## Facts

- Private oil and gas lessees, including BP America Production Co. (successor to Amoco), held federal gas leases in the San Juan Basin and owed royalties to the United States.
- The lessees calculated royalties based on wellhead value and deducted certain post-production costs, including costs to make coalbed methane marketable.
- In the mid-1990s, the Department of the Interior’s Minerals Management Service (MMS) concluded that certain deductions (including CO₂ removal costs) were improper and that royalties had been underpaid for earlier production years.
- In 1996, MMS issued administrative orders directing the lessees to pay additional royalties (over $4 million for BP).
- The lessees argued that 28 U.S.C. § 2415(a)’s six-year statute of limitations for “every action for money damages” founded on contract barred the Government from issuing these administrative payment orders for older periods.

## Issues

1. Whether 28 U.S.C. § 2415(a)’s six-year limitations period for an “action for money damages” founded on contract applies to agency administrative orders demanding payment, rather than only to court suits.
2. Whether the terms “action,” “complaint,” and “money damages” in § 2415(a) encompass administrative enforcement proceedings or are limited to judicial proceedings.

## Decision

- The Supreme Court affirmed the D.C. Circuit’s judgment.
- The Court held that § 2415(a)’s six-year statute of limitations applies only to court actions, not to MMS administrative payment orders.
- Because the limitations provision did not govern the agency’s orders, the administrative royalty assessments were not time-barred by § 2415(a).

## Legal Principles

- Absent a statutory definition to the contrary, statutory terms are interpreted according to their ordinary meaning.
- In § 2415(a), the terms “action” and “complaint” are ordinarily judicial terms, indicating a limitation aimed at lawsuits filed in court rather than agency proceedings.
- The phrase “action for money damages” reinforces a judicial focus because “damages” commonly refers to compensation awarded by a court.
- Section 2415(a)’s reference to filing within one year after final administrative decisions indicates that Congress distinguished administrative proceedings from the judicial “action” that may follow.
- Statutes of limitations restricting the United States’ enforcement authority are not extended beyond their clear textual scope.

## Conclusion

The Court concluded that 28 U.S.C. § 2415(a) limits only judicial contract actions for money damages brought by the United States and does not bar federal agencies from issuing administrative payment orders to recover alleged royalty underpayments.


BP Am. Prod. Co. v. Burton, 549 U.S. 84 (2006)