Noble Energy, Inc. v. Jewell ( 2015 )


Menu:
  •                             UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF COLUMBIA
    NOBLE ENERGY, INC.,
    Plaintiff
    v.                                                   Civil Action No. 14-898 (CKK)
    SALLLY JEWELL, et al.,
    Defendants
    MEMORANDUM OPINION
    (June 8, 2015)
    Plaintiff Noble Energy, Inc., challenges an order from the United States Department of
    the Interior Bureau of Safety and Environmental Enforcement (“BSEE” or the “agency”)
    requiring it to permanently plug an offshore well, Well OCS-P 0320, No. 2, including related
    decommissioning activity. BSEE asserts the authority to require Noble Energy to plug the well
    under its decommissioning regulations, found at 
    30 C.F.R. §§ 250.1700-1754
    , issued pursuant to
    the Outer Continental Shelf Lands Act, 
    43 U.S.C. § 1331
     et seq. Noble Energy argues that when
    its contractual obligations were discharged—under the common law doctrine of discharge—its
    obligations under the regulations were discharged as well. As explained further below, in the
    April 9, 2014, Order under review—on remand as a result of an action challenging a previous
    order of the agency—BSEE concluded that the decommissioning regulations do not incorporate
    the common law doctrine of discharge and, therefore, the regulations require Noble Energy to
    fulfill the decommissioning obligations. Ultimately, the question for the Court is whether the
    agency’s interpretation of the decommissioning regulations is reasonable. If it is, then Noble
    Energy’s challenge fails. Presently before the Court are Plaintiff Noble Energy, Inc.’s [19]
    Motion for Summary Judgment and Defendants’ [21] Cross-Motion for Summary Judgment.
    1
    Upon consideration of the pleadings, 1 the relevant legal authorities, and the record as a whole,
    the Court GRANTS Defendants’ [21] Cross-Motion for Summary Judgment and DENIES
    Plaintiff’s [19] Motion for Summary Judgment. The Court concludes that the agency’s
    interpretation of its decommissioning regulations is reasonable and, therefore, the Court upholds
    the challenged order. This case is dismissed in its entirety.
    I. BACKGROUND
    The factual and regulatory background to this case were previously recited at length in
    Noble Energy, Inc. v. Salazar (“Noble I”), 
    770 F. Supp. 2d 322
     (D.D.C. 2011), and Noble Energy,
    Inc. v. Salazar (“Noble II”), 
    671 F.3d 1241
     (D.C. Cir. 2012). The Court recites here only the
    background essential to the Court’s resolution of the currently pending motions. The Court
    reserves further presentation of the facts for the issues discussed below.
    Pursuant to a lease acquired in 1979, Noble Energy 2 drilled an exploratory oil well, Well
    OCS-P 320, No. 2, off the coast of California. Noble II, 671 F.3d at 1242. Following a common
    practice, Noble Energy temporarily plugged and abandoned the well in 1985 after discovering oil
    and gas through its exploratory activities. Id. The well remains temporarily plugged and
    abandoned today, and the question in this case is whether BSEE can require Noble Energy to
    1
    The Court’s consideration has focused on the following documents:
    • Pl. Noble Energy, Inc.’s Motion for Summary Judgment (“Pl.’s Mot.”), ECF No. 19;
    • Defs.’ Resp. in Opp’n to Pl.’s Mot. for Summary Judgment and Cross-Mot. for Summary
    Judgment (“Defs.’ Opp’n & Cross-Mot.”), ECF No. 20;
    • Pl.’s Combined Reply in Supp. of its Mot. for Summary Judgment and Opp’n to Defs.’
    Cross-Mot. for Summary Judgment (“Pl.’s Reply & Cross-Opp’n”), ECF No. 22; and
    • Defs.’ Reply in Support of their Cross-Mot. for Summary Judgment (“Defs.’ Cross-
    Reply”), ECF No. 24.
    In an exercise of its discretion, the Court finds that holding oral argument in this action would
    not be of assistance in rendering a decision. See LCvR 7(f).
    2
    For the sake of simplicity and clarity, the Court refers to Noble Energy and all of its
    predecessors in interest as “Noble Energy.”
    2
    permanently plug that well. See id. Beginning at that time, Noble Energy received multiple
    suspensions of the lease. In 1999, Noble Energy received a four-year suspension, which
    ultimately became the final suspension of the lease. This lease suspension was revoked as a
    result of the determination by a court in the Northern District of California that the suspension
    “had not been assessed for consistency with California’s coastal management plan” as required
    by the 1990 amendments to the Coastal Zone Management Act, 
    16 U.S.C. § 1451
     et seq. 
    Id. at 1243
    ; see also California ex rel. Cal. Coastal Comm’n v. Norton, 
    150 F. Supp. 2d 1046
    , 1053,
    1057 (N.D. Cal. 2001), affirmed 
    311 F.3d 1162
    , 1173 (9th Cir. 2002). Subsequently, the Court of
    Appeals for the Federal Circuit affirmed a determination by the Court of Federal Claims that “the
    government had effectively ‘repudiated the lease agreements by putting into practice the new
    [court-mandated] rules applicable to the availability of requested suspensions.’” Noble II, 671
    F.3d at 1243 (quoting Amber Res. Co. v. United States, 
    538 F.3d 1358
    , 1370 (Fed. Cir. 2008))
    (alteration in original). Noble Energy and other lessees, together, received $1.1 billion in
    restitution. 
    Id.
     In addition, pursuant to the common law of discharge, 3 Noble Energy (along with
    the other lessees) was discharged from all of the obligations arising from its lease, including the
    obligation to “remove all devices, works, and structures from the premises no longer subject to
    the lease.” 
    Id.
    One year after the Court of Appeals for the Federal Circuit resolved the litigation
    pertaining to the government’s breach of Noble Energy’s lease, the Minerals Management
    Service, 4 a now-disbanded agency of the Department of the Interior, ordered Noble Energy to
    3
    “Under the common law rule of discharge, one party’s material breach of a contract will excuse
    the other party’s performance.” Noble II, 671 F.3d at 1243 n.3 (citing cases and the Restatement
    of Contracts).
    4
    The Minerals Management Service was replaced, in all ways relevant to this action, by the
    Bureau of Safety and Environmental Enforcement.
    3
    “promptly and permanently plug the well,” “clear the well site,” and “perform any additional
    activity necessary to fully satisfy your decommissioning obligations” pursuant to 30 C.F.R.
    250.1723 and related decommissioning regulations. Id. at 1244. Noble Energy challenged that
    order in an action in this judicial district, arguing that the government’s material breach of its
    lease discharged its obligations under the regulations on which the agency relied. Id. Another
    judge in this district determined that “the common law doctrine of discharge did not relieve
    Noble of the regulatory obligation to plug its well permanently, an obligation that the lease did
    not itself create.” Id. Noble Energy appealed, and the Court of Appeals for the D.C. Circuit
    concluded that the outcome of the case depended on the meaning of the decommissioning
    regulations: “If the regulations impose an obligation to plug Well 320-2 regardless of the
    government’s breach of the lease contract, Noble’s argument fails. If the regulations release the
    duty to plug once the government materially breaches the lease agreement, then Noble prevails.”
    Id. at 1245. The Court of Appeals also concluded that the agency was “‘entitled to interpret its
    own regulations in the first instance.’” Id. (quoting Am. Petroleum Inst. v. EPA, 
    906 F.2d 729
    ,
    742 (D.C. Cir. 1990)). However, the Court of Appeals was unable to discern whether the agency
    had, in the original order that was then before that court, interpreted the regulations in question.
    Id. at 1244. Therefore, the Court of Appeals instructed the District Court to vacate the order of
    the Minerals Management Service and to remand to BSEE—which had assumed the
    responsibilities of the Minerals Management Service relevant to this action—for further
    proceedings. Id. at 1246.
    On remand, the BSEE issued the April 9, 2014, Order that is the subject of this challenge.
    In the order, the BSEE interpreted the regulations in question and determined that they were
    independent of the obligations of the lease and were, therefore, not discharged by the
    4
    government’s material breach of the lease. NOB0957-63. Accordingly, the agency ordered Noble
    Energy to “promptly and permanently plug” the well, including “all related activity necessary to
    fully satisfy its decommissioning obligations, including wellhead and casing removal and site
    clearance.” NOB0957. This challenge followed, and Noble Energy once again argues that the
    agency action is arbitrary, capricious, an abuse of discretion, and/or otherwise not in accordance
    with law.
    II. LEGAL STANDARD
    Under Rule 56(a) of the Federal Rules of Civil Procedure, “[t]he court shall grant
    summary judgment if the movant shows that there is no genuine dispute as to any material fact
    and the movant is entitled to judgment as a matter of law.” However, “when a party seeks review
    of agency action under the APA [before a district court], the district judge sits as an appellate
    tribunal. The ‘entire case’ on review is a question of law.” Am. Bioscience, Inc. v. Thompson, 
    269 F.3d 1077
    , 1083 (D.C. Cir. 2001). Accordingly, “the standard set forth in Rule 56[ ] does not
    apply because of the limited role of a court in reviewing the administrative record.... Summary
    judgment is [ ] the mechanism for deciding whether as a matter of law the agency action is
    supported by the administrative record and is otherwise consistent with the APA standard of
    review.” Southeast Conference v. Vilsack, 
    684 F. Supp. 2d 135
    , 142 (D.D.C. 2010).
    The APA “sets forth the full extent of judicial authority to review executive agency
    action for procedural correctness.” FCC v. Fox Television Stations, Inc., 
    556 U.S. 502
    , 513
    (2009). It requires courts to “hold unlawful and set aside agency action, findings, and
    conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in
    accordance with law.” 
    5 U.S.C. § 706
    (2)(A). “This is a ‘narrow’ standard of review as courts
    defer to the agency’s expertise.” Ctr. for Food Safety v. Salazar, 
    898 F. Supp. 2d 130
    , 138
    5
    (D.D.C. 2012) (quoting Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,
    
    463 U.S. 29
    , 43 (1983)). An agency is required to “examine the relevant data and articulate a
    satisfactory explanation for its action including a rational connection between the facts found and
    the choice made.” Motor Vehicle Mfrs. Ass’n, 
    463 U.S. at 43
     (internal quotation omitted). The
    reviewing court “is not to substitute its judgment for that of the agency.” 
    Id.
     Nevertheless, a
    decision that is not fully explained may be upheld “if the agency’s path may reasonably be
    discerned.” Bowman Transp., Inc. v. Arkansas–Best Freight Sys., Inc., 
    419 U.S. 281
    , 286 (1974).
    III. DISCUSSION
    Relying largely on statements in United States v. Texas, 
    507 U.S. 529
     (1993), regarding
    the relationship of statutory or regulatory schemes and prior common law doctrines, Noble
    Energy argues that the decommissioning regulations incorporate the common law of discharge.
    Noble Energy argues that it is not subject to the decommissioning obligations enumerated in
    those regulations given the government’s material breach of the lease that encompassed Noble
    Energy’s rights in Well OCS-P 320, No. 2. Pursuant to the interpretation stated in its 2014 Order,
    BSEE argues that the decommissioning regulations are independent of the contractual
    obligations in the lease agreement. Therefore, the agency argues, the obligations established by
    the regulations have not been discharged—notwithstanding the undisputed material breach by the
    government of the lease and the discharge of Noble Energy’s contractual obligations. The Court
    concludes, first, that it must defer to the agency’s interpretation of its own regulations and,
    second, that the interpretation of those regulations is reasonable. Given these conclusions, the
    Court also concludes that the principle of United States v. Texas, does not yield the result—
    advocated by Plaintiff—that the regulatory decommissioning obligations were discharged by the
    6
    government’s breach of the lease. Accordingly, Plaintiff’s challenge fails, and Noble Energy is
    required to comply with the decommissioning requirements of the regulations.
    A. Deference is Due to the BSEE’s Interpretation of Its Regulations
    As the Court of Appeals stated in Noble II, “[r]esolution of this dispute depends on what
    the plugging regulations mean.” 671 F.3d at 1244. Therefore, the Court first addresses whether
    deference is due to the agency’s interpretation of the regulations at stake, and concludes that
    deference is due. It is well-settled precedent that the Court reviews the agency’s “interpretation
    of its own regulations with ‘substantial deference,’ allowing that interpretation to control unless
    ‘plainly erroneous or inconsistent with the regulation.’” 5 U.S. Postal Serv. v. Postal Regulatory
    Comm’n, No. 13-1308, 
    2015 WL 2191023
    , at *9, --- F.3d --- (D.C. Cir. May 12, 2015) (quoting
    Thomas Jefferson University v. Shalala, 
    512 U.S. 504
    , 512, 514 (1994)). Plaintiff argues that,
    because this case involves the application of the interpretive principle stated in United States v.
    Texas—regarding the common law background of statutes—that the usual principles of
    deference to administrative agencies do not apply. See Pl.’s Reply & Cross-Opp’n at 9. Plaintiff
    offers no authority in support of that principle—nor do the cases cited elsewhere in Plaintiff’s
    brief support that proposition. To the contrary, the opinion of the Court of Appeals in Noble II
    strongly suggests that deference is due. The Court of Appeals concluded that remand to the
    agency was necessary because “‘an agency is entitled to construe its own regulations in the first
    instance.’” Noble II, 671 F.3d at 1246 (quoting Am. Petroleum Inst., 
    906 F.2d at 742
    ). Moreover,
    the Court of Appeals considered whether to defer to any interpretation in the government’s
    litigation brief pursuant to the rule of Auer v. Robbins, 
    519 U.S. 452
    , 262 (1997). The Court of
    5
    The Court notes that deference is not a fall-back position, as Plaintiff suggests, but rather a
    fundamental principle of administrative law.
    7
    Appeals, however, concluded that Auer deference was not due in those circumstances only
    because the panel could not “find any definitive interpretation of the plug and abandon
    regulations in the government’s brief.” Noble II, 671 F.3d at 1246. If Auer deference would have
    been due to an interpretation in the government’s brief, then certainly deference is due to the
    interpretation issued by the agency on remand—particularly because that interpretation was the
    express purpose of the remand. 6 Accordingly, the Court evaluates the interpretation set out by
    BSEE in the 2014 Order “with ‘substantial deference,’ allowing that interpretation to control
    unless ‘plainly erroneous or inconsistent with the regulation.’” U.S. Postal Serv. v. Postal
    Regulatory Comm’n, 
    2015 WL 2191023
    , at *9 (quoting Thomas Jefferson University, 
    512 U.S. at 512, 514
    ).
    B. The BSEE’s Interpretation of its Regulations is Not Plainly Erroneous or Inconsistent
    with the Regulations
    On remand, BSEE concluded that the regulations “impose decommissioning obligations
    independent of the contractual obligations in the lease.” NOB0961. As applied to the
    circumstances in this case, the agency concluded that, “although Noble Energy’s contractual
    obligations were discharged due to the government’s breach, the duty to plug the well remains as
    an independent regulatory duty that exists post breach.” 
    Id.
     As explained further below, BSEE
    based this conclusion on its analysis of the language of the decommissioning regulations and on
    the purpose of those regulations. See 
    id.
     Because of the deference due to the agency in its
    interpretation of its regulation, this Court’s task is to determine whether the agency’s
    6
    In his concurrence, Senior Circuit Judge Stephen William “express[ed] doubt whether the
    Interior Department, on remand, will be able to offer an interpretation that is both reasonable and
    supportive of its action here.” Noble II, 671 F.3d at 1246 (Williams, J., concurring) (emphasis
    added). Even this concurrence adopts the lens of deference by focusing on the “reasonableness”
    of the agency’s interpretation—rather than its correctness. See id.
    8
    interpretation is “plainly erroneous or inconsistent with the regulation.” In conducting this
    analysis, this Court addresses Plaintiff’s arguments that the agency’s regulations have not
    explicitly abrogated the common law principle of discharge and that, without doing so, its
    regulatory obligations were discharged upon the government’s material breach of the lease.
    BSEE first looks to the language of the regulations, noting that “the regulations explicitly
    apply to more than just a current lessee, and the obligations extend beyond the life of the lease.”
    Id. Specifically, the agency notes that the obligations may arise before or after a party becomes a
    lessee, see id. (citing 
    30 C.F.R. § 250.1702
    ); that the obligations are binding on current lessees,
    former lessees and operating rights owners, see 
    id.
     (citing 
    30 C.F.R. § 250.1701
    ); and that they
    remain binding after a lease has been assigned or relinquished, see 
    id.
     (citing 
    30 C.F.R. §§ 556.62
    (d), 556.76). In short, the BSEE concluded that the regulatory obligations are
    independent of the contractual obligations because they apply to parties that are not bound by
    those contractual obligations. The BSEE also looked to the purpose of the regulations and noted
    that the regulations “serve to protect the environment and ensure wise stewardship of resources
    held in trust for the public as mandated under [the Outer Continental Shelf Lands Act].”
    NOB0962. The agency concluded that the regulations serve to realize the stated purpose of the
    Act, that operations “should be conducted in a manner that prevents or minimizes damage to life,
    property or the environment.” 
    Id.
     In the agency’s view, permanently plugging an abandoned well
    would protect the environment. Also in the agency’s view, establishing the decommissioning
    obligations by regulation, in addition to doing so by contract, would facilitate the protection of
    the environment.
    The BSEE’s textual argument why the regulatory decommissioning obligations are
    independent of the contractual decommissioning obligations is essentially that those obligations
    9
    do not apply to the same sets of entities or individuals. Specifically, the agency highlights several
    distinctions between the regulatory obligations and the contractual obligations: that the
    regulatory obligations may accrue before or after the beginning of the lease, that they remain
    binding after a lease is assigned or relinquished, and that they are binding on non-lessee
    operating rights owners. See NOB0961-62. Plaintiff argues that the scope of the
    decommissioning obligations set out in the regulations actually affirms the incorporation of
    common law principles in the regulatory obligations. In support of this contention, Plaintiff notes
    that a person who assigns a lease to another does not, merely through that action, divest
    themselves of all obligations of the lease. See Pl.’s Mot. at 31-32 (quoting Restatement (Second)
    of Contracts § 318(3) (1981)). In other words, Plaintiff argues, just as one who assigns a contract
    remains bound by the original contract obligations, the regulations state that former leaseholders
    continue to be bound by the regulatory obligations. Plaintiff also looks to other features of the
    common law pertaining to contractual obligations that suggest that the regulations mimic rather
    than deviate from the common law in terms of which entities are governed by those
    requirements. See id. at 30-34. Plaintiff claims that there are only minimal differences between
    the scope of the contractual decommissioning obligations and the scope of the regulatory
    decommissioning obligations and that, therefore, these differences are not properly the basis for
    the conclusion that regulatory obligations are independent of the contractual obligations in the
    relevant leases.
    The Court need not delve into the substantive question of precisely whose behavior is
    governed by the lease provisions and whose behavior is governed by the decommissioning
    regulations because the only question presented is whether the agency’s interpretation of its
    regulations is plainly erroneous or inconsistent with the underlying regulations. The regulations
    10
    clearly apply to persons that are not current leaseholders. See Noble II, 671 F.3d at 1244 (citing
    
    30 C.F.R. §§ 556.62
    (d), 556.64(a)(5), 556.76, 250.1710). Regardless of the precise scope of
    obligations under a purely contractual regime, it is reasonable for the agency to conclude that the
    expansive scope of the regulatory decommissioning requirements shows that those requirements
    are independent from the contractual requirements—even if, in many instances, they would both
    apply to leaseholders or to other related parties.
    With respect to the purpose of the decommissioning regulations, the agency’s conclusion
    that the purpose of the regulatory requirements supports the agency’s interpretation that the
    regulations are independent of contractual obligations stated in individual leases is also
    reasonable. In BSEE’s view, the decommissioning regulations serve the statutory purpose of
    protecting the environment. Plaintiff responds that, while the purpose of the statute might
    demonstrate the importance of the decommissioning activities, it does not show that it is
    important for a particular party such as Plaintiff Noble Energy to carry out those activities. Once
    again, the Court’s deferential standard of review is important. In a world of limited resources and
    competing bureaucratic priorities, it is reasonable for the agency to conclude that requiring a
    former lessee—even one whose contractual obligations have been discharged—to complete
    decommissioning activities, rather than relying on the agency to undertake those obligations,
    would serve the ultimate purpose of protecting the marine and coastal environments.
    In sum, the Court concludes that the agency’s reasoning passes muster: the agency has
    adequately explained, based on the purpose and the text of the regulations, its conclusion that the
    regulatory decommissioning obligations are wholly independent from the contractual
    decommissioning obligations and, therefore, they continue to apply to a party freed from the
    contractual obligations stated in an individual lease.
    11
    C. The Regulatory Decommissioning Obligations Have Not Been Discharged By Operation
    of Common Law Principles
    The Court now addresses Plaintiff’s argument that the agency’s interpretation violates the
    principle set out by the Supreme Court in United States v. Texas that “[s]tatutes which invade the
    common law … are to be read with a presumption favoring the retention of long-established and
    familiar principles, except when a statutory purpose to the contrary is evident.” Texas, 
    507 U.S. at 534
    . Plaintiff also relies on the Supreme Court’s further statement that “[i]n order to abrogate a
    common-law principle, the statute must ‘speak directly’ to the question addressed by the
    common law.’’ 
    Id. at 534
    . The common-law principle at issue in this case is that of discharge,
    under which “one party’s material breach of a contract will excuse the other party’s
    performance.” Noble II, 671 F.3d at 1243 n.3. Plaintiff argues that the regulations do not
    explicitly abrogate the common law principle of discharge and, therefore, the principle of
    discharge must be read into the regulation. See Pl.’s Reply & Cross-Opp’n at 6. Specifically
    Plaintiff argues that, because it was discharged from its contractual decommissioning
    obligations, it is no longer bound by the regulatory decommissioning obligations. Defendant
    responds that, because of its conclusion that the regulatory decommissioning obligations are
    independent from the contractual decommissioning obligations, there is no authority to support
    reading the principle into the regulations. The Court agrees with the BSEE that there is no
    authority to support importing the principle of discharge into a non-contractual obligation.
    Plaintiff principally relies on two trial court cases for the proposition that the principle of
    discharge is applicable to the regulatory decommissioning obligations: ABN Amro Bank v. United
    States, 
    34 Fed. Cl. 126
     (1995), and Amoco Production v. Fry, 
    904 F. Supp. 3d 3
     (D.D.C.1995).
    However, notwithstanding the concurrence of Senior Circuit Judge Stephen Williams in Noble II,
    neither case can withstand the weight that Plaintiff places on it. In ABN Amro, a judge of the
    12
    Court of Federal Claims considered the “double forgery” of a check purportedly issued by the
    government and made payable to a supermarket chain, where the government had not actually
    issued the check and the person depositing the check was not actually a representative of the
    payee supermarket chain. 34 Fed. Cl. at 127-28. Treasury regulations governing the payment of
    forged Treasury checks did not explicitly address the “double forgery” scenario. Id. at 134.
    However, prior Federal common law allocated the loss for a Treasury check containing a double
    forgery. Id. at 135. The Court of Federal Claims judge concluded that, absent a more explicit
    provision in the regulations, the regulatory scheme did not override the preexisting Federal
    common law rule. In ABN Amro, in other words, a common law rule explicitly covered a
    situation not explicitly encompassed by a regulatory scheme. The judge concluded that the
    regulatory scheme, even though it appeared “fairly comprehensive,” id. at 131, did not address
    the situation that faced the court and therefore the common law rule continued to govern that
    situation. That is not the case regarding the facts before this Court today. The common law rule
    of discharge applies to contractual obligations—releasing one party from the contractual
    obligations upon a material breach of the contract by another party. This common law rule says
    nothing about regulatory obligations. Therefore, this is not a case where the common law
    addresses a specific situation that is not addressed by a regulatory scheme. Accordingly, the logic
    of ABN Amro does not suggest that the principle of discharge applies to the regulatory
    decommissioning requirements that are the subject of this case.
    Similarly, in Amoco Production v. Fry, another district judge in this judicial district
    addressed the common law right of offset under the Outer Continental Shelf Lands Act. 904 F.
    Supp. at 7-9. The Act required that excess royalties paid by a lessee to the government “ ‘shall be
    repaid without interest.’ ” Id. at 7 (quoting 
    43 U.S.C. § 1339
    (a)). But, at common law, a creditor
    13
    has a right to “use money it owes to a debtor to satisfy the debt owed to it.” 
    Id. at 9
    . A situation
    arose where lessees had underpaid in the past and had paid excess royalties. 
    Id. at 7
    . The district
    court judge concluded that the government’s common law right of offset was not abrogated by
    the statute’s provision for the repayment of excess royalties and, thus, the government was able
    to apply the prior excess payments to the lessees’ underpayments. See 
    id. at 9
    . In other words, the
    statute was silent about the right of offset, and the court concluded that, absent explicit
    abrogation of that right by Congress, the government retained that right within the statutory
    scheme that Congress established. Once again, this precedent does not have the implications for
    the case before the Court today suggested by Plaintiff. In fact, the principle of discharge persists
    here: Plaintiff’s contractual obligations have been discharged by the material breach. No one
    disputes that the regulatory scheme has not eliminated that result. In that sense, the principle of
    discharge has become a limited part of the overall regulatory scheme governing the plugging and
    abandonment of wells. That result is consistent with Amoco Production, but Amoco Production
    cannot carry Plaintiff any farther. Indeed, nothing in that case suggests that this specific contract
    principle is inserted by implication into the decommissioning regulations issued by the agency,
    which the agency has stated are independent of the contractual obligations in the off-shore leases
    issued pursuant to the statutory scheme.
    Analyzing the other cases cited by the parties regarding the scope of the Texas principle
    yields similar results. Relying on United States v. Texas, several federal Courts of Appeals have
    concluded that tools available to the government at common law were not eliminated sub silentio
    by statutory provisions through which Congress legislated in related areas of the law. See, e.g.,
    Exact Software N. Am., Inc. v. DeMoisey, 
    718 F.3d 535
    , 543 (6th Cir. 2013) (judicial power to
    resolve fees disputes not abrogated); United States v. Lahey Clinic Hosp., Inc., 
    399 F.3d 1
    , 15-16
    14
    (1st Cir. 2005) (right to recoup payments not repealed); Cecile Indus., Inc. v. Cheney, 
    995 F.2d 1052
    , 1054-55 (Fed. Cir. 1993) (administrative offset provisions of the Debt Collection Act did
    not eliminate common law offset rights). Others courts have applied principle of United States v.
    Texas in concluding that common law defenses were not eliminated by legislation. See, e.g.,
    Manoharan v. Rajapaksa, 
    711 F.3d 178
    , 179-80 (D.C. Cir. 2013) (head of state immunity applies
    in Torture Victim Protection Act suits); Matar v. Dichter, 
    563 F.3d 9
    , 13-14 (2d Cir. 2009)
    (Foreign Sovereign Immunities Act did not abrogate immunity of former foreign officials). The
    case currently before the Court does not fit into any of these specific categories: this case is not
    about eliminating common law powers of the government or about eliminating litigation
    defenses available at common law.
    In still other cases, courts have concluded that common law principles helped to interpret
    the meaning of a specific statutory or regulatory scheme as a result of the particular interplay
    between the common law rule and the statutory or regulatory scheme in question. See, e.g., Ins.
    Co. of the West v. United States, 
    243 F.3d 1367
    , 1374 (Fed. Cir. 2001) (common law rights of
    assignees unchanged by waiver of sovereign immunity in Tucker Act); In re Niles, 
    106 F.3d 1456
    , 1461 (9th Cir. 1997) (common law allocation of burdens of proof bolsters conclusions
    regarding burden of proof under Bankruptcy Act provision). Taken together, these cases confirm
    that there is no general principle—as Plaintiff maintains—that a common law principle like the
    discharge rule should be automatically read into a regulatory scheme such as the one at issue
    here. These case do establish that explicit language—at least more explicit than presented in this
    case—would be necessary to abrogate the discharge rule itself. Importantly, however, BSEE has
    not abrogated that rule, which by its own terms applies to contractual obligations. BSEE
    concluded that the regulatory requirements regarding decommissioning are independent of the
    15
    contractual decommissioning obligations, and, for the reasons stated above, this conclusion is not
    “plainly erroneous” or “inconsistent with the regulation.” There is no principle in the case law
    that would require this Court to read into the independent regulatory decommissioning
    requirements a version of the discharge rule. In sum, none of Plaintiff’s arguments lead the Court
    to conclude that the agency’s order is arbitrary, capricious, an abuse of discretion, or otherwise
    not in accordance with law. Accordingly, BSEE’s order requiring Noble Energy to carry out its
    regulatory decommissioning obligations regarding Well OCS-P 0320, No. 2, survives this
    Court’s deferential standard of review.
    IV. CONCLUSION
    For the foregoing reasons, the Court GRANTS Defendants’ [21] Cross-Motion for
    Summary Judgment and DENIES Plaintiff’s [19] Motion for Summary Judgment. The Court
    concludes that the agency’s interpretation of its decommissioning regulation, which is at issue in
    this case, is not “plainly erroneous” or “inconsistent with the regulation,” and the principle of
    discharge does not apply to the regulatory decommissioning obligations in question. Therefore,
    the Court upholds the challenged order in this case. This case is dismissed in its entirety.
    An appropriate Order accompanies this Memorandum Opinion.
    Dated: June 8, 2015
    /s/
    COLLEEN KOLLAR-KOTELLY
    United States District Judge
    16