National Wildlife Federation v. Burford

Section 201(a)(1) of the Mineral Leasing Act of 1920, 30 U.S.C. §§ 181 et seq., required coal-lease bids to be at least fair market value, as determined by the secretary of the interior (secretary). Section 201(a)(1) also required the secretary to use competitive bidding to award leases. An interpretive regulation, 43 C.F.R. § 3400.0-5(n), defined “fair market value” as the cash amount, or cash equivalent, for which a knowledgeable buyer would sell or lease coal to a knowledgeable purchaser. The secretary replaced the prior minimum-acceptable-bid (MAB) system with an entry-level-bid (ELB) system, based on studies suggesting a decline in the western coal market. The secretary subsequently accepted coal-lease bids for the Powder River Basin (Basin) area using the ELB system. Pre-sale estimates were based on a prior coal-lease sale that was not comparable to the Basin sale. However, an economic evaluation committee concluded that the prior sale was best suited to the type of lease available in the Basin. The National Wildlife Federation and other environmental groups (plaintiffs) sued BLM Director Robert Burford, the secretary, and others (defendants) in federal district court, challenging the secretary’s use of the ELB system. The district court found that the secretary had acted reasonably in accepting the bids, and entered summary judgment in favor of the defendants. The plaintiffs appealed, arguing that (1) the ELB system was deficient because it provided less than fair market value, (2) the shift to the ELB system was irrational and insufficiently explained in the record, (3) pre-sale estimates did not represent fair market value because they were based on a prior coal-lease sale that was not comparable to the Basin sale, and (4) the bidding process was corrupted by procedural irregularities that included price leaks to industry representatives.