Copper Valley Machine Works, Inc. v. Andrus

On January 1, 1976, the United States Geological Survey (USGS) granted a permit to Copper Valley Machine Works, Inc. (Copper Valley) (plaintiff) for drilling in Alaska. The permit limited drilling to the winter season in order to protect the drilling area’s permafrost character. Copper Valley obtained a two-year lease extension with an expiration date of January 31, 1978. Eleven days prior to the lease’s expiration, Copper Valley requested a 12-month extension to compensate for its 1976 and 1977 summer operation shutdowns. Secretary of the Interior Cecil Andrus (secretary) (defendant) denied the extension. Copper Valley sued the secretary in district court, claiming that § 39 of the Mineral Leasing Act of 1920 (Act), 30 U.S.C. § 209, mandated a lease extension. Specifically, Copper Valley argued that the permit’s seasonal restriction was a “suspension of operations and production” in the interest of conservation, mandating a lease extension under the Act. Section 39 provided that if the secretary suspended operations and production under a lease in the interest of conservation, the lease term would be extended to a term equal to the suspension. Both parties moved for summary judgment. The district court rejected Copper Valley’s argument and granted summary judgment to the secretary. Copper Valley appealed. The secretary argued that (1) § 39 applied only to unanticipated drilling interruptions and (2) Copper Valley’s interpretation of § 39 would double lease terms and therefore conflict with 30 U.S.C. § 226(e), which limited lease terms to 10 years with the possibility of a single two-year extension.