SAN FRANCISCO (CN) – A federal judge said Tuesday that the Trump administration improperly delayed a rule to boost state royalties for oil, gas and coal extracted on public lands, but she declined to issue a ruling because an impending repeal might moot the case.
“I was ready to rule on this today, but I certainly don’t want to rule on something if I have no jurisdiction,” U.S. Magistrate Judge Elizabeth Laporte said during a summary judgment hearing.
California and New Mexico sued the U.S. Department of Interior this past April, arguing it unlawfully postponed the new royalties rule on Feb. 22 – six days before the first payments were due and after the rule was set to take effect on Jan. 1.
The rule was expected to increase royalties by $72 million to $85 million, according to the Interior Department’s Office of Natural Resources Revenue. Both states say they depend on that revenue to help fund services like public education.
Washington state filed an amicus brief supporting the states’ motion for summary judgment.
The U.S. government argues it had the right to delay the rule under a federal law that lets agencies “postpone the effective date” of an action pending judicial review when “justice so requires.” The delay was reportedly in response to federal litigation filed on Dec. 29, 2016, by coal and oil industry groups in the District of Wyoming.
Laporte found the language of the statute does not support the government’s position because the rule’s effective date had already passed.
“Having worked on this, I had already come to the conclusion that the states are correct,” Laporte said. “The plain language of the effective date did not allow this, and it was not a lawful way to do it. It was effectively a repeal without going through the normal procedures.”
But after instituting that delay, the government started the process of officially repealing the rule. The Interior Department published a proposed rule to roll back the increased royalty valuations on April 4, with a public comment period ending May 4. It’s set to take effect on Sept. 6.
Despite siding with the states on their motion for summary judgment, Laporte found the issue of jurisdiction must be decided first.
The federal government filed a motion to dismiss on Aug. 18, arguing the case is moot because the royalty revaluations will be completely repealed in early September.
“We believe the case is prudentially moot now and moot as of Sept. 6,” Justice Department attorney Rebecca Jaffe told the judge.
California Deputy Attorney General Mary Tharin argued the plaintiffs still have standing to seek relief until the repeal takes effect on Sept. 6.
Laporte asked both sides to submit briefs on the issue of prudential mootness and scheduled a hearing on the motion to dismiss for Sept. 11.
After the hearing, Tharin declined to comment on what relief the states will seek now that the rule is about to be repealed.
“We will address those questions in our papers to the court at the appropriate time,” a representative with the California Attorney General’s Office said in an email Tuesday.
The Interior Department faces a similar lawsuit by California and New Mexico over delaying enforcement of a rule that cracks down on methane emissions from oil and gas wells on federal land. That rule was set to take effect on Jan. 17.