Transcript

IN THE SUPREME COURT OF THE UNITED STATES

BP AMERICAN PRODUCTION COMPANY, SUCCESSOR IN INTEREST TO AMOCO PRODUCTION COMPANY, ET AL. Petitioners v. REJANE BURTON, ACTING ASSISTANT SECRETARY, LAND AND MINERALS MANAGEMENT, DEPARTMENT OF THE INTERIOR, ET AL.

Washington, D.C.

Wednesday, October 4, 2006

The above-entitled matter came on for oral argument before the Supreme Court of the United States at 11:06 a.m.

APPEARANCES: JEFFREY A. LAMKEN, ESQ., Washington, D.C.; on behalf of the Petitioners. DARYL JOSEFER, ESQ., Assistant to the Solicitor General, Department of Justice, Washington, D.C.; on behalf of the Respondents.

P R O C E E D I N G S

[11:06 a.m.]

JUSTICE STEVENS: We'll hear argument in BP America Production Company against the Secretary. Mr. Lamken.

ORAL ARGUMENT OF JEFFREY A. LAMKEN

ON BEHALF OF PETITIONER

MR. LAMKEN: Thank you, Justice Stevens, and may it please the Court:

Section 2415(A) established a limitations period for every action for money damages by government which is founded on any contract. That provision, by its terms, applies to every contract action, every adversary adjudication seeking monetary compensation for breach, whether pursued before a court or an agency.

The contention that every action encompasses only civil actions or judicial actions is incorrect for three reasons. First, it is inconsistent with the broad language that Congress used. It is inconsistent with the statutory structure, in that it renders another provision, the exception for administrative offset, totally superfluous. It also creates an irrationality in the hierarchy of the government's claims. Finally, it robs Section 2415(A) of its intended effect.

Turning to the text, Congress and agencies regularly use the term action to refer to adversary adjudications before administrative agencies and before the judiciary. The term --

JUSTICE SOUTER: May I ask you on that point, I understand what you are saying, and I've looked at your authority. But right in the provision itself, there is a verbal distinction made between actions for money damages, and what at the end is referred to as administrative proceedings in providing for the one year supplementary rule.

Doesn't the statute, in effect, say, we don't mean by action what we would -- possibly -- what possibly might be included as an administrative proceeding. If they had wanted an administrative proceeding to be a subset of the action for money damages, wouldn't it have been sensible for Congress to say -- to refer instead of to administrative proceedings, to administrative actions?

MR. LAMKEN: Well, in fact, it refers to administrative proceedings required by contract or law. And that clause applies in the particular circumstance where a law or contract requires some sort of administrative proceeding as a condition precedent to the action for money damages. So if you can bring your money damages action without any prior administrative proceeding, regardless of --

JUSTICE SCALIA: I think your point has to be that there are administrative proceedings that are not actions.

MR. LAMKEN: That is absolutely contract. Non-adversarial administrative proceedings would themselves not be actions. And they also wouldn't be money damages actions. So the distinction the statute draws is not between money damages actions in court and money damages actions before agencies. It is before money damages actions wherever brought. And the administrative proceedings that have to be brought as a condition precedent.

JUSTICE SCALIA: You contend that what commenced the action here was the order demanding payment?

MR. LAMKEN: That is correct. That is the --

JUSTICE SCALIA: That's a very weird commencement of an action, where what then follows is what is referred to as an appeal, within the agency?

MR. LAMKEN: For historical reasons, the denominations are quite strange, but for -- quoted on subsection 1702 and 1724, put pages 5 and 6 of our reply brief, specifically state that the order to pay commences the proceedings. And so --

JUSTICE SCALIA: Which says that?

MR. LAMKEN: On page 5 of our brief, section 1702.

JUSTICE SCALIA: What page of your brief?

MR. LAMKEN: 5 and 6 of the reply brief.

JUSTICE SCALIA: Of the reply.

MR. LAMKEN: Yes. And it's 13 U.S.C. 1724, and it talks -- or it defines the demand as the order to pay. And then the definition provisions in turn, when they're talking about what commences the action, it says that the order to pay commences the action.

JUSTICE SCALIA: I'm not finding it. Where is it in your --

MR. LAMKEN: Page 6 of the reply, Your Honor, the very top. The citation says 13 U.S.C. 1724. It defines demand to include an order to pay issued by the Secretary. And in the next line down, we say it recognizes that the so-called order to pay concluding the action, in fact, commences it, because the statute of limitations uses the word commenced to describe what action the order to pay does.

JUSTICE SCALIA: Why doesn't it make much more sense, as I understand the proceeding, this order doesn't come out of the blue. As required, there has to be a letter to the payee saying, we think you owe so much money. He's allowed to respond, right? And then after considering the response, the order issues.

Now, I would consider that a -- you know, that sounds to me like a complaint and an opportunity to respond to it. And then finally, the first decision of the agency which is then appealed. And CFR provides for what he calls an appeal. And it seems to me the final opinion of the agency is the opinion on the appeal.

MR. LAMKEN: In fact, that process, which isn't even mentioned in the regulations, doesn't have any legal operative effect. It is more like a demand letter. If the lessee doesn't respond to the letter, he doesn't waive any of his rights. If the government fails to include a claim in its demand letter, in the audit letter, it doesn't waive any of its rights.

JUSTICE SCALIA: But it can't issue the order without having issued the letter first, giving the party an opportunity to say why this amount isn't owed.

MR. LAMKEN: Well, in fact, there is nothing in the regulations, and I think the Solicitor General would concede, that actually requires this informal process. It happens to be typically done, and he actually uses the word typically in the brief. But there's nothing that requires it. And if you don't respond, there are no consequences --

JUSTICE SCALIA: Is there anything that requires the order?

MR. LAMKEN: Anything that requires the Secretary to proceed by order?

JUSTICE SCALIA: Yes.

MR. LAMKEN: That is the Secretary's traditional way of doing it.

JUSTICE SCALIA: So you can say the same for the other.

MR. LAMKEN: Oh, but there is a liability if the order fails to issue. The order -- or the first salvo, you still would be required to respond. And so the failure to respond is very much a default. The failure to respond to the letter, the audit letter has no legal operative --

JUSTICE SCALIA: You don't respond to the order. You take an appeal from the order.

MR. LAMKEN: That's correct.

JUSTICE SCALIA: You're crazy to call that a letter of complaint. Even if I grant you your other argument that an administrative proceeding can be commenced by a complaint, the term complaint can apply to administrative proceedings, I don't think that what you've hung your hat on here, namely the order, seems to me to fit that description.

MR. LAMKEN: Justice Scalia, it is the first document which is recognized in the regulations, which provides the lessor of the notice of claims against it. The first one that's required by the regulations in order to commence the proceedings.

JUSTICE SOUTER: You mean the regulations don't refer to the initial letter?

MR. LAMKEN: No. They don't -- the regulations don't require this informal process. It is typically done.

JUSTICE SOUTER: So this relief could start absolutely out of the blue by issuing the order?

MR. LAMKEN: I think that is correct. That is the way it would be done, as an informal process that's typically followed, but you could ignore it and there's no legal operative effect.

JUSTICE SCALIA: I doubt whether that would conform with the Administrative Procedure Act. I mean, even at the first level of agency decision, it seems to me you have to give the individual an opportunity to reply.

MR. LAMKEN: That is perhaps why the agency tries to do the informal process. But, in fact, it does not have legal operative effect. You can completely ignore that initial demand letter, and say, sorry, agency, I'm not responding. The agency then files its order. And that's the first time you must register your defenses.

JUSTICE SCALIA: Of course you can ignore -- that doesn't prove anything. You can ignore an agency complaint, too, a formal complaint, in which case you'll be found liable. What does the fact that you don't have to respond have to do with anything?

MR. LAMKEN: The legal consequences. That's exactly right, Justice Scalia. If you don't respond to the demand letter, there are no legal consequences. If you don't respond to the letter by filing what's called an appeal, you lose. And so it is just like a complaint. You default if you fail to raise your defenses at that point. In addition, section --

JUSTICE STEVENS: And it's also, I assume, true that the demand letter would not toll the statute.

MR. LAMKEN: No, we don't believe the demand letter would toll the statute because it is not required by --

JUSTICE SCALIA: Well, you would win in this case even if it did. I don't think that the difference between the initial letter giving you an opportunity to reply, and the -- what you call the complaint, the order, that time period doesn't put you out of -- out of the permissible period.

MR. LAMKEN: I certainly hope not. But in fact, section 2415(F), which is on page 4 and 5 of the appendix to our brief makes it clear that whether something is denominated a complaint or not does not determine whether or not it is covered by the limitations period. 2415(F) is an exception for counterclaims and offsets by the government, where a private party brings an action against the government.

The counterclaims and offsets typically aren't brought by complaint. They're brought in the answer, they're submitted in the answer. Therefore, whether it's denominated an order, an answer, or something else doesn't control whether or not 2415 applies. 2415 applies to any action for money damages founded on a contract, however you might denominate the initial filing, which commences the proceedings.

JUSTICE GINSBURG: What the point has been made that there are no indications that Plaintiffs had in mind was ordinary civil action in addition to finding this provision similarly in title 28 the judicial code and not in title 5, there's also if you read the following provision, 2416, time for submitting actions -- any states and -- what it tells us the total periods. And in doing that, it refers twice to the defendant which is a term that's used in civil proceedings, not administrative proceedings. Lamken starting at 28 USC, why it is there, and in fact-- administrative actions and actions in courts. And sometimes in 28 USC there are provisions that apply to both. The Federal Tort Claims Act act for example is 28 USC and has a provision for administrative adjustment of claims. People must file their claims before an agency first and the agency can do administrative adjustment. That's entirely separate from the Attorney General's ability to compromise the claim once it is field in court. Section title 5 also contains the -- to the courts and agencies the right to judicial review of agency actions, the waiver of immunity that's necessary for those, in addition to standards that govern judicial review of agency actions. Those were all in Title 5, but --

JUSTICE SCALIA: Please look at 2415(a)(i), you cannot possibly say that that only applies to judicial actions, can you?

MR. LAMKEN: Oh, no. That's --

JUSTICE SCALIA: And that's in title 28. Lamken and that's-- yes. That's in title 28 as well. With respect to the term defendants, Justice Ginsburg, Congress has often used the term defendants even in the context of administrative action. The Stockyards and Packers Act of 1921, it's in 7 USC 210, actually talks about a complaint against a defendant for damages, all adudicated before the Secretary of Agriculture and that was 85 years ago. It seems a little late in the day now to debate whether one can be a defendant, a person who defends before an agency, as well as --

JUSTICE GINSBURG: That's not the typical term used in agency proceedings to designate the responding party. Lamken well, you can talk about responding party, the defendant; the term defendant is sufficiently broad to include one who defends or denies and that would be a term that's been used in the past, as long as 85 years ago to discuss the person who might be liable for damages in adversary -- and the content, the content of the tolling provision as well seems geared, seems geared to a civil lawsuit. It talks about a person being outside the United States, therefore they wouldn't be amenable to service of process.

MR. LAMKEN: But-- that's certainly right. These are certainly all things that would apply, you would expect, both to a civil action in court and an administrative agency action as well. They may work better for one or the other in different particular circumstances but they are all sufficiently broad that they can be used in both circumstances. And the one government in an administrative context would be most interested in would be subsection C where the government does not know the factses, or the government reasonably couldn't know the facts, it gets an exception, just tolling until it reasonably could have known of the facts. And that's just as applicable in an action before an agency as it would be in an action before a court.

In addition, the Government's contract construction renders an entire provision superfluous. And that is the one that Justice SC ALIA mentioned, Section 2415(i) which is an exception for administrative offsets. That exception for administrative offsets would do no work at all --

JUSTICE GINSBURG: That wasnt't part of the original package, was it?

MR. LAMKEN: No, was added about sixteen years later, Your Honor. And it was added, it clarifies the scope of the statute and as this Court admitted, it pointed out in cases like Fausto and Mafonta, the later amendment to a statute can clarify its meaning, and indeed statutes are ordinarily read once amended as if they existed in their amended form from the outset.

JUSTICE GINSBURG: I thought that (i) was added because, the very specific reason that there was a debate between the Department of Justice and -- after that -- Lamken the Comptroller, Your Honor.

JUSTICE SCALIA: Yes.

JUSTICE GINSBURG: Yes. About whether an offset would be subject to --

MR. LAMKEN: That's exactly right. And Congress resolved that debate by providing an exception for administrative offsets, and no other exceptions for any sort of administrative proceeding. And that raises the strong inference that, in fact, this applies to administrative proceedings and it simply doesn't apply to administrative offsets because they are an exception.

JUSTICE SCALIA: They could have said if the other interpretation of 2415(a) as not applying to administrative proceedings were correct, they could have said provision of this section do not apply to administrative proceedings.

MR. LAMKEN: That's-- JUSTIC SCALIA which would have handled the offset. Lamken yes.

MR. LAMKEN: It would have been well beyond the offset. And the fact that they only focus on the offset certainly suggests that when you're not talking about offset, it does apply to administrative proceedings. Lamken I could not have said it better, and I will not attempt to. In fact in addition it raises another anomaly in the statute, the Government's contrary construction. And that it creates sort of an irrationality in the hierarch of claims for the Government. Offensive judicial actions to extract money from private individuals must be brought with six years. Administrative offsets for the Government to try and avoid payment, those must be brought within 10 years under the administrative act -- provision that are enacted together with the exception or not. However, offensive administrative actions to extract money may be brought in perpetuity, forever. It simply strains credulity to believe that Congress at the same time it was saying the Government has only 10 years to assert administrative offsets to avoid paying money, intended administrative agencies to be able to extract money on that very same claim --

JUSTICE SCALIA: I can believe that they do that. [Laughter.]

JUSTICE SCALIA: But -- it might be a mistake. But I would not assume a mistake unless it is very clear. Lamken I think that is exactly right, Justice SC ALIA. And against that is going back to Fausto where there is a sensible hierarchy of claims and a sensible hierarchy of preferences. The Court doesn't ordinarily presume that Congress put in a structure that doesn't respect that ordinary hierarchy. And the Government's construction here is inconsistent with the ordinary hierarchy which allows the Government to avoid making payments on more favorable terms than -- it gets to go in and forcibly extract money from private individuals.

Finally, the Government's construction also undermines the intended effect of the statute. The effect of statutes, the purpose of statutes of limitations, this one in particular, is to provide repose. To allow the individual to know that you no longer confront government claims, to dispose of those documents and also to encourage the Government to be diligent in pursuing its claims. None of those purposes are achieved. All of those purposes are defeated if, once the statute of limitations period expires.

JUSTICE KENNEDY: Mr. Lamken, could we go back to section I for a section more? Is it also possible to say that there was this disagreement between the Department of Justice and the Comptroller General and Congress decided that the Comptroller General was right? And if that's true, should we not accept the Controller General's reading of the entire statute? Lamken if Congress had decided the Comptroller General was right it and had done that for subsection (i) it would would have written subsection (i) the way Justice SC ALIA proposed. Which is to say this does not apply to administrative claims at all. What it did is it said it ooh, this appears to apply to administrative claims and the Comptroller thinks these administrative offsets are important. So we'll get a special a special statute of limitations period in 31 USC for those. We'll exempt them from the more general statute of limitations period in section 28 USC 2415. So I don't believe thatt it should be that way, all right? It it frivolous to suggest that that's the ruling? Not the Government --

JUSTICE STEVENS: Does the legislative history tell us how detailed the congressional examination of the particular issue was? Lamken well, indeed, the legislative history mentioned there was a battle of letters between the Office of Legal Counsel and the Comptroller on this issue. And Congress actually stepped into the fray and created an exception. But it created a limited exception, an exception that applies only to one context and that is administrative offsets. And that certainly raises a very strong inference that where there isn't such an exception the statute applies to administrative proceeds more generally.

MR. LAMKEN: Isn't the most likely answer that they saw a small problem and they rendered a decision on the small problem? And they didn't think about it any further than that? Lamken well, I have a hard time psychoanalyzing Congress because it is sort of a corporate body, and I can't tell you I can't tell what a Member of Congress is doing why. But when the core of these statutes, one generally reads them -- avoids whatever possible superfluity. And if this provision applies to administrative proceedings from the outset, subsection (1) is superfluous. It does no work whatsoever. And so when Congress amended this statute it certainly clarified that where there is no exemption this statute applies to actions filed in administrative proceedings. If there are no further questions, I'll reserve the remainder of my time for rebuttal.

JUSTICE STEVENS: Thank you. Mr. Joseffer?

ORAL ARGUMENT OF DARYL JOSEFFER

ON BEHALF OF RESPONDENT

MR. JOSEFFER: Justices, and may it please the court. The presumption is that the Government itself not pound by a statutre of limitations. And when read as a whole, section 2415(a) does not overcome that presumption but instead makes clear it applies only to suits in court. There are several reasons for that. First, in the ordinary meaning of all of the key statutory terms refers to suits in court. Second, the statute expressly distinguishes between administrative proceedings and actions. Third the statute is located in the judicial code. Fourth, the -- reports for those who are inclined to consider them them strongly support the statute's ordinary meaning and fifth, even if some administrative proceedings were governed by section 2415 A, these would not because they do not involve a complaint.

Now on the first of those points, the term action ordinarily refers to the pursuit of a right in court which is why seven years ago in West v Gibson, every member of this Court agreed that the term action often only refers to suits in court and not to administrative proceedings.

JUSTICE SCALIA: It often does. If often does. But it does not universally. And there are a number of instances cited by the petitioner that -- where this Court and -- and statutes used the term in context where it clearly applies to administrative proceedings.

MR. JOSEFFER: Well--

JUSTICE SCALIA: So the question is how -- you know, how absurd is it not to read it to apply to administrative proceedings in this case? And I find it pretty absurd. Because you assume if you read that it way, that there is effectively no statute of limitations whatever for the Government in these cases.

MR. JOSEFFER: Well, the structure of the law here is tjat in those instances where Congress does authorize administrative recovery it ordinarily provides a context specific administrative limitations period, such as in the Contract Disputes Act which governs almost all of the contracts claims the Government can pursue administratively. Congress specifically enacted a six year limitations period for the submission of a claim to a contracting officer. In thisj unique context, however, Congress had very good reasons for not applying a limitations period until it respectively enacts the present one in 1996. The reason is that what Congress found here in context of mineral leasing, based on the findings of an independent commission, was that the companies were -- on honors system and had abused that by underpaying royalties for up to half a billion dollars annually. So what Congress directed the agency to do is to audit all currrent and past lease accounts. One of the -- reports said to focus on old accounts. Because this was a Congress that was not concerned with repose but with getting some of those vast underpayments back from the companies. Now when we fast forward to 1996 --

JUSTICE SCALIA: Wait, wait, excuse me. This was the Congress that enacted what?

MR. JOSEFFER: Agreed. What I'm referring to now is the Congress that enacted the mineral leasing provisions, which is not --

JUSTICE SCALIA: Which is not what we're talking about here.

MR. JOSEFFER: No, but we are. The structure of the law here is that section 2415(a), as we see it, governs court suits, and that works because when Congress authorizes administrative recovery it almost always provides specific, context specific administrative limitations period. Also when Congress was telling me it should focus on old accounts, it certainly wasn't thinking of the statute of limitations applied to that and the agency in that contemporary context did not understand that those were the limitations period either, because the orders that issued in the aftermath of the 1982act went back seven, eight, nine, sometimes more years than that.

JUSTICE SCALIA: As late as 19789 the Justice Department didn't think that way, did it?

MR. JOSEFFER: The Justice Department--

JUSTICE SCALIA: The opinion of the Office of Legal counsel in '78 was exactly what the petitioner here would urge.

MR. JOSEFFER: No. The OLC opinion was limited by both its terms and reasoning to administrative offsets, not to administrative adjudications. And if I could explain that, an administrative offset occurs in a situation-- this is what OLC was looking at -- where the Government by statute owes retirement benefits to a person. And because it thought that person owed it money what the Government did was to unilaterally reduce the retirement benefits. What OLC opined is that was nothing more than a preadjustment attachment. And OLC thought that if the Government is time barred from obtaining a judgment it should be time barred from on obtaining a judgment it should be time barred from obtaining a prejudgment attachment. Administrative adjudication is significantly different because it does provide an actual judgment. So there are a couple of important points from that. First is that the dispute between OLC and the Comptroller General was limited by its terms to administrative offsets. Although, Justice Stevens, the Comptroller General did opinine beyond that, that the statute specifically applies only to suits in court. But the actual dispute was issue of administrative offsets so when Congress addressed that specific dispute as Justice Alito pointed out it resolved only that specific dispute.

JUSTICE SCALIA: But excuse me. How could OLC possibly think that applied to administrative offsets if it didn't apply to administrative proceedings? I mean, it was a contradiction of the proposition which you are urging here which is that this statute applies only to judicial proceedings. I mean, that's the point. Whether they spoke just to offsets or not, the position taken by the Justice Department was that this statute relates to administrative proceedings.

MR. JOSEFFER: No, the position of OLC was limited to administrative offsets. It did not -- the OLC opinion did not interpret the statutory term action or frankly any other statutory term. Instead it had a theory, which was probably wrong, that administrative offsets are unique because they are pre-adjustment attachment devices. That's the dispute that went to Congress. And that's the dispute Congress actually resolved. In any event, going forward --

JUSTICE SOUTER: Well, on that theory, then, there was no time issue with respect to the right to offset then in the OLC's position.

MR. JOSEFFER: The OLC's view is that if the government was time barred from obtaining a judgment under section 2415(a), that it would be time barred from obtaining a prejudgment attachment.

JUSTICE SOUTER: I thought in answer to Justice Scalia you said what was essential to O LC's position was that the offset is like a prejudgment attachment and, in effect, it is an attachment without process. If that's the case, then timing should have nothing to do with it. Conversely, as Justice Scalia said if timing does have something to do with it, timing presumably in this provision, this provision therefore must have been assumed to have applied to administrative proceedings.

So either it is no time question with respect to the offsets or if there is a time question with respect to the offsets, it implies an O LC position that this provision applies to administrative proceedings.

What's wrong with that logic.

MR. JOSEFFER: I think what's wrong with the logic what is was wrong with the O LC opinion.

JUSTICE SOUTER: It is in good company.

MR. JOSEFFER: .... was that it didn't see a problem -- OL C didn't see a problem with impose as administrative offset. What it saw a problem with is if it thought a judgment would be time barred then a prejudgment attachment should be time barred as well. That was the reasonable that the --

JUSTICE SOUTER: Prejudgment attachment in aid of what could be accomplished administratively by ultimately an administrative judgment.

MR. JOESEFFER: No just -- I guess another point -- the OLC opinion was -- arose in the context where a judgment could be obtained at all only in court.

JUSTICE SCALIA: Do we have that opinion by the way? Both sides cited it. Is it -- it was unpublished.

MR JOESEFFER: It was unpublished.

JUSTICE SCALIA: Did anybody give it to us?

MR. JOESEFFER: The Fisher's office lodged a complaint --

JUSTICE SCALIA: I know they did last year, but nobody did it.

MR. JOESEFFER: Although there's testament.

JUSTICE SCALIA: Good. I would like that.

MR. JOSEFFER: The points just the old see of reasoning was admittedly somewhat odd, but that was the context in which Congress was responding to. And going forward, it is not surplusage because the issue still lies with the government to pursue a suit only in court. It would be time-barred from pursuing a suit in court. The question would then still arise under the OLC opinion unless it had been overruled. Whether the government can nonetheless obtain a prejudgment attachment even though it cannot obtain judgment. That's all the Congress was looking at there. And as this Court has recognized in cases like Ogilvy and Vaughan, when Congress amends a statue to resolve a specific dispute, oftentimes it's amendments should be read as doing no more than that.

I do know that terms -- to get back to the beginning of this discussion -- terms do not always have ordinary meanings, but they presumptively do, especially when a statute must be strictly construed. And here the context confirms that action does have its ordinary meaning for several reasons. First, the ordinary meanings of the other key statutory terms, such as right of action, complaint, and defendant, as Justice Ginsberg pointed out, all ordinarily refer to aspects of suits in court. A right of action is the right to bring a suit in court; a defendant is the person defending in court ordinarily; and a complaint is the document that initiates proceedings by stating a claim is seeking relief in a civil action, which is a suit in court. Especially when those terms are used together, this Court recognized an unhealthful chemical. That a reference to commencing a action by filing a complaint ordinarily refers to filing a suit in court, not a pleading before an administrative agency. The statute then goes on to expressly juxtapose an action against an administrative proceeding by saying that the time to file an action does not run until after the administrative proceedings have concluded, which certainly gives weight to the point that the action is, an administrative proceeding is not an action.

JUSTICE SOUTER: Would it be at the time that 4515 is ultimately -- 2415, I'm sorry, at the time that was enacted, were there any limitations in other statutes on the commencement of administrative proceedings.

MR. JOSEFFER: The ones that we have found -- I'm not a hundred percent sure, but the ones that we have found and cited in our brief do appear to be enacted after that time. I think the reason is that historical administrative -- obviously court suits have been around a lot longer than administrative adjudications. And as Congress has authorized administrative adjudications, it dealt with them on a case-by-case basis. And every time that it enacted a context-specific administrative adjudications period since 1966, in theory it could have just done an across-the-board one for all agency adjudications, but it doesn't yield to the context specific, in part because of the broad variety of administrative procedure.

I mean, as this case illustrates, a statute of limitations that governs a complaint in an action is just not going to work in a large administrative context. Here there is no complaint. An order is a legally binding order. It doesn't seek relief, it imposes it. Unless it is both appealed and stayed pending appeal --

JUSTICE SCALIA: How about the initial letter that in the agency practice precedes the order? I gather there's a letter.

MR. JOSEFFER: There are basically three steps here. First there's an audit. Then if the audit reveals an apparent discrepancy, the agency or state eligibility authority would send an issue letter requesting an explanation.

JUSTICE STEVENS: An issue letter?

MR. JOSEFFER: It's called an issue letter. And it would basically request an explanation of the apparent discrepancy, and then if the agency then decides after consideration of the audit that the issue letter is appropriate and they should order it payable, they will do so.

JUSTICE SCALIA: It sounds to me like a complaint, a response, and an adjudication.

MR. JOSEFFER: I don't know --

JUSTICE SCALIA: The response comes back, I don't think we owe it and here's why, and then there's a ruling, you do owe it, and that's the order. And then you can appeal it, and the CFR refers to it as an appeal.

MR. JOSEFFER: Yes. Well, there are two things. First on the -- with respect to the issue letter, the complaint functionally is a document that initiates proceedings stating it the same as seeking relief in a civil action. With respect to the second of those, an issue letter does not -- is not an allegation of wrongdoing. It does not seek relief. It seeks information so the agency can determine whether or not a discrepancy raised by an audit is in fact a discrepancy.

JUSTICE SCALIA: It does not assert that there's a discrepancy?

MR. JOSEFFER: Well, what it asserts is we have done an audit and the audit has raised the following issues, that's why it's called an issue letter, please provide an explanation. At that point the agency has not decided yet whether it is in fact asserting a claim, and it is not requesting relief which a claim definitely does. All it is requesting is information to help the agency assess the issue.

JUSTICE SCALIA: Do we have an example of an issue letter anywhere? That's not in the material here, is it?

MR. JOSEFFER: No, it is not. It's cited in the administrative record.

JUSTICE SCALIA: All right.

JUSTICE KENNEDY: Do we know in this case what time lapse there was between the issue letter and the order?

MR. JOSEFFER: I don't think it was more than a year or two.

JUSTICE KENNEDY: Well then, if you took the issue letter, then wouldn't all of the government's claims be timely? Because we're only talking about part of the claim anyway, as I understand it; is that correct?

JUSTICE SCALIA: I don't think so. I tried to figure it out, too.

MS. JOSEFFER: I think there would still be about a year in dispute in this case.

JUSTICE ALITO: Going forward, if we agree with your position, the result would be that there will be a seven-year limitations period for oil and gas leases, but for Indian claims and for minerals, there will be no statute of limitations?

MR. JOSEFFER: Yes, and the reason is that that's what Congress chose to do with the prospective 1996 act.

JUSTICE ALITO: When they enacted the seven-year limitation period, did they explain why they would treat those two situations so differently?

MR. JOSEFFER: No, there is no explanation. As a practical matter, though, the prospective 1996 legislation governs a wide variety of aspects of the relationship between the federal government and the lessees. On balance, that package was pretty favorable to the oil companies, and I think Congress probably just decided not, to apply that to itself but not to the Indians.

JUSTICE SCALIA: How do you defend against a claim for stuff that went on a hundred years ago?

MR. JOSEFFER: Well, as --

JUSTICE SCALIA: I am really very reluctant to, unless there is no possible other reading of the statute, to think that that's what the law provides. That the government can show up a hundred years later and say, oh, by the way, you owe all this money. You don't have records from a hundred years ago.

MR. JOSEFFER: There are a few points, both legal and practical. On the legal, until 1966 that absolutely was the law, because historically no limitations period ever applies against the government, and that's the reason for the strict construction canon that the statute applies here only if it clearly applies, and thereby bars the government from forcing the law in the public interest.

JUSTICE SCALIA: Say that again. Until 1966 there were no statute of limitations against any government service?

MR. JOSEFFER: Not contracts. The historical rule is that the government is not bound by statutes of limitations because what it is doing is enforcing the law in the public interest. Now in 1996, Congress enacted Section 2415(A) so that there would prospectively be a contract limitations period. But it strictly construed, because of the historical backdrop and the importance of enforcing the law in the public interest. So that's why we do have a strict construction canon here.

JUSTICE SCALIA: Which didn't apply against the government either?

MR. JOSEFFER: For the same reason why it was never applied against the government.

JUSTICE GINSBURG: So there is no limit on, and you concede that that's the case, so the government could go back on these royalties as long as it likes?

MR. JOSEFFER: Well, as an abstract theoretical matter, the government could reach back many many decades. As a practical matter, though, that has never happened that we found back, say, 50 or a hundred years, and there are practical reasons for that. The first is that the agency does not have enough resources.

JUSTICE KENNEDY: Well, it was involved in the Oneida Indians, if you went back quite a ways, a hundred years.

MR. JOSEFFER: Sir, I didn't mean it in that context. But in the recent context, there are a couple of important points. One is that the government does not have enough resources to audit all of the current accounts in all of the years, which is one of the reasons that we need to be able to go back further when we catch the team in violation. But as a result, the notion that we're going to pull auditing resources off of today to do a frolicking detour into 50 years ago, there's a reason that never happened.

In addition, the farther we try to go back, the greater the proof problems, because oftentimes only the companies have the information that shows what royalties they would owe, and if they've lawfully destroyed these records after six years, it makes it even harder for us to try to go back because of proof problems.

JUSTICE SCALIA: That's another indication. Why would you allow them to destroy those records after six years if you thought that there was no statute of limitations to claim for these things? I mean, that's just another inconsistency in the statutory scheme it's creating. You say you can destroy your records after six years. That doesn't make any sense.

MR. JOSEFFER: Well, first, it's optional, not mandatory. If they want to keep them, they certainly ask. But there's no -- and as a practical matter, because the government bears the initial burden of going forward, if the company destroys the sources of proof, that's on balance going to be in its favor. But in addition, there's not a strict congruence between the six-year period. Because, first, the companies only have to keep documents for six years but in some circumstances they probably keep them for longer. In addition, the statute of limitations tolling is much longer than six years, and so the lawful destruction of records would still leave absence of proof issues in situations where the statute might be tolling for much longer, so it's not a strict congruence.

There is also no indication that Congress enacted the six-year records retention policy because it was thinking about a six-year limitations period, there's never been any linkage between the two.

If I could briefly cover then also, in addition to all the touched on points, this is also located in the judicial code. And although it's true that a couple stray provisions of the judicial code apply to administrative proceedings, they say that expressly. Every time the word action is used in the judicial code, and I'm pretty sure we've identified no other examples, every time the word action is used in the judicial code, it refers to a suit in court and only a suit in court.

When a provision of the judicial code applies to something else, it will say so. For example, 28 U.S. Code 2462, which is a statute of limitations for penalty proceedings, refers to an action, suit or proceeding. The Federal Tort Claims Act very fervently talks about submitting something to an agency.

So if Congress was going to legislate against the backdrop of the strict construction canon in terms of ordinarily referring to suits in court, and put the provision in the judicial code, that is a totally irrational way of expressing intent, especially a clear intent in trying to govern administrative proceedings.

The committee reports also strongly confirm that because they not only say that the statute defines the time limitation for bringing an action in the U.S. courts, and not only used court terminology from front to back. They also say, like the statute, that they're aware of administrative proceedings, but what they're saying is the time to bring an action in the courts does not expire until after the conclusion of those proceedings. The committee has explained that the reason for that provision was the great number and variety of administrative proceedings.

So in other words, Congress is saying there's a great variety of administrative procedure, we're just not going to deal with that here, we're taking it off the table, but saying this limitations period does not expire until a year after the administrative proceedings, whatever they might be, have expired. There's also some relevance to the fact that this legislation was proposed by the Justice Department as part of an overall package of reforms that would govern the civil litigation the Department was handling in the courts. It was then referred to the Judiciary Committees, not to the House Government Reform Committees that might consider administrative procedure matters, and as I mentioned before, was enacted as part of the judicial code.

From start to finish, this legislation has never had anything to do with anything other than court suits, which is why Congress has expressly provided for context-specific administrative systems or limitations periods, which make sense in the context of the relevant administrative procedures.

JUSTICE SCALIA: When you say this legislation, you limit it to the body of 2415(A) and you leave out little (i) which -- is it (i)?.

MR. JOSEFFER: It is (i).

JUSTICE SCALIA: I mean, that clearly does apply to administrative proceedings. And I could understand the argument that Congress was just making things doubly clear, okay, that (A) does not apply to administrative proceedings. I could understand that argument, if the way (i) was written is the provisions of the section shall not apply to administrative proceedings.

And then I would say, you know, that was always the case and this is just making it clear.

It doesn't say that. It says that, the only administrative proceeding that they cut out of it is these offsets, and you know, the normal rule is inclusio -- it means to me when I read the statute as a whole, and that's the way I read statutes, I don't ask whether this section was adopted this year, the other one next year. I don't do it bite by bite. I look at the whole text. And when you read all this stuff together, it seems to me that the import of (i) is that administrative proceedings are, despite the fact that action is not a very common word to use for them, are covered.

MR. JOSEFFER: There is no doubt the statute should be read as a whole. But as this Court has explained in cases like the Ogilvy and Bond cases cited in our brief, when a court is trying to make sense of a statute read as a whole, oftentimes it will find that when Congress faces a specific dispute and amends a statute to resolve a specific dispute, that's all it resolves. And there is no reason to draw a further negative inference, especially here, as the Court of Appeals pointed out, where a strict construction canon applies.

JUSTICE SCALIA: That's the best thing you have going for you, really. The strict construction canon.

MR. JOSEFFER: Well, because -- I mean, and it is an important point, that the statute applies only if it clearly applies by its terms. And it seems to me, the best that petitioners can do is to say the sum of the statutory terms in isolation are ambiguous.

But all that means, as I said, is that under the strict construction canon, we would prevail. And even if the statute governs some administrative proceedings, but not others, it would not govern these for the reason I gave earlier, which is that there are no complaints here. We talked before about the ways in which an order is not a complaint.

It is another important point, though, that in order not only -- not only does it not begin the proceedings, it normally ends them, because appeals are only taken about a quarter of the time. And in some limited circumstances, there's not even a right of appeal if the Assistant Secretary issued the order.

JUSTICE SCALIA: What if I didn't think the order was a complaint, but I thought the initial letter was a complaint? Would the petitioner lose because they never made that argument.

MR. JOSEFFER: Correct. The only argument that is ever made is that an order is a complaint. They haven't preserved the point.

JUSTICE GINSBURG: You made the point that the issue letter is just raising the issues and its not charging, as a complaint would allege, you owe us, but this is maybe --

MR. JOSEFFER: Correct. In an issue letter, there is no claim for relief. Just a claim for the request of information. And there's no allegation of wrongdoing. So it is not a complaint in those ways. Also, it doesn't -- it is not really fair to say that it begins proceedings, because it comes between an audit and an order to pay. So it doesn't -- and plus it is, of course, not filed in a civil action. And in that respect, it doesn't satisfy any of the elements of the ordinary definition of complaint.

JUSTICE ALITO: Are you saying that this doesn't apply to any administrative proceeding, or just those that are structured like this one, where you don't have anything that's labeled a complaint?

MR. JOSEFFER: Well, our primary submission is that it does not apply to any administrative proceedings for the reasons I've given, that the ordinary meanings of all of the key statutory terms are for suits in court. The complaint itself is ordinarily defined to be --

JUSTICE SCALIA: Even if you have an administrative proceeding which is called a complaint? I mean, those are -- and some are, I think.

MR. JOSEFFER: There are some contexts in administrative procedures in which the word complaint is used.

JUSTICE SCALIA: And that would not be covered by 2415(A)?

MR. JOSEFFER: Because it's not filed in an action, which refers to a suit in court, following the occurence of a right of action, which refers to the rights of bringing suit in court, and a statute which then juxtaposes the terms action against in administrative proceeding --

JUSTICE SCALIA: Unless all those terms are used in the agency procedure. They're talking about action, right of action, all those terms are used in the agency's procedural moves, would they then come under this thing?

MR. JOSEFFER: No.

JUSTICE SCALIA: I think you have to say no, because otherwise, it would be up to the agency just by renaming their things to come in or out, right?

MR. JOSEFFER: Well, there's a much more fundamental point than that, too, is that what Congress was doing here was using these terms in the ordinary sense to lay out an across the board rule that applies to a suit in court.

And finally, one thing I should also emphasize is that what we have in this context is a comprehensive administrative scheme. Petitioners like to say that, well, we could just as easily be in court. There is a reason that no administrative royalty proceeding has ever been brought by the government in a court.

And that's first that Congress directed the agency to establish a comprehensive auditing and collection system, and then gave the agency administrative authority to enforce its administrative orders. The only way the agency could administer thousands of leases with something like 9 billion dollars in royalties every year is to do this in an efficient administrative manner.

Congress not only authorized that to ratify it, it has strengthened that with the aim -- and told the agency, as it aid in 1982, to go back and look at old leases, precisely because Congress knew that this was a standalone administrative scheme, and it has never provided an administrative limitations period for the standalone administrative scheme.

If there are no more questions.

JUSTICE STEVENS: Thank you, Mr. Joseffer. Mr. Lamken, as I understand it, you have about 11 minutes left. You don't have to use them all.

REBUTTAL ARGUMENT OF JEFFREY A. LAMKEN

ON BEHALF OF PETITIONERS

MR. LAMKEN: I will endeavor not to. Thank you, Justice Stevens.

I wanted to start with the ordinary meaning of the term action. I was somewhat bemused by the government's insistence that the term action is contrued -- it must mean the action before a court, and has that as its ordinary meaning.

The Solicitor General's own position in West versus Gibson on page 25 of the brief was, section 1981(A) does not, however, define the term action as being limited to judicial proceedings. The statutory language, read in context, suggests that no such limitation was intended. Page 6 of the government's reply.

The term action in section 1981 can easily be construed as encompassing both administrative and judicial proceedings. The term action is a term that's used for adversary adjudicate proceedings, whether those are in court or before an agency. It is not limited to administrative agency proceedings as the government itself recognized in West versus Gibson.

There are more general terms here. There is also complaint, there is also defendant, there's a number of those. But those general terms are also the terms of adversary adjudication. And Congress uses them, as far back as 1921, for adversary adjudications before agencies.

JUSTICE STEVENS: Mr. Lamken, have you had any second thoughts about your position that the order read from the issue letter that we should look at?

MR. LAMKEN: Well, in fact, no. But the answer is that no issue was engaged as to what was the functional equivalent of the complaint below, that issue was raised for the first time by the Solicitor General in its merits brief saying, no, no, no, there is actually some stuff that comes before the order.

But I would encourage the Court to look at the definitions in 1724 and 1702(A), which tell you what, under -- in Congress's view, commences the proceedings here. And in Congress's view, what commenced the proceedings, what triggers the new statute of limitations and stops it from running is the order to pay, which Congress defines as a demand.

JUSTICE SCALIA: That's true, but the provision you're arguing that you come under does talk about a complaint. And that's what -- that's what starts the six years running. And it seems to me odd to call something a complaint which is, in fact, an order. They're not complaining about anything. They are saying, pay the money.

MR. LAMKEN: Actually, Justice --

JUSTICE SCALIA: You know, usually a complaint, you make your point, and say, what do you say. What's your answer? And this is an order. You're -- boom, pay.

MR. LAMKEN: It certainly has a hybrid quality, Justice Scalia. And it is not a hybrid quality that the industry particularly likes. But it is the first time that the government asserts -- states its claims as to what is wrong in a binding legally operative document, where the failure to respond results in default. It has that function as a complaint. It is the first salvo in official, formal, administrative proceedings.

JUSTICE SCALIA: That is only true if you consider an appeal to be the response. And that's rather weird, that the response to a complaint is an appeal.

MR. LAMKEN: The language that has been used, and as a result of very odd historical anomalies and attempts to introduce a sense of due process to these proceedings over time is odd and it is awkward. But it is clear that when Congress wrote the scope of this statute, it said it applies to every action for money damages by the government, which is founded in contract. It doesn't say actions that are begun by complaint.

Now, the complaint is what Congress intends will stop the provision from running. And there is always in an adversary adjudication, some document that functions like a complaint. That provides the defendant the notice of what the claims are against it, and to which failure to respond will result in default.

We believe that the most likely thing to be the complaint here is they provided the options notice and said, boys, you got to respond, otherwise you're in trouble, was the order to pay. And Congress came to that same conclusion when it enacted Progressa and established the statute of limitations provision. But if we lose -- of the claim and only get one because it is the agency letter and the Court's view, well, that is fine, but there's some document here that started these agency procedings. And it is that document which is the complaint.

JUSTICE SCALIA: Can you get us -- we're going to have supplemental material filed, the OLC opinion. Could you get us, you know, a sample of an agency letter, or if you can't, maybe the government can?

MR. LAMKEN: That's true. And in terms of the OLC letter, we offered to lodge it in our brief. Unfortunately, by the Court's rules, we are not allowed to lodge it unless the Court specifically requests it. And so that's why it is not there. But we will get that to you, or the government will get it to you as soon as possible.

The actual agency letter in this case isn't in the administrative record. And it turns out that we haven't been able to find it, and the government hasn't been able to find it. And so it's a letter, it is a demand letter, but it is a letter. And the order to pay is actually the opening salvo in these proceedings. And again, what opens the proceedings in the Justice Department regulations --

JUSTICE KENNEDY: When the file is made giving us the OLC opinion, you will provide a sample of such a letter?

MR. LAMKEN: Of course.

JUSTICE KENNEDY: Or the notion of such a letter.

MR. LAMKEN: It may have to be from some other proceeding.

JUSTICE GINSBURG: Your position is this will apply to the universe of administrative proceedings? This particular lease information was taken care of by an express statute of limitations so what are we talking about for the future, what will change under your interpretation? Not gas leases because that has a seven-year limitation for both administrative orders to pay and court actions.

MR. LAMKEN: It will be all leases on Indian lands. It will be all leases which involve minerals other than oil and gas, whether it be gold, silver, anything like that. All claims before September -- all production before September of 1996. That introduces something of an oddity if one accepts the government's position. It will be, for all claims going forward from September of 1996, the government has seven years. But for the prior 200 years, those claims persist in perpetuity. When Section 215(A) was enacted, Congress could have created the sense of that result by deeming all prior claims to have accrued on the date the statute of limitations was enacted. The very fact that Congress didn't do that was evidence that Congress has anything to do with law, is evidence that Congress understood there already was a statute of limitations applicability.

JUSTICE SCALIA: Won't we be messing up by finding for you here if we don't find that this administrative action is covered by this statute of limitations, there is no statute of limitations? But there may be other areas covered by the -- a suit by the United States Congress, implied in law or in fact where there is a statute of limitations?

MR. LAMKEN: There are some contexts in which there is a separate administrative remedy with its own statute of limitations. One of those --

JUSTICE SCALIA: That would prevail over this?

MR. LAMKEN: Yes. An exception that says notwithstanding 2415, it applies to indiviuals. There is a clause that says except as otherwise provided by Congress. So Congress often takes exceptions, and when it clarified the Minority Leasing Act of 1996, that was an exception to the 2415 which -- so Congress knows how to conduct specialized situations and take things outside of 2415 when it needs to, in that Section 2415 is a catchall, all of those situations where Congress anticipated circumstances, and the government's premise of the whole thing is that Congress botched it. Congress provided a catchall that catches judicial actions but leaves the government free in perpetuity to process on precisely the same claims or precisely the same revenuse plus interest. And because interest is charged at a high rate, that makes those old claims much, much more valuable than the relatively more recent claims. It is a positive catchall limitations period with a loophole so large that it deprives the statute of limitations period of effect almost entirely.

Finally, I would like to say one thing about the strict construction. That is, it doesn't always require the court to narrow otherwise broad statutory language, particularly if doing so would have the effect of rendering another provision, introducing anomalies into the statutory structure and depriving the statute of its intended effect, as the Bowers case we site in our reply brief makes clear. The Bowers case was virtually on point in that the case was -- there was a statute of limitations that could apply to administrative agency actions or could not have, and the Court declined to except the narrow construction proffered by the government because it would have rendered one of the provisions, the one for consent proceedings superfluous because it would have resulted in an anomaly and undermined the premise of repose which undergirded the statute of limitations in that case. Precisely the same things are true here. For those reasons, the court should reach precisely the same results.

If there are no further questions, thank you very much.

JUSTICE STEVENS: Thank you. The cases are submitted. [Whereupon, at 11:59 a.m., the case in the above-entitled matter was submitted.]