BP America Production Co. v. Burton, 549 U.S. 84 (2006)
Primary Holding
Administrative payment orders issued by the Department of the Interior’s Minerals Management Service for assessing royalty underpayments on oil and gas leases do not fall within the 6-year statute of limitations for Government contract actions set out in 28 U.S.C. §2415(a).
In the case of BP America Production Co. v. Burton, the Supreme Court decided that orders from the government to collect unpaid royalties on oil and gas leases do not have to follow the usual 6-year deadline for government contracts. This is important because it means the government can still collect money owed for longer periods, which helps ensure that companies pay their fair share for using public resources. For consumers, this ruling helps protect public funds, as it allows the government to enforce payments that can be used for public services. If you are involved in oil and gas leasing or are affected by such regulations, this case is relevant because it clarifies how long the government has to act if it believes a company hasn't paid what it owes.
AI-generated plain-language summary to help you understand this case
In BP America Production Co. v. Burton, the underlying dispute arose from the assessment of royalty underpayments on oil and gas leases managed by the Department of the Interior’s Minerals Management Service (MMS). BP America Production Company, as the successor in interest to Amoco Production Company, was subject to an MMS audit that identified a deficiency in royalty payments owed to the government. Following the audit, MMS issued an administrative payment order requiring BP to pay the assessed amount. BP contested the order, leading to questions regarding the applicability of the statute of limitations under 28 U.S.C. § 2415(a) for government contract actions to these administrative payment orders. The procedural history of the case began with BP's challenge to the MMS payment order, which was initially appealed within the MMS framework. After exhausting administrative remedies, BP sought judicial review, ultimately leading to a writ of certiorari being granted by the Supreme Court of the United States. The case was heard to determine whether the six-year statute of limitations for government contract actions applied to the administrative payment orders issued by MMS. The relevant background context includes the legislative framework governing oil and gas leases, particularly the Mineral Leasing Act of 1920 and the Federal Oil and Gas Royalty Management Act of 1982 (FOGRMA). FOGRMA established the responsibilities of lessees to accurately calculate and pay royalties, while granting MMS the authority to audit these payments and issue orders for any underpayments. Additionally, the Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 (FOGRSFA) introduced a seven-year statute of limitations for judicial proceedings or demands related to royalties under federal oil and gas leases, which was a critical point of contention in BP's case.
Whether administrative payment orders issued by the Department of the Interior’s Minerals Management Service for assessing royalty underpayments on oil and gas leases fall within the 6-year statute of limitations for Government contract actions set out in 28 U.S.C. §2415(a).
The judgment is reversed.
- Court
- Supreme Court
- Decision Date
- October 4, 2006
- Jurisdiction
- federal
- Case Type
- landmark
- Majority Author
- Alito
- Damages Awarded
- N/A
- Data Quality
- high
Cherokee Nation of Okla. v. Leavitt, 543 U.S. 631 (2005)
Consumer WonThe Government's promises to pay contract support costs to Indian tribes under the Indian Self-Determination and Education Assistance Act are legally binding, even if Congress did not appropriate sufficient funds for those costs.
Graham County Soil & Water Conservation Dist. v. United States ex rel. Wilson, 545 U.S. 409 (2005)
Consumer LostThe 6-year statute of limitations in the False Claims Act does not govern civil actions for retaliation under §3730(h); instead, the most closely analogous state limitations period applies.
Orff v. United States, 545 U.S. 596 (2005)
Consumer LostCongress did not waive the United States' sovereign immunity for suits brought by third-party beneficiaries under the Reclamation Reform Act of 1982, and therefore, individuals who are not parties to a government contract cannot sue the United States for breach of that contract.
Lingle v. Chevron U. S. A. Inc., 544 U.S. 528 (2005)
Consumer LostThe "substantially advances" formula established in Agins v. City of Tiburon is not an appropriate test for determining whether government regulation effects a taking under the Fifth Amendment.