Watt v. Alaska – Oral Argument – January 13, 1981

Media for Watt v. Alaska

Audio Transcription for Opinion Announcement – April 21, 1981 in Watt v. Alaska

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Warren E. Burger:

We’ll hear arguments first this morning in Andrus v. Alaska and the consolidated case.

Mr. Claiborne, you may proceed whenever you are ready.

Louis F. Claiborne:

Mr. Chief Justice, and may it please the Court:

We deal this morning with the Kenai Moose Range which I am told has been renamed the Kenai National Wildlife Refuge a month ago in the enacted Alaska lands bill.

That range or refuge is in south central Alaska, just south of Anchorage, and east of Cook Inlet.

It comprises approximately two million acres of lands, all within the Kenai Peninsula Borough, boroughs in Alaska being comparable to counties elsewhere.

It was established by withdrawal of public domain or public lands in the United States, some 40 years ago.

Ever since the mid-1950s oil and gas leases have been issued by the United States covering portions of that acreage and substantial revenues have been derived therefrom.

Indeed, since 1965 approximately $80 million in royalties, rents, and bonuses have accrued from those leases.

The issue presented to the Court is how those federal revenues from this refuge ought to be distributed, whether according to the formula in the Mineral Leasing Act of 1920, as Alaska maintains, which would have the result of apportioning 90 percent, in the particular case of Alaska, to the State and ten percent retained in the federal treasury; or whether the appropriate formula is that ordained by the Wildlife Refuge Revenue Sharing Act, an Act originally passed in 1935 and amended in 1964, relevant to this case.

According to that formula, the same revenues would be divided 25 percent to the county out of which these lands have been created, or this refuge has been created, and the remainder, 75 percent, would go to the Conservation Fund.

In practice, the first formula, the formula of the Mineral Leasing Act of 1920, was followed.

And indeed, until anyone thought about it, which was so far as the record indicates for the first time in 1975, that distribution formula obtained.

At that time, in 1975, the Fish and Wildlife Service in Alaska wondered to itself, and then out loud, whether the right formula was being applied.

They accordingly inquired of the Solicitor of the Department of the Interior for advice.

He gave the opinion that it was being done wrongly and that the formula of the Refuge Act, 25 percent to the county, is the one that should have obtained at least since 1964.

He, in turn, the Solicitor, asked the opinion of the Comptroller General of the United States.

The Comptroller General agreed with the Solicitor and ruled accordingly.

Alaska then asked for reconsideration of that opinion, which was duly given, but the Comptroller General adhered to his view and reaffirmed his previous ruling.

At this point the Kenai Peninsula Borough would have been the recipient under the Refuge Act and who would now become the recipient under the ruling of the Comptroller General, brought suit against the Secretary of the Interior seeking a declaration that the Comptroller was indeed correct and that his decision ought to be followed; and also asking that the Secretary of the Interior be required to recoup the monies now determined to have been erroneously paid to Alaska rather than to the county in the previous decade.

Promptly thereafter the State of Alaska initiated a separate lawsuit against the Secretary of the Interior, the Secretary of the Treasury, and the Comptroller General, seeking to set aside the ruling of the Comptroller General and to obtain a declaration and an injunction that the old formula that had been followed in practice should continue to be followed, and that Alaska should continue to receive 90 percent of these revenues.

The suits were consolidated in the district court and in the meantime the monies accruing from the time of the filing of the suits were held in suspense, where they still are.

John Paul Stevens:

Mr. Claiborne, is there any attempt on the part of the Government to recover the money paid between 1964 and 1975?

Louis F. Claiborne:

Your Honor, the Government resisted the complaint of Kenai seeking to compel that action.

The ruling having gone against the Government in the district court and the court of appeals because there’s been no occasion to consider whether, should that ruling be reversed here, it would be appropriate to seek recoupment, in our view it’s a decision which the Government is free to embark upon but cannot be compelled to undertake.

No decision has been reached with respect to what I’ve–

John Paul Stevens:

If you’re right, Alaska has about $50 million that it shouldn’t have, doesn’t it?

Louis F. Claiborne:

–That is so, Mr. Justice Stevens.

It may well be that the appropriate course would be for the United States to bring an action, if necessary, to recoup that money for the benefit of the borough.

Warren E. Burger:

Have there been occasions, Mr. Claiborne, where the United States had this type of a claim in broad terms and took no action to enforce the claim?

Louis F. Claiborne:

I think, Mr. Chief Justice, without being able to cite precedents, that one can find examples on both sides; that is, cases in which the United States for reasons of equity thought it improper to seek to redress the past; other instances in which it was thought right to recoup the money and redistribute it in accordance with what is now declared to be the correct rule.

William H. Rehnquist:

Well, Mr. Claiborne, both the question of Justice Stevens and the question of the Chief Justice suggest that the answer reached by the 9th Circuit is wrong in this case.

I realize there’s a good deal of money turning on the issue, but when you get right down to the statutory materials and go to the presumption against implied repeals and the specific governing the general and other such maxims, on the legal issue isn’t it pretty close to a coin toss?

Louis F. Claiborne:

I would not have thought so, Mr. Justice Rehnquist, but I own that two courts have held against our position and we cannot therefore say that it’s absolutely clear cut that the Government’s view as announced by the Comptroller General and as we urge here is the correct one.

I do invoke the plain meaning rule as the governing canon of construction in this case and this seems in our submission a peculiarly appropriate instance in which Congress spoke as clearly as one could hope for, much more clearly than is the usual case, and one in which one ought to accept Congress at its word.

And if one follows that analysis which we submit is the correct one, then the case is indeed plain that an error has been committed for these ten years and perhaps under those circumstances the proper remedy is to redress that past error.

We are not speaking of the individual private persons who have relied to their detriment on the error of the Administrator who is speaking of a state whose mineral revenues are so generous that they are able to repay their own citizens.

At all events, as the Court well knows, the district court ruled against the Secretary, despite finding that the plain meaning of the statute was as contended for, but holding in what can only be described as a most unusual construction of the statute that the word “minerals”, though in the statute apparently applicable to both refuges made up of acquired land and those made up of public domain lands, must be construed by a judicial decree with the words of the statute so as to apply only in the one case and not in the other, the reasoning behind that being that this would accomplish no change in the law and that there was insufficient indication that Congress by adding the word “minerals” to the Revenue Sharing Act meant to accomplish any change of the law.

The court of appeals affirmed that decision, basically on the same reasoning.

Now this case reaches the courts, and at least this Court, only because of two circumstances that occurred after the relevant statute had been enacted; unfortunately, not such rare occurrences, but still unfortunate.

The first is that the Department of the Interior was very slow in implementing the change of law, if that’s what it was, which had occurred in 1964.

The second was that Congress, though having a clear opportunity to indicate which was the correct view of their own statute, expressly declined that invitation in 1978 and said, since the matter is before the Court, we will let the courts decide what we meant in 1964 rather than resolving it themselves and sparing this and the other courts the need for resolution.

Now the statute on its face, everyone has agreed, at least until Alaska filed its brief in this Court, was perfectly plain.

John Paul Stevens:

Mr. Claiborne, before you get into your analysis of the ’64 statute, would you tell me what is the statutory authority for the Secretary to derive revenues from the sale of timber, hay, grass, and all these others, sand and gravel, the things other than minerals?

Is there some statute that authorizes the disposition of those?

Louis F. Claiborne:

The authority as understood by the Department and indeed as recited in rulings of the Solicitor is that the so called Wildlife Refuge Revenue Sharing Act as originally enacted in 1935 does authorize the Secretary… and, indeed, the words are reasonably clear to that end… does authorize the Secretary to grant sales or dispositions, which in this context are understood to include leases, of those products… in the case of some of the products it’s an outright sale, but in other instances it’s leases… with respect to both refuges made up of acquired lands and those made up of public domain lands, without distinction.

John Paul Stevens:

If the Mineral Leasing Act did not apply would that statutory authority have authorized the making of the leases that are involved here?

Louis F. Claiborne:

We suggest that that is a possible construction of the 1935 Act, even before its amendment, and indeed that was the ruling of the Acting Solicitor of the Department of the Interior in 1946, before the Acquired Lands Act had been passed, and therefore the only authority then available with respect to mineral leases on acquired lands.

He read the word 1935 Refuge Act as including the lease for oil and gas on acquired lands.

If it applied to acquired lands, it likewise applied to public domain lands, though unnecessarily, since the Mineral Leasing Act of 1920 was already available for that purpose.

We do not deem it necessary for this Court to decide that question, that is, what the law was before 1964, because in 1964 Congress added the word “minerals” to those revenues which could be leased, those resources which could be leased, and the revenues from mineral leases as among those that ought to be distributed according to the formula of the Act.

And it was that very plain action of adding the word “minerals” that moots out the question–

John Paul Stevens:

It isn’t entirely mooted out, because isn’t it normally true that the division of revenues would be computed according to a statute that also grants the authority to make the lease in the first place?

It’s somewhat unusual in your position to have the statutory authority for everything but minerals in one statute, and the mineral leasing authority in another statute, but say that doesn’t govern the way the money should be divided up.

Louis F. Claiborne:

–Mr. Justice Stevens, it is certainly neater, if that’s an appropriate word, if the same statute both gives the authority and governs the distribution of revenues.

I would point out that all leases of public lands are distributed, or granted, under the Mineral Leasing Act of 1920 so far as the mechanics are concerned, whether they’re acquired lands or not.

The Acquired Lands Act, for instance, simply says, you may apply the Mineral Leasing Act of 1920 to acquired lands as you have been doing with respect to other lands.

I have–

Byron R. White:

Mr. Claiborne, isn’t there some real basis, though, for treating acquired lands and domain lands differently with respect to how much of a share of the royalty should go to a county?

Louis F. Claiborne:

Mr. Justice White, that may have been the thought, but as–

Byron R. White:

–Well, there would be a basis for doing it.

Louis F. Claiborne:

–There would.

Byron R. White:

After all, acquired lands does reduce the county’s tax base.

Louis F. Claiborne:

But, considering the revenues from all other sources, all clearly divided under the Refuge Act, whether from acquired or from public domain lands, it is difficult to see why mineral revenues, that is, oil and gas revenues, should be segregated for different treatment.

Now, there is a different formula.

It’s not simply 25 percent in the case of acquired lands.

there are two other options available, more generous options potentially, and in practice seem to be more generous, than with respect to the lands that are in refuges that come from the public domain.

Byron R. White:

Well, the ’64 amendments were aimed at facilitating the acquisition of lands?

Louis F. Claiborne:

That was plainly the main purpose of the ’64 amendment.

But quite incidentally two other things were done.

One was to authorize expressly the granting of leases of public buildings and public accommodations, and having those revenues distributed pursuant to the Refuge Act, something the Comptroller General had ruled could not be done; and then tying up this problem about minerals that was ambiguous before.

Byron R. White:

It doesn’t… perhaps the county might be entitled to share more heavily with respect to acquired lands but how about the public domain lands, that they never were taxing anyway?

Louis F. Claiborne:

Well, they do receive a share of all other revenues, and it’s difficult to appreciate why they shouldn’t receive a like share of mineral revenues.

Because one could argue that the State receives it for their benefit in any event, but why should they not receive it directly in the locality?

I am trespassing on the time of my co counsel, and will allow him to continue.

Warren E. Burger:

Mr. Cranston.

Charles K. Cranston:

Mr. Chief Justice and may it please the Court:

My name is Charles Cranston from Anchorage, Alaska, representing the Kenai Peninsula Borough.

I think I’d like to start off by addressing the very question that Justice White asked, and that is, is there not some justification for treating differently counties with reserved land refuge from those counties which have acquired land refuges?

And my answer to that is, no, there is no difference for treating those counties differently.

And I’ll explain why I believe that is the case, and perhaps with that we can understand really why this case is here.

Warren E. Burger:

Just by way of definition, to clarify it for me at least, when you speak of the term “acquired lands”, are those always lands which have been on the tax rolls before they were acquired?

Charles K. Cranston:

Presumably so, Mr. Chief Justice.

I believe that certainly under the new Act, ’78 amendment, acquired lands are called fee lands, and those were lands which were previously held in fee by private individuals and reacquired by the Government.

Thus, if they were held in fee, presumably they were taxed.

The reserved lands, on the other hand, were always part of the public domain and were never taxed.

I think if you look at the Kenai Peninsula Borough itself we have a striking example of why the reserved land county should be the recipient of these wildlife refuge revenues.

In the case of Kenai there have been two million acres withdrawn from the tax roll.

Admittedly those lands were never on the tax roll, but nevertheless two million acres of land remain unavailable for the tax base of this borough.

If we apply conservative property tax estimates, that will equal anywhere from six to $10 million a year of tax revenues.

Warren E. Burger:

Are you relating that to current rates of tax in that area?

Charles K. Cranston:

Yes, Mr. Chief Justice, I am.

I am assuming a very low appraisal of $100 an acre and a very low mill rate of from three to five mills, which is roughly within the range of the current tax rate in that borough.

Now, considering the fact that this wildlife refuge has development, oil and gas development, which requires services such as fire protection, it of course increases the population of the borough, schools, the development in essence adds to the load on the borough to provide public services.

William H. Rehnquist:

But, Mr. Cranston, is that any different than the situation of any other western state that was admitted to the Union, where the Federal Government started out owning 70 or 80 percent of the land in the state?

Charles K. Cranston:

It could be, Justice Rehnquist, in that I believe it’s unusual in all of the public domain to have development of that public domain, which adds to the services which the local government must provide.

That is to say, simply, if you have grazing on BLM grazing land, that doesn’t necessarily increase the type of intensive use of the land that requires additional services which normally are provided by the county’s tax base.

And so I believe that in the case of oil development, albeit on a wildlife refuge, there is a legitimate reason for treating the county with a reserved refuge the same as one with an acquired refuge, because the net result is the same.

You have the development, you have the increased population, you have the need to provide the services, there is no difference in rationale as to why one should be treated differently if you look at it from the standpoint of the county and if you look at it from the revenue obligation of the county, that is the threat to the county’s revenues and the threat to the county’s tax base.

William H. Rehnquist:

But the county’s tax base derives ultimately from the authority of the Alaska Legislature, does it not?

Charles K. Cranston:

That’s correct, Your Honor.

But the Alaska Legislature has permitted counties to tax land as well as improvements, and it is certainly expected that when the land itself is taken out of the tax base, there certainly is significant reduction in available tax revenue to the county.

That is, it may only then tax the improvements, and in the case of an acquired refuge, the county, as in Plaquemines Parish, Louisiana, is a good example, may tax both the land and improvements and there is really no reason why one should be treated any differently than the other.

And I think this is what Congress recognized certainly in the 1964 amendment, when if you read the statute, if one were asked to draft a statute which gave authority to the Secretary to transmit 25 percent of reserved land refuges revenues to the counties, and 25 percent of acquired land refuge revenues, you couldn’t come up with language any different from that which appears in the Act.

And I believe Congress must have recognized the similarity of result both as to acquired and as to reserved land refuges.

Thus, again going to the question with which I started this argument, there is really no basis upon which to distinguish between the two types.

And I would also like to address the question which Justice Rehnquist did ask early in this argument, is it not close to a coin toss as to how these statutes should be interpreted?

And again I would answer that question by saying, no, it is not close to a coin toss.

I think the Mineral Leasing Act of 1920 and the Wildlife Refuge Sharing Act are clearly inconsistent.

You can’t have one and the other.

There has to be a choice, either the Mineral Leasing Act applies, or the Wildlife Refuge Sharing Act applies.

And this Court on numerous occasions has stated, and most recently in SEC v. Sloan, that where there is a clear inconsistency between the statutes involved, that apart from any express indication of congressional intent, there is an implied repeal of at least the inconsistent provisions.

Now, we certainly aren’t saying that all of the Mineral Leasing Act goes.

That of course is not the case.

But certainly those provisions of the Mineral Leasing Act which allocate revenues between the counties and the Federal Government must apply in this case, since otherwise you have the clear inconsistency.

William H. Rehnquist:

You do concede that there is a general policy against implied appeal you not?

Charles K. Cranston:

Certainly, Your Honor, and this Court has recognized that many times, but the exception to that policy against implied repeal is certainly pointed out most strongly by this case, where there is such a clear inconsistency between those statutes, and given that inconsistency, I believe that consistent with Sloan–

John Paul Stevens:

Mr. Cranston, how do you explain the fact that apparently the change was drafted by the Department of Interior as a perfecting amendment, and yet they didn’t apparently realize that the change meant what you now say it means, for at least ten years?

Charles K. Cranston:

–Certainly Interior in its early letters, when this Act came before Congress in 1962, added the word “minerals”, and called it a perfecting amendment.

I think there are probably two answers to the question, Your Honor.

Charles K. Cranston:

One is that the amendment was simply recognizing what had been at least the idea or the concept of Interior before the 1964 amendment, and that’s reflected in numerous memoranda which are in the Appendix.

I won’t refer them, but I think they’ve been referred to in the briefs.

Secondly, I think it’s fair to say that the effect of the perfecting amendment did not filter down to those individuals in the Fish and Wildlife Service, principally in Alaska, people who were responsible for administering the law.

I think my only explanation can be that there was an administrative oversight inconsistent with the statute and certainly inconsistent with the desires of Congress.

John Paul Stevens:

Well, is it not correct that your basic position is that it was much more than a perfecting amendment, it made a fundamental change?

Charles K. Cranston:

It certainly made a change with respect to ultimately how the revenues were to be distributed.

I would not concede that it made a fundamental change in the overall statutory scheme, since before the 1964 amendment there was certainly reason to believe that mineral revenues could be distributed under the 1935 Act as provided in the 1964 Act.

That is, that simply it was… just that.

John Paul Stevens:

But the people who wrote the checks didn’t think that.

Charles K. Cranston:

I don’t… well–

John Paul Stevens:

And nobody complained for whenever it’s… ’55 or so, and if you want to add another ten years, then there’s 20 years of construction of the Act.

Charles K. Cranston:

–Certainly the people who wrote the checks didn’t follow the Act.

Now, what they thought, I don’t know, because–

John Paul Stevens:

I mean, I’m talking about the period before 1964.

Charles K. Cranston:

–Okay.

Certainly, before 1964 that’s true.

They did not think, or at least give expression to what the Act could have permitted.

But again let me point out that there was never any explanation of why they did what they did until 1975, and when it was first brought to the attention of those people who could explain what was being done, the explanation was consistent with both the position taken by the Solicitor today and by the Kenai Peninsula Borough.

Warren E. Burger:

This is not the first time that the Department of Interior has had a change in position from one period to another, is it?

Or, perhaps I shouldn’t put that to you, since you’re not responsible for the Department of Interior.

But in the oil shale case we had exactly–

Charles K. Cranston:

Well, Mr. Chief Justice, that’s a difficult question for me to answer, but I… human nature being what it is, I assume that there may have been other instances where positions have changed.

But certainly there’s nothing wrong in… yes?

Byron R. White:

–Well, Mr. Cranston, let me ask you one you probably, won’t be hard for you to answer.

What’s the status of a county or a borough in Alaska?

Charles K. Cranston:

A borough, Justice White, is exactly the same as a county, say in Maryland or Virginia.

It has rather broad area wide–

Byron R. White:

Well, is it a creature of the State?

It’s a creature of the State, I suppose, and it has the powers… are they constitutionally granted powers or are they legislative?

Charles K. Cranston:

–A county, unlike… perhaps the unique thing about an Alaska borough is it is a self chosen local government.

Charles K. Cranston:

That is all of Alaska is not divided–

Byron R. White:

It’s a home rule sort of thing?

Charles K. Cranston:

–into boroughs.

It’s done by local option under statutory authority.

Byron R. White:

Does it sort of have home rule authority?

Charles K. Cranston:

It may.

It may have home rule authority if the populace wants that.

Byron R. White:

Well, let me ask you this.

Could the Alaska Legislature, at least prospectively, require the boroughs or counties to turn over their revenues from oil and gas leases to the State?

Charles K. Cranston:

That is a question that may be difficult.

I would say that if–

Byron R. White:

If the State is ultimately responsible, if it determined to take over, say, the financing of all the schools throughout the State and decided to take all the revenues from oil and gas leases into the State treasury and then redistribute them, would there be some barrier to that?

Charles K. Cranston:

–There’s certainly, I think, under the Alaska Constitution, nothing that grants a constitutional right for the existence of a–

Byron R. White:

So that, if the powers that be in Alaska want to change the result of this case, either way it went, I suppose, nothing we could do about it.

Charles K. Cranston:

–That is conceivably possible, Your Honor, although I think that would be true in any other state as well as Alaska.

Byron R. White:

I just wonder why we’re having to settle a fight between the county and the State here when you could settle it yourself; the State Legislature could settle it.

Charles K. Cranston:

Again, I think the simple answer is that we have two inconsistent statutes and until that is done there is no other alternative.

Byron R. White:

But the State Legislature could… it sounds like they control the distribution no matter what the federal law said.

Charles K. Cranston:

I’m not willing to concede that–

Byron R. White:

I wouldn’t if I were you.

Charles K. Cranston:

–the county has a right to the money under federal law.

I’m not certain that that could happen, and I certainly have not briefed that point.

John Paul Stevens:

Could I ask one more question, please, Mr. Cranston?

Because if you lose, the State of Alaska gets 90 percent.

If you win the county gets 25 percent.

What part of the 90 percent would probably inure to the benefit of your county?

In other words, what part of the total State of Alaska does the Kenai Borough represent in either economic or population or some kind of terms?

Charles K. Cranston:

Probably the borough would get considerably less than that which it would be entitled to under the Wildlife Refuge Revenue Sharing Act.

The State of Alaska now has roughly, under the latest census, 400,000 persons.

I think the Kenai Borough might have 20,000.

Charles K. Cranston:

So the percentage of–

John Paul Stevens:

About five percent–

Charles K. Cranston:

–Right.

And I’d say it’s a fair statement that these revenues are probably distributed on a somewhat per capita basis.

Thank you very much for your time.

Warren E. Burger:

Mr. Koester.

G. Thomas Koester:

Mr. Chief Justice, and may it please the Court:

My name is Tom Koester and I represent the State of Alaska in this proceeding.

Alaska’s position here is really quite straightforward.

the Moose Range leases, the leases on the Moose Range with which we’re dealing here, were issued under the authority of the Mineral Leasing Act of 1920, and Section 35 of that Act provides specifically that the revenues from leases issued under the authority of the Act are to be distributed in a certain fashion.

In Alaska those revenues are to be distributed 90 percent to the State and 10 percent to the Federal Government.

It is our position that the 1964 amendment to the Wildlife Refuge Revenue Sharing Act did not change the scheme set out in the Mineral Leasing Act for distribution of the revenues from the Kenai Range.

Our position is based on an analysis, first, of the policies underlying Section 35, on the legislative history of the 1964 amendment, and on the administrative practice of the Department of Interior with respect to the revenues received from the Kenai Range.

Now, the policy underlying Section 35 of the Mineral Leasing Act has been in effect since 1920, and that is a policy by which Congress has determined it is appropriate to share revenues from mineral exploitation of the public lands in this country with the states in which those lands are located.

That has been the policy since 1920.

It was recently reaffirmed in the 1976 amendments to the Mineral Leasing Act.

The policy with respect to Alaska has been that Alaska should receive a greater portion than the other states.

There are two reasons.

First, Alaska is not covered by the Reclamation Act, into which a significant portion of revenues from public lands in other states is placed.

But more importantly, as the legislative history cited in our brief with respect to the Alaska Statehood Act demonstrates, Congress was concerned when it conferred statehood on Alaska that there was a very distorted land ownership pattern in the Territory of Alaska.

The Federal Government owned 99 percent of the land.

In addition, significant portions of the public lands in Alaska were withdrawn for purposes which Congress found, withdrawals that Congress found were excessive.

As a result, Congress provided that 90 percent of the revenues from those lands would be given to the State because these withdrawals were hampering development in Alaska.

This would include public lands that were in the withdrawal status, if those lands were leased for mineral exploitation, as the Kenai Moose Range was.

In accordance with these policies underlying Section 35 of the Mineral Leasing Act, the Department of Interior distributed the oil and gas lease revenues from the Kenai Moose Range pursuant to Section 35, from the date of statehood until this question was asked by the Director of the Fish and Wildlife Service in 1975.

So we have a practice from 1959 through 1975 unbroken, of these revenues being distributed pursuant to Section 35.

The Director’s 1975 question focused on an amendment 11 years earlier, in 1964, to the Wildlife Refuge Revenue Sharing Act.

Now, the purpose of the 1964 amendment, it is agreed by all parties, was to remove or eliminate opposition on the part of states to the acquisition of land by the Fish and Wildlife Service for wildlife refuges.

The problem was that once these lands were acquired, they were taken off the tax rolls, and that the existing provisions of the Wildlife Refuge Revenue Sharing Act were inadequate to compensate the local governments for the lost revenues.

Because the governor of an affected state could block acquisition, the Fish and Wildlife Service found that it was unable to acquire land because the counties were afraid they were going to lose money.

G. Thomas Koester:

Now, it should be noted that this issue has nothing to do with public land revenues, it has nothing to do with the congressional policy in Section 35.

The public land revenues are to be shared with states.

Congress passed the amendment changing the formula for distribution of revenues from acquired lands and eliminated the obstacle to continued land acquisition.

But at the same time it gave rise to the Director’s question in 1975 by adding the word “minerals” to the list of revenue sources governed by the Refuge Revenue Sharing Act.

Now, as has been mentioned, it was described in the cover letter, this proposal to add the word Mr. Justice White.

Nor is the addition of the minerals mentioned anywhere in the subsequent legislative history.

Now, in testifying on the proposed bill, we believe it is significant that the Department of the Interior witnesses stated that this bill if passed, including the word “minerals”, would not affect the distribution of revenues from public lands.

In fact, they provided charts showing what the revenue distribution was under the existing law and that it would be under the amendment if passed.

It’s significant, we believe, that revenues attributable to the Kenai Moose range both in 1962 and in 1964 totalled less than $10,000.

At this time the oil and gas revenues from the Kenai Moose exceeded three and a half million dollars.

And it is significant that those oil and gas revenues were not included in the charts prepared by the Department of Interior for the use of Congress addressing this amendment.

The witnesses also testified that some oil and gas revenues currently were being distributed under the Wildlife Refuge Revenue Sharing Act, but no additional oil and gas revenues would be subjected to that distribution as a result of this amendment.

Well, the Comptroller General had ruled in 1942 that the Refuge Revenue Sharing Act did not reach oil and gas revenues.

That was still the administrative interpretation by the Comptroller General, charged with overseeing expenditures of revenues received by the United States in 1964 when this amendment was passed.

Oil and gas revenues from acquired lands were subject to the formula contained in the Refuge Revenue Sharing Act but they were subjected to that formula by virtue of Section 6 of the Mineral Leasing Act for acquired lands.

William H. Rehnquist:

The Kenai Moose Range was established in ’41, wasn’t it?

G. Thomas Koester:

Right.

And it was created out of public lands, not acquired lands.

So, under the Comptroller General’s ruling, those revenues would not be governed by the Refuge Revenue Sharing Act.

If the Kenai Moose Range had been created out of acquired lands, they would have been governed by the formula in the Refuge Revenue Sharing Act, but only because Section 6 of the Mineral Leasing Act for acquired lands directed that they be distributed in the formula in the same way that non mineral revenues from those acquired lands were to be distributed.

Now, the Interior Department witnesses testified that no new revenues would be subjected to the formula in the Refuge Revenue Sharing Act by virtue of the amendment, and this was true even though Congressmen were concerned at the time they were considering this amendment that the revenues available to the Department of Interior to make these payments to counties were going to be insufficient.

It would seem that if Interior proposal to add the word $4 million a year more from the Kenai National Moose range.

Or certainly, Congress, if it had intended the word $4 million annually available, which will eliminate any concern in this regard.

Now, following the passage of the amendment, the Department of the Interior continued its pre-1964 practice of distributing the Kenai Moose Range oil and gas revenues pursuant to Section 35 of the Mineral Leasing Act.

Potter Stewart:

Is this part of your argument directed to your submission that the word “minerals” in this statute does not include oil and gas?

G. Thomas Koester:

Well, I think perhaps–

Potter Stewart:

The argument is made in your brief.

G. Thomas Koester:

–The argument is made in our brief.

The petitioners in this case have throughout maintained that the plain meaning of the word “minerals” compels the conclusion that the oil and gas revenues from Kenai National Moose Range are subject to distribution under the Refuge Revenue Sharing Act.

Well, Alaska’s position has always been, and still is, in fact, that this is not an appropriate case for application of the plain meaning rule.

G. Thomas Koester:

Here you have two statutes which lead to diametrically opposed results.

However–

Potter Stewart:

But you also have an argument that oil and gas are not within the plain meaning of the statute.

G. Thomas Koester:

–Right.

I think what our argument is, is that if this case is going to turn–

Potter Stewart:

And I was wondering if you’re directing yourself to that argument now, or not?

G. Thomas Koester:

–If this… no, I’m not, except in response to your question.

Potter Stewart:

Right.

G. Thomas Koester:

If this case is to turn on the plain meaning rule, then it must be resolved that Section 35 controls, because Section 35 and the Mineral Leasing Act in general speak specifically to oil and gas, whereas the word “minerals” in many cases is construed to include oil and gas, in some cases is construed not to include oil and gas, but in any event requires construction.

It is not a plain meaning, it is not susceptible to plain meaning construction, as including oil and gas.

It requires a process of construction.

But our basic position is that this is not an appropriate case for the application of the plain meaning rule, because we have two statutes involved, and even under a plain meaning rule interpretation of the word 35, which under its plain meaning leads to an opposite result.

So a process of construction is required here, and one must try to determine what Congress intended.

Now, after Congress passed the 1964 amendment, and added the word pre-1964 practice of distributing these revenues pursuant to Section 35 of the Mineral Leasing Act.

Now, this administrative practice was consistent, entirely consistent, with the policy underlying Section 35 of the Mineral Leasing Act, that is, to share public land revenues with states.

It also was consistent with the congressional policy with respect to public lands in Alaska, that Alaska should receive 90 percent of those revenues, because of the excessive number of withdrawals in Alaska.

And finally, it is consistent with the testimony of the Department of Interior witnesses, when testifying before Congress, that this amendment would have no effect on the distribution of public land revenues, that it would not subject additional oil and gas revenues to distribution under the Wildlife Refuge Revenue Sharing Act.

However, when the Director in 1975 asked his question, whether this amendment 11 years earlier changed the rules, the Solicitor of the Department of Interior and the Comptroller General adopted the position which is now being taken by the petitioners in this Court.

They rested their conclusion on the plain meaning rule.

Now I believe that, as we have shown, the plain meaning rule is inappropriate unless it is going to be used to find that Section 35 controls.

But what we believe is more interesting at this point is the argument which has been raised by the federal petitioners in their brief, and that is somehow that in 1964 there was a perception that the Wildlife Refuge Revenue Sharing Act controlled these revenues.

Now, under the Comptroller General’s rulings it did not, but that there was somehow this perception on the part of senior Department of the Interior officials, that this perception was communicated to Congress… although they concede that it may possibly only have been communicated by inference… and that Congress may therefore have added the word “minerals” based on this perception or understanding, and the Court now should effectuate that presumed congressional understanding by construing the word “minerals” to include the oil and gas revenues from the public lands of the Kenai National Moose Range.

Well this argument requires several assumptions before you can get from Point A to Point B.

The first is that both the Interior Department officials and Congress were unaware of the Comptroller General’s rulings.

The second is that they were unaware that the Kenai Moose Range was generating $4 million a year in oil and gas revenues because their testimony was, and the charts showed, the Kenai revenues were only $10,000 a year.

The third is that they were unaware that Interior was in a process of distributing these revenues under a totally different statutory scheme, under Section 35 of the Mineral Leasing Act.

And finally, as has been discussed, that Interior continued to distribute these revenues in the wrong way, or a way which was not perceived by the senior officials of the Department of the Interior as being the proper manner.

We submit that this chain of assumptions that must be made before one reaches the result sought by the petitioners simply is untenable.

It requires too much of a leap of fate.

We believe Justice Brennan’s comment in the SEC v. Sloan case suggests a more appropriate assumption and that is that this continuous process by which the Department of the Interior distributed the revenues pursuant to Section 35 of the Mineral Leasing Act more accurately reflects both the Department of Interior’s understanding and Congress’s understanding.

G. Thomas Koester:

If there is any doubt in this regard, one would suggest that because the Secretary of the Interior… the evidence is that that the Secretary of the Interior gave the directive to continue this practice.

So even if his senior officials were confused, the Secretary wasn’t.

William H. Rehnquist:

Well, the Secretary doesn’t ordinarily turn to the Comptroller General for legal advice, does he?

G. Thomas Koester:

I don’t believe so.

He turns to his Solicitor for legal advice.

But here, I think, the issue really is that no legal advice was necessary.

In 1964 everyone understood that public land oil and gas revenues, whether in wildlife refuges or not, were subject to distribution under Section 35 of the Mineral Leasing Act.

So no legal advice was necessary.

It was not necessary to get a formal opinion at that time.

The Secretary simply said, continue the preexisting practice, because there is no need to change it.

Now, this construction… that is, the construction adopted by the Secretary of the Interior in 1966 and continued until 1975… leaves intact without an implied amendment or repeal the congressional policy regarding the sharing of revenues under Section 35 of the Mineral Leasing Act, revenues from public lands.

It also leaves intact the specific congressional policy that revenues from public lands in Alaska should be shared on a basis of 90 percent to Alaska and ten percent to the Federal Government.

Now, in its reply brief and here today, Kenai… and briefly alluded to by Mr. Claiborne… discuss Alaska’s changed economics.

And as I’m sure the Court is aware, Alaska now is enjoying rather large public revenues from state owned mineral lands.

However, this seems to me to be beside the point.

Congress in 1964 could not foresee that Alaska would enjoy this kind of bonanza.

Moreover, these revenues are from nonrenewable resources.

What is here today will be gone tomorrow.

Byron R. White:

I suppose Congress could change the formula now, too, couldn’t it?

G. Thomas Koester:

I believe, if it is to be changed, that is, for Congress to do it–

Byron R. White:

Oh, I know, they could do it; there would be no problem.

G. Thomas Koester:

–Well, I think there still might be an argument here because, actually, this was one of the fundamental underpinnings which underlay the Statehood Act and while it may or may not rise to the level of a compact, and I don’t believe that that issue really needs to be decided here, it is certainly an issue that that will be–

Byron R. White:

Well, I would think, if you think it’s a substantial question, your argument would be that the ’64 amendments were unconstitutional, if construed to change the distribution.

G. Thomas Koester:

–Well, I think it’s sufficiently clear though, here, that Congress did not intend to change those–

Byron R. White:

Well, what if it isn’t?

What if we disagree with you?

G. Thomas Koester:

–Well, then, I think you should consider very carefully the fact–

Byron R. White:

Well, you haven’t raised that, have you, anywhere?

G. Thomas Koester:

–Yes.

Byron R. White:

Have you ever resisted the Government’s case on the ground that Congress has no power to change the distribution of the revenues from reserved lands?

G. Thomas Koester:

In the lower courts we did.

Potter Stewart:

And you’ve mentioned in your brief here–

G. Thomas Koester:

And here we’ve mentioned–

Potter Stewart:

–Today, the Alaska Statehood Act, under the quid pro quo.

G. Thomas Koester:

–Right.

We have mentioned the fact that it is incorporated in the Statehood Act, and we’ve not made a definitive argument on the parameters of the statehood compact, what it would require to change that statehood compact.

And I think we recognize that there are legitimate policy concerns under which Congress can deal with revenues from public lands.

However, it is a very interesting question, and particularly, given the policy considerations that Congress gave when it enacted statehood for Alaska to the distribution of public land revenues, it certainly seems that at least if there is going to be a change, it is a change that must be made by the legislature.

Potter Stewart:

Well, what about the distribution of the revenues from non oil and gas leases, or produce from reserved lands in these refuges or–

G. Thomas Koester:

Well, I think, as was mentioned, I believe in response to a question from Justice White, the authority for those sales of surface resources stems from the Wildlife Refuge Revenue Sharing Act.

In other words, Congress in dealing with mineral revenues in Alaska, revenues derived under the Mineral Leasing Act, provided specifically that 90 percent of them were to go to the State.

However, it did not make that provision with respect to non mineral revenues.

And therefore the non mineral revenues are subject to the provisions of the Act which allows their sale in the first place, in this case the Wildlife Refuge Revenue Sharing Act.

And as the charts in the legislative history show, the Kenai Borough was receiving some of those revenues, even at that time, albeit they were minimal compared to the oil and gas revenues which were being derived.

Now, the judgments of the district court and the court of appeals, we believe, reached an appropriate solution to the dilemma here.

That is, to construe the word “minerals” as reaching those from acquired lands, those on acquired lands but not reaching those on public lands.

Mr. Claiborne suggests that this type of narrowing construction indulged by the district court and the court of appeals is somewhat unusual… in fact, unique, I think, was the word he used.

However, this Court has done that very thing.

In United States v. American Trucking Association, it narrowed the construction of the word v. Colorado Public Interest Group in 1976 it narrowed the term “radioactive materials”.

And in both cases it was persuaded by the fact that with respect to one subclass contained within the general term being construed Congress had definitively legislated there was a strong preexisting congressional scheme of regulation.

And that’s precisely the case here.

There has been a policy since 1920 of distributing public land revenues under Section 35 of the Mineral Leasing Act.

Now, Mr. Cranston has suggested that there is a problem here in that counties containing reserved lands do not get these revenues while counties containing acquired lands with oil and gas development do.

In terms of the money, direct revenue sharing to the counties, as the federal petitioners point out in their brief, there were amendments in 1978 to the Refuge Revenue Sharing Act which authorized additional payments to counties containing reserved lands.

Those payments can be as much as 75 cents per acre.

Or, in the event that timber sales, material sales, gravel sales and so on, exceed that amount, then they would get the higher figure.

So they get the largest amount available either under the provisions of the Refuge Revenue Sharing Act or the 75 cents per acre.

But I think, more significant is that in 1964 when Interior was proposing that this word “minerals” be included, the Interior Department felt that these oil and gas revenues being shared with counties resulted in windfalls to the counties.

Interior was not at all pleased that counties were receiving oil and gas revenues.

And yet what is now suggested is that by adding the word 1964.

G. Thomas Koester:

Finally, the policy of the 1964 amendment, as I mentioned, was to eliminate objection to the acquisition of additional lands for wildlife refuges.

If this statute, the amendment, is construed as changing the distribution formula for oil and gas revenues from public lands, the very evil sought to be remedied by that amendment would result in that, certainly in the case of Alaska, the State would object to the creation of additional wildlife ranges if in fact that would change the revenue distribution from those lands.

And yet that is what is asserted here.

We believe that this Court should not construe the 1964 amendment in a fashion which could result in the very evil which was sought to be remedied by Congress, and yet that would happen here.

John Paul Stevens:

–Mr. Koester, may I ask one question?

You refer in your brief to some charts or material in the 1964 legislative history which I have not locked at myself, which suggest a breakdown of what revenues were being generated and were not to be changed.

Was there any source of revenue in that record that could be classified as a mineral revenue such as, say, it was stone or… something like that, other than oil and gas on the one hand, or things like sand and gravel, which were previously mentioned in the statutes specifically?

G. Thomas Koester:

The only things that I can recall are in fact sand and gravel, and those were explicitly mentioned in the Wildlife Refuge Revenue Sharing Act.

There is nothing else that I can conceive of although I suppose… and purely speculating… but if a wildlife refuge had a tourist shop and they sold gold trinkets or something, perhaps that would be included.

But again, that would be material not specifically subject already to governance by a specific statute.

In other words, the Mineral Leasing Act of 1920 does not authorize the leasing of land for gold extraction.

And so, to the extent that the Department of Interior could sell gold trinkets or nuggets that it found, or stones, or pebbles, or shells, that authorization would come out of the Wildlife Refuge Revenue Sharing Act, and the terms of that Act would then apply.

But we’re not dealing with that here, we’re dealing with oil and gas, which was already governed by Section 35 of the Mineral Leasing Act.

For the policy reasons underlying Section 35 of the Mineral Leasing Act and the legislative history underlying the 1964 amendment, as well as the administrative practice of the Department of Interior for 11 years following that amendment, we believe this Court should affirm the decisions of the district court and the court of appeals.

Warren E. Burger:

Mr. Claiborne, you have about two minutes left.

Louis F. Claiborne:

Thank you, Mr. Chief Justice.

First, in answer to the question asked by Mr. Justice Stevens, I draw the Justice’s attention to the Appendix to our brief at page 2a.

This is a part of the affidavit of the Director of the Fish and Wildlife Service Paragraph 3 of that affidavit indicates that the mineral revenues generated by all wildlife refuges consists entirely of oil and gas revenues.

That apparently has always been true and is true as of the date of this affidavit.

John Paul Stevens:

That can’t be entirely true because weren’t there sand and gravel sales?

Louis F. Claiborne:

I take it the word “mineral” here is used as meaning mineral other than sand and gravel specified in the Wildlife Revenue Sharing Act, though I don’t for a fact know that there was any such revenue even though it’s specified.

John Paul Stevens:

You mean, that there was any sand and gravel revenue?

Louis F. Claiborne:

Indeed.

Mr. Justice White suggested that the Alaska Legislature could resolve this case.

Byron R. White:

Well, I didn’t suggest that they could change the distribution between the United States and Alaska.

Louis F. Claiborne:

It would be enormous–

Byron R. White:

I think it would be your interest.

Louis F. Claiborne:

–The enormous difference is it goes between the 90 percent and the 25 percent, whoever it goes to in Alaska.

I would add that it is a case which is entirely appropriate for Congress, the national Congress, to resolve, but it has declined the invitation to do so when the matter was very clearly put before it in–

Byron R. White:

Well, you wouldn’t suggest that the Alaska Legislature would be disentitled if you won this case to take the 25 percent that would go to the county?

Louis F. Claiborne:

–I suppose the duty of the Secretary would be to pay to the county.

Whether the county was then required by Alaska law to turn it over–

Byron R. White:

You probably don’t even have an opinion on that.

Louis F. Claiborne:

–It would not be our concern; that is so.

But I do think the Secretary must first obey the federal law and pay it to the county–

Byron R. White:

Yes.

Louis F. Claiborne:

–whatever the county is then required to do.

But, it seems to me that the approach this Court ought to take is that Congress ought to be held to its word if the consequences of what it wrote or not, as it intended it, and we think they probably are, then Congress has an easy opportunity to amend the Act.

But this Court ought not torture the text to guess what Congress may or may not have been doing in changing or not changing the law in 1964.

Byron R. White:

Does the word “mineral” or does the addition of the word… would the addition of the word “mineral” have any meaning whatsoever if the State wins this case?

Louis F. Claiborne:

It would accomplish precisely nothing because it would simply confirm the formula already enacted by the Mineral Leasing Act–

Byron R. White:

Would it affect, would it add something, would it change the distribution of any other?

Louis F. Claiborne:

–Nothing whatever, Mr. Justice White.

Byron R. White:

Mineral besides oil and gas?

Louis F. Claiborne:

It would be entirely surplusage, unless it applies to reserved lands.

Because at least all minerals covered by the Minerals Leasing Act for acquired lands in 1947, or by that Act, required to be distributed under the Refuge Act formula… now… gold and silver night present a separate question.

Byron R. White:

Well, so you answer yes, if there were gold and silver discovered, the word “minerals” would have some meaning besides oil and gas?

Louis F. Claiborne:

Yes.

Though no one, in the ’64… or ’62 debates, ever suggested that there was gold and silver to be found on this refuge.

The only mineral ever spoken of was oil and gas, and everyone knew that the word “mineral” in that context meant oil and gas.

Warren E. Burger:

Thank you, gentlemen.

The case is submitted.