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08/19/70 Texaco, Inc. v. Walter J. Hickel

August 19, 1970




Leventhal, Robinson and MacKinnon,* Circuit Judges.




This is an appeal from a judgment of the District Court granting Texaco's petition for a mandamus-type order to require the Secretary of the Interior to issue a permit to drill an offshore well, off the Louisiana coast. The basis of the action was that the proposed well site was within an area covered by a lease from the State of Louisiana, a lease that was maintained by a 1958 decision of the Secretary of the Interior pursuant to Section 6 of the Outer Continental Shelf Lands Act, 43 U.S.C. sec. 1335. Pursuant to a 1968 decision of the Department's Solicitor, the Secretary refused to issue the permit. The District Court's order vacated the 1968 decision of the Solicitor and directed the Secretary to issue a permit. For reasons set forth in this opinion we affirm the ruling vacating the 1968 decision of the Solicitor, but we remand in order to permit further consideration of the baseline issue within the Interior Department.


On February 7, 1936, the State of Louisiana issued to Texaco's predecessors in interest State Mineral Lease No. 340 covering submerged land lying off the shore of Marsh Island and Vermilion Parish. The northern boundary of the leased land ran, with exceptions not here relevant, along the mean high water line. The southern boundary was established as:

Beginning at a point in the South shore line of Marsh Island . . .; Thence South into the marginal or maritime belt of the Gulf of Mexico . . . to the extreme limit or boundary of the domain, territory and sovereignty of the State of Louisiana.

At the time the lease was executed, Louisiana claimed a seaward boundary three leagues from land.

In 1947 the Supreme Court decided United States v. California, 332 U.S. 19, 67 S. Ct. 1658, 91 L. Ed. 1889, which held that the United States rather than the State of California owned the submerged land lying seaward of the ordinary low water mark. In 1950 the Court applied the same rule in the case of Louisiana. United States v. Louisiana, 339 U.S. 699, 70 S. Ct. 914, 94 L. Ed. 1216. One effect of this 1950 decision was to deprive Texaco of the right to conduct offshore operations under its Louisiana lease of land "to the extreme limit" of Louisiana's sovereignty.

The coastal states, their lessees, and other interested parties objected strongly to these Tidelands decisions of the Supreme Court and sought relief in Congress. In 1953 Congress responded by enacting the Submerged Lands Act *fn1 and the Outer Continental Shelf Lands Act. *fn2 The Submerged Lands Act provided for the extension or confirmation of State boundaries out beyond the line of ordinary low water. All coastal states were given the right to claim a boundary three miles distant from the "coast line" as defined in the Act. States bordering on the Gulf of Mexico, which had traditionally claimed seaward boundaries in excess of three miles, were granted the opportunity to prove and claim such an historical boundary, -- up to a limit of three marine leagues (approximately nine miles.)3 The Outer Continental Shelf Lands Act asserted federal jurisdiction, including jurisdiction to grant mineral leases, over all submerged lands on the continental shelf seaward of the lands granted to the States by the Submerged Lands Act.

The 1953 legislation also concerned itself with the status of mineral leases which had been issued by the coastal states and which purported to grant an interest in the Submerged Land on the Outer Continental Shelf. Section 6(b) of the Outer Continental Shelf Lands Act, 43 U.S.C. § 1335(b) provides that any person holding such a lease "may continue to maintain such lease, and may conduct operations thereunder" provided that the lease meets the requirements specified in § 6(a). Section 6(a), 43 U.S.C. § 1335(a), states that § 6 is applicable to "any mineral lease covering submerged lands on the outer Continental Shelf issued by any State" if that lease meets a number of specified requirements, including the requirement that:

(2) such lease was issued prior to December 21, 1948, and would have been on June 5, 1950, in force and effect in accordance with its terms and provisions and the law of the State issuing it had the State had the authority to issue such lease.

Section 6 contemplates that application shall be made to the Secretary of the Interior for a determination that a State lease meets the requirements of § 6(a) and that applicant is therefore entitled to continue to maintain the lease.

In 1953 Texaco filed an application with the Secretary pursuant to the Outer Continental Shelf Lands Act requesting authority to maintain its State Lease No. 340 as a federal lease. This application was rejected in the first instance by the Bureau of Land Management on the ground that the State Lease did not cover submerged land on the Outer Continental Shelf. Texaco appealed to the Solicitor of the Department of the Interior through whom the Secretary exercised his § 6 validation authority. Texaco contended that its State Lease covered land 27 miles out into the Gulf from the shore and offered in support of this claim a certificate issued by the Louisiana State Mineral Board, which, Texaco argued, should be conclusive on the issue of coverage.4

On February 12, 1958, the Solicitor ruled that Texaco was entitled to validation as to submerged land which Louisiana thought in good faith to be its property at the time it issued the lease and which it in good faith intended to convey to the leasee. Under this standard the Solicitor found that Lease No. 340 covered submerged land three leagues out into the Gulf of Mexico from the coast line.

At the time of the 1958 validation proceeding before the Solicitor there was pending in the Supreme Court an original action brought by the State of Louisiana to establish an historical boundary of greater than three miles. In 1960 a decision was issued rejecting Louisiana's claim. United States v. States of Louisiana, Tex., 363 U.S. 1, 80 S. Ct. 961, 4 L. Ed. 2d 1025. Consequently Louisiana was entitled to claim only that seaward boundary ...

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