National Wildlife Federation v. Burford
871 F.2d 849 (9th Cir. 1989)
The Department of the Interior
(DOI) held an auction to lease the mineral rights to mine for coal on 23k
acres of Federally-owned land.
Because they auctioned so
much at one time, and due to the economic conditions of the day, the bids
were much lower ($60M-$100M) than they might have otherwise been.
There were rumors that BLM
had leaked what the minimum accepted bids were, so people knew not to bid
NWF sued for an injunction,
saying that the auction violated the Mineral Leasing Act (30 U.S.C. §201).
§201(a)(1) said that no bids less than fair market value
(FMV) "as determined by the Secretary" would be accepted.
NWF argued that the DOI
accepted bids that were less than FMV.
DOI presented their
calculations of what FMV should be, and the bids were within what DOI
considered to be an acceptable range.
NWF argued that DOI's
calculations were flawed.
DOI's regulations had said
that an independent assessment of FMV was to be prepared by the US
Geologic Survey before an auction, but they DOI deleted that requirement
the day before the auction and were using their own (much lower)
estimate of the FMV for the land.
The Trial Court found for DOI.
The Appellate Court affirmed.
The Appellate Court found
that DOI acted "unwisely" but they didn't act unreasonably.
The Court found that since §201(a)(1) says that FMV will be defined by DOI, unless
DOI was so out of line that their actions were arbitrary and
capricious, the Court would defer to DOI's judgment.
See Chevron U.S.A. Inc.
v. Natural Resources Defense Council
(467 U.S. 837 (1984)).