CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT.
Warren, Black, Douglas, Clark, Harlan, Brennan, Stewart, White, Goldberg
MR. JUSTICE HARLAN delivered the opinion of the Court.
The question presented in this case is whether the Secretary of the Interior has authority to cancel in an administrative proceeding a lease of public lands issued under the provisions of the Mineral Leasing Act of 1920, 30 U. S. C. §§ 181 et seq., in circumstances where such lease was granted in violation of the Act and regulations promulgated thereunder. Because of a seeming conflict in principle between the decision of the Court of Appeals in this case, 112 U. S. App. D.C. 344, 303 F.2d 204, and that of the Court of Appeals for the Tenth Circuit in Pan American Petroleum Corp. v. Pierson, 284 F.2d 649, and also because of the importance of the question to the proper administration of the Mineral Leasing Act, we brought the case here. 371 U.S. 886. For reasons stated hereafter we affirm the judgment below.
Section 17 of the Mineral Leasing Act, 30 U. S. C. § 226, authorizes the Secretary of the Interior to grant to the first qualified applicant, without competitive bidding, oil and gas leases of lands in the public domain not within a known geologic structure. These are called "noncompetitive" leases.*fn1 A departmental regulation provides that "no offer" for a noncompetitive lease "may be made
for less than 640 acres except . . . where the land is surrounded by lands not available for leasing under the act." 43 CFR § 192.42 (d). "Not available" has always been administratively construed to mean lands not available for leasing to anyone. Hence lands covered only by an outstanding application for a lease are considered available, Natalie Z. Shell, 62 I. D. 417 (1955), and therefore subject to the 640-acre requirement.
On September 11, 1956, petitioner*fn2 applied to the Santa Fe Land Office in New Mexico (whose authority also embraces Oklahoma) for an 80-acre noncompetitive lease of land in Oklahoma. There was already on file an application by one Connell for a noncompetitive lease of an adjoining 40-acre tract, but no lease had issued to Connell at the time of petitioner's application. Immediately following petitioner's application two other persons, Cuccia and Conley, filed for a lease of the entire 120 acres. On December 1, 1956, the 40-acre lease issued to Connell, the validity of which is not questioned here. In November 1957 an 80-acre lease issued to petitioner. Following notification that their 120-acre application had been rejected, Cuccia and Conley pursued a departmental appeal, 43 CFR §§ 221.1-221.2. This ultimately resulted in a cancellation of petitioner's lease on the ground that having failed to include in his application the adjoining 40-acre tract (no lease to Connell having then been issued), his 80-acre application was invalid, thus leaving the Cuccia and Conley application in respect of that tract prior in right. Accordingly a lease to them was directed.*fn3
The ensuing litigation instituted by petitioner in the Federal District Court resulted in the judgment of
the Court of Appeals, now under review, sustaining the administrative cancellation.
Petitioner's claim before this Court*fn4 rests on § 31 of the Mineral Leasing Act, 30 U. S. C. § 188, as amended, which, in pertinent part, reads as follows:
"Except as otherwise herein provided, any lease issued under the provisions of . . . [this Act] may be forfeited and canceled by an appropriate proceeding in the United States district court for the district in which the property, or some part thereof, is located whenever the lessee fails to comply with any of the provisions of . . . [the Act], of the lease, or of the general regulations promulgated under . . . [the Act] and in force at the date of the lease . . . .
"Any lease issued after August 21, 1935,*fn5 under the provisions of . . . [§ 17 of the Act, 30 U. S. C. § 226] shall be subject to cancellation by the Secretary of the Interior after thirty days' notice upon the failure of the lessee to comply with any of the provisions of the lease, unless or until the land covered by any such lease is known to contain valuable deposits of oil or gas."
Petitioner contends: (1) § 31 is the exclusive source of the Secretary's power to forfeit a lease once it has been issued; (2) the section, by its second paragraph, limits administrative cancellation to instances where a lessee has failed to comply with the terms of his lease and then only so long as the land is not known to contain oil or gas; (3) since petitioner failed to comply not with the terms of his lease but with a departmental regulation, cancellation
of his lease was governed by the first paragraph of § 31, which requires a judicial proceeding.
The Secretary, on the other hand, contends: (1) the provisions of § 31 as a whole apply only to events, whether in violation of lease terms, the Act, or the regulations, occurring after a lease has been issued; (2) the Secretary's authority to cancel on the basis of pre-lease events is found not in § 31 but in his general powers of management over lands in the public domain; (3) that authority remained unaffected by the Mineral Leasing Act.
We think that the Secretary, under his general powers of management over the public lands, had authority to cancel this lease administratively for invalidity at its inception, unless such authority was withdrawn by the Mineral Leasing Act. With respect to earlier statutes containing no express administrative cancellation authority, this Court, in Cameron v. United States, 252 U.S. 450, found such authority to exist. In there sustaining the Secretary's power to cancel administratively an invalid mining claim, the Court said (at p. 461):
"True, the mineral land law does not in itself confer such authority on the land department. Neither does it place the authority elsewhere. But this does not mean that the authority does not exist anywhere, for, in the absence of some direction to the contrary, the general ...