v. Rocky Mountain Regional Director et al
Filing
29
OPINION AND ORDER. IT IS HEREBY ORDERED that by 6/30/2015, Parties shall jointly submit a Proposed Case Management Plan. SEE ORDER FOR DETAILS. Signed by Judge Susan P. Watters on 6/15/2015. (EMH, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION
FILED
J:.JN I 5 2015
ELK PETROLEUM, Inc.,,
CV 14-30-BLG-SPW
Clerk, U.S. District Court
District Of Montana
Billings
Plaintiff/Counter-Defendant,
vs.
OPINION and ORDER
ROCKY MOUNTAIN REGIONAL
DIRECTOR, BUREAU OF INDIAN
AFFAIRS, and the UNITED STATES
DEPARTMENT OF THE INTERIOR,
INDIAN AFFAIRS,
Defendants/Counter-Plaintiffs.
This Court previously set a preliminary pretrial conference in this case and
ordered the parties to, inter alia, submit a joint discovery plan. However, the
parties could not agree on discovery deadlines. Defendant Rocky Mountain
Regional Director ("Regional Director") 1 claims that discovery is inappropriate, as
this case is brought under the Administrative Procedures Act ("AP A"). Plaintiff
Elk Petroleum disagrees and believes that it is entitled to discover information
outside the administrative record. This Court vacated the preliminary pretrial
conference and ordered the parties to brief the issue of whether discovery should
1
The Department of the Interior has also appeared. The Court includes both
Defendants when referring to the "Regional Director."
1
be conducted. The matter is now fully briefed. The Court agrees with the
Regional Director and finds that discovery would be inappropriate.
I. Background
In Spring 2008, Elk Petroleum and the Crow Tribe of Indians ("Tribe")
negotiated a proposed Indian Mineral Development Agreement ("Agreement").
(Doc. 1 at 4). Pursuant to federal law, the Tribe submitted the Agreement to the
Regional Director for approval. (Id.). On June 26, 2008, the Regional Director
notified the Tribe about some issues in the Agreement. (Id. at 5). Elk Petroleum
and the Tribe agreed to "clarifications" to the Agreement and submitted it again to
the Regional Director. (Id.).
On July 30, 2008, the Regional Director responded with a letter that is
interpreted differently by the parties. According to Elk Petroleum, the Regional
Director gave conditional approval to the Agreement. (Id. at 6). Conversely, the
Regional Director believes that he approved the Agreement without conditions.
(Doc. 15 at 11).
Under the Agreement, Elk Petroleum was to pay a bonus payment and
annual rentals to the Tribe. (Doc. 1 at 6). As far as the Court can tell, Elk
Petroleum never took actions on the Crow Reservation after July 30, 2008. In
March 2009, Elk Petroleum received invoices for annual rental and bonus
payments from the Regional Director. (Id.). On April 16, 2009, Elk Petroleum
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wrote to the Regional Director and the Tribe to express its opinion that the
Agreement had not been finalized and approved. (Id.). On May 26, 2009, the
Regional Director informed Elk Petroleum that the Agreement was not conditional
and is considered final. (Id.).
On October 14, 2009, the Regional Director issued a decision that cancelled
the Agreement and assessed Elk Petroleum with bonus and rental payments
totaling $626,930.85. (Id. at 7). According to Elk Petroleum, the Regional
Director did not undergo any formal fact finding procedure. (Doc. 25 at 4). Elk
Petroleum appealed the Regional Director's decision to the Interior Board of
Indian Appeals ("Board"). (Doc. 1 at 7). Elk Petroleum moved the Board for a
hearing to resolve issues of material fact, but the Board denied the motion. (Doc.
25 at 5). On December 19, 2012, the Board affirmed the Regional Director's
decision. (Doc. 1 at 7).
Elk Petroleum filed this action against the Regional Director on March 7,
2014, seeking a declaratory judgment that the Agreement is not enforceable. (Id.
at 8). The Regional Director filed a counterclaim against Elk Petroleum and seeks
a declaratory judgment that Elk Petroleum is liable under the Agreement for the
bonus and rental payments. (Doc. 15 at 15). Both parties agree that this action is
brought pursuant to the APA. The Regional Director filed the administrative
record on May 15, 2015. (Doc. 26).
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II. Discussion
The issue presently before the Court is whether the parties should be allowed
to conduct discovery. Elk Petroleum acknowledges that in APA cases, the
reviewing court typically relies upon the administrative record. However, Elk
Petroleum argues that extra-record information is required in this case for effective
judicial review and because the parties have not had an opportunity for factfinding. The Regional Director argues that the administrative record does not
require supplementation and that discovery would be an inappropriate attempt to
create a new record.
"Generally, judicial review of an agency decision is limited to the
administrative record on which the agency based the challenged decision." Fence
Creek Cattle Co. v. U.S. Forest Serv., 602 F.3d 1125, 1131 (9th Cir. 2010). A
court may expand the record in four circumstances:
(1) supplementation is necessary to determine if the agency has
considered all factors and explained its decision; (2) the agency relied
on documents not in the record; (3) supplementation is needed to
explain technical terms or complex subjects; or (4) plaintiffs have
shown bad faith on the part of the agency.
Id. These exceptions are "narrowly construed and applied." Lands Council v.
Powell, 395 F.3d 1019, 1030 (9th Cir. 2005).
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The Court finds that discovery is not warranted. Elk Petroleum argues that
discovery is necessary to understand the agency's decision making process, as it
"has no way of knowing how the decision in question was reached." (Doc. 28 at
6). However, the Board issued a nine page ruling explaining why it affirmed the
Regional Director's decision. (AR0000004). The Court finds that the Board's
written ruling is sufficient for this Court to determine whether it considered all the
relevant factors. This does not foreclose Elk Petroleum's arguments that the Board
reached an incorrect legal conclusion. It just means that the record does not need
to be supplemented for the Court to determine ifthe Board "considered all factors
and explained its decision." Fence Creek Cattle, 602 F.3d at 1131.
Further, Elk Petroleum does not describe what information it would seek
from the Regional Director or what evidence is missing from the administrative
record. It only argues that it should be permitted to depose the Regional Director.
Elk Petroleum also wants discovery so that it has "reasonable assurance" that the
administrative record is accurate and complete. (Doc. 28 at 5).
These general concerns are not enough to trigger the narrow exceptions
explained above. A review of the administrative record shows that the Regional
Director's position should not surprise Elk Petroleum. The Regional Director
wrote several letters to Elk Petroleum regarding the Agreement's enforceability.
The Regional Director also filed a response brief to the Board after Elk Petroleum
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appealed his decision. (AR0000023). A deposition is not necessary to determine
why the Regional Director believes he correctly assessed bonus and rental
payments against Elk Petroleum and why he cancelled the Agreement.
In regards to its argument that discovery is necessary to determine the
administrative record's authenticity, Elk Petroleum appears to be arguing that the
Regional Director has acted in bad faith. To invoke the bad faith exception to
allow discovery beyond the administrative record, "there must be a strong showing
of bad faith or improper behavior." Pub. Power Council v. Johnson, 674 F.2d 791,
795 {9th Cir. 1982). The Court does not find any facts to support Elk Petroleum's
inference that the Regional Director could have acted improperly.
Finally, Elk Petroleum argues it is entitled to discovery since the Regional
Director and the Board denied opportunities for fact finding. However, the Court
finds that this argument is not sufficient to allow for discovery. If this Court finds
that the Regional Director or the Board should have allowed Elk Petroleum to
conduct discovery, then this Court would likely follow the "preferred procedure"
and remand back to the Board. Id. at 794.
III. Conclusion
In sum, the Court does not find any exceptional circumstances to warrant a
departure from the general rules of administrative review. Since discovery would
be inappropriate, a pretrial preliminary conference is unnecessary. Accordingly, IT
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IS HEREBY ORDERED that by June 30, 2015, the parties shall jointly submit a
proposed Case Management Plan that includes deadlines for the following events:
(1) Lodging of objections to the administrative record; (2) briefing schedules for
dispositive motions; and (3) any other deadlines the parties believe are appropriate.
~~
DATED this /)day of June, 2015.
United States District Judge
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