority to

administrative agencies, courts do not extend Chevron deference to an agency's construction of them.

It is true that the statute before us contemplates a regulatory role for the agency. However, the implicit delegation of

duties concerning the regulations for administrative appeals

is limited to precisely that subject and does not extend by its

terms or placement to any implication of authority to the

agency to "regulate the scope of the judicial power vested by

the statute." Id. at 650. As Justice Marshall wrote in

Adams Fruit, the fact that "Congress envisioned ... a role

for [an administrative agency] in administering [a] statute,"

by itself "does not empower the Secretary to regulate the

scope of the judicial power vested by the statute." Id. Just

so here. The fact that an agency has made a determination

such as the establishment of regulations governing administrative appeals, does not empower it to " 'bootstrap itself in

an area in which it has no jurisdiction,' " id. (quoting Federal

Maritime Comm'n v. Three Train Lines, Inc., 411 U.S. 726,

745 (1973) (specifically the grant of jurisdiction to the

courts)).

Moreover, administrative agencies have no particular expertise in determining the scope of an Article III court's

jurisdiction. Of course, "practical agency expertise is one of

the principal justifications behind Chevron deference." Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 651-52

(1990). Absent congressional delegation, if an agency has

promulgated a regulation outside the scope of its specialized

knowledge, courts will not defer to it. See, e.g., Professional

Reactor Operator Soc'y v. NRC, 939 F.2d 1047, 1051 (D.C.

Cir. 1991) (affording no Chevron deference to agency interpretations of statutes "outside the agency's particular expertise and special charge to administer"). It goes without

saying that the jurisdiction of the federal courts is outside

agencies' expertise. See, e.g., Florida Manufactured Hous.

Ass'n, Inc. v. Cisneros, 53 F.3d 1565, 1574 n.2 (11th Cir.

1995); Ramey, 9 F.3d at 136 n.7 (explaining that "agencies

can bring no particular expertise to the subject"). Our

holding that DOI's interpretation of FOGRSFA's 33-month

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deadline is entitled to no deference thus is but a specific

application of the general principle that an agency's regulations deserve no deference where they proceed neither from a

congressional delegation nor from agency expertise.

The inapplicability of Chevron to jurisdiction-conferring

statutes is also informed by a federal court's obligation to

consider sua sponte its jurisdiction to hear a case. See, e.g.,

Citizens for Abatement of Aircraft Noise, Inc. v. Metropolitan Wash. Airports Auth., 917 F.2d 48, 53 (D.C. Cir. 1990)

("[I]t is well established that a court of appeals must first

satisfy itself of its own jurisdiction, sua sponte if necessary,

before proceeding to the merits."), aff'd, 501 U.S. 252 (1991).

Courts have an obligation to examine the source of their own

power. In the same way that a court must determine for

itself that it has the jurisdiction to hear a dispute, even if the

parties have so stipulated, a court must determine the scope

of a congressional conferral of jurisdiction without consulting

the views of an agency. Put another way, neither the parties

to a private action nor an administrative agency may dictate

the scope of an Article III court's jurisdiction.

C. Jurisdiction under FOGRSFA

Because we conclude that the Chevron framework is inapplicable to FOGRSFA's conferral of jurisdiction on the federal courts, we must decide, as an original matter, whether the

district court had jurisdiction to hear Murphy's lawsuit. The

outcome depends on what the meaning of the words "any

administrative proceeding" is. More precisely, we must consider whether a refund request falls within the statute's

definition of "any administrative proceeding"--in other words,

whether FOGRSFA's 33-month deadline begins to run when

a party files a request for a refund. We hold that it does.

As always, in interpreting a statute, we begin with the text

of the statute itself. Carter v. United States, 120 S. Ct. 2159,

2170 (2000) ("In analyzing a statute, we begin by examining

the text."). As noted above, 30 U.S.C. s 1724(h)(1) obliges

DOI's Secretary to "issue a final decision in any administrative proceeding, including any administrative proceedings

pending on August 13, 1996, within 33 months from the date

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such proceeding was commenced or 33 months from August

13, 1996, whichever is later." If she fails to do so, FOGRSFA

establishes that she "shall be deemed to have issued a final

decision in favor of the Secretary ... and the appellant shall

have a right to judicial review of such deemed final action in

accordance with Title 5." Id. s 1724(h)(2). The statute

further defines "administrative proceeding" as "any Department of the Interior agency process in which a demand,

decision or order issued by the Secretary ... is subject to

appeal or has been appealed." Id. s 1702(18).

We conclude that Murphy's request that DOI refund its

royalty overpayments triggered an "administrative proceeding" within the meaning of s 1702(18). FOGRSFA makes

clear that a private party's refund request is a type of

"demand." A "demand" is "a separate written request by a

lessee ... which asserts an obligation due the lessee ... that

provides a reasonable basis to conclude that the obligation in

the amount of the demand is due and owing." Id.

s 1702(23)(B). Because Murphy's refund request "assert[ed]

an obligation" on the part of DOI to compensate it for past

royalty overpayments, it was a "demand" for the purposes of

FOGRSFA's 33-month deadline. And, because Murphy's

"demand" set in motion an "agency process" that could

culminate in a DOI order that would be "subject to appeal," it

triggered an "administrative proceeding."

Moreover, FOGRSFA contemplates that both DOI and

private parties are capable of making "demands." See id.

s 1702(23)(A) (defining DOI-issued "demands"); id.

s 1702(23)(B) (defining private-party-issued "demands"). To

be sure, the statute defines "administrative proceeding" to

include "a demand, decision or order issued by the Secretary."

Id. s 1702(18) (emphasis added). The placement of "issued

by the Secretary" arguably implies that the italicized phrase

modifies "demand," "decision," and "order." On this interpretation, a private party's "demand" does not, simply by

virtue of being a "demand," set in motion an "administrative

proceeding." Rather, an "administrative proceeding" can be

triggered only by a particular type of "demand"--viz., one

that has been "issued by the Secretary."

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This strikes us as an implausible reading. If s 1702(18)'s

reference to "demand" is read to denote only that class of

"demands" that have been issued by DOI's Secretary, then

the term is entirely redundant. This is so because all DOIissued "demands" are also "orders." Id. s 1702(23)(A) (defining "demand" to include only a request by a lessee or "an

order to pay issued by the Secretary ... to a lessee"). The

fact that "demand" and "order" are separately enumerated

suggests that Congress viewed them as separate categories.

See Gustafson v. Alloyd Co., 513 U.S. 561, 574 (1995) (instructing courts to "avoid a reading [of statutory language]

which renders some words altogether redundant"); Parker v.

Califano, 561 F.2d 320, 325 (D.C. Cir. 1977) (invoking "the

familiar principle that statutory language should be construed

so as to avoid redundancy"). We will not assume that

Congress intended the definition of "demand" to be perfectly

coextensive with "order." Rather, we conclude that "demand" includes both orders to pay issued by DOI, and refund

requests submitted by private parties. Either is sufficient to

set in motion an "administrative proceeding" within the meaning of s 1702(18)--and, hence, to trigger FOGRSFA's 33-

month deadline.

DOI's interpretation of "administrative proceeding" is an

unconvincing one for the additional reason that it reads

"subject to appeal" out of the statute. FOGRSFA expressly

defines as an "administrative proceeding" a "demand, decision, or order" that either "has been appealed" or "is subject

to appeal." 30 U.S.C. s 1702(18) (emphasis added). But as

DOI sees it, "administrative proceeding" refers only to an

order that has been appealed, not to an order that could be

appealed. 64 Fed. Reg. 26,240, 26,240 (1999) (stating that

"DOI has 33 months from the date a proceeding is commenced to complete all levels of administrative review" (emphasis added)). Of course, when "construing a statute we are

obliged to give effect, if possible, to every word Congress

used." Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979).

DOI's reading, under which "subject to appeal" lacks any

force, contradicts the "endlessly reiterated principle of statutory construction ... that all words in a statute are to be

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assigned meaning, and that nothing therein is to be construed

as surplusage." Qi-Zhuo v. Meissner, 70 F.3d 136, 139 (D.C.

Cir. 1995); see also Halverson v. Slater, 129 F.3d 180, 185

(D.C. Cir. 1997) (invoking "the familiar doctrine that the

Congress cannot be presumed to do a futile thing").

Nor is it significant that s 1724(h) is entitled "appeals and

final agency action." It is true, as DOI argues, that "the title

of a statute and the heading of a section are tools available for

the resolution of a doubt about the meaning of a statute."

Almendarez-Torres v. United States, 523 U.S. 224, 234 (1998)

(internal quotation and citation omitted). But as

Almendarez-Torres makes plain, a section's title is a useful

device only where its "meaning" is in "doubt." "For interpretative purposes, [it is] of use only when [it] shed[s] light on

some ambiguous word or phrase." Pennsylvania Dep't of

Corrs. v. Yeskey, 524 U.S. 206, 212 (1998) (citation omitted).

When a statute is unambiguous, its title cannot be used to

"limit the plain meaning of the text." Id. And as we have

explained, FOGRSFA's definition of "administrative proceeding" is plain: The category "administrative proceeding" includes a private party's "demand," which in turn includes a

refund request.

Even if we accept DOI's invitation to consult s 1724(h)'s

title, the fact that it speaks of "appeals" does not compel the

conclusion that "final agency action" cannot obtain unless a

party has filed an administrative appeal. For in addition to

"appeals," s 1724(h)'s title also includes "final agency action."

The subsection performs two functions: It both states that

DOI's orders are subject to administrative appeal, and defines when final agency action occurs. It does not imply that

an "appeal" is a sine qua non without which "final agency

action" cannot exist.

Nothing in our dissenting colleague's extended discussion

of the canon of the last antecedent disturbs our conclusion

that the statutory phrase "issued by the Secretary" does not

modify "demand." If anything, it supports that conclusion.

Under that canon, as the dissent reminds us, a subsequent

modifying phrase "refer[s] solely to the last antecedent, which

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consists of the last word, phrase, or clause...." Dissent at 2

(quoting 2A Norman Singer, Statutes and Statutory Construction s 47:33 (6th ed. 2000)). But that same source

confirms that a subsequent phrase may modify an antecedent

"phrase," "clause," or "word." Therefore, there is no reason

to conclude that "issued by the Secretary" modifies the entire

preceding phrase ("demand, decision, or order"), as opposed

to the preceding word ("order"). Indeed, the rule as easily

supports our conclusion that "issued by the Secretary" does

not modify the comparatively remote word "demand" as the

dissent's conclusion that "issued by the Secretary" modifies

the phrase "demand, decision, or order." The rule of the last

antecedent may be sound "grammar," Dissent at 1, 3, but it

does not dispose of this case.

We conclude that Murphy's February 3, 1989 refund request set in motion an "administrative proceeding" within the

meaning of FOGRSFA. Because Murphy's request was

pending far longer than 33 months when the statute became

effective on August 16, 1996, DOI's failure to resolve it is

deemed a "final decision" that triggered a right to immediate

judicial review. The district court therefore erred when it

concluded that it lacked jurisdiction to hear Murphy's lawsuit.

D. Miscellany

Because we hold that the district court had jurisdiction

under FOGRSFA, we need not reach Murphy's alternative

argument that the delay between the filing of the refund

request and the November 1998 order--which the district

court described as "indeed worrisome" but not "final agency

action"--triggered a right to judicial review under Telecommunications Research & Action Center v. FCC, 750 F.2d 70

(D.C. Cir. 1984). Because we conclude that the entirety of

Murphy's refund request was within the district court's jurisdiction, we need not address Murphy's alternative claim that

the court had jurisdiction over one specific portion: its challenge to DOI's December 1993 order.

III. CONCLUSION

Chevron deference is inappropriate in this case because

FOGRSFA's conferral of jurisdiction is a grant of power to

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the federal courts, not to an administrative agency. Applying

de novo review, we conclude that a refund request is an

"administrative proceeding" within the meaning of

FOGRSFA. In other words, the statute's 33-month deadline

begins to run when a party submits a refund request. The

district court therefore had jurisdiction to hear Murphy's

challenge to DOI's November 1998 order, and we reverse its

dismissal of Murphy's lawsuit.

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Rogers, Circuit Judge, dissenting: In dismissing the complaint for lack of jurisdiction, the district court observed that

the 10-year delay by the Department of the Interior ("DOI")

in addressing the refund request of appellant Murphy Exploration and Production Co. ("Murphy") was "worrisome."

However worrisome that delay may be, the only question for

this court is whether Congress provided in the Federal Oil

and Gas Royalty Simplification and Fairness Act the relief

that Murphy claims entitles it to review in the federal district

court. Because the statutory text, structure, and legislative

history demonstrate that Congress intended for the statute to

shorten only delays in the agency administrative process

following initial action by DOI, and because the court's contrary interpretation robs the statute of its logical and natural

meaning, I dissent.

At the heart of my disagreement with the court is the term

"administrative proceeding," which is defined in the statute as

"any Department of the Interior agency process in which a

demand, decision, or order issued by the Secretary ... is

subject to appeal or has been appealed." 30 U.S.C.

s 1702(18) (emphasis added). The court correctly reasons

that "a private party's refund request is a type of 'demand.' "

Opinion at 10. However, the court then curiously states that

it is merely arguable that the phrase "issued by the Secretary" that it modifies "demand," "decision," and "order." See

opinion at 10.

This point does not seem arguable because basic "rules of

grammar apply in statutory construction." Anhydrides &

Chemicals, Inc. v. United States, 130 F.3d 1481, 1483 (Fed.

Cir. 1997). Specifically, the rule of the last antecedent applies here, and the court has observed that it is "one of the

simplest canons of statutory construction." United States v.

Pritchett, 470 F.2d 455, 459 n.9 (D.C. Cir. 1972). As defined

by the court, the rule states: "Ordinarily, qualifying phrases

are to be applied to the words or phrase immediately preceding and are not to be construed as extending to others more

remote. This ... is not an inflexible rule, and is not applied

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where the context indicates otherwise." Id. at 459 (footnote

omitted). A treatise definition of the rule is similar: "Referential and qualifying words and phrases, where no contrary

intention appears, refer solely to the last antecedent [, which

consists of] the last word, phrase, or clause that can be made

an antecedent without impairing the meaning of the sentence." Norman Singer, 2A Statutes and Statutory Construction s 47:33 (6th ed. 2000) (footnote and internal quotation

marks omitted).

The rule of the last antecedent compels the conclusion that

"issued by the Secretary" modifies "demand," "decision," and

"order." This is the most natural reading of the statute

because these three nouns are similar, are placed next to each

other, and are all capable of being modified by "issued by the

Secretary." Ordinarily, adjectival modifiers are placed closest to the nouns they modify, and to avoid ambiguity or

confusion, nouns that are not modified are set apart from

nouns that are modified. Congress would have drafted the

statute differently if it had intended to convey the meaning

that the court finds. Cf. Gustafson v. Alloyd Co. Inc., 513

U.S. 561, 575 (1995). If Congress had not intended for

"issued by the Secretary" to modify all three nouns, "Congress with ease could have drafted [s 1702(18)] to read"1:

"any agency process in which a decision or order issued by

the Secretary, or a demand, is subject to appeal." Thus, the

most plausible conclusion is that Congress meant for "issued

by the Secretary" to modify "demand."

The court suggests that because an antecedent is sometimes a single "word" instead of a "phrase," the rule supports

the conclusion that "issued by the Secretary" only modifies

the word "order." See opinion at 13.2 This application of the

rule guts it of all practical meaning. How are we to determine if the relevant antecedent is just a single word, or if it is

a larger phrase? The rule itself provides guidance, as it

__________

1 Id.

2 In quoting the rule of the last antecedent, the court omits in

its ellipsis key language, namely, "the last word, phrase, or clause

that can be made an antecedent without impairing the meaning of

the sentence." See opinion at 13 (omitting italicized language).

encourages us to extend the reach of the modifying phrase as

far as is possible "without impairing the meaning of the

sentence." The Supreme Court has also provided useful

advice: "When several words are followed by a clause which

is applicable as much to the first and other words as to the

last, the natural construction of the language demands that

the clause be read as applicable to all." Porto Rico Ry.,

Light & Power Co. v. Mor, 253 U.S. 345, 348 (1920). Furthermore, the court's application of the rule is in conflict with

cases like Pritchett, which make clear that the rule does not

endorse parsing antecedent clauses to limit the meaning of a

modifying phrase to a single word. In Pritchett, this court

considered a statute that referred to "members of the Army,

Navy, or Marine Corps of the United States or of the

National Guard or Organized Reserves when on duty."

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strued the modifying phrase "when on duty" to apply to all of

the service members listed, not just members of the Reserves. See id. at 459-61. Thus, the court has misapplied

the rule.

Not only has the court failed to point to any reason why the

ordinary rule of the last antecedent does not apply, the court

fails to identify any contextual clues in the statutory language

indicating that "demand" should be considered separately

from "decision" and "order." Instead, the court relies on

another canon of statutory interpretation, in effect asserting

that the natural reading of the statute is implausible because

it makes the term "demand" redundant. The court's approach is flawed for two reasons. First, although statutory

interpretation should proceed in a manner that avoids redundancy, see Gustafson, 513 U.S. at 574, this principle is not a

license to ignore fundamental principles of grammar. The

court points to no authority suggesting that an antecedent

clause can be parsed in such an unnatural manner, or that

grammar rules can be suspended to avoid redundancy. Second, the court's reading does not really avoid redundancy in

the statutory language; it just creates a different kind of

redundancy. If the phrase "issued by the Secretary" modifies only "order" (or if it modifies both "decision" and "order,"

an even more improbable reading), then it is surplusage

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because, for the purposes of this statute, only the Secretary

(or a delegated State) can issue decisions and orders. See 30

U.S.C. s 1702. The phrase "issued by the Secretary" is

stripped of much of its meaning unless it is construed to

modify "demand."

The type of redundancy that cases like Gustafson warn

against is not at issue here. See opinion at 11. In Gustafson,

a broad definition of the word "communication" threatened

completely to overshadow four other words in a definitional

list ("notice, circular, advertisement, [and] letter"), making

them "altogether redundant." Gustafson, 513 U.S. at 573-74.

Such a broad definition would have made the relevant statute's reach more expansive than Congress intended, and

inconsistent with "the background of what Congress was

attempting to accomplish in enacting [it]." Id. at 575. In

contrast, if "demand" is modified by "issued by the Secretary," the resulting overlap between "demand" and "order" is

far less problematic. Were the court's excessively strict view

of what redundancy means to prevail generally, then other

definitions in s 1702 would also be redundant. For example,

"Indian tribe" is defined to "mean any Indian tribe, band,

nation, pueblo, community, rancheria, colony, or other group

of Indians." 30 U.S.C. s 1702(4). No less than each of these

words, the terms "order" and "demand" overlap, but they also

convey distinct meanings. Congress simply chose to define

the statute's terms using words that do not each possess

mutually exclusive and wholly independent meanings. The

fact that all demands issued by the Secretary are also orders

(although all orders are not necessarily demands) does not

mean that basic grammatical rules should be violated to wring

extra meaning out of the antecedent clause.

The court's reliance on Gustafson is misplaced for another

reason as well. In Gustafson, the Supreme Court cautioned

against "reliance on one word ... in isolation," and stated

that a disputed phrase "must be read in its entirety." Gustafson, 513 U.S. at 574. The Supreme Court refused to pluck

one word out of a list, preferring to read the word in context

so that its meaning would not be unreasonably expanded.

See id. Here, the court divorces "demand" from its natural

and appropriate context when it refuses to apply the phrase

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that modifies it. Other aspects of the statutory language also

help to show that the 33-month deadline cannot be triggered

when a private party files a refund request. Section 1724(h)

repeatedly uses the terms "appeal" and "appellant." For

example, it provides that "[d]emands or orders issued by the

Secretary are subject to administrative appeal," that a private

party's "immediate appeal of an order" should not be hindered, and that "[t]he 33-month period may be extended by

any period of time agreed upon in writing by the Secretary

and the appellant." 30 U.S.C. s 1724(h). These references

to "appeal" and "appellant" establish the context of s 1724(h)

and confirm that it was not meant to limit the time that the

Secretary has to respond initially to refund requests. The

court ignores the statute's repeated use of the terms "appeal"

and "appellant."

The structure of the statute also points to the implausibility

of the court's construction that "issued by the Secretary"

should be read not to modify "demand." Private parties'

demands and refund requests are not subject to administrative appeal in the absence of action by the Secretary. Logically, only demands issued by the Secretary can be appealed;

a private party cannot appeal its own refund request. The

statute provides that "[d]emands or orders issued by the

Secretary or a delegated State are subject to administrative

appeal in accordance with the regulations of the Secretary."

Id. s 1724(h). In this part of the statute, as in s 1702(18),

the phrase "issued by the Secretary" is properly construed to

modify both "demands" and "orders."

It is obvious that a private party's demand can lead to a

DOI order, and that DOI order, in turn, is subject to appeal.

See opinion at 10. However, the court engages in interpretive sleight of hand when it states that "because Murphy's

'demand' set in motion an 'agency process' that could culminate in a DOI order that would be 'subject to appeal,' it

triggered an 'administrative proceeding.' " Opinion at 10. If,

as the court concludes, the term "demand" in the definition of

"administrative proceeding" extends to refund requests, then

under its interpretation the relevant reading of "administrative proceeding" would be "the agency process in which a

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refund request is subject to appeal." But of course a refund

request itself cannot be subject to appeal. Similarly, for

example, even though a tort claim might lead to a judicial

decision that is subject to appeal, it would be odd to characterize a tort claim itself, in the absence of any adjudication, as

"subject to appeal."

Perhaps the court interprets the term "agency process," as

used in s 1702(18), to be so expansive that it is appropriate to

read into the statute the unmentioned, but obviously necessary, step of DOI's order in response to a refund request.

See opinion at 10. Although as a general principle every

word in a statute should be construed to have meaning, see

Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979), in this

context it is implausible to suggest that Congress' use of the

term "agency process" means that a refund request can itself

be considered "subject to appeal" for purposes of triggering

the 33-month time limit. Put otherwise, the agency must act

for the phrase "subject to appeal" to have meaning. The

court's reasoning, however, bootstraps a significant agency

action--an order issued in response to a refund request--into

the meaning of the statute.

In contrast with the court's strained construction, DOI has

proposed a more reasonable way to interpret Congress' reference to "agency process" in conjunction with the phrases "is

subject to appeal" and "has been appealed." The agency

"recognizes that the 33-month deadline was intended to apply

to (1) appeals that were already pending when [the statute]

was enacted, and (2) appeals of future agency demands,

decisions, and orders." Br. for Appellee at 38. The " 'agency

process in which a demand, decision, or order issued by the

Secretary ... has been appealed,' refers to the agency process for resolving those appeals already pending when [the

statute] took effect" on August 13, 1996. Id. Such appeals

must be resolved by May 13, 1999, 33 months after the date

the statute took effect. The statute's reference to an "agency

process in which a demand, decision, or order issued by the

Secretary ... is subject to appeal," simply pertains to the

agency process for resolving appeals of demands, decisions,

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and orders issued by the Secretary after the statute was

enacted. See id.

The legislative history of the statute also supports the

conclusion that a private party's refund request cannot trigger the 33-month deadline. For example, the House Report

generally describes one of the reforms of the new law as

"placing a time limit on administrative appeals." H.R. Rep.

No. 104-667, at 15 (1996), reprinted in 1996 U.S.C.C.A.N.

1442, 1444. More specifically, the House Report describes

the section that was codified as s 1724(h) as "requir[ing] the

Secretary of the Interior to take a final departmental action

on appealed claims within 33 months." Id. at 18, reprinted

in 1996 U.S.C.C.A.N. 1442, 1448 (emphasis added). This is

consistent with the overall goal of s 1724(h) reflecting Congressional intent to make the agency appeals process more

efficient, thus accelerating "the collection of onshore and

offshore oil and gas royalty payments from Federal lands."

Id. at 14, reprinted in 1996 U.S.C.C.A.N. 1442, 1442.

The legislative history underscores the point that Congress

knew exactly how to write a statute to state that filing a

refund request could trigger an "administrative proceeding."

The first Senate version of the bill provided that " 'administrative proceeding' means any agency process for rulemaking,

adjudication or licensing," and that an administrative proceeding could be commenced by "the receipt by the Secretary

of a written request or demand by a lessee." 141 Cong. Rec.

S9517-02, S9539 (1995). This language did not survive in the

final legislation enacted by Congress. The absence of such

clear language in the final legislation enacted into law is fair

notice that the meaning of the statute has changed. Cf.

Booth v. Churner, No. 99-1964, 2001 WL 567712, *4-*5, 121

S. Ct. 1819 (U.S. May 29, 2001). The court nonetheless reads

back into the statute provisions that Congress eliminated.

Based on the plain language, structure, and legislative

history of the statute, therefore, I would hold that for the

purposes of s 1724(h), an administrative proceeding cannot

be commenced when a private party files a refund request.

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Accordingly, I would affirm the dismissal of the complaint for

lack of jurisdiction.3

__________

3 Murphy's other contentions lack merit. First, Murphy suggests that the ten-year delay between the filing of its refund

request and DOI's November 1998 order was unreasonable, and

that under the principles of Telecommunications Research and

Action Center v. FCC, 750 F.2d 70 (D.C. Cir. 1984) ("TRAC"), the

district court should have regarded the 1998 order as final agency

action. However, the remedy for unreasonable agency delay is for

the court to order the agency to expedite its administrative processes and issue a final decision within a time frame set by the court, or

to explain its refusal to act. Murphy did not request such relief,

but sought a substantive determination on the merits. Moreover,

because DOI has acted and the 33-month time period has not

expired, the delay is "worrisome," but not unreasonable under

TRAC. Second, Murphy's challenge to the December 1993 order

fails because its amended complaint does not mention that order.

See Kennecott Utah Copper Corp. v. DOI, 88 F.3d 1191, 1202-03

(D.C. Cir. 1996).

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