Opinion ID: 744140
Heading Depth: 4
Heading Rank: 2

Heading: The Format of Decisionmaking

Text: 54 To satisfy Chevron, the delegation of authority to form binding policy must include not only discretion to formulate interpretations but also discretion to utilize the particular format selected. See Robert A. Anthony, Which Agency Interpretations Should Bind Citizens and the Courts?, 7 YALE J. ON REG. 1, 4 (1990) (hereinafter Anthony) (The touchstone in every case is whether Congress intended to delegate to the agency the power to interpret with the force of law in the particular format that was used.). After analyzing relevant Supreme Court cases, commentators Davis and Pierce have concluded Chevron should be held to apply to the meanings agencies give statutes in all legislative rules and in most adjudications. [But][i]t should not be held to apply to agency pronouncements in less formal formats.... 1 KENNETH C. DAVIS & RICHARD J. PIERCE, JR., ADMINISTRATIVE LAW TREATISE § 3.5, at 119 (3d ed.1994). 55 This circuit has denied Chevron deference to agency policies promulgated in formats other than legislative rules or adjudications. Headrick v. Rockwell Int'l Corp., 24 F.3d 1272, 1282 (10th Cir.1994) ( [W]hile [an interpretive rule] may be entitled to some consideration in our analysis, it does not carry the force of law and we are in no way bound to afford it any special deference under Chevron.) (citations omitted). As we have unequivocally held, [i]t is elementary administrative law that in order for [agency actions] to have binding force there are only two methods that an agency may use in formulating policy. It may establish binding policy either through rule-making procedures or through adjudications that create binding precedents. Amrep Corp. v. FTC, 768 F.2d 1171, 1178 (10th Cir.1985). 23 56 Most circuits agree with our conclusion that Chevron deference is owed only to legislative rules and agency adjudications. See, e.g., Motor Vehicle Mfrs. Ass'n v. New York State Dep't of Envtl. Conservation, 17 F.3d 521, 534-35 (2d Cir.1994) (denying Chevron deference to statutory interpretation promulgated in agency advisory circular after concluding that the advisory circular was not a regulation for the purposes of the Act at issue); Kelley v. E.I. DuPont de Nemours & Co., 17 F.3d 836, 841-42 (6th Cir.1994) (distinguishing Chevron deference granted to agency legislative rules from lesser deference accorded policy statements and interpretive rulings); Satellite Broad. & Communications Ass'n of America v. Oman, 17 F.3d 344, 346-47 (11th Cir.1994) (according Chevron deference to formally promulgated legislative rule after previously declining to accord deference to similar policy decision); Travelstead v. Derwinski, 978 F.2d 1244, 1250 (Fed.Cir.1992) (noting general rule that agency pronouncements in formats less formal than legislative rules should be analyzed under Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 164, 89 L.Ed. 124 (1944), rather than Chevron ); Dalheim v. KDFW-TV, 918 F.2d 1220, 1228 & n. 39 (5th Cir.1990) (acknowledging application of Skidmore analysis to agency interpretive rules); cf. Limerick Ecology Action, Inc. v. United States Nuclear Regulatory Comm'n, 869 F.2d 719, 736 (3d Cir.1989) (an agency policy statement is entitled to no greater deference than any other policy statement, i.e., none) (citations omitted); Vietnam Veterans of America v. Secretary of the Navy, 843 F.2d 528, 537 (D.C.Cir.1988) (A binding policy is an oxymoron.). See generally Atchison, Topeka & Santa Fe Ry. Co. v. Pena, 44 F.3d 437 (7th Cir.1994) (en banc) (Chevron deference owed where agency has rulemaking authority and follows notice and comment process but not where agency has no rulemaking authority), aff'd on other grounds, 516 U.S. 152, 116 S.Ct. 595, 133 L.Ed.2d 535 (1996) (holding text and structure of statute clear). 24 57 According to the Department of the Interior's internal regulations, the Solicitor has authority: 58 To issue final legal interpretations, in the form of M-Opinions published in Decisions of the United States Department of the Interior, on all matters within the jurisdiction of the Department, which shall be binding, when signed, on all other Departmental offices and officials and which may be overruled or modified only by the Solicitor, the Under Secretary, or the Secretary. 59 Aplt.'s App., vol. IX at 2069. A Solicitor's opinion is issued at the personal discretion of the Solicitor, without notice and comment, and can be overruled or modified at any time. Id. at 1982, 2069. The opinion at issue here, although presented as authoritative statutory construction, is nothing more than a public pronouncement that Interior will not assert the federal government's right to CBM under its reservation of coal; in that context, the opinion is a valid and useful document. As a simple policy statement, however, the Solicitor's opinion fails to provide the procedural protections required for Chevron deference to attach. 60 [A] practice of routine acceptance for interpretations expressed in [informal] formats would, in abdication of judicial duties under Marbury, endow them with force of law where Congress did not intend them to have such force. By this process, the agency would bind the public without itself being bound by interpretations in these formats. And since these formats are exempt from APA public participation requirements, an especially odious frustration is visited upon the affected private parties: they are bound by a proposition they had no opportunity to help shape and will have no meaningful opportunity to challenge when it is applied to them. 61 Anthony, supra, at 57-58 (footnotes omitted and emphasis added). 62 Agencies can make law only in two formats, legislative rules and adjudications; the Solicitor's opinion was not promulgated with the procedural protections attendant to either format. Amrep, 768 F.2d at 1178. Accordingly, Chevron does not mandate that we give deference to the 1981 Solicitor's opinion. 25 3. Skidmore Consideration 63 Although Chevron deference to the Solicitor's opinion is clearly not warranted, we do assess the merits of that opinion to the extent suggested in Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944). 64 We consider that the rulings, interpretations and opinions of the [agency], ... while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control. 65 Id. at 140, 65 S.Ct. at 164; see also Headrick, 24 F.3d at 1282 (distinguishing between Chevron and Skidmore deference). There are several facets of this Solicitor's opinion, however, that impair its power to persuade. 66 The Solicitor began his analysis of CBM ownership by noting the principle of resolving doubts in land grants in favor of the sovereign. While properly citing Andrus v. Charlestone Stone Prods. Co., 436 U.S. 604, 617, 98 S.Ct. 2002, 2009-10, 56 L.Ed.2d 570 (1978), for this general principle on land grants, the Solicitor immediately qualified the application of that principle by asserting that land grants  'are not to be so construed as to defeat the intent of the legislature, or to withhold what is given either expressly or by necessary or fair implication....'  Leo Sheep Co. v. United States, 440 U.S. 668, 682-83, 99 S.Ct. 1403, 1411, 59 L.Ed.2d 677 (1979) (quoting United States v. Denver & Rio Grande Ry. Co., 150 U.S. 1, 14, 14 S.Ct. 11, 15, 37 L.Ed. 975 (1893)). Apart from the basic premise that the principle of favoring the sovereign is involved when the legislative intent is in doubt, as here, the quoted qualification to the general rule arose in the context of grants under the Railroad Acts where the United States had offered land to railroads as an inducement to undertake track construction. Id. Since the situation involved here is not analogous to the facts of Leo Sheep, the principle of resolving doubts in favor of the sovereign applies with undiminished vigor. The Solicitor's conclusion on CBM ownership was determined without application of this governing canon. 67 The Solicitor further compromised his legal analysis by citing a state law case and suggesting that principles of common law conveyances lend support to his conclusion regarding ownership of CBM. 88 Interior Dec. at 544. Not only was the particular case on which the Solicitor relied overruled on appeal, United States Steel Corp. v. Hoge, No. 78-682 (Pa. Ct. C.P., Greene Cty., March 24, 1980), aff'd, 304 Pa.Super. 182, 450 A.2d 162 (1982), rev'd, 503 Pa. 140, 468 A.2d 1380 (1983), but cases construing common law conveyances are inapposite to the case at bar as we have discussed supra note 17. 68 The Solicitor's position on the statutory reservation of CBM is also inconsistent with Interior statements on coal made contemporaneously with the 1909 and 1910 Acts. In 1909 the United States Geological Survey, a branch of the Department of the Interior, recognized that gas trapped with coal is generated by the coalification process. Rollin T. Chamberlin, Notes on Explosive Mine Gases and Dust, U.S. Geol. Surv. Bull. 383, H.R. DOC. NO . 59-823, at 16 (1909). This contemporaneous statement acknowledging the shared genesis of coal and CBM belies the Solicitor's simplistic conclusion that in 1909 Congress believed that coal was a solid rock. The Solicitor's narrow construction of coal in the 1909 and 1910 Acts is also inconsistent with the position Interior has taken in other similar mineral reservation disputes. As we have noted supra, Interior has typically construed such mineral reservations broadly. See Aulston, 915 F.2d at 595; Brennan v. Udall, 379 F.2d at 804; see also 1 CURTIS H. LINDLEY, AMERICAN LAW RELATING TO MINES AND MINERAL LANDS § 96, at 169 (the word 'mineral,' as used in these various acts, should be understood in its widest signification). On the few occasions in which a mineral term has been interpreted narrowly, courts have rejected those interpretations. See, e.g., Western Nuclear, Inc., 462 U.S. at 42, 45, 103 S.Ct. at 2222-23, 2224 (rejecting Circuit Court's reliance on 1910 Department of the Interior determination that gravel is not a mineral in favor of more recent expansive definitions of the term); Union Oil Co., 549 F.2d at 1279-80 & n. 19 (rejecting Department of the Interior letter opinions suggesting that geothermal steam is not a mineral within the meaning of the Stock-Raising Homestead Act). 69 Moreover, the opinion has a number of factual limitations that militate against applying it here. The opinion is titled Ownership of and Right to Extract Coalbed Gas in Federal Coal Deposits. 88 Interior Dec. 538 (1981). It thus only purports to govern the disposition of present federal land interests, not the interests of private parties, such as are at issue in this case. The opinion also explicitly refuses to warrant title to any oil and gas deposit. Id. at 549. The Solicitor thereby concedes that it is beyond the scope of the opinion to settle disputed property rights. It is only now, over a decade after the issuance of the opinion, that the Amoco defendants and the Department of the Interior suggest that private parties like the Tribe should be swept within the opinion's net and that their ownership of CBM was finally settled by its rationale. These assertions reach well beyond the scope of the original opinion. 70 Finally, we are convinced that the Solicitor's statutory interpretation of the 1909 and 1910 Acts is arbitrary. Even under the deference mandated by Chevron, legislative regulations are [not] given controlling weight [if] they are arbitrary, capricious, or manifestly contrary to the statute. 467 U.S. at 844, 104 S.Ct. at 2782. Review under the 'arbitrary and capricious' tag line ... encompasses a range of levels of deference to the agency. American Horse Protection Ass'n v. Lyng, 812 F.2d 1, 4 (D.C.Cir.1987). In ... typical reviews, ... we must consider whether the agency's decisionmaking was 'reasoned.'  Id. at 5 (citation omitted). An agency decision which is not reasoned persuades no more than it controls. Reasoned decisionmaking considers relevant factors and explains the  'facts and policy concerns.'  Id. (citation omitted). While the Solicitor recognized that CBM is always present in solid rock coal and is only potentially but not naturally severable from coal, he nonetheless concluded that a reservation of coal excludes CBM. 88 Interior Dec. at 540. By failing to explain how Congress could have intended to convey a substance neither known to be valuable nor severable at the time of the enactments, the Solicitor's opinion failed to consider facts which might have significantly affected its decisionmaking. Reasoned decisionmaking does not omit without explanation potentially determinative factors. 71 Thus, we are not persuaded we should defer to the Solicitor's opinion. 26 The general congressional intent of the 1909 and 1910 Acts to reserve to the United States all the benefits of the coal resources controls the determination of CBM ownership. We hold that ownership of CBM, an integral component of coal inseverable at the time of the 1909 and 1910 enactments, is vested in the Tribe as owners of the coal resource.