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Update on Federal and Indian Royalty Decisions

L. Poe Leggette, Federal and Indian Oil & Gas Royalty Valuation and Management II (1998)

Federal royalty litigation proceeds in two forums: the federal courts and the Interior Board of Land Appeals (“IBLA” or “the Board”). Papers 16A and 16B summarize the most significant decisions issued by the courts and the Board within the last 6 years in federal and Indian royalty cases.

The IBLA's jurisdiction in royalty matters is to review appeals taken from decisions or orders of the Directors of the Minerals Management Service (“MMS”) or, in the case of Indian lands, of the Commissioner of Indian Affairs. IBLA's review is essentially de novo, reviewing the case as fully as the Secretary of the Interior might; and its review ordinarily is on a documentary record often assembled without strict adherence — or any adherence — to rules of evidence. Accordingly, though there are occasional exceptions, procedural decisions are generally not to be found in the Board's decisions. This update mentions one.

The jurisdiction of the federal courts, on the other hand, is limited. Restraints on where and when the Department may be sued are the stock-in-trade of royalty litigation in the courts. Lessees have also urged the courts to find limits on certain of MMS's enforcement activities by challenging orders to produce documents as unlawful, orders to pay as untimely, and the withholding of refunds and credits for future offset as unconstitutional. MMS, in turn, has cha