[00:00:00] Speaker 03:
Case number 23-5254, Twin Medals Minnesota LLC and Franconia Minerals US LLC at balance versus United States of America at L. Ms.

[00:00:12] Speaker 03:
Blatt for the balance, Ms.

[00:00:14] Speaker 03:
Jaffee for the appellees, Ms.

[00:00:16] Speaker 03:
McGrath for the intervener appellees.

[00:00:21] Speaker 07:
Morning, Ms.

[00:00:22] Speaker 07:
Blatt.

[00:00:25] Speaker 02:
Good morning and thank you and may it please the court Lisa Blatt for the appellants.

[00:00:30] Speaker 02:
With the court's permission, I would like to address two post briefing developments that we think suggest that the court should hold the appeal in abeyance just based on judicial economy.

[00:00:41] Speaker 02:
First, we're obviously on the eve of a new administration that has publicly enthusiastically expressed support

[00:00:48] Speaker 02:
for this project, and we think that that government could immediately take new action that would moot the issues on appeal.

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And second, there's the flurry of 28 J letters that have been filed in the last, I think, 10 days or so.

[00:01:02] Speaker 02:
So on December 19th, the Forest Service, or sorry, the Interior Department, the government informed this court and us for the first time

[00:01:11] Speaker 02:
that Interior sought the Forest Service's view on Twin Metal's preference rights, lease applications, and Forest Service then responded, expressing their opposition to the project.

[00:01:23] Speaker 02:
On Friday, we filed our own 28-J letter that informed the court that we have since administratively appealed that Forest Service action.

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And although this court we think could decide all the issues on appeal today or now, and without regard to the Forest Services view, at least the preference rights lease applications involve complicated questions, certainly a first impression that the court may want to wish and wait if it doesn't have to decide those questions.

[00:01:53] Speaker 07:
How would resolution of the administrative appeal that you recently filed

[00:02:02] Speaker 07:
move this case?

[00:02:04] Speaker 02:
Well, I don't think it would move it, but it certainly could affect it because the government is relying on the Forest Service lack of consent.

[00:02:13] Speaker 02:
And obviously, if that's appealed.

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But I think more importantly, and this dovetails with both the timing of the letter that it was filed three years after the Interior Department declined and declined the applications

[00:02:28] Speaker 02:
three years ago, this was not the basis and it came on the eve of oral argument strikes to us is not only grotesquely post hoc, but even smacks of possible political issues and.

[00:02:40] Speaker 02:
Monday a new administration comes in.

[00:02:43] Speaker 02:
And so I think it just dovetails with that.

[00:02:44] Speaker 02:
To be sure, it does not, you can decide the question simply on Chenery at Calcutt Grounds because the Interior Department doesn't even cite the Forest Service Letter.

[00:02:55] Speaker 02:
So you can just ignore the Forest Service views.

[00:02:57] Speaker 02:
It doesn't prohibit you from deciding it.

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It's just a question of judicial efficiency.

[00:03:03] Speaker 02:
So it's totally obviously within your discretion.

[00:03:06] Speaker 02:
And I'm going to start with the jurisdictional issue, but when we get into the preference right lease applications, we can walk through it and you'll see you don't have to even look at what the Forest Service did.

[00:03:16] Speaker 06:
administrative appeal goes only to the PLRA applications, right?

[00:03:21] Speaker 02:
That's correct.

[00:03:22] Speaker 02:
That's correct.

[00:03:23] Speaker 02:
Not the the not the lease renewal.

[00:03:26] Speaker 02:
So I'll start with the jurisdictional issue.

[00:03:29] Speaker 02:
This is involving the APA challenge to the 2022 interior cancellation of a 2019 lease renewal.

[00:03:38] Speaker 02:
And the court below held that it lacked jurisdiction because it construed the complaint

[00:03:43] Speaker 02:
as being the source of the right being the 1966 lease.

[00:03:47] Speaker 02:
And it said the complaint was challenging the government's interpretation of that lease.

[00:03:52] Speaker 02:
That obviously is manifestly wrong because the government's cancellation was not based on the lease, much less any interpretation.

[00:03:59] Speaker 02:
The government's cancellation was based exclusively, exclusively on statutory and regulatory grounds.

[00:04:06] Speaker 02:
The complaint challenges those grounds and judicial review of statutory and regulatory views obviously falls within the heartland of APA jurisdiction.

[00:04:15] Speaker 06:
What's the source of, on your view, what's the source of the alleged right to renew the leases?

[00:04:25] Speaker 06:
It's not the leases, it's the APA.

[00:04:28] Speaker 02:
It's the APA.

[00:04:29] Speaker 02:
Remember, if the cancellation said the government cancels a lease and said, we canceled this lease because we think it violated NEPA, you'd have a classic APA review of the government's view under NEPA.

[00:04:41] Speaker 02:
Well, guess what?

[00:04:42] Speaker 02:
That was one of the reasons the government canceled this lease.

[00:04:46] Speaker 06:
I mean, that's a very odd view that review would be separated if you're

[00:04:56] Speaker 06:
claiming under the leases, you go to the court of federal claims.

[00:05:02] Speaker 06:
But if you're saying that the explanation for construing the leases was not adequately articulated, and therefore arbitrary and capricious, sounds like APA.

[00:05:16] Speaker 06:
So you come here.

[00:05:17] Speaker 06:
No.

[00:05:18] Speaker 06:
And that's an odd

[00:05:19] Speaker 02:
Well, that may be, but that's not this case.

[00:05:22] Speaker 02:
No one is saying that they arbitrarily construed the lease.

[00:05:25] Speaker 02:
They arbitrarily and unlawfully construed a statute and a regulation.

[00:05:28] Speaker 02:
The cancellation is based, recall, on the Downs opinion.

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And the Downs opinion cites regulation 3514 and advises BLM that they are authorized to cancel a release.

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Remember, there's already a release here.

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And the Downs opinion says there are three regulatory and statutory reasons you're authorized to cancel the release.

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And the cancellation relies on that.

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The first is it construed

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i.e.

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the agency construed Section 508 a statute to require for service consent.

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Second, the Downs opinion says there's a series of four regulations that require the government to use the standardized renewal forms that only give you a preferential right of review.

[00:06:11] Speaker 02:
And third, the Downs memo says the renewal violated NEPA because you did not consider a no action alternative.

[00:06:20] Speaker 02:
Now, it also retracts the Georgiani opinion, which comes from the Trump administration.

[00:06:24] Speaker 02:
And the Georgiani opinion gives you competing views of the statute and regulation.

[00:06:29] Speaker 02:
So who is right between Giorgianni and Downs is a classic APA.

[00:06:33] Speaker 02:
The government doesn't dispute if the Downs opinion is wrong based on statute and regulation.

[00:06:39] Speaker 02:
There's an adequate renewal, a lease that is in existence.

[00:06:46] Speaker 02:
So it's not like we said and brought a complaint saying, interior, you must renew a lease.

[00:06:52] Speaker 02:
It's already been renewed.

[00:06:53] Speaker 02:
What we have is a cancellation.

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And I think the example we give in our brief, if an agency says,

[00:06:57] Speaker 02:
We're going to cancel a lease because you have a left arm or because it's your left-handed or because it's a Tuesday or because we construe a statute that says the lease was unlawfully renewed.

[00:07:09] Speaker 02:
That is a paradigmatic classic APA challenge.

[00:07:13] Speaker 02:
This court, and we cite the megapulse, which is cited then on Crowley, that even if the court below the district court has to construe the lease, this court said pretty lucidly that that does not transform

[00:07:25] Speaker 02:
what is otherwise within the jurisdiction of the court into an action on the contract.

[00:07:28] Speaker 02:
What matters is the source.

[00:07:30] Speaker 02:
So if the government had said, we can screw this lease, you violated it, then that's a disguised breach of contract claim.

[00:07:37] Speaker 02:
But that's just not this complaint.

[00:07:38] Speaker 02:
The complaint is, and I think it's in paragraph 113 seeks classic APA remedies.

[00:07:44] Speaker 02:
It seeks vacature of the downs opinion, vacature of the cancellation and a declaratory relief that those actions were unlawful.

[00:07:51] Speaker 02:
the district court on remand has to sort through the regulations and the statute and the government doesn't dispute that if once those are vacated the lease is the lease already got renewed in 2019 it's only three years later when the government canceled they're only impermissible if a court would agree that the interpretation was inconsistent with the lease's

[00:08:15] Speaker 05:
The rights here clearly emanate from the leases.

[00:08:17] Speaker 05:
You don't have the leases.

[00:08:19] Speaker 05:
There's no discussion.

[00:08:20] Speaker 05:
That's what the fight is all about.

[00:08:21] Speaker 02:
So there's no discussion.

[00:08:23] Speaker 02:
I mean, there's no dispute that Article 3 standing and this case wouldn't be here but for a contract.

[00:08:28] Speaker 02:
But every single decision of your of your court and Megapulse is saying the fact that the

[00:08:33] Speaker 02:
that there's a but for relationship between the cause of action and the fact that you're in existence does not deprive the court of jurisdiction.

[00:08:41] Speaker 02:
Or this court could never review arbitrary and capricious deprivations of contractual rights based on statutes, regulations.

[00:08:49] Speaker 02:
I mean, this is a classic APA case.

[00:08:52] Speaker 02:
We cite the Texas oil case where the court said we unwind on lawful agency action, and that meant the underlying contract was valid.

[00:09:01] Speaker 02:
So I just think that the but for was a bridge you crossed in Megapulse.

[00:09:05] Speaker 02:
If you remember in that case, it was a government contract.

[00:09:09] Speaker 02:
And the issue in Megapulse was the government was trying to release trade secrets and the plaintiff there said, you can't take our trade seeking information.

[00:09:19] Speaker 02:
And the government said, no, no, we think we're entitled to do that under the contract.

[00:09:23] Speaker 02:
That case turned on a contractual interpretation of the contract

[00:09:28] Speaker 02:
vis-a-vis the Trade Secret Act.

[00:09:29] Speaker 02:
So it cannot be the fact that we're here because we have a renewed lease.

[00:09:34] Speaker 02:
The government canceled it, not even citing any interpretation, not citing the lease at all.

[00:09:40] Speaker 02:
It said you violated our statutes and regulations.

[00:09:43] Speaker 07:
If we agree with you, that would require us to send back counts one and four.

[00:09:51] Speaker 07:
Correct.

[00:09:52] Speaker 07:
Wouldn't affect counts two and three.

[00:09:54] Speaker 02:
That's correct.

[00:09:56] Speaker 02:
Absolutely correct.

[00:09:57] Speaker 02:
That's why the jurisdictional issue I think is quite straightforward because you can't change the fact that the only basis for the cancellation did not cite the lease, did not construe the lease, did not interpret the lease, and we're not challenging any governmental interpretation of a contract.

[00:10:13] Speaker 02:
Plain and simple.

[00:10:14] Speaker 02:
The preference right lead application is a much more, and we can turn to it, but it is a much more

[00:10:19] Speaker 02:
complicated regulatory analysis.

[00:10:22] Speaker 02:
Before I turn to the preference rights leads applications, the one thing I will say, because the other thing the judge, the court below relied on was specific performance.

[00:10:31] Speaker 02:
And specific performance, we think, would have to be where a court, we're asking a court to order the government to take specific action on a contractual provision.

[00:10:40] Speaker 02:
Of course, we're not doing this here.

[00:10:42] Speaker 02:
We're just asking to unwind unlawful agency action, return to the status quo ante, which is an existing lease renewal that

[00:10:50] Speaker 02:
the Trump administration entered into back in 2019.

[00:10:52] Speaker 05:
I don't understand what you think, what regulation you think they violated or what statutes.

[00:10:58] Speaker 02:
So we don't think that.

[00:11:00] Speaker 05:
What I'm trying to say is- No, I don't, what I'm implicit or explicitly trying to say, I don't think the way you're looking at it rings true as I read the record.

[00:11:09] Speaker 05:
They were acting within the authority that they are given based on their view of the contract.

[00:11:17] Speaker 05:
No, they weren't.

[00:11:17] Speaker 05:
It's a paradigmatic example of a contractual dispute.

[00:11:21] Speaker 05:
There's no rights here, say, for the contract.

[00:11:23] Speaker 05:
There's nothing in the regulations that answer the questions that are at issue here.

[00:11:28] Speaker 02:
Yes.

[00:11:29] Speaker 05:
What is the fighting about?

[00:11:30] Speaker 02:
With all due respect, 3514 is a regulation.

[00:11:35] Speaker 02:
The interior cancellation, which is at

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Which is in the joint appendix sites says we're relying on the downs opinion and I'll just go through it down said that you have to have forced consent.

[00:11:49] Speaker 02:
George Johnny says I read the statute not to require for for service consent and the for service had no authority to veto this.

[00:11:56] Speaker 02:
The second point is Down says, Giorgiani relied on a regulation, 3221.4f.

[00:12:03] Speaker 02:
You may disagree with Giorgiani's review of the regulation, but he construed that regulation to give Twin Metals a right to automatic renewal.

[00:12:11] Speaker 02:
Giorgiani and we also relied on the contract.

[00:12:14] Speaker 02:
Downs in turn says, I've got four regulations that we think

[00:12:18] Speaker 02:
don't stand for that proposition that when reading combination with 32 21.4 don't give twin metals and automatic right.

[00:12:26] Speaker 02:
So you may be right.

[00:12:28] Speaker 02:
We think you will be wrong, but it'll be on appeal.

[00:12:31] Speaker 02:
But the district court has to actually gonna have to look at these regulations and decide between Georgiani and downs who is correct.

[00:12:38] Speaker 02:
And then the third provision has nothing to do with the lease at all.

[00:12:42] Speaker 02:
The entire authority for saying you can terminate or uh uh uh

[00:12:48] Speaker 02:
cancel the lease is because the Department of Interior did not conduct the right NEPA analysis.

[00:12:53] Speaker 02:
So again, I started out by saying if we had a lease, Interior says you gotta cancel it because you violated NEPA.

[00:13:00] Speaker 02:
I don't see how the government could say with a straight face that that's not within an APA jurisdictional count.

[00:13:05] Speaker 02:
I mean, jurisdiction, and that's one of the basis for it.

[00:13:09] Speaker 02:
Now, it's true that there is a dispute about the interpretation of the lease.

[00:13:15] Speaker 02:
But the government did not rely on anything to do with the lease to do it.

[00:13:19] Speaker 02:
So the exclusive basis is all statutory regulatory use.

[00:13:24] Speaker 05:
They surely did rely on the lease in the sense that what they were saying was that we have the authority.

[00:13:32] Speaker 05:
There is nothing in the lease that prohibits us from this

[00:13:35] Speaker 05:
acting one way or the other.

[00:13:37] Speaker 05:
Well, I have lease rights.

[00:13:38] Speaker 05:
You're claiming your lease rights have been violated there.

[00:13:41] Speaker 05:
I mean, I just leaves out.

[00:13:43] Speaker 05:
It's so clear.

[00:13:44] Speaker 05:
But that I don't.

[00:13:46] Speaker 02:
We don't have a lease right.

[00:13:47] Speaker 02:
We had a lease.

[00:13:47] Speaker 05:
So there's no question it was a contract under the lease.

[00:13:50] Speaker 05:
The government could not take these actions under the lease.

[00:13:54] Speaker 02:
But that's not the complaint.

[00:13:55] Speaker 02:
The complaint says under the authority that they cited under the regulation and statute, they had

[00:14:00] Speaker 05:
they incorrectly i think the government i'll let them speak for themselves either the way i construed it was that the government is essentially saying we have the authority under law to be able to approve or not approve here uh in a situation where there's the least especially when there's nothing in the least that gives you the rights that you're claiming

[00:14:25] Speaker 02:
Assume you're right, then your view is the Trump administration erroneously gave us a contract.

[00:14:30] Speaker 02:
They gave us a lease.

[00:14:31] Speaker 02:
You may be right that the Trump administration was out to lunch, but they issued a lease.

[00:14:36] Speaker 02:
The Biden administration came in and said, we can only get out of our contractual relationship if we have the regulatory authority to do it under 3514.

[00:14:44] Speaker 02:
And we're going to cite a bunch of statutes and regs that do that.

[00:14:48] Speaker 02:
You cannot read the Downs opinion is 10 pages of statutory and regulatory analysis.

[00:14:54] Speaker 02:
It doesn't analyze the lease.

[00:14:55] Speaker 02:
It doesn't say you didn't have a right under the lease.

[00:14:58] Speaker 02:
It doesn't say you didn't have a right to renewal.

[00:15:00] Speaker 02:
It literally says when the Trump administration signed that lease, it violated our regulations and our statute.

[00:15:07] Speaker 02:
The government can see.

[00:15:08] Speaker 02:
I don't think they would dispute if Miss Downs is incorrect.

[00:15:12] Speaker 02:
The cancellation is invalid and we have a lease.

[00:15:15] Speaker 02:
But that's an APA claim.

[00:15:17] Speaker 02:
Now, again, we could have brought a you breached the lease argument in the Court of Federal Claims.

[00:15:25] Speaker 02:
Well, we didn't bring that claim.

[00:15:27] Speaker 02:
That claim to be sure belongs in the Court of Federal Claims.

[00:15:30] Speaker 02:
And we think we do have a contractual claim because, you know, they breached the lease.

[00:15:34] Speaker 02:
But we have also an APA claim that the regulatory and statutory analysis and their justification

[00:15:41] Speaker 02:
Again, if the Downs opinion says you should cancel this lease because we don't like the way Twin Metals, we don't like the foreign country they're from, that doesn't belong in the Court of Federal Claims.

[00:15:54] Speaker 02:
It may be a breach of contract, but you can still challenge it in district court.

[00:16:00] Speaker 07:
I guess another way of putting it is that Board of Federal Claims doesn't adjudicate whether the administration or any administration properly construed a statute of regulation.

[00:16:14] Speaker 02:
Yeah, they would.

[00:16:15] Speaker 02:
Yeah.

[00:16:16] Speaker 02:
In a breach of contract, I probably think they would have jurisdiction to view a government's defense under a statute.

[00:16:23] Speaker 02:
But we could not bring this claim in the court of federal claims.

[00:16:28] Speaker 02:
They simply would have no jurisdiction.

[00:16:30] Speaker 05:
One of the regulations you're relying on says that the terms of the lease renewal be governed by the terms of the lease.

[00:16:40] Speaker 02:
Yes, I know.

[00:16:41] Speaker 02:
And that's when that's when the Downs opinion says, I've got four other regulations to give light to that.

[00:16:47] Speaker 02:
And we disagree.

[00:16:49] Speaker 02:
All we're saying is that that court has jurisdiction to construe the regulations.

[00:16:52] Speaker 02:
What you're exactly saying is something that the district court is free to say, and we're free to appeal.

[00:16:58] Speaker 02:
But that's right.

[00:16:58] Speaker 02:
That's reading regulation.

[00:17:00] Speaker 02:
And the fact, again, that this court in Megapulse and in Crowley said, you know, we, if the fact that the contract has to be construed in the course of this, that doesn't deprive the court of jurisdiction.

[00:17:10] Speaker 02:
It doesn't even affect the NEPA analysis and the Forest Service consent.

[00:17:14] Speaker 02:
You can look at the, you can burn the lease and you still have to resolve the Forest Service consent issue and the NEPA claim.

[00:17:21] Speaker 02:
The lease is just there's there's no construction of the lease.

[00:17:25] Speaker 02:
There's no citation to the lease.

[00:17:26] Speaker 02:
The lease is irrelevant.

[00:17:27] Speaker 02:
We're literally talking about a NEPA.

[00:17:29] Speaker 02:
Did you have to go look at a no action alternative?

[00:17:31] Speaker 02:
That's a pure question of law has zero to do with the lease.

[00:17:34] Speaker 02:
And does the Forest Service has the consent?

[00:17:38] Speaker 02:
I don't.

[00:17:38] Speaker 02:
The court can't.

[00:17:39] Speaker 02:
The court can say nothing about the lease in response to those claims.

[00:17:43] Speaker 06:
Government.

[00:17:45] Speaker 06:
Contract law is.

[00:17:47] Speaker 06:
very complicated.

[00:17:49] Speaker 06:
I mean, there's a federal acquisition regulation that reads like an encyclopedia.

[00:17:54] Speaker 06:
And it's just not right to say that the CFC deciding a contract claim won't routinely have to construe all of the positive law reflected in that regulation.

[00:18:09] Speaker 06:
I agree.

[00:18:10] Speaker 06:
And reflected in the statutes that give the government authority to contract in the first place.

[00:18:15] Speaker 06:
Totally agree.

[00:18:15] Speaker 06:
So this kind of, you know,

[00:18:18] Speaker 06:
separate the attempt to separate the terms of the lease from the terms of the statutes and regs that sort of define the government's contracting authority here.

[00:18:31] Speaker 06:
Just seems like that's a hard thing to untangle.

[00:18:35] Speaker 02:
Well, two responses.

[00:18:38] Speaker 02:
First, you can always bring a case in this court that also where the CFC has concurrent jurisdiction.

[00:18:45] Speaker 02:
It's just depending on the nature of the right thought, the nature of the relief.

[00:18:48] Speaker 06:
But second and more importantly- Yes, but your theory is that we have to sort of cleave the statutory and regulatory questions from the contract questions.

[00:19:00] Speaker 02:
No, the theory is where the source of our right is exclusively on the APA because we are challenging the government's exclusive statutory and regulatory rights.

[00:19:12] Speaker 02:
If you just, again, looking at the NEPA and the Forest Service consent issue,

[00:19:17] Speaker 02:
That we couldn't bring that case in the court of federal claims has nothing to do with the far.

[00:19:21] Speaker 02:
It has nothing to do with the lease.

[00:19:23] Speaker 02:
We have a lease that the Trump administration renewed in 2019.

[00:19:26] Speaker 02:
And when the Biden administration said interior, you can cancel this because it violated NEPA.

[00:19:34] Speaker 02:
You don't look at the least to resolve that doesn't matter what the lease says.

[00:19:37] Speaker 02:
It matters what NEPA says when it says you should have gotten for service consent.

[00:19:42] Speaker 02:
There's nothing in the lease.

[00:19:43] Speaker 02:
It speaks to this.

[00:19:43] Speaker 02:
You couldn't bring that case.

[00:19:45] Speaker 02:
The only issue where as an incidental matter, the lease will get construed as this battle between your Johnny and downs about what kind of standardized form has to be used and what that means.

[00:19:57] Speaker 02:
We think we independently have an argument that the lease controls the regulation.

[00:20:01] Speaker 02:
But that is jurisdictionally irrelevant that the district court or even this court would have to pursue a contract in an APA claim.

[00:20:08] Speaker 02:
Otherwise, you're depriving this court of jurisdiction to review any unlawful agency action that relates to a contract.

[00:20:16] Speaker 06:
Suppose there were no cancellation.

[00:20:20] Speaker 06:
You think the lease was validly renewed.

[00:20:26] Speaker 06:
The government thinks it wasn't validly renewed.

[00:20:30] Speaker 06:
So they refuse to perform.

[00:20:32] Speaker 06:
You bring the breach of contract claim and then you litigate.

[00:20:36] Speaker 02:
Well, that's that would be a breach of contract claim if there was no cancellation, right?

[00:20:41] Speaker 06:
But I think that running on the statutes and regs that.

[00:20:45] Speaker 02:
Well.

[00:20:46] Speaker 02:
I don't I mean, I guess if they said we're breaching.

[00:20:50] Speaker 02:
We're breaching the contract.

[00:20:53] Speaker 06:
I don't know because I've never seen validly renewed.

[00:20:58] Speaker 06:
because the forest service didn't consent or whatever.

[00:21:03] Speaker 02:
The the reason why I'm struggling with the question is the force that sorry interior has this regulation that tells you when you can cancel a release and you can't sorry cancel a renewal and you can't cancel renewal because you think there was non performance.

[00:21:20] Speaker 02:
You can only cancel it because well you can but they said you also can cancel it

[00:21:25] Speaker 02:
if it violated the statute and regulations when you entered into it.

[00:21:28] Speaker 02:
And that's what makes this the classic APA challenge.

[00:21:31] Speaker 02:
If there was no 3514 and there was no Downs opinion, then it's gonna turn on what the complaint looks like.

[00:21:39] Speaker 02:
But if it's a disguised contract claim, I think under the two cases, the government cites where it's just the government breaches the contract.

[00:21:46] Speaker 02:
But this is not a breach of the renewal.

[00:21:48] Speaker 02:
I mean, well, it is.

[00:21:49] Speaker 05:
What's the violation of 3514?

[00:21:51] Speaker 05:
It's not in your opening brief.

[00:21:53] Speaker 05:
In the reply brief, you argued something for the first time in the reply.

[00:21:57] Speaker 02:
We didn't, we're not arguing 3514.

[00:21:59] Speaker 02:
That's the sole basis of the cancellation.

[00:22:02] Speaker 05:
So the government, then what's the violation of a regulation?

[00:22:06] Speaker 05:
Since you don't want to focus on the lease.

[00:22:09] Speaker 05:
I'm struggling with that.

[00:22:09] Speaker 05:
It downs, because down says, Look to the lease.

[00:22:13] Speaker 05:
You're arguing the reason we have

[00:22:16] Speaker 05:
a claim that's viable is because they allegedly violated a regulation.

[00:22:19] Speaker 05:
Suppose we go to the merits of that.

[00:22:21] Speaker 05:
What did they violate?

[00:22:23] Speaker 02:
What did the Trump administration, the Biden administration claim you're bringing?

[00:22:28] Speaker 05:
Where was the violation of a statutory provision or regulation?

[00:22:32] Speaker 02:
I facially, we're not saying if I could just be clear on this, we're not saying the Biden administration violated a statute on this claim.

[00:22:39] Speaker 02:
We're saying the Biden administration erroneously

[00:22:43] Speaker 02:
accused and found that the Trump administration violated the statute of regulation.

[00:22:47] Speaker 05:
That really doesn't work.

[00:22:49] Speaker 05:
That's Saddam's opinion.

[00:22:50] Speaker 05:
You're saying you're bringing a claim to the court and saying we were acted against and our rights were violated.

[00:23:00] Speaker 05:
And so, of course, as a judge, I'm saying based on what?

[00:23:02] Speaker 05:
Now, your whole argument today has nothing to do with the lease.

[00:23:05] Speaker 05:
It has to do with the regulations they were relying on.

[00:23:08] Speaker 05:
So now I'm curious to know what regulation did they violate?

[00:23:13] Speaker 05:
So.

[00:23:14] Speaker 05:
You can't then say, well, Trump did this and Biden did that.

[00:23:18] Speaker 05:
You have to now answer the court and say, what specifically was the.

[00:23:22] Speaker 02:
So.

[00:23:23] Speaker 05:
Statute that.

[00:23:24] Speaker 05:
Because your brief is not clear on this.

[00:23:26] Speaker 05:
Well.

[00:23:26] Speaker 05:
I'm looking at it again.

[00:23:27] Speaker 05:
It is not.

[00:23:28] Speaker 02:
I think our brief does say under the APA, you're allowed to bring judicial review of an agency's construction of a statute.

[00:23:35] Speaker 05:
All I want to know is, just so I can think about this carefully beyond what I've already done,

[00:23:41] Speaker 05:
What regulation or statutory provision do you think the government actors violated in acting against your client?

[00:23:50] Speaker 02:
Only one as part of our attack on the down statutory and regulatory analysis.

[00:23:57] Speaker 02:
We say that downs relied on four regulations that we think are inconsistent with the 3221.4 F, which you just read earlier.

[00:24:05] Speaker 02:
you know that you have this right to renewal consistent with the terms of the lease.

[00:24:10] Speaker 02:
So we think in terms of that battle of the regulations, we think the downs opinion incorrectly reads the regulations in violation of another regulation.

[00:24:21] Speaker 02:
That's a pure APA challenge.

[00:24:23] Speaker 05:
And so the right your clients had that was abrogated is what?

[00:24:26] Speaker 02:
A regulatory, a regulatory right to automatic renewal of the lease.

[00:24:30] Speaker 05:
Automatic renewal.

[00:24:31] Speaker 05:
You're saying the regular, I want to make sure I have this clear.

[00:24:33] Speaker 05:
Your argument to this court, because this for me, given the way you're arguing, is the heart of it.

[00:24:38] Speaker 05:
There was a regulatory provision that gave us a right of automatic renewal.

[00:24:43] Speaker 05:
That's what you're- And I want to say, I sure didn't come away

[00:24:46] Speaker 05:
from your brief understanding where that was coming from.

[00:24:49] Speaker 05:
I'll look again, but I wanna make sure I understand where that's your argument.

[00:24:53] Speaker 02:
I don't see it.

[00:24:55] Speaker 02:
With all due respect, that is what Georgiani, the Trump administration interior secretary said.

[00:25:00] Speaker 02:
No, no, no.

[00:25:00] Speaker 05:
And Downs rescinds it.

[00:25:01] Speaker 05:
No, you're at a different stage now.

[00:25:03] Speaker 05:
I agree.

[00:25:04] Speaker 05:
Okay, I know you, I certainly know you know.

[00:25:08] Speaker 05:
But the point is, I don't know what it is you're resting your argument on, because I don't see the regulation that gives the right

[00:25:15] Speaker 05:
that you're asserting.

[00:25:17] Speaker 02:
So if the government said, just you, Interior, we want you to cancel this lease because of NEPA.

[00:25:26] Speaker 02:
We're not going to come into court and say we have a rely right under NEPA to the release.

[00:25:31] Speaker 02:
I can't say that.

[00:25:31] Speaker 02:
What I would say is we already have a renewal.

[00:25:35] Speaker 02:
The government is erroneously relying on NEPA.

[00:25:38] Speaker 02:
Their construction of NEPA is unlawful.

[00:25:41] Speaker 06:
Why don't you give us a site and some text.

[00:25:46] Speaker 06:
Statute, don't say APA, but it's a statute or a reg that gives you this right.

[00:25:53] Speaker 06:
Just give me the site and the text.

[00:25:55] Speaker 02:
It's the APA.

[00:25:57] Speaker 02:
It's the arbitrary and unlawful.

[00:25:58] Speaker 02:
No, no.

[00:26:02] Speaker 02:
But our cause of action is under the APA.

[00:26:03] Speaker 06:
Cause of action is, but the source of the substantive right to renewal.

[00:26:09] Speaker 02:
There's a contractual law or the rest.

[00:26:12] Speaker 02:
So it's a, I mean, I guess a contract is positive law.

[00:26:15] Speaker 02:
The actual underlying right is under the contract.

[00:26:19] Speaker 02:
Okay.

[00:26:20] Speaker 02:
It's a renewal.

[00:26:21] Speaker 02:
It's a contract.

[00:26:23] Speaker 02:
And the cancellation.

[00:26:24] Speaker 02:
QED.

[00:26:26] Speaker 05:
Yeah, we're coming right back to the same place.

[00:26:28] Speaker 02:
Well, then any time you have an unlawful agency construction of a statute, that's the basis for action taken on a contract, you would be depriving the court of jurisdiction.

[00:26:41] Speaker 06:
Before you move on, just one question about the remedy.

[00:26:45] Speaker 06:
It's not quite specific performance, but it's not too far off.

[00:26:50] Speaker 06:
It's setting aside an action, the effect of which is to reinstate the contract,

[00:26:57] Speaker 06:
You've also asked for a declaratory judgment.

[00:26:59] Speaker 06:
I mean, suppose you and I have a contract and I say it's been repudiated and I'm not going to perform, you go to district court for a declaration that the contract is still in effect.

[00:27:13] Speaker 06:
Classic contract remedy and it seems a lot like what you're doing here.

[00:27:18] Speaker 02:
The difference is that if, forget the repudiation, you have the unlawful agency action of a separate final agency action

[00:27:26] Speaker 02:
the interior cancellation and the downs opinion.

[00:27:29] Speaker 02:
If you set those aside, just the status quo ante the APH, just like the Texas oil case, the renewal is just there.

[00:27:36] Speaker 02:
The court doesn't have to do anything.

[00:27:38] Speaker 02:
If the court just sets aside the unlawful agency action, no other relief needs to be done.

[00:27:42] Speaker 02:
It's just the release is by force of law, it's in existence.

[00:27:47] Speaker 02:
So the court doesn't have to order interior to do anything.

[00:27:51] Speaker 02:
It doesn't even have to declare the lease valid.

[00:27:53] Speaker 02:
If you set aside the cancellation, the release is there.

[00:27:56] Speaker 02:
So you could have a complaint that just says, please set aside the downs opinion.

[00:28:01] Speaker 02:
Please set aside the statutory analysis in it.

[00:28:03] Speaker 02:
And we win, we go home, we're happy.

[00:28:06] Speaker 02:
And that's an APA.

[00:28:07] Speaker 02:
That's not specific performance.

[00:28:09] Speaker 02:
That's just set aside on lawful agency action.

[00:28:15] Speaker 02:
So if I can turn.

[00:28:16] Speaker 02:
guess to the next issue and that is the preference rights lease application.

[00:28:22] Speaker 02:
So another regulation here, I mean there are two are somewhat parallel and that the cancellation is based on one regulation, denial of the preference rights lease applications is on another regulation and we think those are parallel subject to APA challenges.

[00:28:38] Speaker 02:
One is a cancellation and here is a declination of an application.

[00:28:41] Speaker 02:
So the government relies on 23 10 2 and that says that it's mandatory that you deny any application if the land is subject to a withdrawal for service withdrawal request and the consideration of that application is discretionary.

[00:28:59] Speaker 02:
And so what the BLM decision says is the decision here was discretionary therefore it's denied.

[00:29:04] Speaker 02:
and there was no other analysis.

[00:29:06] Speaker 02:
And we think that that just is completely contrary to the regulations, that BLM did not have the discretion to deny the preference right lease application.

[00:29:16] Speaker 02:
I can walk you through that, but we rely first on the 3501-10, which says preference right leases are issued to holders of prospecting permits that discover a valuable mineral deposit.

[00:29:30] Speaker 02:
And then importantly, 3507-1119,

[00:29:34] Speaker 02:
then carefully delineate exactly when BLM will grant one of these applications.

[00:29:39] Speaker 02:
And then it says, and here's where we're going to deny it.

[00:29:43] Speaker 02:
And then most importantly, they expressly point out to the holders of these prospecting permits when they have complete discretion.

[00:29:52] Speaker 02:
So in 350711D, the BLM informs the public that if you're a prospecting permit,

[00:30:00] Speaker 02:
and you have land that relates to the reorganization plan number three lands, which are acquired lands, you just are not entitled to a preference right lease.

[00:30:09] Speaker 02:
And then the regulation 350550 BLM says, our decision to grant or deny this application is within our complete discretion.

[00:30:19] Speaker 02:
We also think that the regulatory history, sorry.

[00:30:22] Speaker 06:
Sorry, I don't have all the numbers in front of me, but suppose I thought,

[00:30:26] Speaker 06:
that BLM's discretion is circumscribed, but the Forest Service has discretion to refuse consent, which then compels denial.

[00:30:38] Speaker 06:
What result then?

[00:30:40] Speaker 02:
Right.

[00:30:40] Speaker 02:
And so the government says exactly what you said, forget even our discretion, the fact that the Forest Service discretion would trigger the 25, the mandatory denial under 2310.

[00:30:52] Speaker 02:
and we have several responses.

[00:30:53] Speaker 02:
The first most obviously is the Calcutt-Chenery response was that was not the decision on which the agency relied.

[00:31:00] Speaker 06:
So you would have to remand it because the- No, but if what I said, if what my question suggests is right, then it's not, it's just a legal, you just lose on legal grounds.

[00:31:14] Speaker 06:
There's nothing to remand.

[00:31:15] Speaker 06:
The decision

[00:31:17] Speaker 06:
I want to get the allowance of which is discretionary and then end of case.

[00:31:24] Speaker 02:
Yeah, but that's not what the agency said.

[00:31:26] Speaker 02:
That's what they now want to say in their brief.

[00:31:28] Speaker 02:
It's a new argument.

[00:31:29] Speaker 02:
It's just under Chenery, they would have to say, they said it's not within BLM's discretion.

[00:31:34] Speaker 06:
The government in their brief says... No, I get that, but we don't do Chenery remands when a claim is just legally invalid, regardless.

[00:31:46] Speaker 06:
I mean, maybe we do it for exercises of discretion.

[00:31:50] Speaker 02:
Maybe.

[00:31:50] Speaker 02:
Yes.

[00:31:50] Speaker 02:
Maybe.

[00:31:51] Speaker 02:
Maybe.

[00:31:51] Speaker 02:
No, I'm not so sure about that.

[00:31:52] Speaker 02:
But even if you're correct on that, we think it is a very litigable issue and we would litigate it that the Forest Service doesn't have that kind of discretion, that absolute discretion.

[00:32:01] Speaker 02:
And we've got several arguments.

[00:32:03] Speaker 02:
First is just the statute.

[00:32:05] Speaker 02:
We would argue under the statute that the Forest Service is

[00:32:08] Speaker 02:
circumscribed by it has to be limited to development and utilization.

[00:32:12] Speaker 02:
More importantly we think that remember in 2016 the Forest Service attempted to deny consent and they issued I think it was a 20 page document purporting to have reasoned analysis and that would be just subject to an APA challenge.

[00:32:25] Speaker 02:
Finally we would argue that and we think it's there's a good argument that the Forest Service already consented here.

[00:32:32] Speaker 02:
And that would happen at the prospecting permit stage.

[00:32:34] Speaker 02:
And we would get into a fight, there would be a lot of litigation over this, but the actual Forest Service consent to the prospecting permit says, this is not, we're not consenting to your preference right lease applications under reorganization plan number three lands.

[00:32:51] Speaker 02:
And the manual distinguishes between those reorganization plan number three lands and the 508 lands.

[00:32:57] Speaker 02:
And it says the consent is provided at the prospecting stage.

[00:33:00] Speaker 02:
So we would be arguing all of this stuff that hasn't been briefed, which is why I said this is a very complicated issue.

[00:33:08] Speaker 02:
But all we had below was the agency saying that the Bureau of Land Management didn't consent.

[00:33:15] Speaker 02:
Now they come back and say, well, the Forest Service had discretion.

[00:33:17] Speaker 02:
But we would say, what are you talking about?

[00:33:20] Speaker 02:
We have a lot of arguments under the Forest Service

[00:33:23] Speaker 02:
for services ability or lack of ability, but you know a lot.

[00:33:29] Speaker 06:
So so what I hear you saying is even spotting me no chenery.

[00:33:36] Speaker 06:
Oh, we have lots of argument and remand for those legal questions.

[00:33:42] Speaker 02:
Yeah, my guess is that the district court wouldn't even sort that out.

[00:33:46] Speaker 02:
We would go back first to the Forest Service and remember we had.

[00:33:51] Speaker 02:
If you look at what, again, this is what the Trump administration was doing.

[00:33:54] Speaker 02:
The Trump administration was saying Forest Service didn't have a right to veto the lease renewals.

[00:33:59] Speaker 02:
So we're not sure what the government thinks of our, the new government will think of our Forest Service arguments.

[00:34:04] Speaker 02:
But we have a series of arguments that we would make that the Forest Service just can't say we're not in the mood.

[00:34:09] Speaker 02:
We think the Forest Service can impose reasonable conditions.

[00:34:12] Speaker 02:
We think there has to be a NEPA analysis.

[00:34:13] Speaker 02:
We think there has to be

[00:34:15] Speaker 02:
gazillion permits we'd have to get before we mine.

[00:34:18] Speaker 02:
But this is just a preference right lease application, which just means we have a right to get in there as opposed to anyone else.

[00:34:25] Speaker 02:
It's not a right to mine.

[00:34:26] Speaker 02:
Of course, we have a long, long way to go.

[00:34:28] Speaker 02:
But I just don't think the government can say.

[00:34:31] Speaker 02:
And I think this is, again, another regulatory issue.

[00:34:34] Speaker 02:
I think the government is saying under 2310, the thing that triggers the mandatory denial, that that's something that has to be within the agency's complete discretion.

[00:34:45] Speaker 02:
and the fact that the regulations so clearly demarcate between when the agency has discretion and just these other ones.

[00:34:52] Speaker 02:
And this is what I was going to get into about the regulatory history, although I know you kind of were getting into the Forest Service.

[00:34:57] Speaker 02:
And this is why, again, telling you you're better off waiting.

[00:35:01] Speaker 02:
But it's a very complicated history where, and it's in the 1999 preamble to the regulations, the government talks about there's been a history of saying you're entitled to these preference right lease applications.

[00:35:14] Speaker 02:
But as a historical matter, we've always

[00:35:17] Speaker 02:
treated reorganization plan three very differently.

[00:35:20] Speaker 02:
And we now want to make our regulations clear that you're not entitled to it.

[00:35:24] Speaker 02:
And then the rest of it were just converting into plain English.

[00:35:27] Speaker 02:
And so the previous one said you are entitled to these preference right lease applications.

[00:35:33] Speaker 02:
But I will spot you.

[00:35:34] Speaker 02:
This is, you know, you want to wait into this.

[00:35:36] Speaker 02:
It's a lot.

[00:35:37] Speaker 02:
And Monday, Monday, we have a new administration.

[00:35:41] Speaker 02:
The president has we have.

[00:35:44] Speaker 02:
Thank you.

[00:35:55] Speaker 07:
Miss Jeffy.

[00:36:01] Speaker 04:
May it please the court, Rebecca Jaffe, appearing on behalf of the United States.

[00:36:07] Speaker 04:
I'm going to jump right into the contract claim.

[00:36:10] Speaker 04:
The source of plaintiffs asserted rights is the lease contracts, not any laws.

[00:36:15] Speaker 04:
In making this determination, the court looks at the substance of the claim, not any artful characterizations.

[00:36:22] Speaker 04:
Interior canceled the leases because, in Interior's view, renewal was discretionary.

[00:36:29] Speaker 04:
That's at JAA 251.

[00:36:30] Speaker 04:
And Interior said, when we renewed the leases in 2019, we did not obtain the Forest Service's consent to renewal, and we did not consider a no-renewal alternative under the National Environmental Policy Act.

[00:36:45] Speaker 04:
Interior said that was wrong because renewal was discretionary, and therefore we had to consider not renewing

[00:36:51] Speaker 04:
and had to obtain Forest Service consent.

[00:36:55] Speaker 04:
Twin Metals says Interior erred because it was entitled to non-discretionary renewal under the contract terms.

[00:37:03] Speaker 04:
In the complaint, plaintiffs say, considering a no renewal, no action alternative was not an option under the 2004 leases, which granted Twin Metals a right to renewal that was not conditioned on environmental review.

[00:37:18] Speaker 04:
That's at JA-58.

[00:37:20] Speaker 04:
They say the third renewal was not conditioned on Forest Service consent.

[00:37:25] Speaker 04:
That's at JA-53.

[00:37:27] Speaker 04:
They say the appropriate interpretation of the leases is granting non-discretionary renewal.

[00:37:33] Speaker 04:
That's at JA-41.

[00:37:37] Speaker 07:
Plaintiff's Council... Don't they argue as a matter of law Forest Service consent is not required?

[00:37:46] Speaker 07:
Isn't that the crux of their argument?

[00:37:48] Speaker 07:
And if they're right about that argument, then isn't that an APA claim?

[00:37:57] Speaker 07:
Or just resolving that argument isn't that classic APA claim?

[00:38:03] Speaker 04:
The crux of their argument is for service consent wasn't required because renewal was non-discretionary.

[00:38:11] Speaker 04:
And there's no statute that gives them a right to non-discretionary renewal.

[00:38:16] Speaker 04:
Under the megapulse test, this court has to look at what's the source of the right, and is it a truly independent source?

[00:38:24] Speaker 04:
truly independent from the contracts.

[00:38:26] Speaker 04:
So in megapolls, they said, the Trade Secrets Act, that's the independent source of our rights.

[00:38:31] Speaker 04:
We developed this data before we ever contracted with the government.

[00:38:35] Speaker 04:
We have these rights.

[00:38:37] Speaker 04:
Here, there's no statute that says you have a right to non-discretionary renewal.

[00:38:42] Speaker 04:
The statute that says you have to have forest service consent and the statutes that authorize leasing, they don't actually mention renewal at all.

[00:38:49] Speaker 04:
Plaintiffs point to the regulation

[00:38:52] Speaker 04:
from 1966 that addressed renewal.

[00:38:55] Speaker 04:
That's 43 CFR 3221.4f.

[00:39:00] Speaker 04:
That says, the lessee will be granted a right of renewal under such reasonable terms and conditions as the Secretary of the Interior may prescribe.

[00:39:08] Speaker 04:
So one, the regulation doesn't say whether renewal is discretionary or non-discretionary.

[00:39:14] Speaker 04:
And two, the regulation encompasses the terms, and you have to look at the terms to figure out whether it's discretionary or not.

[00:39:22] Speaker 04:
They counseled for metals council talked about the Downs opinion, but they're not saying in their complaint, Downs misconstrued NEPA.

[00:39:31] Speaker 04:
This is actually how NEPA works.

[00:39:34] Speaker 04:
They're not saying in their complaint, Downs misconstrued 16 USC 508B.

[00:39:39] Speaker 04:
And this is how leasing in this area works.

[00:39:43] Speaker 04:
They're saying in their complaint, we had a right to non-discretionary renewal.

[00:39:47] Speaker 04:
That's the source of their right.

[00:39:49] Speaker 04:
Uh, plaintiffs also point to the regulation that says that authorizes interior to cancel a lease.

[00:39:56] Speaker 04:
That's 43 CFR 3514.30 B. That regulation says nothing whatsoever about renewal, much less non discretionary renewal.

[00:40:05] Speaker 04:
It says BLM may cancel your lease administratively if we issued it and in violation of any law or regulation.

[00:40:13] Speaker 07:
So isn't the relief that they're requesting vacature of the Downs opinion?

[00:40:19] Speaker 04:
The relief that they're requesting is specific performance.

[00:40:22] Speaker 04:
They're asking the court to set aside the cancellation of the contracts.

[00:40:25] Speaker 04:
and declare that the contracts are valid and in force.

[00:40:30] Speaker 04:
That is specific performance.

[00:40:33] Speaker 04:
Congress, when it promulgated Section 702 of the APA, specifically said in the legislative history, we don't want the APA to be a mechanism for people to get specific performance of government contracts.

[00:40:47] Speaker 04:
And there's policy reasons for that, but that's what they're seeking here, is specific performance.

[00:41:00] Speaker 06:
Does it matter that the renewal and the cancellation are separate agency actions?

[00:41:13] Speaker 04:
The renewal in 2019 and the cancellation in 2022?

[00:41:18] Speaker 04:
Yeah.

[00:41:25] Speaker 04:
I'm not sure that I see how it would matter for the claims before this court now.

[00:41:30] Speaker 06:
The agency action before this- I'm not sure it does either, but Luke, you have authority for saying you look to the ultimate source of the right.

[00:41:41] Speaker 06:
I get that.

[00:41:42] Speaker 06:
It seems to trace back to the lease.

[00:41:46] Speaker 06:
But another way of thinking about this is you can disentangle

[00:41:55] Speaker 06:
If the cancellation rests on the legal proposition that forest service consent was required, it's a statutory question.

[00:42:13] Speaker 06:
It's unconnected to the prior renewal.

[00:42:20] Speaker 06:
It feels a little more APA-like.

[00:42:24] Speaker 06:
discreet.

[00:42:28] Speaker 06:
And answering that question, you don't need to know whether ultimately they're entitled to renewal of the lease could still be the case that renewal is totally discretionary.

[00:42:40] Speaker 06:
And they've just given a legally valid, legally bad reason for exercising their discretion.

[00:42:53] Speaker 04:
That's not the complaint that plaintiffs brought, Your Honor.

[00:42:56] Speaker 04:
The complaint that plaintiffs brought says the third renewal was not conditioned on Forest Service consent, that the 2004 leases granted Twin Metals a right to renewal that was not conditioned on environmental review, that the leases should be interpreted as granting non-discretionary renewal.

[00:43:18] Speaker 04:
That's the complaint that they chose to bring.

[00:43:34] Speaker 04:
I wanted to point to the court to the specific citations about the fact that what they're seeking is specific performance.

[00:43:41] Speaker 04:
They requested declaration saying that the 2019 leases remain valid and in force.

[00:43:46] Speaker 04:
That's J24 and J63.

[00:43:49] Speaker 04:
They asked the court to set aside the cancellation.

[00:43:52] Speaker 04:
That's J62.

[00:43:53] Speaker 04:
And that specific performance, a classic contractual remedy.

[00:43:58] Speaker 07:
I guess I'm having trouble understanding how

[00:44:04] Speaker 07:
asking for the court to declare that, like the Downs opinion, I'm looking at their prayer for relief, which is page 44 of the complaint.

[00:44:16] Speaker 07:
I don't know what page of the JA it is, because what I'm looking at, it's not paginated.

[00:44:26] Speaker 07:
But it asks that for the court to declare that several actions are contrary to law and be vacated and set aside.

[00:44:35] Speaker 07:
and there's a laundry list of them.

[00:44:38] Speaker 07:
E at paragraph 133.

[00:44:44] Speaker 07:
And then, you know, one third paragraph 134 is declared, releases remain valid, et cetera, et cetera.

[00:44:51] Speaker 07:
I don't understand how any of that is requesting specific performance.

[00:44:56] Speaker 07:
It's seeking a declaration that certain

[00:45:03] Speaker 07:
um, actions or opinions were erroneous.

[00:45:08] Speaker 07:
And then to the extent that those were relied upon for take other actions to not renew the leases, then then that legal effect flows from that.

[00:45:19] Speaker 07:
But how is any of that specific form?

[00:45:23] Speaker 04:
So I have two responses to that, Your Honor.

[00:45:26] Speaker 04:
The first is that the actions, the actions listed in paragraph 1 33 of the complaint, which is J 62

[00:45:33] Speaker 04:
We're not saying that all of those are contract claims.

[00:45:37] Speaker 04:
For example, they list their challenge to the rejection of their preference right lease applications, and we're not suggesting that that's a contract claim.

[00:45:45] Speaker 04:
So we're only pointing to the pieces that challenge the lease cancellation specifically.

[00:45:50] Speaker 04:
And then my second response, and the more important one, Your Honor, is that under megapulse, the court looks at what's the essence of this claim.

[00:45:59] Speaker 04:
At its heart, what is it?

[00:46:02] Speaker 04:
Is it a contract claim, or is it an APA claim?

[00:46:05] Speaker 04:
And at its heart, this is a contract claim.

[00:46:08] Speaker 04:
And to make that determination, the court looks at the source of the right and the relief that they're seeking.

[00:46:13] Speaker 04:
And on these specific facts, the constellation of facts here, what they're seeking is specific performance.

[00:46:20] Speaker 04:
The source of the right is the contracts.

[00:46:22] Speaker 04:
They're not able to point.

[00:46:23] Speaker 04:
And counsel pretty much conceded that before, that the source is the contract.

[00:46:28] Speaker 04:
There is no statute.

[00:46:29] Speaker 04:
So claim one.

[00:46:32] Speaker 07:
which is at page 39 of the complaint.

[00:46:36] Speaker 07:
I don't have the JACE pad.

[00:46:39] Speaker 07:
It says that the lease cancellation violated the APA because the reconsideration of the Georgiani opinion was untimely, et cetera, and the Downs opinion was erroneous, essentially.

[00:47:01] Speaker 07:
How is that the contract?

[00:47:06] Speaker 04:
Because, Your Honor, they say in claim one, paragraph 113, a no renewal, no action alternative was not an option under the 2004 leases, which granted Twin Metals a right to renewal that was not conditioned on environmental review, according to the Georgiani's opinions, correct and reasonable interpretation.

[00:47:30] Speaker 04:
And then in paragraph 114, they say they have a right to successive renewals of the leases.

[00:47:37] Speaker 04:
So, you know, the essence here is a contract claim.

[00:47:42] Speaker 07:
And I guess, let me make it a little bit more plain.

[00:47:48] Speaker 07:
So, yes, it does allege that.

[00:47:51] Speaker 07:
But if it doesn't allege that, then how do we know whether there's an injury, whether they're standing?

[00:47:58] Speaker 07:
But the claim,

[00:48:02] Speaker 07:
that claim in essence seems to be all about the opinion.

[00:48:08] Speaker 07:
And we hear those APA cases every day of the week, whether some interpretation, whether it's a interpretive ruling or a more binding regulatory ruling

[00:48:33] Speaker 07:
whether those are erroneous or not.

[00:48:38] Speaker 07:
I mean, that's within the heartland of the APA.

[00:48:41] Speaker 07:
I mean, sometimes we have to figure out whether it's final agency action and it's actionable, but I mean, that's what the APA is for, right?

[00:48:51] Speaker 04:
Your Honor, I have a couple responses to that.

[00:48:54] Speaker 04:
First, we certainly aren't challenging plaintiff standing, but we don't think that paragraphs 113 and 114 are there

[00:49:02] Speaker 04:
Um, are there to establish standing?

[00:49:07] Speaker 04:
You could say, you know, we have standing because we have interest in this area.

[00:49:13] Speaker 04:
We've invested in this area and we're bringing a claim based on something else.

[00:49:19] Speaker 07:
I mean, that's all I'm saying is, is that if all they said in their complaint was we think that the Downs opinion was erroneous, everyone's response would be, well, who cares?

[00:49:33] Speaker 07:
You got to have it some sort of context.

[00:49:36] Speaker 07:
And the reason we care is because it led to the cancellation of leases.

[00:49:42] Speaker 07:
That doesn't mean that the lease is the basis of the claim.

[00:49:48] Speaker 05:
I mean, isn't your point, what's the basis?

[00:49:50] Speaker 05:
It's the point I was asking opposing counsel.

[00:49:53] Speaker 05:
So what are the regular, what is the alleged regulatory violation?

[00:49:58] Speaker 05:
The APA

[00:49:59] Speaker 05:
This can't be an arbitrary and capricious claim the way the case is framed.

[00:50:03] Speaker 05:
That would be silly.

[00:50:05] Speaker 05:
So if we're looking at the APA, we're looking at an alleged violation of law.

[00:50:12] Speaker 05:
And so the question becomes, well, what?

[00:50:14] Speaker 05:
What regulation, what statute are they claiming is violated?

[00:50:18] Speaker 05:
And I think what you're, if I'm understanding you correctly, you're saying,

[00:50:22] Speaker 05:
no matter what else they say, bottom line, they're saying under the lease, this could not happen.

[00:50:28] Speaker 05:
That's where our right comes from.

[00:50:30] Speaker 05:
Is that right?

[00:50:31] Speaker 04:
Yes, your honor.

[00:50:32] Speaker 04:
Yes.

[00:50:32] Speaker 04:
And exactly.

[00:50:34] Speaker 04:
And back to Judge Wilkin's question, let's just say, hypothetically speaking, that Interior had done a NEPA analysis on whether to renew or not and said,

[00:50:46] Speaker 04:
we're not going to renew based on the NEPA analysis that we've done and the environmental consequences.

[00:50:52] Speaker 04:
And they brought a claim and said, you didn't do NEPA right.

[00:50:55] Speaker 04:
You didn't consider X. You didn't consider Y. That would be an APA claim.

[00:51:01] Speaker 04:
And we would still be in a place where the cancellation is, to the court's point, why we care, why we're here.

[00:51:08] Speaker 04:
But the claim they brought is,

[00:51:11] Speaker 04:
You couldn't do NEPA because we had a right to non-discretionary renewal.

[00:51:15] Speaker 04:
That is a contract claim.

[00:51:21] Speaker 05:
Can I point to any regulation that says they had a right to non-discretionary?

[00:51:26] Speaker 04:
Yes, Your Honor.

[00:51:28] Speaker 04:
That was a more concise way of saying that.

[00:51:34] Speaker 04:
If the court has no further questions on the contract claim, I will

[00:51:41] Speaker 04:
turn to the preference right lease application claim.

[00:51:48] Speaker 04:
So turning to the preference right lease application claim.

[00:51:56] Speaker 04:
Plaintiffs challenge to BLM's denial of their preference right lease applications fails as a matter of law.

[00:52:03] Speaker 04:
Plaintiff's lease applications were pending when the Forest Service filed an application to withdraw relevant lands from mineral leasing.

[00:52:13] Speaker 04:
Under the Federal Land Policy Management Act, when Interior receives an application to withdraw lands, then the lands must be segregated from mineral leasing.

[00:52:23] Speaker 04:
That's 43 USC 1714B.

[00:52:27] Speaker 04:
Upon publication of a Federal Register notice announcing the application, the land shall be segregated.

[00:52:33] Speaker 04:
And BLM regulations mandate that BLM must reject discretionary applications to use segregated lands.

[00:52:41] Speaker 04:
43 CFR 2310.2D.

[00:52:44] Speaker 04:
That regulation says applications for the use of lands involved in a withdrawal application, the allowance of which is discretionary, shall be denied.

[00:52:56] Speaker 04:
At the time of the withdrawal application and the segregation of the relevant lands, plaintiff's lease applications remain pending and issuance of any leases remain discretionary.

[00:53:04] Speaker 04:
Because it was discretionary, BLM had to deny the applications.

[00:53:09] Speaker 04:
That's a straightforward application of the regulations plain language.

[00:53:14] Speaker 04:
There are two steps where the United States had discretion.

[00:53:18] Speaker 04:
The court doesn't need to reach any of those steps because the material question is whether there was any discretion, and that alone suffices to require denial.

[00:53:27] Speaker 04:
But in any event, the two steps are one, BLM must determine that issuing a lease

[00:53:33] Speaker 04:
is in the best interest of the United States under 16 USC 508B.

[00:53:39] Speaker 04:
And two, the Forest Service must consent to the issuance of a lease.

[00:53:44] Speaker 04:
Those are two discretionary steps.

[00:53:47] Speaker 04:
And Interior had not yet decided that issuing a lease was in the interest of the United States.

[00:53:53] Speaker 04:
And the Forest Service certainly had not consented to the issuance of leases and nobody disputes that they have the right to consent so that the applications were discretionary.

[00:54:07] Speaker 04:
Twin Metals relies heavily on an interpretation of the regulations that

[00:54:12] Speaker 04:
plain language of the regulations doesn't support.

[00:54:14] Speaker 04:
The regulations don't say if, you know, these are the only reasons by which your lease application may be denied, and they don't say if you do these three things, you must be entitled to a lease.

[00:54:27] Speaker 04:
I think it's important to take a step back here and recognize that these regulations apply to a variety of different leasing statutes.

[00:54:35] Speaker 04:
For example, under the Mineral Leasing Statute, excuse me, under the Mineral Leasing Act,

[00:54:39] Speaker 04:
A prospecting permit holder who discovers a valuable mineral deposit is entitled to a lease.

[00:54:44] Speaker 04:
That's what the statute says.

[00:54:46] Speaker 04:
But 16 USC 508B is an obscure specific statute that, to the best of Interior's knowledge, has only ever applied to four leases ever.

[00:54:58] Speaker 04:
It only applies on some national forest lands.

[00:55:01] Speaker 04:
And that statute says that the Forest Service has discretion whether to consent, and it says that the Interior needs to decide that issuing a lease is in the best interest of the United States.

[00:55:17] Speaker 04:
Plaintiffs make an expressio unius argument, but that doctrine only applies when the circumstances support a sensible inference that the term left out must have been meant to be excluded.

[00:55:30] Speaker 04:
And this court said that in Delaware River Keeper Network 857F3D388.

[00:55:35] Speaker 04:
The point here is that the statute gives the Forest Service discretion.

[00:55:44] Speaker 04:
The statute says the Forest Service can consent or not.

[00:55:46] Speaker 04:
The Forest Service has discretion.

[00:55:48] Speaker 04:
Interior has discretion whether or not to determine that a lease is in the best interest of the United States.

[00:55:56] Speaker 04:
Plaintiffs argue that

[00:55:59] Speaker 04:
This is a post hoc explanation because in the decision that Interior made rejecting the preference right lease applications, Interior said, referred to BLM's discretion instead of the United States's discretion.

[00:56:20] Speaker 04:
That's at J234.

[00:56:21] Speaker 04:
We think that's harmless error for a couple of reasons.

[00:56:24] Speaker 04:
First of all, and most importantly, BLM cited the applicable regulation.

[00:56:28] Speaker 04:
43 CFR 2310.2 D. This is in a situation where Interior cited Regulation X and now post-hoc, Council is citing a completely different statute or regulation.

[00:56:43] Speaker 04:
This is a situation where they cited the regulation and they said, this is at our discretion.

[00:56:49] Speaker 04:
We believe BLM has discretion.

[00:56:50] Speaker 04:
Plaintiffs disagree.

[00:56:51] Speaker 04:
There's no question the Forest Service has discretion and the Interior's path can reasonably be discerned.

[00:57:06] Speaker 04:
If the court has no further questions on the preference for a lease application claim.

[00:57:12] Speaker 06:
What about the Forest Service discretion?

[00:57:19] Speaker 04:
To consent or not to consent.

[00:57:23] Speaker 06:
Is that sufficient?

[00:57:25] Speaker 04:
to deny the lease applications.

[00:57:28] Speaker 04:
Yes, it's the existence of that discretion.

[00:57:32] Speaker 04:
Because the application was discretionary, it had to be denied by law.

[00:57:39] Speaker 04:
Plaintiffs argue that they're entitled to get a decision from the Forest Service, but they don't have any such right.

[00:57:48] Speaker 04:
The application was discretionary at the time that

[00:57:52] Speaker 04:
the lands were segregated from mineral leasing, and it's the existence of that discretion that mandates denial of their applications.

[00:58:01] Speaker 06:
And either, in your view, either discretion vested in BLM or discretion vested in the Forest Service is sufficient?

[00:58:11] Speaker 04:
Yes, Your Honor.

[00:58:12] Speaker 04:
We think both exist, but even if you disagree with us, we only need to resolve one of the two.

[00:58:18] Speaker 04:
Yes, Your Honor.

[00:58:20] Speaker 04:
Yes, Your Honor.

[00:58:26] Speaker 04:
If the court has no further questions, it should affirm.

[00:58:32] Speaker 04:
Thank you.

[00:58:47] Speaker 01:
Good morning, it may please the court, Aileen McGrath for the intervener at police.

[00:58:52] Speaker 01:
I agree with the government that as to the jurisdictional question, the complaint speaks for itself and makes clear that the source of the rights that Twin Metals is asserting in this case, and I believe I heard Twin Metals to articulate it the same way, despite cloaked under the APA, the source of the rights that the plaintiff asserts emanate from the contract itself and that alone

[00:59:12] Speaker 01:
is enough to resolve the jurisdictional question.

[00:59:15] Speaker 01:
I think what I will add is that to the extent that Twin Metals has raised any counter arguments, I think that the court's existing precedent answers those counter arguments and many of the questions that the court has asked here today.

[00:59:27] Speaker 01:
Maybe I'll start with the questions that Judge Wilkins was asking a moment ago about the relevance of the need for the court to construe any federal regulations governing the determinations made in the Downs opinion in reference to paragraph 113 of the complaint.

[00:59:42] Speaker 01:
This court's decision and spectrum leasing at footnote five rather expressly said that the need to consider federal regulations and construe those federal regulations does not transform what is otherwise a contract claim into something else.

[00:59:58] Speaker 01:
That's exactly the scenario here.

[01:00:00] Speaker 01:
And that's even putting aside the fact that as I think the government

[01:00:03] Speaker 01:
has already pointed out, with respect to each and every one of those challenges to the Downs opinion, the government's argument, Twin Metals argument, excuse me, is that the government disregarded rights that belong to Twin Metals by virtue of the leases, not that the government otherwise misconstrued or misapplied rights that Twin Metals has under any other source of federal law.

[01:00:25] Speaker 01:
And so spectrum leasing, I think, disposes of the question whether the relevance of those federal regulations changes the essential character.

[01:00:32] Speaker 01:
of this claim.

[01:00:33] Speaker 01:
Number two, Flynn Metals argues that the fact that the government invoked a provision that allows it to cancel contracts in certain circumstances and the fact that the contract itself contains a reference to a federal regulation, that that too changes the essential nature of the contract.

[01:00:49] Speaker 01:
Here too, the court's precedents already answer that question.

[01:00:53] Speaker 01:
On pages 70 to 79 of the court's decision in Ingersoll Ranch, the court considered an identical argument about a contract that likewise referenced a federal regulatory provision and a government cancellation that likewise invoked a similar source of authority for the government to cancel a contract.

[01:01:11] Speaker 01:
There too, this court said that's not enough to change what is at its essence a contract action.

[01:01:18] Speaker 01:
Number three, I've heard Twin Metals to say that allowing jurisdiction to vest in the Court of Federal Claims here would shunt all sorts of other challenges to an agency's reasoning and decision making to the Court of Federal Claims.

[01:01:32] Speaker 01:
That is another argument that this court rejected in Ingersoll Rand as well, where the plaintiff made exactly that argument.

[01:01:39] Speaker 01:
And so again, as I started with, even though you can look plainly at the face of the complaint and to the arguments that have been made here to see that this case belongs

[01:01:48] Speaker 01:
In the Court of Federal Claims, you can also look squarely to this court's existing precedent.

[01:01:52] Speaker 01:
Beyond that, I'll very quickly, if I may, say something about the Forest Service Consent issue as to the preference right lease applications.

[01:02:00] Speaker 01:
And as to that issue, we agree with the government.

[01:02:03] Speaker 01:
And this is why we haven't taken a position on the 28-J letters and all the documents that have been exchanged back and forth, because our view is that none of that matters whatsoever.

[01:02:13] Speaker 01:
The regulation that the court needs to construe here, as this court has already explored, speaks to whether the allowance

[01:02:21] Speaker 01:
of an application is discretionary.

[01:02:23] Speaker 01:
The plain language.

[01:02:24] Speaker 06:
What about Ms.

[01:02:25] Speaker 06:
Blatt's prudential arguments?

[01:02:28] Speaker 06:
This is messy.

[01:02:29] Speaker 06:
It hasn't been a focus of the briefing.

[01:02:33] Speaker 01:
The reason it hasn't been.

[01:02:35] Speaker 06:
First view or review

[01:02:38] Speaker 01:
Because I don't think the court needs to, and in fact could not, in properly construing that regulation, consider questions about what the Forest Service might have or would or has done.

[01:02:49] Speaker 01:
Because the regulation looks only to the existence of whether the Forest Service has discretion.

[01:02:55] Speaker 01:
The Forest Service's position and any arguments that Twin Metals might make in response to that position is all entirely beside the point.

[01:03:04] Speaker 01:
The 43 CFR 2310.2 directed interior through the Bureau of Land Management to deny these applications based on the existence of that discretion and not to require the Forest Service to act upon it.

[01:03:19] Speaker 01:
So anything that the Twin Metals or anyone has tried to introduce in the record that speaks to that possibility or arguments that might be made is completely beside the point as to this interpretation, this interpretive question.

[01:03:32] Speaker 06:
And you'd be pressing that argument even if the Forest Service had consented on the last round.

[01:03:42] Speaker 01:
The argument would be the same, yes, Judge Katz.

[01:03:45] Speaker 01:
Because the question is whether there is the existence of discretion at some level of the government.

[01:03:50] Speaker 01:
And to be clear, we agree with the government, as I think we clarified in our brief, that BLM's discretion here also resolves the issue.

[01:03:58] Speaker 01:
you need look no further than the existence of the Forest Service's discretion.

[01:04:02] Speaker 01:
Whether it actually took a position doesn't matter for purposes of answering that question.

[01:04:06] Speaker 06:
Again, I understand why you read it that way.

[01:04:11] Speaker 06:
It's a much less attractive position if they have, in fact, consented.

[01:04:16] Speaker 06:
But I understand.

[01:04:19] Speaker 01:
Thank you.

[01:04:20] Speaker 01:
Unless the court has any further questions on either of these issues, I think we would ask the court to affirm.

[01:04:28] Speaker 07:
Thank you.

[01:04:32] Speaker 07:
All right, Ms.

[01:04:33] Speaker 07:
Platt, I believe you're out of time, but we'll give you three minutes on rebuttal.

[01:04:43] Speaker 02:
Some very quick points on the jurisdiction issue.

[01:04:47] Speaker 02:
They keep framing this as quote, we're alleging a nondiscretionary right to renew.

[01:04:52] Speaker 02:
That's not in the complaint.

[01:04:55] Speaker 02:
The paragraph that they cite and the paragraph the district court cites, which is 114, uses the right to renewal.

[01:05:01] Speaker 02:
And then we cite a regulation.

[01:05:02] Speaker 02:
We don't cite the lease.

[01:05:03] Speaker 02:
We cite 3221.

[01:05:05] Speaker 02:
So the only non-discretionary right to renewal that's mentioned in the complaint refers to a regulation.

[01:05:10] Speaker 02:
What we're seeking is a right not to have our release arbitrarily canceled.

[01:05:16] Speaker 02:
J.A.

[01:05:17] Speaker 02:
260 is the cancellation.

[01:05:18] Speaker 02:
It is based on the Downs opinion.

[01:05:21] Speaker 02:
Paragraphs 113 and the preceding paragraph says the Downs opinion's legal conclusions were wrong.

[01:05:27] Speaker 02:
And to that extent, that is all APA.

[01:05:29] Speaker 02:
And Judge Edwards, I'm sorry if it wasn't clear, but on page 34 of our brief, we say that the regulation that was violated in this case is the 351430, which is what I started.

[01:05:40] Speaker 02:
We're saying the government violated the regulation that

[01:05:45] Speaker 02:
interior construed that authorized cancellation.

[01:05:48] Speaker 02:
They violated that regulation because they erroneously concluded that there were three statutory and regulatory violations.

[01:05:55] Speaker 02:
We also on page 34 of our brief and the complaint also says that the 3221.4 regulation in paragraphs, I think it's in 113 and 114, it goes through a host of regulatory violations.

[01:06:08] Speaker 02:
on the preference right lease applications.

[01:06:12] Speaker 02:
Remember that this withdrawal regulation and the statute is subject to valid existing rights.

[01:06:17] Speaker 02:
There's a lot of talk about that in the brief.

[01:06:19] Speaker 02:
And obviously, Judge Casas, if the Forest Service had consented, there would obviously be a valid existing right and they couldn't have done that.

[01:06:26] Speaker 02:
And so the valid existing rights are highly relevant because we think that's not a vested right.

[01:06:30] Speaker 02:
A vested right is a contract.

[01:06:32] Speaker 02:
But if there's any regulatory right to the process, i.e.

[01:06:35] Speaker 02:
we could have challenged

[01:06:36] Speaker 02:
the Forest Service's consent denial, we have a valid existing right.

[01:06:41] Speaker 02:
The notion the government said that the statute gives them the right to decline a lease.

[01:06:50] Speaker 06:
So that would separate the two issues, the district court

[01:06:57] Speaker 06:
conflated to the existence of discretion and valid existing.

[01:07:01] Speaker 02:
Yes, the district court and the agency below.

[01:07:04] Speaker 02:
The agency never analyzed valid existing rights.

[01:07:06] Speaker 02:
It says, yeah, we have this regulation, valid existing rights, but in any event, BLM has discretion.

[01:07:12] Speaker 06:
Makes sense to equate them if we're talking about BLM's discretion.

[01:07:16] Speaker 02:
Yeah.

[01:07:17] Speaker 02:
Yeah, I guess.

[01:07:18] Speaker 02:
Yes.

[01:07:18] Speaker 02:
I mean, we think

[01:07:20] Speaker 02:
Correct.

[01:07:21] Speaker 02:
Yes, I think we'd still have an argument.

[01:07:23] Speaker 06:
Less so for the Forest Service.

[01:07:25] Speaker 02:
Yeah, I think it would depend.

[01:07:26] Speaker 02:
We think the regulation about discretion is talking complete discretion.

[01:07:30] Speaker 02:
If you disagree with that and you think there's actually cabin discretion, then I think not only is that regulation not implicated, but the valid existing rights statutory requirement kicks in.

[01:07:40] Speaker 02:
And again, we think we are litigating our valid existing rights under the Forest Service Consent Issue now, which the agency sought three years too late.

[01:07:49] Speaker 02:
The government's entire reliance on BLM's discretion is the statutory notice that this is in the best interest of the United States, but then they can't issue an entire regulatory scheme giving you an entitlement and say, oh, never mind.

[01:08:00] Speaker 02:
I mean, that's just pretty bedrock APA law that the agency is bound by its regulation.

[01:08:05] Speaker 02:
And we think the most reasonable interpretation of the regulations is that we had a right to go through the process.

[01:08:13] Speaker 02:
And also, again, because it wasn't litigated, the government says we don't dispute the Forest Service consent.

[01:08:19] Speaker 02:
Well, we would.

[01:08:19] Speaker 02:
We would argue the Forest Service already consented.

[01:08:21] Speaker 02:
And therefore, we had a valid existing right.

[01:08:24] Speaker 07:
And that's it.

[01:08:25] Speaker 07:
Thank you.

[01:08:26] Speaker 07:
Thank you.

[01:08:26] Speaker 07:
We'll take the matter into advisement.