## Facts

- The Department of the Interior, through the BIA, conducted four competitive sales of oil-and-gas leases on the Jicarilla Apache Reservation in the early 1970s.
- A governing regulation, 25 C.F.R. § 171.3, required advance advertising of lease sales (including weekly publication for three consecutive weeks in an appropriate local newspaper), plus other notice.
- The Jicarilla Apache Tribe claimed the Secretary failed to comply with the regulation’s publication/notice requirements, reducing competition and depressing bonus bids.
- In 1976, the Tribe sued the Secretary and multiple private oil-and-gas lessees seeking cancellation of nonproducing leases and NEPA relief for producing leases (including an environmental impact statement).
- The district court found regulatory noncompliance but declined to cancel leases; it ordered lessees to pay additional “adjusted bonus” amounts to compensate for the notice defect.
- The district court rejected the Tribe’s NEPA claim based on laches and unclean hands, and dismissed lessees’ counterclaims against the Tribe on tribal sovereign immunity grounds.
- The Tribe appealed; the Secretary and lessees cross-appealed, challenging liability findings, remedies (including bonus adjustments), immunity rulings, and rental obligations during litigation.

## Issues

1. Whether technical noncompliance with 25 C.F.R. § 171.3 required cancellation of the leases.
2. Whether the district court properly used equitable powers to uphold the leases and award compensatory “adjusted bonus” payments instead of cancellation.
3. Whether the Tribe’s NEPA claim for equitable relief was barred by laches and unclean hands.
4. Whether lessees’ counterclaims against the Tribe were barred by tribal sovereign immunity absent a clear waiver.
5. Whether lessees owed annual rentals during the pendency of litigation when the leases were ultimately upheld.

## Decision

- The Tenth Circuit agreed that the Secretary did not strictly comply with the notice requirements of 25 C.F.R. § 171.3.
- The court held that the regulatory violation did not automatically require lease cancellation and affirmed the equitable remedy preserving the leases.
- The court upheld the award of additional bonus compensation to remedy the economic harm from defective notice.
- The court affirmed rejection of the Tribe’s NEPA claim based on laches and unclean hands.
- The court affirmed dismissal of lessees’ counterclaims against the Tribe on tribal sovereign immunity grounds.
- The court modified the remedy by requiring payment of annual rentals during litigation because lessees’ rights under the leases were being upheld.

## Legal Principles

- Agency failure to comply with leasing-notice regulations may support relief without requiring invalidation of executed leases; cancellation is not automatic.
- Federal courts have equitable discretion to select remedies that compensate for economic injury while avoiding unnecessary disruption to settled contractual and reliance interests.
- When leases are upheld against a cancellation challenge, lessees remain obligated to pay lease rentals during litigation.
- Equitable defenses such as laches and unclean hands can bar NEPA-based equitable relief where the plaintiff delays unreasonably and acts inconsistently with the asserted environmental position.
- Tribal sovereign immunity bars counterclaims absent a clear and unequivocal waiver; a tribe’s initiation of suit does not, by itself, waive immunity for affirmative counterclaims.

## Conclusion

The Tenth Circuit upheld oil-and-gas leases despite technical defects in federally required sale notice, approved compensation through adjusted bonuses, required ongoing rental payments while the leases were enforced, barred NEPA relief on laches and unclean hands, and reaffirmed tribal sovereign immunity against lessees’ counterclaims absent unequivocal waiver.


Jicarilla Apache Tribe v. Andrus, 687 F.2d 1324 (10th Cir. 1982)