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Mobil Oil Exploration & Producing Southeast, Inc. v. United States
United States Supreme Court
530 U.S. 604 (2000)
Mobil Oil Exploration and Producing Southeast, Inc. (plaintiffs) paid the United States (defendant) $156 million as an up-front bonus payment in return for 10-year renewable lease contracts allowing the plaintiffs to explore for oil off the coast of North Carolina. The contracts conditioned the plaintiffs’ right to explore for oil on their ability to obtain government permissions consistent with various federal statutes, including the Outer Continental Shelf Lands Act (OCSLA) and the Coastal Zone Management Act. In October 1992, the plaintiffs brought a breach of contract suit against the United States in the Court of Federal Claims. The Court of Federal Claims found that the Department of the Interior failed to approve plans submitted by the plaintiffs within thirty days, as required by the OCSLA. It further found that the Department of the Interior communicated to the plaintiffs its inability to approve the plan within 13 months. Based on these findings, the Court of Federal Claims found that the United States had repudiated a contractual promise by failing to approve the OCSLA-mandated plan within 30 days. It granted plaintiffs summary judgment and awarded the plaintiffs restitution for the $156 million paid as an up-front bonus. Upon appeal, the Government argued that restitution was improper because the plaintiffs would not have satisfied the consistency requirements of the Coastal Zone Management Act and therefore would have been unable to explore for oil even if the OCSLA-mandated plan was approved on schedule.
Rule of Law
Holding and Reasoning (Breyer, J.)
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