Secretary of Interior v. California, 464 U.S. 312 (1984)

Secretary of the Interior v. California

Argued November 1, 1983
Decided January 11, 1984 *
No. 82-1326

464 U.S. 312

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Syllabus

Section 307(c)(1) of the Coastal Zone Management Act (CZMA) provides that

[e]ach Federal agency conducting or supporting activities directly affecting the coastal zone shall conduct or support those activities in a manner which is, to the maximum extent practicable, consistent with approved state management programs.

CZMA defines the "coastal zone" to include state but not federal land near the shorelines of the several coastal States, as well as coastal waters extending "seaward to the outer limit of the United States territorial sea." The territorial sea for the States bordering on the Pacific Ocean or Atlantic Ocean extends three geographical miles seaward from the coastline. Submerged lands subject to the jurisdiction of the United States that lie beyond the territorial sea constitute the Outer Continental Shelf (OCS). By virtue of the Submerged Lands Act, the coastal zone belongs to the States, while the OCS belongs to the Federal Government. In these cases, the Department of the Interior (Interior), rejecting California’s demands that a consistency review was required under § 307(c)(1), sold oil and gas leases of certain tracts on the OCS off the coast of California. California and other interested parties then filed suits in Federal District Court to enjoin the sale of some of the tracts, alleging that Interior had violated § 307(c)(1) in that leasing sets in motion a chain of events that culminates in oil and gas development and therefore "directly affects" the coastal zone within the meaning of § 307(c)(1). The District Court entered a summary judgment for the plaintiffs, holding that a consistency determination was required before the sale. The Court of Appeals affirmed.

Held: Interior’s sale of OCS oil and gas leases is not an activity "directly affecting" the coastal zone within the meaning of § 307(c)(1), and thus a consistency review is not required under that section before such sales are made. Pp. 320-343.

(a) CZMA nowhere defines or explains which federal activity should be viewed as "directly affecting" the coastal zone, but the legislative history of § 307(c)(1) discloses that Congress did not intend the section to reach OCS lease sales. The "directly affecting" language was aimed primarily at activities conducted or supported by federal agencies on federal lands physically situated in the coastal zone but excluded from the zone as formally defined by CZMA. This reading of § 307(c)(1) finds further support in the history of other sections of CZMA. Pp. 321-330.

(b) Nor is a broader reading of § 307(c)(1) compelled by the thrust of other CZMA provisions. It is clear that Congress believed that CZMA’s purposes could be adequately effectuated without reaching federal activities conducted outside the coastal zone. Moreover, an examination of § 307’s structure suggests that lease sales are a type of federal agency activity not intended to be covered by § 307(c)(1). Section 307(c)(3), which deals with private parties’ activities authorized by a federal agency’s issuance of licenses and permits, is the provision that is more pertinent to OCS lease sales, and that provision definitely does not require consistency review of such sales. Pp. 331-335.

(c) Congress has carefully codified the fine distinction between a sale of a "lease" and the issuance of a permit to "explore for," "produce," or "develop" oil or gas. By the time the leases in question here were sold, it was clear that a lease sale by Interior did not involve the submission or approval of "any plan for the exploration or development of, or production from" the lease tracts. Since 1978, when the Outer Continental Shelf Lands Act of 1953 (OCSLA) was amended, there have been four statutory stages to developing an offshore oil well: (1) preparation of a leasing program, (2) lease sales (the stage in dispute here), (3) exploration by the lessees, and (4) development and production. The purchase of an OCS lease, standing alone, entails no right to explore for, develop, or produce oil or gas resources on the OCS. The first two stages are not subject to consistency review, but the last two stages are. Under OCSLA’s plain language, the purchase of a lease entails no right to proceed with full exploration, development, or production that might trigger § 307(c)(3)(B)’s consistency review provisions; the lessee acquires only a priority in submitting plans to conduct those activities. Pp. 335-341.

(d) Even if OCS lease sales are viewed as involving an activity "conduct[ed]" or "support[ed]" by a federal agency within the meaning of § 307(c)(1), lease sales cannot be characterized as "directly affecting" the coastal zone. Since 1978, the sale of a lease grants the lessee the right to conduct only very limited "preliminary activities" on the OCS, and does not authorize full-scale exploration, development, or production. Those activities may not begin until separate federal approval has been obtained. In these circumstances, the possible effects on the coastal zone that may eventually result from the sale of a lease cannot be termed "direct." Pp. 342-343.

683 F.2d 1253, reversed.

O’CONNOR, J., delivered the opinion of the Court, in which BURGER, C.J., and WHITE, POWELL, and REHNQUIST, JJ., joined. STEVENS, J., filed a dissenting opinion, in which BRENNAN, MARSHALL, and BLACKMUN, JJ., joined, post, p. 344.