Aera Energy LLC v. Kenneth Salazar, et al

Filing

OPINION filed [1305578] (Pages: 24) for the Court by Judge Tatel [10-5101, 10-5110]

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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 24, 2011

Decided April 29, 2011

No. 10-5101
AERA ENERGY LLC,
APPELLANT
v.
KENNETH LEE SALAZAR, SECRETARY, UNITED STATES
DEPARTMENT OF THE INTERIOR AND UNITED STATES
DEPARTMENT OF THE INTERIOR,
APPELLEES

Consolidated with 10-5110

Appeals from the United States District Court
for the District of Columbia
(No. 1:08-cv-01614)

Steven J. Rosenbaum argued the cause for appellants.
With him on the briefs was Joshua D. Greenberg.
Mary Gabrielle Sprague, Attorney, U.S. Department of
Justice, argued the cause for federal appellees. With her on
the brief were William B. Lazarus and David C. Shilton,

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Attorneys. R. Craig Lawrence, Assistant U.S. Attorney,
entered an appearance.
Before: ROGERS and TATEL, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the court filed by Circuit Judge TATEL.
TATEL, Circuit Judge: In 1999, the Pacific Regional
Director of the Interior Department’s Minerals Management
Service caused four oil and gas leases off the California coast,
for which appellants had originally paid the United States
over $140 million, to expire. The Regional Director later
testified that he based his decision solely on political
considerations and that absent such considerations he would
have instead extended the leases. Reviewing the matter de
novo, however, the Interior Board of Land Appeals, acting
without regard to political considerations and on the basis of
scientific evidence, affirmed the original decision. The district
court upheld that ruling, and appellants now appeal, arguing
that in order to cure the Regional Director’s original decision
of political taint, the Board should have adopted the decision
the Regional Director says he would have made absent
political influence. Because we agree with the district court
that appellants received all they were entitled to—i.e., an
agency decision on the merits without regard to extrastatutory, political factors—we affirm.
I.
Under the Outer Continental Shelf Lands Act of 1953,
the federal government has jurisdiction and control over the
outer continental shelf, a zone which extends from the edge of
state coastal waters to the border of international waters—
generally from 3 to 200 miles offshore and covering a total
area of some 1.76 billion acres. See 43 U.S.C. §§ 1331(a),

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1332; Minerals Management Service, Report to Congress:
Comprehensive Inventory of U.S. OCS Oil and Natural Gas
Resources
3
(Feb.
2006),
available
at
http://www.boemre.gov/revaldiv/PDFs/FinalInventoryReport
DeliveredToCongress-corrected3-6-06.pdf. In recent years,
crude oil extracted from the outer continental shelf has
represented an increasingly large share of America’s domestic
oil production, rising from under ten percent in 1981 to nearly
thirty percent in 2010. Energy Information Administration,
Crude Oil Production (2011). Although the vast majority of
outer continental shelf oil production occurs in the Gulf of
Mexico, a limited amount also takes place off the California
coast. Id. California’s small share is attributable at least in
part to two circumstances: that the last California outer
continental shelf lease sale occurred in 1984; and that since
fiscal year 1991, Congress and the President have imposed a
series of moratoria on any new sales. Samedan Oil Corp. v.
Minerals Mgmt. Serv., IBLA 2000-142 at 16 (Dec. 5, 2006)
(“ALJ Op.”) (included at J.A. 717). Because all current and
future oil and gas production on the California outer
continental shelf must in all probability come from leases sold
before 1984, the fate of those leases has become quite
important to both proponents and opponents of oil and gas
drilling off the California coast.
The Outer Continental Shelf Lands Act empowers the
Secretary of the Interior to sell and administer oil and gas
leases on the outer continental shelf, an authority that the
Secretary largely delegated (at all times relevant to this case)
to the Minerals Management Service (“MMS”), which in turn
delegated most of this authority to its regional offices. 43
U.S.C. §§ 1334(a), 1337(b); 30 C.F.R. § 250.104 (1999);
Dep’t of Interior, Departmental Manual, Part 118, § 5.8 (Apr.
15, 2003); Dep’t of Interior, Department Manual, Part 118,
§ 5.9 (Dec. 9, 1996). The Secretary has since abolished the

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Minerals Management Service and transferred its Outer
Continental Shelf Lands Act responsibilities. Sec’y of
Interior, Secretarial Order 3299 (May 19, 2010). But because
that reorganization occurred after the relevant events in this
case, we shall refer to MMS’s authority as it existed before
the reorganization.
Exercising that authority, MMS grants exclusive rights to
explore for, develop, and produce oil and natural gas in
exchange for an up-front bonus, annual rentals, and royalties
on oil and natural gas actually produced for a “primary term”
of either five or ten years. 43 U.S.C. § 1337(a), (b). During
the exploration stage, production or other operations on the
lease may be “suspended” either at the request of the
leaseholder or at the Service’s direction, which has the effect
of extending the lease’s term for the suspension period. 43
U.S.C. §§ 1334(a)(1); 1337(b)(5); 30 C.F.R. §§ 250.110,
256.73 (1999). Leaseholders may voluntarily join multiple
leases together into “units” by signing “unitization”
agreements that must be approved by the Service. 43 U.S.C.
§ 1334(a)(4); 30 C.F.R. §§ 250.1300, 250.1301(a) (1999).
The regulations in effect when the units at issue in this case
were created required a unit to
include the minimum number of leases or
portions of leases required to permit one or
more reservoirs or potential hydrocarbon
accumulations to be served by an optimal
number of artificial islands, installations, or
other devices necessary for the efficient
exploration or development and production of
oil and gas or other minerals.
30 C.F.R. § 250.50(b) (1986). In other words, for a lease to
belong in a particular unit, the lease must overlie “one or

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more [mineral] reservoirs or potential hydrocarbon
accumulations.” In re Samedan Oil Corp., 173 IBLA 23, 39–
40 (2007) (“IBLA Op.”). Once a unit has been approved, all
leases within the unit are generally extended as one. 30 C.F.R.
§ 250.1301(g) (1999); MMS’s Answer to Aera’s Statement of
Reasons 4–5, Feb. 26, 2001 (included at J.A. 295–96)
(agreeing with Aera that in practice suspension requests have
been handled at the unit, rather than the lease level). During
the exploration stage, the Service also has authority to
“contract” a unit by excluding all or part of one or more leases
based on better understandings about the dimensions and
qualities of the underlying mineral reservoir. IBLA Op., 173
IBLA at 36, 40 (justifying that interpretation of the
appropriate legal criteria for excluding leases from a unit
based (1) on the regulations in effect when the units at issue in
this case were formed, 30 C.F.R. § 250.50(b) (1987); (2) on
the two corresponding unit agreements; and (3) especially on
the preamble to the applicable regulations, Oil and Gas and
Sulphur Operations in the Outer Continental Shelf, 45 Fed.
Reg. 29,280, 29,281 (May 2, 1980), which states in relevant
part, “After exploration has been completed, a better
delineation of the mineral reservoir will be available, and
adjustments prior to development and production may be
warranted. In keeping with the minimum area standard, the
portions of leased areas that do not overlie the more precisely
delineated reservoir should be excluded from the unit area in
an adjustment.”). If a completely excluded lease’s primary
term has ended and if no other basis for extending that term
applies, then that lease expires upon exclusion from the unit.
30 C.F.R. § 2501.1301(f) (1999). To summarize, a lease’s
lifecycle begins with its primary term, during which it might
be joined together with other leases into a unit, after which all
leases within the unit might have operations “suspended” (and
so have their terms extended), perhaps even multiple times,
until, in some cases, the original lease is excluded—at which

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point, assuming both the primary term and any subsequent
suspensions have ended, the lease expires. Although this is
hardly the only path a lease might follow—indeed many
leases are extended by production—it is essentially what
happened to the four leases involved in this case.
Their story begins in the early 1980s when Appellant
Aera Energy paid $141 million for three of the leases, and
Appellant Noble Energy’s predecessor paid $1.65 million for
the fourth. All four leases were later unitized—Aera’s leases
became part of the Santa Maria Unit and Noble’s became part
of the Gato Canyon Unit. Prior to 1999, both units had
operations suspended several times, first at the companies’
request and then between 1992 and 1999, at the Regional
Office’s direction as part of a study known as the California
Offshore Oil and Gas Energy Resources (“COOGER”) study.
The COOGER study “was designed to help MMS evaluate
the operators’ exploration and development plans, as well as
to provide local governmental entities in California with
information regarding activities on the leased properties.”
Amber Resources Co. v. United States, 538 F.3d 1358, 1365
(Fed. Cir. 2008). During the study period, Dr. J. Lisle Reed,
MMS’s Pacific Regional Director, ordered the simultaneous
suspension of operations for all forty undeveloped California
leases—with the last COOGER suspension expiring in
August 1999.
Anticipating the end of the COOGER study, Reed
informed both Aera and Noble in December 1998 that if they
wished to extend their units, they would need to submit new
suspension requests, which they did. Then in June 1999,
setting in motion the events at issue in this case, Reed told
both companies that his office would be evaluating whether
any units should be “contracted.” Over the ensuing months,
Aera and Noble made their case against contraction by

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presenting scientific and historical data to the Regional staff.
Reed then notified Aera and Noble of his decision: “we have
determined that the geological and geophysical data and
interpretation no longer support inclusion of [the four leases]
within the Santa Maria [and Gato Canyon] Unit[s].”
Accordingly, Reed excluded the four leases, causing them to
expire. Simultaneously, he granted suspension requests for the
remaining leases in each unit.
While Reed was considering the suspension requests,
“[California’s] Governor, other State and local officials,
including California Coastal Commission members, and
various Congressional members expressed opposition to or
concern over development of the 40 undeveloped California
[outer continental shelf] leases, with some advocating for
their termination.” ALJ Op. at 16–17 (included at J.A. 717–
18). For example, on June 16, 1999, Senator Diane Feinstein
wrote to the Secretary of the Interior to “indicate my strong
opposition to any extension by the Minerals Management
Service of leases for the 40 undeveloped underwater tracts off
the coasts of California . . . and [to] urge [the Secretary] to
terminate these leases without any further extensions.”
Suspecting that politics had influenced Reed’s decision
and disagreeing with the negative assessment of the leases’
production potential, Aera and Noble appealed to the Interior
Board of Land Appeals (“IBLA”)—“Interior's review
authority charged with deciding, on behalf of the Secretary,
matters relating to the use and disposition of public lands and
their resources.” Orion Reserves Ltd. P'ship v. Salazar, 553
F.3d 697, 700 n.1 (D.C. Cir. 2009) (citing 43 C.F.R.
§ 4.1(b)(3)). The companies offered seven “independent
reasons” that Reed’s decision “should be reversed as a matter
of law” including that the decision was “unduly tainted by
impermissible political considerations,” that they had received

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inadequate notice “that the decision on [their] latest [unitwide] suspension request[s] would entail a re-evaluation of
the prospectivity of individual leases,” and that “[t]he [four]
leases are highly prospective.” Aera and Noble also asked the
IBLA to order an evidentiary hearing before an administrative
law judge if it found the record inadequate to evaluate these
arguments.
The IBLA decided that Reed’s “conclusory findings”
were “fundamental[ly] flaw[ed].” In re Samedan Oil Corp.,
163 IBLA 63, 69 (Sept. 7, 2004). But because it also found
that the record required further factual development, it
referred Aera and Noble’s appeals to an administrative law
judge for an independent evidentiary hearing covering not just
the evidence considered by MMS at the time of Reed’s
decision, but also any evidence available to the agency at that
time. Id. at 70–71; In re Samedan Oil Corp., IBLA 2005-166,
IBLA 2005-167, at 2–4 (May 11, 2005). MMS moved for
reconsideration, arguing against holding a hearing and
suggesting instead a remand to the Pacific Regional Director
to issue a new decision. In response, Aera and Noble pressed
the IBLA to proceed as planned and to issue a de novo
decision based on the administrative law judge’s proposed
fact findings, which the IBLA ultimately agreed to do.
The administrative law judge held a thirteen day hearing,
which focused primarily on the potential for commercial
production of oil and gas from the four excluded leases but
which also included evidence regarding political influence
over the original decision making process. Most significantly
for our purposes, Reed testified that his decision was based
not on the merits, but on politics. According to Reed, his
immediate supervisor told him that it “would be politically
very important to cancel some of the tracts” as a show of
“good faith to California officials” who vocally opposed

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drilling off the California coast. Reed Dep. 10:04:18–36, Mar.
24, 2005 (included at J.A. 362). Excluding the four leases
“would help her in carrying on the credibility of the region
and her work in Washington.” Reed Dep. 11:21:20–26
(included at J.A. 374–75). In particular, she hoped it would
“appease[]” California politicians, helping her to preserve the
remaining thirty-six undeveloped leases. Reed Dep. 11:22:28–
:23:16 (included at J.A. 375–76).
In addition, Reed explained that absent these political
considerations, he would have reached the opposite
decision—i.e., he would have left the four leases in their units
and granted Aera and Noble’s suspension requests. Reed Dep.
9:58:12–46, 10:06:10–52, 11:39:46–52 (included at J.A. 361,
363, 379). In saying this, Reed acknowledged that his
subordinates, unaware of any political pressure and primarily
responsible for analyzing the relevant scientific data, had
concluded “that the excluded leases did not qualify for
continued inclusion in their respective units . . . [and] that the
excluded leases were ‘marginal.’ ” ALJ Op. at 19 (included at
J.A. 720). Even so, Reed testified “that regardless of the
degree of marginality, he would not have removed the leases
from their respective units.” Id. Explaining why he disagreed
with his subordinates, Reed said that “cancellation of the
leases would result in lost rental revenue for the Government
and a lost opportunity for development of possible
hydrocarbon accumulations, given his opinion that . . . there
was little hope of leasing the tracts again for years in light of
the leasing moratorium and political climate.” Id. In addition,
Reed insisted “that the [geological] data was susceptible to
different interpretations.” Id. at 18 (included at J.A. 719).
The administrative law judge found Reed’s testimony
about whether political considerations played a role in the
exclusion decision “convincing[,] . . . unrebutted[,] and . . .

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credible.” Id. But with respect to the leases’ geological
potential and the propriety of excluding them, the
administrative law judge found Reed to be a less reliable
witness than his subordinates. Id. at 19 (included at J.A. 720).
The administrative law judge offered three reasons for this
credibility determination: first, “no rule or written policy . . .
permits unitization based upon [two of Reed’s rationales—]
the fact that the Government may lose rental revenue or that a
lease may not be released for many years,” id.; second, “the
purpose of unitization is not to extend leases,” id.; and third,
Reed “was less qualified than [his subordinates] by training
and relative familiarity with the relevant data to render an
opinion on whether the excluded leases should have been
removed from their respective units,” id. In addition, the
administrative law judge made extensive findings regarding
the exploration histories of the four leases, the companies’
future exploration and development plans, and the likelihood
that the leases contained potential hydrocarbon
accumulations. He concluded that the companies’ exploration
efforts on the four leases had essentially ended and that based
on data collected during that now-completed exploration
period, it was unlikely that any of the leases contained
potential hydrocarbon accumulations.
The IBLA then issued a final decision in which it adopted
the administrative law judge’s fact findings. The “key issue”
the Board addressed, which had been “the focal point of the
hearing proceedings, was whether the evidence available to
MMS at the time of the decisions formed a reasonable basis
for the decisions to remove the leases from their respective
units.” IBLA Op., 173 IBLA at 38–39. To answer that
question, the IBLA laid out the proper legal criteria for unit
contractions. Notably, the IBLA rejected two criteria that
Aera and Noble had championed and that Regional Director
Reed had testified he would have considered but for politics:

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“the potential loss of rental revenue and the minimal
likelihood of tract releasing.” Id. at 37. Instead, the IBLA
explained that once exploration is complete, as it essentially
was for these four leases, “contraction of a unit area is
appropriate if the evidence does not show the requisite strong
possibility of the presence of a hydrocarbon accumulation on
the excluded leases.” Id. at 41. Because “[t]he [administrative
law] judge’s factual findings and the record as a whole clearly
demonstrate that the excluded leases do not contain potential
hydrocarbon accumulations” the IBLA upheld the exclusion
decision. Id. at 44 (emphasis added).
The IBLA also considered whether the exclusion
decisions “were unduly tainted by impermissible political
considerations.” Id. at 38. The Board first observed that “Dr.
Reed did not review or evaluate the data himself, but relied on
the analysis of his staff who were not instructed that the
excluded leases needed to be terminated or that any particular
result was desired and who reached the decision that the
leases should be excluded based strictly on the seismic, well
log, and other geological and geophysical data” and that
“MMS’s technical staff was more qualified than Dr. Reed by
training and relative familiarity with the relevant data.” Based
on those observations, the Board concluded “that the
decision-making process and actual decision-makers [i.e.,
Reed’s subordinates] were sufficiently insulated from the
political pressure to obviate the need to set aside the MMS’s
decisions.” Id. In addition, the IBLA concluded that “the
record developed during the hearing process clearly supports
MMS’s decisions to exclude the leases from their respective
units.” Id. (emphasis added). In other words, as discussed
above, because Aera and Noble had failed to show a “strong
possibility” of hydrocarbon accumulation on the excluded
leases based on a fresh and politically untainted evidentiary
record, the decision to exclude those leases was correct.

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Seeking to overturn the IBLA’s decision—which,
significantly for the issue in this case, represents Interior’s
final agency action for the purposes of judicial review, Orion
Reserves Ltd., 553 F.3d at 707–08—Aera and Noble brought
suit in the United States District Court for the District of
Columbia under the Administrative Procedure Act, 5 U.S.C.
§ 706. Although their complaint included both a political
influence claim and allegations that the IBLA’s factual
findings and choice of legal criteria were arbitrary, capricious,
an abuse of discretion, and contrary to law, the companies
pursued only the political influence claim at summary
judgment. The district court agreed with Aera and Noble that
Reed, not his subordinates, was the MMS’s actual
decisionmaker and that the IBLA therefore erred when it
concluded that MMS’s original decision had been insulated
from improper political influence because that influence did
not extend to those subordinates. Aera Energy LLC v. Salazar,
691 F. Supp. 2d 25, 33–34 (D.D.C. 2010); Noble Energy, Inc.
v. Salazar, 691 F. Supp. 2d 14, 21–22 (D.D.C. 2010).
Treating that error as harmless, however, the district court
granted summary judgment to the Secretary, reasoning that
the IBLA, which was not subject to improper political
influence, had “authority to stand in the shoes of the Secretary
and to review decisions de novo when it finds that those
decisions are not properly supported.” Aera Energy, 691 F.
Supp. 2d at 36; Noble Energy, 691 F. Supp. 2d at 24; see also
5 U.S.C. § 706. By exercising that authority and finding
“ ‘that the leases were properly excluded from the units
because they lack the potential hydrocarbon accumulations
necessary for continued inclusion in the units[,]’ ” the IBLA
cured the Regional Director’s decision of its improper
political taint. Aera Energy, 691 F. Supp. 2d at 36 (quoting
IBLA decision); Noble Energy, 691 F. Supp. 2d at 24 (same).
Accordingly, the district court upheld the IBLA’s exclusion
decision.

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Aera and Noble now appeal. We review the district
court’s decision to grant summary judgment de novo. Novicki
v. Cook, 946 F.2d 938, 941 (D.C. Cir. 1991).
II.
In support of the claim that they are entitled to have their
four leases reinstated, Aera and Noble advance three principal
arguments. First, they claim that our precedent required the
IBLA to adopt the decision Reed would have made absent
political considerations. Second, they contend that under
Department regulations and past Board decisions, the IBLA
“neither can nor does substitute its judgment and discretion
for that of the administrative decision maker—here, the MMS
Regional Director,” Dr. J. Lisle Reed. Pet’r’s Br. 48. Finally,
the companies argue that the IBLA erred when it treated
Reed’s subordinates instead of Reed as MMS’s actual
decisionmaker.
We agree with Aera and Noble that Reed was the
relevant decisionmaker for MMS’s original decision and that
in concluding otherwise, the IBLA erred. But the Board
offered an independent basis for rejecting the companies’
political influence claims, and if that alternative is adequate,
then, as the district court found, the Secretary’s error was
harmless. See 5 U.S.C. § 706. We thus turn to Aera and
Noble’s first two arguments, which challenge the adequacy of
the alternative basis for the Board’s decision.
The Secretary urges us to bar Aera and Noble from
pursuing either argument because “[d]uring the administrative
appeal proceeding, [the companies] expressly and repeatedly
requested an evidentiary hearing before an [administrative
law judge] and a de novo decision by the IBLA.” Resp’t’s Br.
57. We agree with the Secretary that because Aera and Noble

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successfully convinced the IBLA, over MMS’s objections, to
order an evidentiary hearing and make a de novo decision and
failed to offer an alternative argument about the scope of the
Board’s authority, it would be unfair to allow Aera and Noble
now to advance the clearly inconsistent theory that the IBLA
lacked de novo decision making authority. See New
Hampshire v. Maine, 532 U.S. 742, 749 (2001) (“Where a
party assumes a certain position in a legal proceeding, and
succeeds in maintaining that position, he may not thereafter,
simply because his interests have changed, assume a contrary
position . . . .” (internal quotation marks omitted)); id. at 750
(explaining that judicial estoppel may be appropriate when a
party’s “later position [is] clearly inconsistent with its earlier
position[,] . . . the party has succeeded in persuading a court
to accept that party’s earlier position[, and] the party seeking
to assert an inconsistent position would derive an unfair
advantage or impose an unfair detriment on the opposing
party if not estopped” (internal citations and quotation marks
omitted)). In any event, we are dubious about that theory
given that the Secretary has expressly “reserved” authority to
take over and render a final decision about matters arising
under the Outer Continental Shelf Lands Act, 43 C.F.R.
§ 4.5(a)(1); that Department regulations authorize the IBLA
to “decide [administrative appeals] as fully and finally as
might the Secretary,” 43 C.F.R. § 4.1 (emphasis added); and
that the IBLA “may, on its own motion, refer any case to an
administrative law judge for a hearing on an issue of fact,” 43
C.F.R. § 4.415 (2004).
That said, the Secretary gives us no basis for barring the
companies from pursuing their first theory—that to remove
political taint from Reed’s decision, the IBLA should have
reinstated the four leases, rather than evaluating whether to
exclude them from their units. From the very beginning of the
administrative appeal process, Aera and Noble identified

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improper political influence as an “independent reason” to set
aside Reed’s exclusion decision. Aera’s Statement of Reasons
1 (included at J.A. 273) (emphasis added). Indeed, the IBLA
itself treated the companies’ political influence claim as a
separate and distinct issue. IBLA Op., 173 IBLA at 38. That
theory is thus best understood as an alternative argument, and
a party that presents two “alternative arguments . . .
abandon[s]” neither. See Busse Broad. Corp. v. FCC, 87 F.3d
1456, 1461 (D.C. Cir. 1996).
With these threshold matters behind us, this case boils
down to one issue: when politics has impermissibly infected
an agency decision, what steps must the agency take to cure
the taint? On this subject, we have several key cases, from
which three related principles emerge.
First, political pressure invalidates agency action only
when it shapes, in whole or in part, the judgment of the
ultimate agency decisionmaker. Thus, in our first political
influence case, D.C. Federation of Civic Ass’ns v. Volpe, we
asked whether “extraneous pressure intruded into the [agency
decisionmaker’s] calculus of consideration.” 459 F.2d 1231,
1246 (D.C. Cir. 1971). Similarly, in ATX, Inc. v. U.S.
Department of Transportation, we explained that “judicial
evaluation of pressure must focus on the nexus between the
pressure and the actual decision maker” rather than on the
pressure alone. 41 F.3d 1522, 1528 (D.C. Cir. 1994). Volpe is
representative of this principle. There, we overturned the
Department of Transportation’s approval of the much
debated, never-built Three Sisters Bridge between
Washington, D.C. and Virginia because Transportation
Secretary Volpe had approved the bridge only after
Representative Natcher, Chairman of the Subcommittee on
the District of Columbia of the House Appropriations
Committee, threatened to withhold money for the construction

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of the City’s subway system unless the bridge was built.
Volpe, 459 F.2d at 1245–49.
Second, even where political considerations have tainted
agency action, we have consistently given the agency an
opportunity to issue a new, untainted decision. For example,
in Volpe we expressly rejected the notion that “remand would
be futile . . . since the agency can only repeat the process it
purports already to have undertaken: namely, considering the
project solely on its merits,” id. at 1247 n.84, and instead sent
the case back to the agency for a new decision. Likewise, in
Koniag, Inc., Village of Uyak v. Andrus, we concluded that a
letter from Congressman Dingell to the Secretary of the
Interior had compromised the appearance of impartiality in
the Secretary’s determination that several Native Alaskan
villages were ineligible to take land and revenues under the
Alaska Native Claims Settlement Act. 580 F.2d 601 (D.C.
Cir. 1978) (“Koniag I”). Yet we rejected the remedy that the
district court had ordered—reinstatement of “the last
untainted decision” within the agency. Id. at 604. “[A] remand
to the Secretary, rather than a reinstatement of the [untainted]
decisions, is the proper remedy,” we explained, because even
“[a]ssuming the worst—that the letter contributed to the
Secretary’s decision in these cases—we cannot say that 3 ½
years later, a new Secretary in a new administration is thereby
rendered incapable of giving these cases a fair and
dispassionate treatment.” Id. at 611.
We have applied these two principles in cases where
politics threatened to or did, as here, intrude on intermediate
agency decisions. In such situations, so long as the agency
successfully insulated its final decisionmaker from the effects
of political pressure, we have allowed the agency’s final
decision to stand—as though we had reviewed, reversed, and
remanded the intermediate decision and then received a new

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petition for review from the agency’s subsequent decision.
For example, in Press Broadcasting Co. v. FCC, we upheld a
Commission decision notwithstanding that the Mass Media
Bureau, the office that first decided the issue, was exposed to
ex parte contacts from a congressional staffer. 59 F.3d 1365
(D.C. Cir. 1995). As we explained, because the Mass Media
Bureau had recused itself and because the full Commission,
which had not been subjected to any improper influence, then
rendered a fresh decision, that decision was free of taint. Id. at
1369–70.
Third, our political influence cases emphasize the value
of “establish[ing] ‘a full scale administrative record which
might dispel any doubts about the true nature of [the
agency’s] action.’ ” ATX, 41 F.3d at 1528 (quoting Volpe, 458
F.2d at 1249) (second alteration in the original). We first
made this point in Volpe, explaining that the agency could
“insulate itself from extraneous pressures unrelated to the
merits of the question . . . perhaps by compiling a full-scale
administrative record, utilizing fully intra-agency review
procedures, and consulting with other agencies and planning
groups.” Volpe, 458 F.2d at 1239 n.84. Likewise, in ATX, we
upheld the Department of Transportation’s denial of an
application to operate a new airline because the agency’s
decisionmakers, though aware of vociferous congressional
opposition to the application, had “insulated [their] own
decision making process” by ordering an evidentiary hearing
before an administrative law judge and by “issu[ing] a lengthy
opinion based on . . . [and] fully supported by the
[administrative] record.” 41 F.3d at 1528. These steps ensured
the “decision was clear [and] open to scrutiny.” Id.
Applied to this case, these principles require that we
reject Aera and Noble’s challenge. Notwithstanding that
political considerations concededly drove Reed’s decision,

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Aera and Noble have offered no evidence that political
pressure affected the Department’s ultimate decisionmaker—
the IBLA—or the administrative law judge who issued the
proposed fact findings on which the IBLA based its decision.
See Orion Reserves Ltd., 553 F.3d at 700 n.1 (noting that an
IBLA decision is the Department’s final decision). Moreover,
at Aera and Noble’s urging, the IBLA took just the sort of
steps to cure even the appearance of political impropriety that
we have encouraged or credited in our previous cases—
namely, ordering a formal evidentiary hearing based on
evidence known to MMS’s Regional office, as well as
evidence available at the time of the decision, and then
issuing a de novo decision based on that factual record.
Granting Aera and Noble the relief they seek—the decision
Reed would have made absent political pressure rather than
the decision the IBLA did make—would thus thwart the
Department’s effort to cure the political taint that infected
Reed’s original decision.
Aera and Noble argue that this case differs from the
decisions discussed above in two critical respects. First, the
companies point out that none of those cases contains explicit
evidence of political taint whereas here Reed himself admits
he would have reached the companies’ preferred decision
absent political considerations. But because the same legal
principles apply regardless of whether the political taint is
admitted or inferred, it is irrelevant that the evidence of
political influence is more direct here than in our previous
decisions. And in any event, in several cases the evidence was
adequate to convince us that political pressure warranted, or
could have warranted, invalidating agency decisions. See
Press Broad., 59 F.3d at 1370 & n.9 (noting “we might well
have” reversed the agency because of “congressional ex parte
interference in the administrative process” had the agency not
corrected its mistake by issuing a new and untainted

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decision); see also Koniag I, 580 F.2d at 610–11 (remanding
to the agency, in part, because political pressure
“compromised the appearance of the Secretary’s
impartiality”); cf. Volpe, 459 F.2d at 1245 (stating the position
of the opinion’s author (but only for himself) that “the impact
of th[e] [political] pressure [was, in that case,] sufficient,
standing alone, to invalidate the Secretary’s action”).
Second, Aera and Noble insist that this case is unique
because without political influence the IBLA never would
have had the opportunity even to consider “contracting” the
companies’ units. Given that only “adversely affected” parties
can appeal a Regional Director’s decision, there would, they
emphasize, have been no party to appeal had Reed left the
leases in their units and granted the companies’ suspension
requests. 30 C.F.R. § 290.2. In contrast, our other cases have
all had “parties on both sides,” making it “inevitable that . . .
the lower level official’s decision would . . . be appealed” to
higher level decisionmakers within the agency. Reply Br. 19
(contrasting this case with Koniag I). Moreover, the
companies explain that unlike the suspension decisions, which
came in response to requests from Aera and Noble, the
“contraction” decision was discretionary—that is, Reed had
no obligation even to consider it and likely would never have
done so but for politics. This too distinguishes our other cases
in which “an application for Government approval had been
submitted; a decision had to be rendered; and the question
was whether political influence tainted the decision.” Reply
Br. 16 (contrasting this case with Press Broadcasting and
ATX). The companies thus contend that unlike aggrieved
parties in our previous cases, they cannot be placed in a
politically untainted position unless the agency gives effect to
the decision Reed would have made.

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Aera and Noble are correct that the circumstances
presented here are in certain respects unlike those in our
previous cases. But we are unconvinced that these differences
warrant adopting a wholly new approach to curing political
interference in agency decision making. We have never even
hinted that to cure a decision of political taint, an agency must
determine, and give effect to, the decision that would have
been made had politics not intruded. Indeed, even though
Koniag I lacks the unique features of this case, the district
court there took an approach very much like that advocated by
Aera and Noble—namely, reinstatement of a subordinate
official’s untainted decision—out of concern over the
lingering effects of past political interference. See Koniag,
Inc. v. Kleppe, 405 F.Supp. 1360, 1370–73 (D.D.C. 1975).
Although we could have either affirmed the district court or
ordered a remedy analogous to the one Aera and Noble now
seek—by requiring the Department of the Interior to ascertain
and implement the decision the previous Secretary would
have made absent politics—we instead gave the new
Secretary a chance to issue a fresh untainted decision. See
Koniag I, 580 F.2d at 610–11. Likewise, in Volpe we required
an agency redo, rather than an investigation into a politically
untainted alternative universe. See Volpe, 459 F.2d at 1247
n.84.
This approach makes sense. Were we to adopt the
companies’ position, anyone believing that politics had
influenced an agency decision would presumably demand an
evidentiary hearing to determine not only whether politics
actually did influence the decision, but also what the decision
would have been absent political interference. Such hearings
would be both complex and burdensome. More troubling,
such an approach would effectively empower officials no
longer responsible for the original, politically driven
decision—and as in this case perhaps no longer even

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employed by the agency—to control agency policy.
Undoubtedly, some officials would take such an opportunity
to offer a revisionist history, and determining what would
have happened but-for political interference would be no easy
task. Consider, for example, that applying Aera and Noble’s
rule in Koniag would have meant asking a former Secretary
from a different administration who failed to insulate his
decision from political influence to dictate the case’s
outcome, instead of handing the task to the then-incumbent
Secretary.
Moreover, accepting the companies’ argument would
mean forcing the IBLA to adopt a “special” procedure
exclusively for political influence cases. After all, the IBLA
ordinarily has de novo review authority (or, at least, Aera and
Noble are estopped from arguing otherwise, see supra 13–14),
and “de novo” review ordinarily means that an appellate body
provides its own answers to questions presented on appeal
rather than ones based on what the original decisionmaker
would have done. Requiring the IBLA to mechanically
impose Reed’s hypothetical decision would thus deviate from
the Board’s ordinary practice. But we have never required a
special procedure and instead have encouraged agencies to
adapt established internal procedures to render fresh untainted
decisions. See, e.g., Press Broad., 59 F.3d at 1370
(concluding that the FCC had cured an earlier, tainted
decision because the Commission issued a de novo decision
after the tainted agency staff had been recused); ATX, 41 F.3d
at 1528 (observing that the Secretary of Transportation’s
decision to order a full-evidentiary hearing was
“unobjectionable;” indeed, it “was an appropriate response to
[congressional] pressure”). Indeed, in Koniag we expressly
rejected judicial tinkering with the procedures an agency
normally uses to correct its own errors. 580 F.2d at 610–11
(concluding that remand to the Secretary for a new decision

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rather than reinstatement of the last, untainted decision within
the agency was appropriate).
Finally, applying Aera and Noble’s framework would in
some cases mean an agency would have to adopt a decision
the agency itself considers unlawful. This very case illustrates
the problem. The IBLA determined not only that exclusion
was appropriate under the correct legal standard, but also that
two of the criteria Reed would have relied on to maintain the
leases—“potential loss of rental revenue” and “the minimal
likelihood of tract releasing”—were impermissible
considerations. IBLA Op., 173 IBLA at 37; ALJ Op. at 19
(included at J.A. 720). Accordingly, were the IBLA to impose
Reed’s decision, it would effectively be embracing the very
factors it believed were impermissible, a decision we would
normally find arbitrary and capricious. Cf. Allentown Mack
Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 374 (1998) (“It is
hard to imagine a more violent breach of th[e] requirement [of
reasoned decision making] than applying a rule of primary
conduct or a standard of proof which is in fact different from
the rule or standard formally announced.”); Alaska Prof’l
Hunters Ass'n v. FAA, 177 F.3d 1030, 1034 (D.C. Cir. 1999)
(requiring an agency to conduct notice and comment
rulemaking before significantly revising a definitive
interpretation of the agency’s regulations). Yet that is exactly
what Aera and Noble would have us require as a matter of
law.
Resisting the significance of the IBLA’s determinations,
Aera and Noble point out that the Board made no “explicit
finding” that Reed’s hypothetical decision would have been
unlawful and point to purportedly “ample bases for his
conclusions” in his testimony. Pet’r’s 28(j) Letter 1–2, Jan.
28, 2011. But even assuming some of Reed’s rationales would
have been appropriate, the companies do not dispute that

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Reed would have based his politically untainted decision on
considerations the IBLA subsequently determined were
inappropriate. In any event, we think it hardly surprising that
the IBLA made no “explicit finding” about the lawfulness of a
decision Reed never made, particularly given that our case
law nowhere even hints that de novo review must include
such an inquiry. That said, because the Board made no
“explicit finding,” we have highlighted the flaws in Reed’s
decision not as a basis to affirm, but merely to illustrate the
bizarre results that embracing the companies’ theory could
produce.
Of course, this might well have been a different case had
the companies also advanced traditional Administrative
Procedure Act claims alleging, for example, that the
Department violated its own procedural or substantive
requirements for “contracting,” or even considering whether
to contract, a unit. Certainly, courts reviewing agency
decisions involving political interference must be attuned to
the heightened possibility that political influence will have
caused agencies to cut corners. In this case, Aera and Noble
made several such arguments to the IBLA, including that
there was sufficient evidence that each lease contained
mineral deposits to warrant their continued inclusion and that
the companies had received inadequate notice that the
Regional office would be considering whether to “contract”
the units. The Board rejected these arguments. Significantly,
it also implicitly rejected any argument that evaluating
whether to contract the units at that time would have been
improper, explaining that once exploration is essentially
complete, as in the case of these four leases, it is appropriate
under agency regulations to assess the available scientific
evidence to determine whether leases should continue to be
included in their units. But because Aera and Noble failed to
challenge these conclusions on appeal, we must assume the

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procedural and substantive soundness of the Department’s
decision. Given that assumption, Aera and Noble were
entitled to nothing more than what they received—an agency
decision on the merits uninfluenced by political
considerations.
III.
We are keenly aware that administrative agencies making
important and sometimes controversial decisions are often
buffeted by political pressure. Indeed, public advocacy plays a
healthy role in our system. Accordingly, “we have never
questioned the authority of congressional representatives to
exert pressure, and we have held that congressional actions
not targeted directly at [agency] decision makers—such as
contemporaneous hearings—do not invalidate an agency
decision.” ATX, 41 F.3d at 1528 (citing Volpe, 459 F.2d at
1249 and Koniag, 580 F.2d at 610) (emphasis added). But
sometimes political pressure crosses the line and prevents an
agency from performing its statutorily prescribed duties.
When that occurs, we have repeatedly declined to stand in the
agency’s shoes and take over its decision making function.
Instead, we have directed the agency to use the traditional
administrative tools at its disposal to render a politically
untainted decision. Such an approach follows from the
distinct roles Congress has assigned to administrative
agencies and the courts: for agencies, to reach reasoned
decisions based on the relevant statutory factors; and for the
courts, to ensure that those agencies properly carry out their
statutory responsibilities. Having found that the IBLA
fulfilled its role, we have fulfilled ours and so affirm.
So ordered.