Noble Energy, Inc. v. Salazar, et al., No. 11-5114 (D.C. Cir. 2012)
Annotate this CaseNoble Energy and other lessees sued in the Court of Federal Claims, alleging that application of the Coastal Zone Management Act, 16 U.S.C. 1451-1464, suspension requests constituted a material breach of their lease agreements to drill for, develop, and produce oil and natural gas on submerged lands off the coast of California. The Court of Federal Claims agreed; on appeal the Federal Circuit affirmed. One year after the Federal Circuit's decision in the breach-of-contract litigation, the Minerals Management Service (MMS), sent a letter to Noble ordering it to plug and abandon Well 320-2 permanently. The district court ruled that the common law doctrine of discharge did not relieve Noble of the regulatory obligation to plug its well permanently, an obligation that the lease did not itself create. Resolution of the dispute depended on what the plugging regulations meant. The court held that it was up to MMS's successor to interpret its regulation in the first instance and to determine whether they apply in situations like Noble's. If they do, the agency must explain why. Therefore, the court vacated the judgment and sent the case back to the district court with instructions to vacate Interior's order and to remand to the Secretary for further proceedings.
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