Court Opinion

ID: 8967882
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:19:33.471452+00
Date Added: 2024-06-11T17:10:22.920050
License: Public Domain

McKAY, Circuit Judge,
dissenting:
In my judgment, the court has not properly focused on whose interest the Secretary has a duty to protect. Thus, the court has erroneously overturned the Secretary’s exercise of discretion without any support in the law. I therefore must respectfully dissent.
At issue in this case is an eighty-acre tract of restricted Indian allotment land owned by Newton Rose and others. The Rose tract was leased to Shell Oil Company on January 17, 1979. Shell assigned the lease to Cotton Petroleum. The three-year lease term was to expire on January 17, 1982, unless Cotton did one of three things to extend the life of the lease: (1) produce oil or gas in paying quantities; (2) commence drilling on the lease; or (3) secure approval during the primary term of the unit agreement and commence drilling within the unit. Cotton failed to meet any of the lease-extending terms. Nine days prior to the lease’s expiration, Cotton submitted a communitization agreement for government approval. Cotton knew that the agreement had to be approved by three separate federal agencies. Two of the three agencies approved the communitization agreement prior to the lease’s expiration. However, the Assistant Secretary for Indian Affairs, acting pursuant to proper authority from the Secretary of Interior, determined that it was in the best interest of the Indians to allow the lease to expire before approving the communitization agreement. Clearly, the duty of the Secretary in this matter was to act in the best interest of the Rose lessors. The court has, in effect, held that it was in the Indians’ best interest not to let the lease expire. Nevertheless, I am unable to find anything in the opinion which persuasively argues that the Secretary abused his discretion by determining that it was in the Indians’ best interest to have the lease expire so as to renegotiate the lease and bonus payments. The majority lists various factors including the long-term economic effects of the agreement and not relying on the recommendation of the Minerals Management Service as indicating that the Secretary violated his own guidelines. Given the breadth of the Secretary’s discretion, our duty to defer to it, and the burden on the Secretary to act in the best interest of the Indians, I find it totally inconsistent with our cases to suggest that his economic judgment was, as a matter of law, wrong. Moreover, to suggest that, as a matter of law, it was in the Rose lessee’s interest to forego the renegotiation of the lease in order to obtain the larger bonus payment turns the deference owed to the Secretary on its head.
If we recognize that the Secretary’s duty is to the Rose lessors, then we must also accept that so long as in his considered judgment his action will be to their benefit (whether he is in the end right or wrong), he may do anything which at law may be done in order to protect their interests. Indeed, he is legally bound to do so. It would be an extraordinary proposition indeed to suggest that it would be “arbitrary or capricious” for the Secretary to let a lease expire by its own terms if that would be in the Indians’ best interest.
Although the exact basis of the court’s opinion is somewhat unclear, it apparently rests, at least in part, on the view that the act of “submitting” the communitization agreement prior to the expiration of the lease constituted “approval” of the agreement, thereby extending the life of the lease. The two cases cited by the majority in support of this view are, at best, of *1530doubtful authority. Both cases deal with the power of the Secretary to make his post-expiration approval retroactive. Neither holds that the Secretary’s post-expiration approval, as a matter of law, constitutes a retroactive decision which saves an expiring lease despite the Secretary’s intention otherwise. See Hallam v. Commerce Mining, & Royalty Co., 49 F.2d 103 (10th Cir.), cert. denied, 284 U.S. 643, 52 S.Ct. 23, 76 L.Ed. 547 (1931); Hood v. United States, 256 F.2d 522 (9th Cir.1958).1 In fact, in Hallam we recognized the strong policy of permitting the Secretary the broadest possible powers, including the power to suspend his regulations. Id. at 108. The entire thrust of that case was the breadth of the Secretary’s power, including the power to relate approval back to the date of submission. Hallam is a far cry from the majority’s apparent position that the Secretary has no choice but to relate approval back in order to revive an expired lease. In my view it is an extraordinary feat to convert the Secretary’s broad power to relate an approval back to the date of submission, if doing so is in the Indians’ best interest, into a mandate which in effect removes the Secretary’s power to permit the expiration of the lease if it does not serve the Indians’ interest. Indeed, the tenor of the majority’s discussion on this issue appears to be more concerned with what is in the best interest of Cotton Petroleum, the lessee, rather than what is in the best interest of the Indian lessors. I find no authority for such an emphasis anywhere in the law.
The majority faults the Secretary for failing to make the communitization approval retroactive. Yet, the majority itself suggests that the Secretary’s decision not to exercise his broad retroactivity discretion was altogether deliberate. As the court notes, the Secretary did not initially accept the Indians’ argument that the lease had expired; instead, he remanded the matter to the Area Director for his determination of whether communitization was in the best interest of the Rose lessor. Majority Opinion at 1519. Thereafter, the Secretary concluded that the Rose lease had expired. It therefore is beyond cavil that the Secretary deliberately determined not to exercise his retroactivity authority, but rather to let the Rose lease remain expired. Thus, in concluding that the Secretary should have made the approval retroactive, the majority impermissibly substitutes its judgment for that of the Secretary.
I also disagree with the majority’s view that the Secretary violated his own regulations.2 In my view, the proper analysis requires us to begin with the proposition established in Kenai Oil & Gas v. Department of Interior, 671 F.2d 383 (10th Cir.1982). In that case we made clear that “all communitization agreements on restricted Indian lands must be approved by the Secretary of Interior or his designate, in this case, the Superintendent of the BIA.” Id. at 384-85. In Kenai, the proposed commu-nitization agreement which would have extended the lease was clearly, like the instant case, submitted timely to prevent the expiration of the lease. The Superintendent, acting for the Secretary, refused to approve the proposed communitization agreement, resulting in the expiration of the lease. The only, difference between this case and that one is that, in Kenai, the Superintendent refused to approve the agreement at all. Here, the Secretary simply refused to approve it retroactively.
It seems to me that the majority has turned Kenai on its head. The thrust of the Kenai decision is that the Secretary *1531acts in a fiduciary responsibility to the Indian lessor, and that judicial review of the Secretary’s decision is severely limited. It was in that context that this court held “if the [Secretary] considered all relevant factors in reaching his decision and has made no clear error of judgment, his action cannot be overturned.” Id. at 386. Indeed, apropos to this case, in Kenai we rejected the lessee’s two-part argument that the Secretary exceeded the scope of his discretion by basing his decision on economic factors and that the manner in which the Secretary reached his decision was procedurally defective. Id.
It is clear that the Secretary precisely followed Kenai in this case. He issued regulations which outlined the matters which subordinates should include in their reports to him, so that he could exercise his (not their) discretion in looking after the interests of the Indian lessors. Thus, in this case the Secretary clearly “considered all relevant factors in reaching his decision....” Id.
The majority acknowledges that in Ke-nai we rejected the argument that the Secretary’s discretion was limited to consideration of specific factors. See ante at 1526. Nevertheless, the court now seeks to impose its own set of limitations on the Secretary’s decisionmaking process. The majority dwells on the notion that the Secretary must consider all relevant factors in reaching his decision and faults the Secretary for failing to do so. However, the record indicates that the Secretary was cognizant of, and his actions were at all times consistent with the Indians’ economic interests. By requiring Cotton to renegotiate the lease at current market rates, and possibly to pay a sizeable bonus to the Indian lessors, the Secretary’s decision clearly was grounded in his fiduciary responsibility to the Indians. Whether or not the court agrees with the effect of the decision on the lessee is irrelevant. As long as there is a rational basis for the Secretary’s conclusion that a bonus based on a renegotiation of the lease would improve the revenues flowing to the Indian lessor, his decision must be upheld. We are without authority to question or overturn that determination.
I am particularly concerned by the majority’s suggestion that the Secretary must list and specifically explain his disposition of each and every factor which was considered in reaching a final decision. Nothing in the cases cited by the majority suggests that the decisionmaker must itemize each and every factor discarded as well as the factors taken into account in order to reach a reasoned decision.3 All that those cases suggest is that the Secretary must (1) take into account and have before him factors which are relevant to the decision, and (2) provide enough of an explanation “to enable the court to determine whether the ... decision was reached for an impermissible reason or for no reason at all.” Dunlop v. Bachowski, 421 U.S. 560, 573, 95 S.Ct. 1851, 1861, 44 L.Ed.2d 377 (1975); Camp v. Pitts, 411 U.S. 138, 142-43, 93 S.Ct. 1241, 1244, 36 L.Ed.2d 106 (1973). Here the Secretary clearly did that. First, under guidelines designed to conform to Kenai, the Secretary remanded to his subordinates for the precise purpose of ensur*1532ing that he had all of the relevant factors before him before he made his final decision. Second, as the court itself noted, in rendering his decision the Secretary stated that by disproving the communitization agreement with respect to the Rose lease, he was serving the best economic interests of the lessors. Maj. op. at 1525-26. I find no error in either the procedure followed, or the outcome achieved, by the Secretary. The Secretary may have been incorrect in his determination, but the correctness of his findings are not at issue here. The issue is whether or not the Secretary’s opinion was arbitrary or capricious. All the majority has shown are rational reasons for disagreeing with the Secretary’s determination, not that the Secretary’s broad discretionary power was abused.
An even greater source of concern to me is the court’s suggestion that if the Secretary can be faulted for failing to articulate his reasoning or follow his guidelines, then this court must declare, as a matter of law, a particular result. As stated previously, the most we can do under those circumstances is to remand for consideration of all relevant factors. See Camp v. Pitts, 411 U.S. at 142-43, 93 S.Ct. at 1244.
To summarize, in this case the Secretary had all of the relevant information before him. There is no suggestion that data were unavailable or withheld from the Secretary. There is no dispute that the Secretary’s sole responsibility is to exercise his discretion as a trustee for the Indian lessors according to a reasoned assessment of the lessors’ best interests — in this case the Rose lessors. Kenai itself makes clear that one of the things the Secretary has discretion to do is let leases expire if that will be in the best interest of the Indians. The Secretary did no more than that in this case. Finally, our role in reviewing this case is terribly limited by the deference we owe to the Secretary, and any shortcomings in the Secretary’s decision may only be remedied by remand to the Secretary for appropriate action.
These considerations therefore dictate that we ought not overturn the Secretary’s decision, and particularly we ought not mandate a particular result. For the foregoing reasons, I respectfully dissent, believing that the Secretary’s decision should be affirmed.

. In Hallam the court was dealing with an overlapping lease that related back to the date- the lease was made. It was not dealing with a lease that had expired prior to the submission of a communitization agreement. In Hood, while the court refers to the retroactivity doctrine, it expressly states that “[i]t is probable here that there is no necessity to rely upon the doctrine of ‘relation back' to make the approval of the Secretary ... effective." 256 F.2d at 529. Thus, the Hood court understood that the application of retroactivity, was. not automatic.

. Assuming arguendo that the Secretary did violate his own guidelines, it is an unprecedented leap for this court to do something other than remand the case to the Secretary for action in compliance with those guidelines. That is precisely what the majority has done in this case. I cannot agree with the court’s conclusion or action in this regard.

. The fact is that Kenai can only fairly be read as requiring the Secretary to consider all relevant factors. There is no language in Kenai or anywhere else that requires the Secretary to specifically articulate in a written opinion the details of the factors he considered, so long as the record is clear that he had all the factors before him. Nothing could be more clear than the fact that his remand demonstrates that he had before him and considered all of the relevant factors.
The reasoning employed in cases involving Rule 52 of the Federal Rules of Civil Procedure is analogous here. For example, this court has held:
The rule does not require the making of elaborate findings of fact extending into minute and unnecessary detail in respect to every feature or phase of the case.... The court did not dictate into the record findings of fact and conclusions of law. Neither did it file formal written findings of fact and conclusions of law. But the court did file a written opinion which contained findings of fact and conclusions of law. And while the opinion may not have been as complete as might have been desired in respect to the making of findings of fact, we think it is wholly unnecessary to remand the case for the making of additional findings.
Trentman v. City and County of Denver, 236 F.2d 951, 953 (10th Cir.), cert. denied, 352 U.S. 943, 77 S.Ct. 265, 1 L.Ed.2d 239 (1956).