The decision of when to file a taking claim in the U.S. Court of Federal Claims is a critically important step in bringing a successful taking case. File at the wrong time, and you may find yourself out of court.
The assignee of oil and gas lease rights, Solenex, LLC, on federal land in Montana learned this lesson after having its taking and contract claims dismissed by a Court of Federal Claims judge for lack of jurisdiction.
In May 1982, the Bureau of Land Management issue to Solenex’s predecessor in interest a ten-year oil and gas lease for 6,247 acres of land in Montana. After much back and forth with the BLM regarding an exploratory well drilling permit, Solenex filed an Administrative Procedures Act claim in the federal District Court for the District of Columbia, challenging the suspension of the lease and later the outright cancellation of the lease. The district court ruled for Solenex, and the Government appealed the decision on November 16, 2022.
However, on March 14, 2022, Solenex also filed a contract and taking complaint in the U.S. Court of Federal Claims, asserting that the Secretary of Interior’s decision to cancel the lease resulted in the unconstitutional taking of its property rights and breached the lease agreement. The Court concluded that the CFC claims were based on the same operative facts as those on which Solenex’s APA claims were based: the Secretary of Interior lacked the authority to cancel the lease; the Secretary’s cancellation of the lease violated law; and the Secretary’s decision to cancel the lease was arbitrary and capricious.
Therefore, under 28 U.S.C. § 1500, the Court dismissed the lawsuit for lack of jurisdiction:
[T]he United States Court of Federal Claims shall not have jurisdiction of any claim for or in respect to which the plaintiff or his assignee has pending in any other court any suit or process against the United States or any person, who, at the time when the cause of action alleged in such suit or process arose. . . .
Had Solenex waited to file its CFC claims after completing the appeal in the D.C. Circuit or filed its CFC lawsuit before suing in the district court, it may have avoided altogether the Section 1500 dismissal.
Read full decision here.
