PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

_________________________________ 

MARALEX RESOURCES, INC., a 

Colorado corporation; ALEXIS M. 

O'HARE; MARY C. O'HARE, 

 Plaintiffs - Appellants, 

v. 

DAVID BARNHARDT, in his official 

capacity as Acting Secretary of the United 

States Department of the Interior; THE 

UNITED STATES DEPARTMENT OF 

INTERIOR; THE UNITED STATES OF 

AMERICA,

 

 Defendants - Appellees. 

No. 17-1421 

_________________________________ 

Appeal from the United States District Court 

for the District of Colorado 

(D.C. No. 1:15-CV-01893-CMA)

_________________________________ 

William E. Zimsky, Abadie & Schill, PC, Durango, Colorado, appearing for the 

Appellants. 

Tamara N. Rountree, Attorney, Environmental and Natural Resources Division, United 

States Department of Justice, Washington, DC (Jeffrey H. Wood, Acting Assistant 

Attorney General, and Eric Grant, Deputy Assistant Attorney General, United States 

Department of Justice, Washington, DC; William Lazarus and John L. Smeltzer, 

Attorneys, Environmental and Natural Resources Division, United States Department of 

Justice, Washington, DC; and Philip C. Lowe, Rocky Mountain Regional Solicitor’s 

  In accordance with Fed. R. App. P. 43(c)(2), David Barnhardt is substituted 

for Ryan Zinke, as the respondent in this action. 

FILED 

United States Court of Appeals 

Tenth Circuit 

January 18, 2019

Elisabeth A. Shumaker 

Clerk of Court
2 

Office, Department of the Interior, Lakewood, Colorado, with her on the brief), appearing 

for the Appellee. 

_________________________________ 

Before BRISCOE, LUCERO, and MATHESON, Circuit Judges. 

_________________________________ 

BRISCOE, Circuit Judge. 

_________________________________ 

Plaintiffs Maralex Resources, Inc. (Maralex), Alexis O’Hare and Mary C. 

O’Hare (the O’Hares) filed this action against the Secretary of the Department of the 

Interior (Secretary), the Department of the Interior, and the United States seeking 

review of a decision of the Interior Board of Land Appeals (IBLA) upholding four 

Notices of Incidents of Noncompliance that were issued by the Bureau of Land 

Management’s (BLM’s) Tres Rios Field Office to Maralex for failing to allow a 

BLM representative to access certain oil and gas lease sites operated by Maralex on 

land owned by the O’Hares. The district court affirmed the IBLA’s decision. 

Plaintiffs now appeal. 

Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we conclude that the 

BLM, in issuing the Notices of Incidents of Noncompliance, lacked authority to 

require plaintiffs to provide BLM with a key to a lease site on privately-owned land 

or to allow the BLM to install its own locks on the gates to such lease site. 

Consequently, we reverse and remand to the district court with instructions to enter 

judgment in favor of plaintiffs on this “key or lock” issue. 
3 

I 

The Parcel and its component Tracts 

At issue in this case is a 320-acre parcel of land (the Parcel) that is located in 

the S1/2 of Section 35, Township 34 South, Range 7 West in La Plata County in 

southwestern Colorado. The Parcel, which is comprised of 240 acres of private 

surface/mineral estate and 80 acres of Indian surface/mineral estate, lies over the 

Ignacio Blanco gas field and the Fruitland coal formation. 

The O’Hares own the surface and mineral estate in a 120-acre tract of land in 

the SW1/4SE1/4 and E1/2SW1/4 of the Parcel (the O’Hare Tract). The Southern Ute 

Indian Tribe (Tribe) holds the surface and mineral estate in the W1/2SW1/4 of the 

Parcel (the Tribe Tract). The remainder of the Parcel (the Remainder Tract)—the 

N1/2SE1/4 and SE1/4SE1/4—is privately-owned by the O’Hare family, J. Elmer and 

Wanda Lee Kenner, and Irma Rowse. 

The leases of the Tracts 

On June 6, 1974, the Tribe, acting pursuant to the Indian Mineral Leasing Act 

of 1938, 25 U.S.C. §§ 396a-396g (2012), issued to Sun Oil Company an Indian oil 

and gas lease, Mining Lease Contract No. MOO-C-1420-1531, for its mineral estate 

in the Tribe Tract. Amoco Production Company (Amoco) later took over as the 

lessee. 
4 

On April 28, 1995, the O’Hares issued to Maralex1

 a private oil and gas lease 

for the O’Hare Tract. SG Interests III, Ltd. (SG III) later joined Maralex as colessee. 

The O’Hares, Kenners, and Rowse issued three private oil and gas leases 

covering the Remainder Tract. SG III and Maralex became the lessees of those 

leases. 

The Communitization Agreement 

In 1996, all of the parties (SG III, Maralex, the Tribe, the O’Hares, Kenners, 

and Rowe) “communitized” their coal and gas interests in the Parcel under the terms 

of a written agreement. More specifically, in a written Communitization Agreement 

(CA) dated May 1, 1996, the parties agreed to develop and operate the Parcel “as an 

entirety, with the understanding and agreement . . . that all Communitized Substances 

produced therefrom [would] be allocated among the leaseholds comprising said area 

in the proportion that the acreage interest of each leasehold bears to the entire 

acreage interest committed to [the CA].” Aplt. App. at 3. The CA further stated, in 

pertinent part, that “[t]he royalties payable on Communitized Substances allocated to 

the individual leases comprising the [Tract] . . . shall be determined and paid on the 

basis prescribed in each of the individual leases.” Id. 

Two other provisions of the CA are relevant to this case. First, the CA stated: 

“This agreement shall be subject to all applicable Federal and State laws or executive 

 1

 According to the record on appeal, Mary O’Hare is the president of Maralex. 

Aplt. App. at 8. 
5 

orders, rules and regulations . . . .” Id. at 4. In addition, the CA stated: “It is agreed 

between the Parties Hereto that the Secretary of the Interior, or his duly Authorized 

Officer, shall have the right of supervision over all operations within the 

Communitized Area to the extent same includes the oil and gas lease(s) under which 

the . . . Tribe is lessor and insofar as governed by applicable oil and gas regulations 

of the Department of Interior.” Id. at 5. 

The CA was approved by the Tribe and the Bureau of Indian Affairs (BIA) 

effective May 1, 1996. 

The wells operating under the CA 

There are four wells associated with the CA and arising from the underlying 

leases, all of which are operated by Maralex. The four wells are physically situated 

in two areas on the O’Hares’ private surface estate in the O’Hare Tract. Each such 

area is enclosed by a fence and a locked gate. All four of the wells are producing 

“both fee and Tribal minerals” from the Fruitland coal formation. Id. at 32. 

Although the oil and gas at issue is produced from private mineral interests and from 

wells situated on private surface estates, such production is, under the terms of the 

CA, allocated to all of the oil and gas interests, including that of the Tribe, as the 

owner of record title to the mineral estate in the Tribe’s Section of the Parcel. 

BLM’s attempt to inspect the wells 

On February 11, 2013, Gabriel Trujillo, a Petroleum Engineering Technician 

employed by the BLM, sent an email to Maralex stating that he planned to inspect the 

four wells. On February 12, 2013, Christi Reid, a Maralex employee, responded by 
6 

email, noted that the wells were situated “on Mickey O’Hare’s property,” and stated 

that she envisioned “problems with him granting access” to Trujillo. Id. at 18. One 

day later, on February 13, 2013, Reid emailed Trujillo again, stating: “I talked to 

Mickey O’Hare and let him know that you want to inspect the . . . wells. He wants to 

talk to you directly . . . .” Id. 

On February 22, 2013, Trujillo drove to the Parcel in an attempt to examine 

the wells. Upon arrival, Trujillo found that there was a locked gate that prevented 

him from examining the wells. That same day, Trujillo spoke by phone with Mickey 

O’Hare. O’Hare informed Trujillo that he had no right to inspect the wells because 

O’Hare owned both the surface and mineral rights. 

BLM’s issuance of INCs to Maralex 

On February 26, 2013, Trujillo completed four official BLM forms entitled 

“Notice of Incidents of Noncompliance” (INC). Id. at 23. The INCs noted that 

Trujillo had attempted unsuccessfully to access the wells on February 22, 2013. The 

INCs, which were sent to Maralex, alleged that Maralex was in violation of 43 C.F.R. 

§ 3162.1(b), and they gave Maralex until March 25, 2013, to provide Trujillo and the 

BLM with access to the wells. In the “Remarks” section of the INCs, Trujillo stated: 

“For corrective action, I will need a key to access the location or be able to put a 

BLM lock in with it.” Id. at 24. 

Maralex’s administrative appeal of the INCs 

On March 27, 2013, a law firm representing Maralex and the O’Hares sent a 

letter to BLM appealing the four INCs. The letter asserted that the BLM had 
7 

misinterpreted its authority to inspect oil and gas wells located on private land. More 

specifically, the letter asserted that the BLM “ha[d] limited authority to inspect 

facilities on Fee Tracts” and that the applicable regulations “only allow[ed] annual 

inspections” of such wells. Id. at 33. The letter also asserted that “there [wa]s no 

statutory authority nor . . . any legitimate justification for giving the BLM unbridled 

discretion to search the facilities at issue in order to ensure that there [wa]s adequate 

site security measurement and that Maralex [wa]s properly measuring the production 

and operation of the wells.” Id. “Thus,” the letter asserted, “BLM’s request for a 

key to any gates to conduct inspections [wa]s violative of Maralex’s constitutionally 

guaranteed protection against unreasonable searches under the Fourth Amendment.” 

Id. Lastly, the letter asserted that “there [wa]s no legal authority for the BLM’s 

demand for unfettered access to the O’Hare’s surface.” Id. And the letter argued that 

“[i]f the BLM was entitled to unfettered right to access O’Hare’s property under 

Section 3162.1(b), it would constitute a regulatory taking of O’Hare’s property in 

violation of O’Hare’s property rights as guarantee [sic] by the takings clause of the 

Fifth Amendment.” Id. at 34. 

On April 10, 2013, the BLM notified Maralex’s counsel that it was treating the 

March 27, 2013 letter “as a request for State Director’s review (SDR) . . . under 43 

CFR 3165.3.” Id. at 88. 

On July 9, 2013, the BLM’s Deputy State Director, Energy, Lands, and 

Minerals, Colorado State Office, sent a letter to Maralex’s counsel responding to 

each point raised by Maralex’s counsel. The letter disagreed that the applicable 
8 

regulations allowed only for “annual inspections for fee tracts in a CA.” Id. at 90. 

Rather, the letter asserted, the “inspected annually” language in the regulation merely 

established a minimum standard as to what was to be accomplished. Id. As for its 

authority to conduct inspections of the wells, the BLM noted that 

Section 101(b) of the Federal Oil and Gas Royalty Management Act of 

1982 (FOGRMA) provides that, “Authorized and properly identified 

representatives of the Secretary may without advance notice, enter 

upon, travel across and inspect lease sites on Federal or Indian lands 

and may obtain from the operator immediate access to secured facilities 

on such lease sites, for the purpose of making any inspection or 

investigation for determining whether there is compliance with the 

requirements of the minearal [sic] leasing laws and this Act.” 

Id. at 90-91 (italics in original). The BLM in turn stated that “[s]ince the subject 

wells’ production is subject to a federal CA and the government receives a portion of 

the production’s royalty, the BLM is responsible for assuring production 

accountability” and that “[t]his includes inspections for site security, proper handling, 

measurement and reporting of production and protection against product theft.” Id. at 

91. “Therefore,” the letter stated, “BLM must be allowed to perform the production 

related inspection which necessitates physical access to the subject wells and their 

associated facilities without advance notice.” Id. In a section entitled “Decision,” 

the letter stated: 

Upon review, the four INCs covering denied access to the subject 

wells were properly issued and are upheld. The stay of enforcement 

action granted in our April 10, 2013, letter to Maralex is hereby lifted. 

 

Maralex must provide the BLM Tres Rios Field Office access 

without advance notice as required by the INCs and the regulations. If 

Maralex chooses not to provide access as required, Maralex will be 

subject to assessments pursuant to 43 CFR 3163.1. In addition further 
9 

non-compliance shall result in proposed civil penalties pursuant to 43 

CFR 3163.2(e)(1). 

Id. at 93. 

On August 20, 2013, Maralex’s counsel sent the BLM a notice of appeal of the 

July 9, 2013 decision. Id. at 97. Maralex’s counsel followed that up by filing with 

the IBLA a Statement of Reasons for Appeal. Id. at 98. The Statement of Reasons 

argued that the regulation relied on by the BLM, 43 C.F.R. § 3162.1(b), applies only 

“to Federal and Indian lease sites,” and that “there is no statutory authority to support 

the BLM’s suggestion that it has the right to conduct warrantless searches of 

Maralex’s facilities.” Id. at 113. “Thus,” the Statement of Reasons asserted, “BLM’s 

request violates Maralex’s right not to be subject to unreasonable searches as 

guaranteed by the Fourth Amendment.” Id. Lastly, the Statement of Reasons 

asserted that “if the BLM does have the statutory and regulatory authority to access 

the O’Hare’s Fee Tract at any time, such authority would constitute a regulatory 

taking of the O’Hare’s property in violation of their due process rights under the 

Fifth Amendment.” Id. 

On July 10, 2015, the IBLA issued a written decision affirming the BLM’s 

July 9, 2013 decision. In doing so, the IBLA did not address whether plaintiffs were 

required to provide the BLM with a key or allow the BLM to install its own locks on 

Maralex’s gates, nor did the IBLA address plaintiffs’ constitutional arguments. 

The district court proceedings 
10 

On September 1, 2015, Maralex and the O’Hares initiated these proceedings 

by filing a complaint in federal district court against the Secretary, the Department of 

the Interior, and the United States. The complaint sought reversal of the IBLA’s 

decision, as well as declaratory relief. 

On October 19, 2017, the district court issued an order affirming the IBLA’s 

determination. Plaintiffs now appeal. 

II 

Plaintiffs raise two issues on appeal: (1) whether they waived their argument 

that the BLM lacked authority to require them to provide the BLM with keys to the 

locked gates on the O’Hares’ private property or, alternatively, to allow the BLM to 

place its own locks on those gates; and (2) whether the BLM has statutory or 

regulatory authority to require plaintiffs to provide the BLM with keys to locked 

gates on privately-owned lands or, alternatively, to allow the BLM to place its own 

locks on such gates.2

 As discussed in more detail below, whether plaintiffs waived 

their argument is a close question, but assuming they did, we nevertheless exercise 

discretion to address the underlying issue. We in turn conclude that BLM lacked 

authority to impose the “key or lock” requirement. 

Did plaintiffs waive their argument that the BLM lacked authority 

to require them to provide keys to their locked gates or to allow the 

BLM to place its own locks on those gates?

 2

 Until recently, plaintiffs asserted three additional issues on appeal, including 

Fourth and Fifth Amendment challenges to the inspection protocol advocated by the 

BLM. At oral argument, however, plaintiffs abandoned those issues. Consequently, 

we do not address them. 
11 

As noted, plaintiffs first argue that the district court erred in concluding that 

they waived their argument that the BLM lacked authority to require them to provide 

the BLM with keys to locked gates or to allow the BLM to place its own locks on 

those gates. The district court concluded that plaintiffs “did not present to the IBLA 

this particular argument that the BLM’s corrective action exceeded its authority.” 

Aplt. App. at 207-08. The district court in turn concluded “that Plaintiffs waived this 

argument for purposes of this appeal and [it] decline[d] to consider it.” Id. at 208. 

To resolve this issue, we begin by turning to the record. Plaintiffs, in their 

initial appeal of the INCs, “claim[ed] that BLM ha[d] no statutory authority or 

legitimate justification giving the BLM unbridled discretion to search the subject 

well facilities in order to ensure site security and proper measurement” and that, 

consequently, “the BLM’s request for a key to any gates to conduct inspections [wa]s 

in violation of Maralex’s constitutionally guaranteed protection against unreasonable 

searches under the Fourth Amendment.” Aplt. App. at 90. 

In their appeal to the IBLA from the State Director’s decision denying their 

initial appeal, plaintiffs argued, in pertinent part, that “there [wa]s no statutory 

authority nor . . . any legitimate justification for giving the BLM unbridled discretion 

to search the facilities at issue at any time and without notice,” and that, 

consequently, “BLM’s request for a key to any gates to conduct unannounced 

inspections [wa]s violative of Maralex’s constitutionally guaranteed protection 

against unreasonable searches under the Fourth Amendment.” Id. at 102. Plaintiffs 

further argued that “there [wa]s no statutory support for warrantless, unannounced 
12 

inspections of [the] Fee Tracts,” and thus the BLM could not “rely on” its own 

regulations “for conducting unannounced, warrantless searches of the sites at issue.” 

Id. at 107–08. Plaintiffs also argued that “Paragraph 13” of the CA “does not provide 

the BLM with the unlimited right to conduct inspections without advance notice nor 

does it form the basis for giving the BLM a key to have unlimited physical access to 

the wells and related facilities on Fee Tracts, which is applicable only to Federal and 

Indian lease sites.” Id. at 112. Lastly, the plaintiffs challenged the State Director’s 

rejection of “the O’Hare’s [sic] assertion that forcing them to supply the BLM with a 

key to a lock to allow the BLM to have physical access to their surface property for 

unannounced inspections of Maralex’s wells and related facilities located on the 

O’Hare’s [sic] surface constitute[d] an unauthorized takings under the Fifth 

Amendment.” Id. at 112-13. 

In our view, it is a close question whether plaintiffs presented their argument 

to the IBLA that BLM exceeded its statutory and regulatory authority by requiring a 

key or lock in the INCs. On the one hand, plaintiffs clearly argued, as part of their 

Fourth Amendment challenge, that the BLM lacked both statutory and regulatory 

authority to impose the key/lock requirement. On the other hand, plaintiffs expressly 

asserted before the IBLA that it lacked authority to address their Fourth Amendment 

challenge and they asked the IBLA not to consider it. 

Even assuming, however, that plaintiffs failed to properly present to the IBLA 

their argument that the key/lock requirement exceeded the BLM’s statutory and 

regulatory authority, we nevertheless choose to exercise our discretion to address that 
13 

issue.3

 See U.S. Nat’l Bank of Oregon v. Indep. Ins. Agents of Am., Inc., 508 U.S. 

439, 447–48 (1993) (discussing authority of appellate court to address potentially 

waived issue). We have held, albeit in a slightly different context, that we may 

depart from general waiver principles “particularly when we are presented with a 

strictly legal question, the proper resolution of which is beyond doubt or when 

manifest injustice would otherwise result.” Daigle v. Shell Oil Co., 972 F.2d 1527, 

1539 (10th Cir. 1992). Further, in considering whether to address an alternative 

theory, we take into account (1) “whether the ground was fully briefed and argued 

here and below,” (2) “whether the parties have had a fair opportunity to develop the 

factual record,” and (3) “whether, in light of factual findings to which we defer or 

uncontested facts, our decision would involve only questions of law.” Elkins v. 

Comfort, 392 F.3d 1159, 1162 (10th Cir. 2004) (citations omitted). 

In this case, the issue of the BLM’s statutory and regulatory authority has been 

fully briefed and argued in this court by both sides. Further, the factual record is 

essentially undisputed and, thus, we are presented with only a question of law. 

Lastly, and perhaps most importantly, the BLM has indicated its intention to enforce 

the key/lock requirement at the conclusion of this litigation. On October 22, 2018, 

 3

 We are not aware of, nor has the BLM cited to, any authority holding that 

preservation of the issue before the IBLA is a jurisdictional prerequisite. See Air 

Courier Conference of Am. v. Am. Postal Workers Union AFL-CIO, 498 U.S. 517, 

523 n.3 (1991) (“The judicial review provisions of the APA are not jurisdictional . . . 

.”); Chissoe v. Zinke, 725 F. App’x 614, 621 (10th Cir. 2018) (stating that “judicial 

exhaustion requirements under the APA are prudential only.”); Vietnam Veterans of 

Am. v. Shinseki, 599 F.3d 654, 661 (D.C. Cir. 2010) (“We think the proposition that 

the review provisions of the APA are not jurisdictional is now firmly established.”). 
14 

we issued an order to show cause directing the parties to address, in pertinent part, 

the question of whether the BLM was continuing to require Maralex to provide the 

BLM with a key to the lock on the O’Hares’ gate or to allow the BLM to place its 

own lock on the gate. On December 18, 2018, defendants responded that, indeed, 

“BLM continues to require Maralex to either provide the agency with a key to the 

lock on the O’Hares’ gate or allow BLM to place its own lock on the gate.” Aple. 

Resp. to Order to Show Cause at 2. Defendants asserted that, “[i]n the absence of 

compliance with the [key/lock requirement] in the INCs, Mr. O’Hare may refuse 

BLM access to the wells at any time, as he did in February 2013 (which led to BLM’s 

issuance of the INCs).” Id. at 3. Thus, despite the fact that the INCs were issued 

nearly six years ago, it is clear that the BLM intends to enforce the key/lock 

requirement once this litigation ends. For this reason, we conclude that the interests 

of justice are best served if we address the merits of plaintiffs’ argument that BLM 

lacks statutory and regulatory authority to impose the key/lock requirement. 

Does the BLM have authority to require a landowner or operator 

to provide the BLM with keys to the landowner’s locked gates or allow 

the BLM to place its own locks on the landowner’s gates?

We now turn to the merits of plaintiffs’ argument. Plaintiffs assert that, even 

assuming some statutory or regulatory authority exists for the BLM to conduct 

inspections on fee lands without advanced notice, “there are limits to such 

inspections.” Aplt. Br. at 40. Plaintiffs point to the language of 30 U.S.C. § 1718 to 

support their position. Section 1718, plaintiffs note, “limits the right to enter upon, 

travel across and inspect lease sites to not only ‘authorized’ representatives of the 
15 

Secretary, but to representatives that are ‘properly identified.’” Id. And, plaintiffs 

argue, “[b]ecause the landowner and the operator have the right to ensure that the 

representative is properly identified, the BLM cannot force either the landowner or 

the operator to provide a key to the landowner’s locked gates or be forced to allow 

the BLM to place a lock on the landowner’s locked gates since by doing so neither 

the landowner nor operator will be able to check the identification of the person(s) 

entering upon, travelling across, and/or inspecting the facilities.” Id. at 40-41. 

Lastly, plaintiffs argue that “[a]ll that is required of the operator under Section 

1718(b) is to provide ‘immediate access to secured facilities’ to a properly identified 

representative of the Secretary.” Id. at 41. This means, plaintiffs argue, that “if the 

operator is on site at the time of the inspection, it is required to open any gates or 

otherwise secured facilities” and “[i]f the operator is not on the lease site when the 

authorized, properly identified representative arrives at the lease site, then the 

operator is required to go to the lease site and provide immediate access.” Id. 

Defendants argue, in response, that “the INCs’ corrective action requiring 

Plaintiffs to provide BLM with key or lock access is permissible under the statute and 

the regulations.” Aple. Br. at 39. In particular, defendants assert that “FOGRMA 

and its implementing regulations provide that any person who fails to allow 

authorized inspections is liable for penalties, which may not be applied if the liable 

person takes the prescribed corrective action within the required timeframe.” Id. 

a) Standard of review 
16 

Although this is an appeal from the district court’s decision, we accord no 

particular deference to that decision. Instead, we conduct our own independent 

review of the agency’s decision. Exxon Mobil Oil Corp. v. Norton, 346 F.3d 1244, 

1248 (10th Cir. 2003). Under the Administrative Procedures Act, we will “set aside 

agency’s action if it is arbitrary, capricious, an abuse of discretion, or otherwise not 

in accordance with law.” Utah Envtl. Cong. v. Bosworth, 439 F.3d 1184, 1188 (10th 

Cir. 2006) (internal quotations omitted); see 5 U.S.C. § 706(2)(A). 

When reviewing an agency’s interpretation of a statute it administers, we first 

determine whether Congress has directly spoken to the precise issue. See Chevron, 

U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842 (1984); Cliffs Synfuel 

Corp. v. Norton, 291 F.3d 1250, 1257 (10th Cir. 2002). “If the intent of Congress is 

clear, that is the end of the matter; for the court . . . must give effect to the 

unambiguously expressed intent of Congress.” Chevron, 467 U.S. at 842–43. If, 

however, the statute is silent or ambiguous on the issue in question, we do not impose 

our own construction on the statute, but rather ascertain whether the agency’s 

interpretation is a permissible construction of the statute. Id. at 843. If it is, we defer 

to that interpretation. Id. at 844. Our review of federal regulations is similar. “In the 

usual course, when an agency is authorized by Congress to issue regulations and 

promulgates a regulation interpreting a statute it enforces, the interpretation receives 

deference if the statute is ambiguous and if the agency’s interpretation is reasonable.” 

Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2124 (2016). “This principle is 

implemented by the two-step analysis set forth in Chevron.” Id. “At the first step, a 
17 

court must determine whether Congress has ‘directly spoken to the precise question 

at issue.” Encino, 136 S. Ct. at 2124 (quoting Chevron, 467 U.S. at 842). “If the 

intent of Congress is clear, 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.”4

 

Chevron, 467 U.S. at 842-43. “If not, then at the second step the court must defer to 

the agency’s interpretation if it is ‘reasonable.’” Encino, 136 S. Ct. at 2125 (quoting 

Chevron, 467 U.S. at 844). “It is well established that an agency’s interpretation 

need not be the only possible reading of a regulation—or even the best one—to 

prevail.” Decker v. Nw. Envtl. Def. Ctr., 568 U.S. 597, 613 (2013). “When an 

agency interprets its own regulation, the Court, as a general rule, defers to it unless 

that interpretation is plainly erroneous or inconsistent with the regulation.” Id. 

(quotation marks omitted). 

b) Analysis 

We begin our analysis by briefly examining the overall statutory and 

regulatory scheme for inspections of oil and gas lease sites that implicate Indian 

 4

 At the first step of the Chevron analysis, “we must giv[e] all undefined terms 

their ordinary meaning.’” Nat’l Credit Union Admin. Bd. v. Nomura Home Equity 

Loan, Inc., 764 F.3d 1199, 1227 (10th Cir. 2014) (quoting Fed. Hous. Fin. Agency v. 

UBS Americas Inc., 712 F.3d 136, 141 (2d Cir. 2013)). “We may consult a 

dictionary to determine the plain meaning of a term” and may “also take into account 

the broader context of the statute as a whole when ascertaining the meaning of a 

particular provision.” Conrad v. Phone Directories Co., 585 F.3d 1376, 1381 (10th 

Cir. 2009) (quotation marks and citation omitted). 
18 

mineral interests. In § 1702 of FOGRMA, Congress set forth the following 

definitions that are relevant to understanding the substantive provisions of the Act: 

(1) “Federal land” means all land and interests in land owned by the 

United States which are subject to the mineral leasing laws, including 

mineral resources or mineral estates reserved to the United States in the 

conveyance of a surface or nonmineral estate; 

· · · 

(3) “Indian lands” means any lands or interest in lands of an Indian tribe 

or an Indian allottee held in trust by the United States or which is 

subject to Federal restriction against alienation or which is administered 

by the United States pursuant to section 14(g) of Public Law 92-203 [43 

USC § 1613(g)], as amended, including mineral resources and mineral 

estates reserved to an Indian tribe or an Indian allottee in the 

conveyance of a surface or nonmineral estate, except that such term 

does not include any lands subject to the provisions of section 3 of the 

Act of June 28, 1906 (34 Stat. 539) [unclassified]; 

· · · 

(5) “lease” means any contract, profit-share arrangement, joint venture, 

or other agreement issued or approved by the United States under a 

mineral leasing law that authorizes exploration for, extraction of, or 

removal of oil or gas; 

(6) “lease site” means any lands or submerged lands, including the 

surface of a severed mineral estate, on which exploration for, or 

extraction or removal of, oil or gas is authorized pursuant to a lease; 

· · · 

30 U.S.C. § 1702(1), (3), (5), (6). 

In our view, the plain language of the statutory definition of “lease” includes 

communitization agreements approved by the United States, such as the one at issue 

in this case. More specifically, a communitization agreement is a “contract” or 

“other agreement” that, depending upon the circumstances, has been “approved by 

the United States under a mineral leasing law,” i.e., federal law governing mineral 

rights on Indian and trust land, “that authorizes exploration for, extraction of, or 
19 

removal of oil or gas.”5

 Thus, the statutory definition of “lease site” necessarily 

includes any lands, including privately-owned lands, on which exploration for and 

extraction of oil and gas is occurring pursuant to a communitization agreement. 

Section 1718 of FOGRMA, entitled “Inspection,” provides in pertinent part as 

follows: 

(b) Inspection of lease sites for compliance with mineral leasing laws 

and 30 USCS §§ 1701 et seq. Authorized and properly identified 

representatives of the Secretary may without advance notice, enter upon, 

travel across and inspect lease sites on Federal or Indian lands and may 

obtain from the operator immediate access to secured facilities on such 

lease sites, for the purpose of making any inspection or investigation for 

determining whether there is compliance with the requirements of the 

mineral leasing laws and this Act. The Secretary shall develop

guidelines setting forth the coverage and the frequency of such

inspections. 

30 U.S.C. §1718(b). Although § 1718(b) incorporates the statutory phrase “lease 

sites,” it proceeds to limit the scope of that phrase by authorizing BLM 

representatives to, “without advance notice, enter upon, travel across and inspect” 

lease sites that exist “on Federal or Indian lands,” i.e., non-fee lands owned by the 

United States or held in trust by the United States for a tribe, and that arise out of 

 5

 Neither the IBLA nor the BLM have expressly adopted this broad definition 

of “lease.” Instead, the IBLA interpreted the identically-worded regulatory definition 

of the term “lease site” to include more than “Federal or Indian lease sites,” and also 

concluded that the identically-worded regulatory definition of the term “lease” was 

not incorporated into the regulatory phrase “lease site.” Aplt. App. at 170, 174. We 

reject this latter conclusion as inconsistent with the statutory language and normal 

rules of statutory construction. In particular, “it is a normal rule of statutory 

construction that identical words used in different parts of the same act are intended 

to have the same meaning,” and we see no evidence that Congress intended for the 

term “lease,” as used in the term “lease site,” to carry a different meaning. Pereira v. 

Sessions, 138 S. Ct. 2105, 2115 (2018). 
20 

contracts or agreements issued or approved by the United States. Further, the statute 

is silent with respect to how, if at all, BLM representatives may access lease sites on 

privately-owned lands. 

Defendants concede that “Congress did not expressly address the application 

of Section 1718(b) inspection authority to fee lands committed to communitization 

agreements.” Aple. Br. at 15. But, defendants argue, “[g]iven that ambiguity, BLM 

reasonably exercised its delegated rulemaking authority to include the inspection of 

fee lands that, like the O’Hares’, are subject to a communitization agreement that was 

approved by the Department and involves Indian lands where the affected tribe shares 

in the production and royalties of the oil and gas operation.” Id. 

Defendants’ arguments hinge on the threshold question of whether § 1718(b) is 

ambiguous or not. A statute is “ambiguous if it is reasonably susceptible to more 

than one interpretation or capable of being understood in two or more possible senses 

or ways.” Nat’l Credit Union Admin. Bd. v. Nomura Home Equity Loan, Inc., 764 

F.3d 1199, 1226 (10th Cir. 2014) (quotations and citations omitted); see Chickasaw 

Nation v. United States, 534 U.S. 84, 90 (2001). Although it may be reasonable from 

a policy standpoint for the BLM to have authority to inspect fee lands that are subject 

to a communitization agreement approved by the United States, § 1718(b) simply is 

not ambiguous and thus does not provide the BLM with any authority to exercise its 

delegated rulemaking authority on that issue. As noted, § 1718(b) quite clearly limits 

the BLM’s inspection authority to lease sites on federal and Indian lands. 
21 

To be sure, § 1718(b) is silent with respect to inspections of lease sites on fee 

lands, but that silence does not render the statute ambiguous. See Spring Creek Expl. 

& Prod. Co. v. Hess Bakken Inv., II, LLC, 887 F.3d 1003, 1018 (10th Cir. 2018) 

(“silence is not ambiguity”). When the Supreme Court has discussed the exercise of 

agency discretion “‘in the interstices created by statutory silence,’” it has done so 

only when “considering undefined terms in a statute or statutory directive to perform 

a specific task without giving detailed instructions.” Marlow v. New Food Guy, Inc., 

861 F.3d 1157, 1162 (10th Cir. 2017) (quoting Util. Air Regulatory Grp. v. EPA, 134 

S. Ct. 2427, 2445 (2014) (internal quotation marks omitted)). And that is simply not 

the case with § 1718(b). As noted, § 1718(b) plainly focuses on lease sites “on 

Federal or Indian lands” and does not otherwise leave any terms or statutory 

directives undefined. 

For these reasons then, we conclude that § 1718(b) does not afford the BLM 

with authority to inspect lease sites on privately-owned lands. Thus, we must look 

elsewhere to determine whether any authority exists for the BLM’s proposed 

inspections of the wells in this case. 

The Secretary has issued regulations implementing the various statutory 

directives outlined by Congress in FOGRMA. To begin with, 43 C.F.R. § 3161.1(b) 

states: 

The regulations in this part and 43 CFR part 3170, including subparts 

3173, 3174, and 3175, relating to site security, measurement of oil and 

gas, reporting of production and operations, and assessments or

penalties for non-compliance with such requirements, are applicable to 

all wells and facilities on State or privately owned lands committed to a 
22 

unit or communitization agreement, which include Federal or Indian 

lease interests, notwithstanding any provision of a unit or 

communitization agreement to the contrary. 

43 C.F.R. § 3161.1(b) (emphasis added). 

In turn, 43 C.F.R. § 3161.3, entitled “Inspections,” states: 

(a) The authorized officer shall establish procedures to ensure that each 

Federal and Indian lease site which is producing or is expected to 

produce significant quantities of oil or gas in any year or which has a 

history of noncompliance with applicable provisions of law or 

regulations, lease terms, orders or directives shall be inspected at least 

once annually. Similarly, each lease site on non-Federal or non-Indian 

lands subject to a formal agreement such as a unit or communitization 

agreement which has been approved by the Department of the Interior 

and in which the United States or the Indian lessors share in production 

shall be inspected annually whenever any of the foregoing criteria are 

applicable. 

(b) In accomplishing the inspections, the authorized officer may utilize 

Bureau personnel, may enter into cooperative agreements with States or 

Indian Tribes, may delegate the inspection authority to any State, or 

may contract with any non-Federal Government entities. Any 

cooperative agreement, delegation or contractual arrangement shall not 

be effective without concurrence of the Secretary and shall include 

applicable provisions of the Federal Oil and Gas Royalty Management 

Act. 

43 C.F.R. § 3163.3(a) and (b).6

Lastly, 43 C.F.R. § 3162.1, which discusses “General requirements” for 

operating rights owners and operators, states: 

(a) The operating rights owner or operator, as appropriate, shall comply 

with applicable laws and regulations; with the lease terms, Onshore Oil 

 6

 The Secretary’s authority to enact the portion of this regulation concerning 

inspections on privately-owned lands arises both from the general purposes 

provisions of FOGRMA, § 1701(b)(3)-(5), as well as § 1711(a) and (b). Section 

1711(a) directs the Secretary, in part, to “establish a comprehensive inspection . . . 

system,” and §1711(b) directs the Secretary to conduct annual inspections of certain 

lease sites, without limitation to sites contained on Federal or Indian lands. 
23 

and Gas Orders, NTL’s; and with other orders and instructions of the 

authorized officer. These include, but are not limited to, conducting all 

operations in a manner which ensures the proper handling, 

measurement, disposition, and site security of leasehold production; 

which protects other natural resources and environmental quality; which 

protects life and property; and which results in maximum ultimate 

economic recovery of oil and gas with minimum waste and with 

minimum adverse effect on ultimate recovery of other mineral 

resources. 

(b) The operator shall permit properly identified authorized 

representatives to enter upon, travel across and inspect lease sites and 

records normally kept on the lease pertinent thereto without advance 

notice. Inspections normally will be conducted during those hours when 

responsible persons are expected to be present at the operation being 

inspected. Such permission shall include access to secured facilities on 

such lease sites for the purpose of making any inspection or 

investigation for determining whether there is compliance with the 

mineral leasing laws, the regulations in this part, and any applicable 

orders, notices or directives. 

(c) For the purpose of making any inspection or investigation, the 

Secretary or his authorized representative shall have the same right to 

enter upon or travel across any lease site as the operator has acquired 

by purchase, condemnation or otherwise.

43 C.F.R. § 3162.1 (emphasis added).7

The regulatory provisions thus provide for an inspection framework that 

applies to federal, Indian, and certain privately-owned lands, but that, not 

surprisingly, provides the BLM with greater inspection authority over federal and 

Indian lands than privately-owned lands. With respect to lease sites on federal and 

Indian land that are “producing or . . . expected to produce significant quantities of 

oil or gas in a year or which ha[ve] a history of noncompliance with applicable 

 7

 It was this regulation that Maralex was cited for violating in the four INCs. 

Aplt. App. at 168. 
24 

provisions of law or regulations,” BLM representatives must inspect such lease sites 

“at least once annually.” 43 C.F.R. § 3161.3(a). As for lease sites on privatelyowned lands that are committed to a unit or communitization agreement that has been 

approved by the Department of the Interior, they are required to “be inspected 

annually whenever” they are “producing or . . . expected to produce significant 

quantities of oil or gas in any year or” if they “ha[ve] a history of noncompliance 

with applicable provisions of law or regulations.”8

 43 C.F.R. § 3161.3(a). They can 

also be inspected by the BLM for purposes of assessing “site security, measurement, 

reporting of production and operations, and assessments or penalties for 

noncompliance with such requirements.” 43 C.F.R. § 3161.2. Further, the operating 

rights owner or operator of any such lease site on privately-owned land is required to 

“permit properly identified authorized representatives” of the BLM “to enter upon, 

travel across and inspect lease sites and records normally kept on the lease pertinent 

thereto without advance notice.” 43 C.F.R. § 3162.1(b). Any such inspections, 

however, must normally “be conducted during those hours when responsible persons 

are expected to be present at the operation being inspected.” Id. In addition, “[s]uch 

permission” by the operating rights owner or operator “shall include access to 

secured facilities on such lease sites for the purpose of making any inspection or 

investigation for determining whether there is compliance with the mineral leasing 

 8

 In this case, the IBLA expressly found that the wells at issue “are producing 

or expected to produce significant quantities of oil and gas,” thus rendering the wells 

subject to annual inspection under § 3163.3(a). Aplt. App. at 172. 
25 

laws, the regulations . . . , and any applicable orders, notices or directives.” Id. 

Lastly, BLM representatives are, “for the purpose of making any inspection or 

investigation,” afforded the same right of entry to and travel access across the lease 

site “as the operator has acquired by purchase, condemnation or otherwise.” Id. § 

3162.1(c). 

Thus, at least for purposes of this case, the key difference between lease sites 

on federal/Indian lands and lease sites on privately-owned land subject to a 

communitization agreement is how BLM representatives may access them. For lease 

sites on federal/Indian lands, BLM representatives have the right to enter those sites 

by themselves without first seeking permission from the operating rights owner or 

operator. In contrast, for lease sites on privately-owned lands, BLM representatives 

may not independently enter the sites, but instead must seek entry (but do not have to 

give advance notice) from the operating rights owner or operator and the operating 

rights owner or operator, as noted, is obligated to allow such entry. 

As for how often BLM representatives may inspect the wells, the regulations 

contain no limitation. Indeed, the only reference to frequency of inspections is 

contained in § 3161.3(a), which, as noted, requires lease sites meeting certain 

requirements to be inspected at least once annually. Section 3161.3(a) does not, 

however, impose any upper limit on the number of inspections. In other words, as 

both the State Director and the IBLA concluded in their respective decisions, “[t]he 

[regulatory] wording ‘inspected annually’ is a minimum standard not a maximum 

limitation.” Aplt. App. at 90; see id. at 176 n.10 (IBLA decision). 
26 

In sum, the BLM had authority to inspect the wells at issue. The question 

remains, however, whether BLM had authority to require Maralex to provide BLM 

with “a key to access the location or” allow BLM to install its own locks. Aplt. App. 

at 24). 

We agree with plaintiffs that the BLM lacks authority to require an operator or 

landowner to provide the BLM with a key to the landowner’s locked gates or to allow 

the BLM to place its own locks on the landowner’s locked gates. But we arrive at 

this conclusion in a different manner than suggested by plaintiffs. Although 

plaintiffs base many of their arguments on the language of § 1718(b), that statutory 

subsection, as discussed above, does not apply at all to lease sites on privately-owned 

lands. Instead, the parameters of inspections of lease sites on privately-owned lands 

are outlined in two regulations: 30 C.F.R. §§ 3162.1 and 3163.3. Neither of those 

regulations provide any authority for the BLM to require an operating rights owner or 

operator (or, for that matter, a private landowner) to (a) provide BLM with a key to a 

lease site on privately-owned land, or (b) to install a BLM-lock on the gates to such 

lease site. Rather, as discussed above, the BLM has the right to conduct 

unannounced inspections of such sites, but must rely on the operating rights owner or 

operator to afford them entry to the lease site. 

Defendants, for their part, cite in their appellate brief to the statutory and 

regulatory provisions authorizing the BLM to take “corrective action.” Aple. Br. at 

39 (citing 30 U.S.C. §§ 1719(a)(2)(A), (a)(2)(B) and 43 C.F.R. § 3163.1(a)(4)). 

Those statutory provisions, however, speak only in terms of monetary “civil 
27 

penalties” (the amount of which depends upon how long the violation has gone on). 

30 U.S.C. §§ 1719(a)(2), (b). The regulatory provisions also mention the possibility 

of lease cancellations and criminal penalties. 43 C.F.R. §§ 3163.1(a)(5), 3163.3. 

Notably, nothing in the statutory and regulatory provisions mentions the remedy 

imposed on the plaintiffs in this case, i.e., requiring them to provide BLM with a key 

or to allow BLM to install its own locks. Although defendants concede this point, 

they nevertheless argue that “it is reasonable to conclude that when a landowner 

denies BLM entry, the very least that the agency can permissibly do under the statute 

is order any reasonable remedy that will yield the access required to carry out 

Congress’s charge.” Id. at 39-40. We reject that argument. Requiring the provision 

of a key or lock access is, without question, a drastic measure that would, at a 

minimum, require express congressional approval. Because no such approval 

appears in the relevant statutes or regulations, defendants’ arguments must be 

rejected. 

III 

We REVERSE and REMAND to the district court with directions to enter 

judgment in favor of plaintiffs on their claim that the BLM lacks authority to require 

plaintiffs to provide the BLM with a key to access the wells at issue or to allow BLM 

to install its own locks.