## Facts

- The U.S. Department of the Interior, Bureau of Land Management (BLM), administered competitive federal oil-and-gas leasing under the Mineral Leasing Act (MLA).
- BLM held a Utah lease sale that included parcels near two national parks and other sensitive or unique lands.
- The proposed leasing drew numerous protests from outside groups based on environmental and land-management concerns.
- Despite the protests, BLM proceeded with the sale and accepted high bids for certain parcels.
- Impact Energy Resources, LLC (Impact) was a winning bidder on certain parcels; it was a responsible, qualified bidder and submitted the highest bids meeting the national minimum acceptable bid.
- After the sale but before any leases were issued, Ken Salazar became Secretary of the Interior.
- Secretary Salazar issued a memorandum directing BLM to withdraw the contested leases from issuance, citing concerns about the adequacy of environmental review and the need to reconsider the leasing decisions.
- Impact appealed the withdrawal decision to the Interior Board of Land Appeals (IBLA).
- IBLA concluded the Secretary retained broad discretion to withdraw lease parcels at any time before a lease is actually issued.
- Impact then sought review in federal district court, arguing the MLA required issuance once BLM offered parcels for sale and accepted acceptable high bids, and also challenging the withdrawal under the Administrative Procedure Act (APA).

## Issues

1. Whether the MLA required the Secretary to issue an oil-and-gas lease to a high, qualified bidder once BLM conducted a sale and accepted the bid, or whether the Secretary retained discretion to decline issuance before the lease was issued.
2. Whether the Secretary’s withdrawal decision was unlawful under the APA (including whether it was arbitrary or capricious).
3. Whether any portion of the challenge was barred by the MLA’s 90-day limitations period, 30 U.S.C. § 226-2, and what agency action constituted the Secretary’s “final decision” starting that period.

## Decision

- The court upheld IBLA’s conclusion that the Secretary retained discretion under the MLA and related regulations to withdraw parcels and decline to issue leases at any time before lease issuance.
- The court rejected the argument that high bidders obtained a vested right to a lease based solely on bid acceptance; prior to issuance, the bidder held only an expectancy.
- Applying APA review, the court sustained the Secretary’s withdrawal decision as within statutory authority and supported by a rational explanation tied to environmental-review concerns and the administrative record.
- The court held that the MLA’s 90-day limitations period in 30 U.S.C. § 226-2 applied to challenges contesting the Secretary’s leasing decision and barred at least some claims because suit was not brought within 90 days of the Secretary’s final withdrawal decision.

## Legal Principles

- Under the MLA, the Secretary has discretion to decide whether public lands will be leased, and that discretion can continue through the period after a sale but before a lease is issued.
- A high bid at a federal lease sale, even if accepted as the high bid meeting minimum requirements, does not by itself create a property right or enforceable entitlement to a lease before the lease is issued.
- Agency withdrawal of offered parcels based on concerns about environmental review and compliance obligations can be upheld under the APA where the agency provides a reasoned explanation and acts within statutory authority.
- The MLA’s limitations provision, 30 U.S.C. § 226-2, requires actions contesting the Secretary’s leasing decisions to be filed within 90 days after the Secretary’s final decision.

## Conclusion

Impact Energy Resources, LLC v. Salazar held that the Secretary of the Interior could withdraw Utah oil-and-gas parcels after a competitive sale but before lease issuance, because bidders gain no vested right until a lease is issued; the court also upheld the withdrawal under APA review and applied the MLA’s 90-day filing limit to bar untimely challenges to the Secretary’s final withdrawal decision.


Impact Energy Resources, LLC v. Salazar, 2010 WL 3489544 (2010)