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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 & Producing Southeast, Inc. (Mobil) (plaintiff) entered into a contract with the U.S. government (defendant), in which Mobil paid approximately $156 million in exchange for 10-year leases pursuant to which Mobil could produce any oil it found off the coast of North Carolina. Mobil also agreed to pay subsequent rental and royalty payments. The contract was made subject to certain then-existing statutes and regulations, as well as future regulations promulgated pursuant to then-existing statutes. These statutes and regulations included, among other things, requirements that Mobil obtain Department of Interior (DOI) approval of an exploration plan and other approvals from the State of North Carolina. Under the statute, the DOI was required to approve an exploration plan that met its requirements within 30 days. Mobil submitted a draft exploration plan and the DOI issued an informal, preliminary finding that the proposed exploration would not significantly affect the environment. Subsequently, Congress enacted the Outer Banks Protection Act (OBPA), which altered the requirements to which Mobil was subject when it entered into the contract. Specifically, the newly-enacted OBPA delayed formal approval of any exploration plans for a period of at least 13 months, delayed approval of well permits, and created a new DOI environmental review. Two days after the enactment of OBPA, Mobil submitted its formal exploration plan to the DOI. Approximately five weeks later, the DOI wrote a letter to Mobil stating that Mobil’s exploration plan was “approvable in all respects,” but that the OBPA prohibited it from approving the plan at that time. About two months later, North Carolina objected to Mobil’s well permitting on the grounds that it did not have sufficient information. Mobil brought suit against the federal government claiming that the government repudiated the contract, and seeking restitution of its $156 million. The United States Court of Federal Claims granted Mobil summary judgment. The United States Court of Appeals for the Federal Circuit reversed. The United States Supreme Court granted certiorari.

Rule of Law


Holding and Reasoning (Breyer, J.)

Dissent (Stevens, J.)

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