author: BRIMMER, District Judge.

text:
    GETTY OIL COMPANY, Plaintiff, v. William P. CLARK, Secretary, United States Department of the Interior, Defendant.
    No. C84-0320-B.
    United States District Court, D. Wyoming.
    July 18, 1985.

      Jerome C. Muys, Susan L. Smith, Holland & Hart, Washington, D.C., Marily S. Kite, Holland & Hart, Cheyenne, Wyo., for plaintiff.
    Richard A. Stacy, U.S. Atty., D. Wyoming, Cheyenne, Wyo., Robert P. Schuster, Jackson, Wyo., Karin P. Sheldon, Sierra Club Legal Defense Fund, Inc., Denver, Colo., Steve Jones, Asst. Atty. Gen., Cheyenne, Wyo., Henry Phibbs, II, Jackson, Wyo., for defendant.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

BRIMMER, District Judge.

This matter came on regularly for hearing before the Court on December 6, 1984 upon cross motions for summary judgment. Counsel appearing were Jerome C. Muys, Esq., Susan L. Smith, Esq., and Marilyn S. Kite, Esq., for plaintiff; Richard A. Stacy, Esq., United States Attorney for the District of Wyoming for defendant, and Karin P. Sheldon, Esq., Steve Jones, Esq., Robert P. Schuster, Esq., and Henry C. Phibbs II, Esq., for Intervenor Defendants. The Court has carefully reviewed the pleadings and the administrative record, considered the arguments of counsel, and being fully-advised in the premises, issues its Findings of Fact and Conclusions of Law:

FINDINGS OF FACT

Plaintiff, Getty Oil Company, seeks judicial review of a decision of the Board of Land Appeals of the Department of Interi- or in Sierra Club, et. al., (On Judicial Remand), 80 IBLA 251 (May 2,1984), vacating the approval of Getty’s Application for Permit to Drill (APD) an exploratory well on Lease No. W-20472, and remanding the application to the Wyoming State Office of the Bureau of Land Management for further action. Jurisdiction of the Court is invoked under 28 U.S.C. § 1331 and the Mineral Leasing Act of 1920, 30 U.S.C. §§ 181, et seq. (MLA), the Federal Administrative Procedures Act, 5 U.S.C. §§ 701-706, the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202 and the Mandamus Act, 28 U.S.C. § 1361. Venue is properly in the United States District Court for the District of Wyoming under 28 U.S.C. § 1391(e).

Plaintiff, a Delaware corporation, is the unit operator of the Bear Thrust Unit located in the Bridger-Teton National Forest in northwestern Wyoming, and holds federal leases in that unit. Defendant, William P. Clark, was, at the time this action was filed, and at the time the relevant decision was entered by the IBLA, the Secretary of Interior for the United States and was responsible for administration of the federal oil and gas leases involved in this action pursuant to the provisions of the MLA cited above, and was sued in his official capacity only. Intervenor defendants were parties to the administrative proceedings out of which this controversy arose, and have standing to assert the claims presented herein.

Lease No. W-20472 is located in the Bridger-Teton National Forest, Sublette County, Wyoming, and was issued effective October 1, 1969 for a primary term of ten (10) years. The current lessee thereof is Northwest Exploration Company, holding it subject to rights accruing to plaintiff under an agreement between Northwest and Reserve Oil, Inc., plaintiff’s predecessor in interest.

The beauty and environmental values of this area have long been recognized. Since August 15, 1947 this area has been subject to restrictions upon oil and gas drilling activities established in a 1947 memorandum of then Secretary of Interior Julius A. Krug, 47 F.R. 8091, (hereafter Krug Memorandum). Lease W-20472 covers property located south of the eleventh standard parallel which was not fully withdrawn from leasing activities, but any leases issued in that area were required to contain several conditions and environmental protection stipulations. The lease as originally issued does not contain stipulations authorizing the Secretary to deny totally any drilling activities upon the property. The lease was issued before the adoption of the National Environmental Policy Act of 1969, 42 U.S.C. §§ 4321 et. seq., (NEPA).

The Krug Memorandum required unitization of leases within the relevant area in order to minimize the impact of oil and gas drilling activities upon surface resources in the area. Reserve Oil, Inc., on February 2, 1979, nine years and four months after the lease in question was issued and a mere eight months before the end of the primary term upon the lease, submitted an application for the formation of a unit, including Lease W-20472, to the United States Geological Survey (USGS) Conservation Division. The USGS Conservation Division subsequently was redesignated as the Minerals Management Service, and merged into the Bureau of Land Management. However, the agency was called the USGS during most of the events relevant to this proceeding, and has been referred to by the parties, and will be referred to by the Court, as USGS throughout to avoid confusion.

The USGS, pursuant to the requirements of the Krug Memorandum, forwarded Reserve’s application to the. United States Forest Service to obtain its concurrence and recommendations concerning additional stipulations to be added to the proposed unit agreement. Four months later, on June 6, 1979, the Forest Service notified the USGS that it concurred in the formation of the unit as a logical unit, and specified additional stipulations to be added to the unit agreement in order to reduce adverse impacts upon the surface values. The terms of the unit agreement, which was issued in standard form pursuant to Department of Interior regulations, stated that Reserve as unit operator was given power to suspend all of the committed leases and to act on behalf of all lessees in proceedings concerning the unit before the Department of Interior.

On June 29, 1979 USGS designated the Bear Thrust Unit as a logical unit and approved the form of the unit agreement as modified to include the stipulations recommended by the Forest Service. Reserve proceeded to seek joinders from thirty-three (33) holders of working interests and overriding royalty interests in the twenty-five (25) leases comprising the Bear Thrust Unit. On September 17, 1979, less than fifteen (15) days before the expiration of the primary term of Lease No. W-20472, and nine (9) years and over eleven (11) months after such lease issued, Reserve submitted the Bear Thrust Unit Agreement with required joinders to the USGS for final approval. The agreement was approved by USGS on September 19, 1979, and Reserve was designated as the Unit Operator.

On August 14, 1979, a month before Reserve submitted the unit agreement with necessary joinders for final approval, Reserve requested permission from USGS and the Forest Service to stake a well on Lease No. W-20472. That same day the Forest Service notified USGS that it was concerned about the environmental impacts that staking could have, and requested that the application be denied until it had an opportunity to consult with its regional office. USGS then denied staking of the well on that basis. On October 2, 1979; Forest Service notified USGS that staking would be acceptable, and an order permitting staking was issued. Getty then undertook staking which was completed, and approved by an interdisciplinary team and representatives of USGS on November 6, 1979.

When USGS approved the unit agreement covering the Bear Thrust Unit on September 19, 1979, it requested Reserve to submit an abbreviated or “skeleton” APD. The application for a permit to drill was submitted and received by USGS on September 24,1979, only a few days before the expiration of the primary term of Lease No. W-20472. However, it was determined that an extensive environmental review, including the preparation of an Environmental Impact Statement (EIS), would be necessary. It was apparent that a decision upon Reserve’s APD could not be completed prior to the expiration of Lease No. W-20472, as well as many other leases committed to the Bear Thrust Unit.

Because of these impending time constraints, on September 21, 1979, less than ten (10) days prior to the expiration of Lease No. W-20472, Northwest submitted a request for suspension of that Lease as well as several other leases committed to the unit. It also sought from the Secretary an automatic suspension of other leases committed to the unit upon application when their lease terms approached termination. That request was consistent with the terms of the unit agreement and applicable regulations which provided that suspension orders relating to operations upon a single lease committed to the unit would be deemed applicable to obligations imposed upon the remaining leases committed to the Unit, and that operations, such as drilling upon one lease in the unit, would be attributed to the remaining leases, for purposes of extensions for two years beyond the primary terms of the leases pursuant to 30 U.S.C. § 226(e). Approval was recommended up through the chain of command in USGS, and the request was ultimately approved by the Director of USGS on May 7, 1980. Northwest and Getty, which had acquired Reserve and succeeded to its rights under the leases and Unit Agreement, were notified of the decision on May 30, 1980. The suspension was made retroactive to September 1, 1979, over eight months before the time the decision was made, and twenty (20) days prior to the time the request for suspension was filed. The suspension order had the effect of extending Getty’s lease term under Lease No. W-20472.

Two grounds were given for the decision granting the suspension: (1) delays imposed upon Reserve due to environmental concerns, such as delays resulting from the initial denial of the staking request, which had the effect of denying Getty “timely access” to the property; and (2) environmental concerns resulting from the fact that the property was being considered for possible inclusion in the National Wilderness Preservation System. Pursuant to the order of the Director of USGS, the suspension included the following provision:

Suspensions are for an indefinite period of time, subject to automatic termination on the first of the month in which (1) the Lessee and unit operator are notified in writing of the decision not to approve any oil and gas drilling operations within the Bear Thrust unit area on the basis of its determination that such operations would result in unacceptable impacts on wilderness characteristics of the area, or (2) actual approved drilling operations are commenced should it be decided to permit the drilling of the well.

The suspension defines various requirements for diligence in commencing and pursuing drilling operations within the unit “should drilling be permitted.” The suspension order also provided that suspensions would be granted upon other leases committed to the unit upon application as they approached the end of their primary terms during the course of environmental study of the unit. Such suspensions were granted upon those leases without the need of detailed review by the Department, and all such suspensions were subject to the provisions quoted above.

Getty, in subsequent correspondence with the Department sought modification of the provision which stated that “should drilling be permitted and the unit operator or lessees do not commence actual drilling operations within 30 days following receipt of all necessary approvals and permits, the suspensions will terminate on the first of the month in which said thirty day period expires”, because it provided inadequate time to spud the well and commence drilling operations upon the lease due to monitoring and other requirements imposed as a result of the environmental study. In response, the Department amended the terms of the suspension by stating that:

It is further understood that should drilling be permitted and the unit operator or lessees do not commence actual drilling operations within thirty days following completion of construction of the well site and access road in compliance with the approved application and Forest Service standards, the suspension will terminate on the first of the month in which said 30 day period expires.

The language of the original Bear Thrust unit suspension order was originally drafted for a suspension request on the Cache Creek unit, a separate unit adjacent to the Bear Thrust unit. It, too, lies within the area south of the eleventh standard parallel in the Bridger-Teton National Forest. The Cache Creek APD was filed just prior to the filing of the Bear Thrust APD by National Cooperative Refinery Association, and sought permission to drill an exploratory well within that unit. Because of common environmental concerns, a single EIS was prepared covering both APDs. While matters relating to the Cache Creek application are relevant to an accurate understanding of proceedings in relation to the adjacent Bear Thrust unit, prior to decisive action by the Federal agencies the Cache Creek APD was withdrawn.

A suspension was sought in relation to the Cache Creek unit prior to the time the suspension request was made for the Bear Thrust unit. On October 16, 1978 a memorandum was sent from the Acting Director of USGS to the Secretary of Interior, Cecil D. Andrus, through Assistant Secretary of Energy and Minerals Davenport and Department of Interior Solicitor Krulitz. The memorandum recommended that the suspension be granted, subject to the condition that the suspension should terminate upon a determination that operations would result in unacceptable impacts on wilderness characteristics in the area, and that in such an eventuality, drilling operations would not be permitted, or, should drilling be permitted, then the suspension would terminate on the first of the month in which actual approved drilling operations are commenced. That memorandum was reviewed and approved by the Secretary of Interior, as well as the other officials mentioned above, and was included in the Cache Creek suspension order. Thereafter, the Director of USGS approved the Bear Thrust suspension request, but mandated that the language originated in the Cache Creek suspension order be included in the Bear Thrust suspension order as well. The USGS also included this term in several subsequent suspension orders covering “sensitive” areas upon which federal oil and gas leases had been issued.

After the suspension was granted, a complete APD was submitted by Getty. What may be one of the most detailed environmental reviews ever conducted was then commenced. During that environmental review opponents of Getty’s application, including the intervenor defendants herein, argued the EIS must include review and consideration of the “no action alternative,” namely, that of denying Getty access to the relevant lease for purposes of any drilling activities.

The Department questioned the propriety of this requested action, and referred the matter to Lowell Madsen, Department of Interior’s Acting Regional Solicitor in Denver, Colorado, who issued a memorandum on October 10, 1980 stating that Getty’s right to drill under the relevant leases, once issued, was “inviolable” and “basic”, and could not be denied, although the Department could restrain and control operations upon the leases in order to protect the environment. Notably, the memorandum appears to have focused solely upon the conditions and stipulations contained in the leases as originally issued in 1969, and did not address the impact, if any, of the provisions of the suspension order quoted above. The Forest Service referred the same question to its own counsel, Dean A. Gardner, who issued a memorandum on December 1, 1980, taking issue with the conclusion set forth in the Madsen memorandum. Nevertheless, USGS and the Forest Service, in reliance upon the result reached in the Madsen memorandum, rejected consideration of the “no action alternative” as unwarranted under the law and applicable lease provisions. The EIS was then completed, and the APD was approved by the USGS Area Oil and Gas Supervisor on May 18, 1982.

Intervenor defendants, Sierra Club, Jackson Hole Alliance, State of Wyoming, and Wyoming Wilderness Society, appealed that decision of the USGS Area Oil and Gas Supervisor to the USGS Director and the IBLA. The State of Wyoming and the Wyoming Wilderness Society also appealed the decision to approve road access to the drill site to the Chief of the United States Forest Service. The Sierra Club and the Jackson Hole Alliance later intervened in that appeal as well. On July 7, 1982, Acting Secretary of Interior Hodel wrote a letter to Ed Herschler, Governor of the State of Wyoming, expressing approval of the decision to grant Getty’s APD. The IBLA construed this letter as a final dis-positive decision of the Acting Secretary upon the issues presented in the various appeals depriving it of jurisdiction, and dismissed the appeals on July 20, 1982.

The intervenor defendants filed three separate actions in this Court seeking judicial review of the IBLA decision in October 1982, and the actions were consolidated in Jackson Hole Alliance, et. al. v. Watt, et. al., Civil Action No. C82-409. Extensive proceedings were held by this Court in attempting to construct an administrative record for review of the administrative actions below. During the course of those proceedings it became apparent that the IBLA had misconstrued the Hodel letter and that Acting Secretary of Interior Hodel had not intended to deprive IBLA of jurisdiction or to make a final, dispositive ruling upon the issues presented in the various appeals to the IBLA. Upon the motion of the Federal defendants, this Court remanded that proceeding to the IBLA on February 9, 1984.

After extensive proceedings on remand, and a careful review of the voluminous record constructed in preparation for the judicial review by this Court in C82-409, the IBLA on May 2, 1984 reversed the action of the USGS Area Oil and Gas Supervisor in approving Getty’s APD, vacated the APD, and remanded the APD to the BLM for preparation of a supplemental EIS considering the “no action alternative” of denial of drilling activities within the Bear Thrust Unit. Sierra Club, et. al., 80 IBLA 251 (May 2, 1984). The IBLA concluded that the original Lease No. W-20472 did not reserve a right in the Secretary of Interior to deny altogether the right to drill upon the lease, but that the language of the lease suspension orders, quoted above, empowered the Secretary to do so. As is stated in the IBLA decision and order:

Where application is made for suspension of unitized oil and gas leases in order to preserve them from expiration pending approval of an application for permission to drill, and where the suspension is granted at the discretion of the authorized officer on condition that permission to drill may be denied upon a finding that drilling operations would result in unacceptable impacts on the wilderness characteristics of the area, and environmental impact statement on the effects of such drilling which fails to consider the alternative of refusing permission to drill is an inadequate basis for a decision to permit drilling.

Id. The IBLA further concluded that:

The language [in the suspension letter quoted above] ... evinces a clear contemplation that the Department of Interi- or reserved the authority to decide not to approve any drilling operations based upon a finding of “unacceptable impacts on wilderness characteristics of the area.”

The IBLA rejected Getty’s contention that the Department lacked power to condition the suspension, either under the relevant system of statutory provisions and implementing regulations, or under the circumstances presented in this case, in light of the holding in Copper Valley Machine Works, Inc. v. Andrus, 653 F.2d 595 (D.C.Cir.1981). It concluded that all authority vested in the Secretary to deny or to condition a lease suspension, even though the condition might have the effect of precluding drilling upon the relevant leases, had been delegated to the Director of USGS by the Secretary and was properly exercised in this case. Finally, the IBLA concluded that the EIS failed to meet the requirements of Section 102 of NEPA since it failed to consider the “no action alternative”, thus necessitating the preparation of a supplemental EIS.

Getty, and the Federal defendants in C82-409, sought reconsideration of the IBLA decision, but it was denied by IBLA on August 10, 1984. Getty then sought a stay of the decision ordering remand for preparation of a supplemental EIS pending judicial review of the IBLA decision, which was also denied. It then filed this action, seeking judicial review of a final administrative decision pursuant to 30 U.S.C. § 226-2 and 43 C.F.R. § 4.21(c).

CONCLUSIONS OF LAW

The Court has jurisdiction over the parties and the subject matter of this proceeding, and venue is properly in the United States District Court for the District of Wyoming.

This action seeks review, pursuant to 5 U.S.C. § 706, of an administrative decision. Under the Department of Interior regulations the IBLA is empowered to decide finally for the Department appeals to the head of the Department from decisions rendered by Departmental officials relating to the use and disposition of public lands and their resources. 43 C.F.R. § 4.2(3). The Secretary and the Director are permitted to take jurisdiction of a case at any stage and to render a final decision in the matter, but where the Secretary or Director do not act the decision of the IBLA is binding upon the Department as fully and finally as if they had taken jurisdiction and themselves had decided the matter. 43 C.F.R. §§ 4.5, 4.1. Therefore, the decision of the IBLA constitutes the final agency action under review, and represents the official position of the Department of Interior upon the issues presented in this case.

The Court must give due deference to the expertise of the Department, and the decision of the IBLA should not be disturbed unless it is found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law. Gulf Oil Corporation v. Morton, 493 F.2d 141 (9th Cir.1973); Sierra Club v. Peterson, 717 F.2d 1409-13 (D.C.Cir.1983); Cabinet Mountains Wilderness v. Peterson, 685 F.2d 678, 681 (D.C.Cir.1982); Committee for Auto Responsibility v. Solomon, 603 F.2d 992-02 (D.C.Cir.1979), cert. denied sub nom; Committee for Auto Responsibility v. Freeman, 445 U.S. 915, 100 S.Ct. 1274, 63 L.Ed.2d 599 (1980). In this case Getty challenges the exercise by the Secretary of discretionary power. The questions presented are (A) whether there was discretion or authority to condition the lease suspension; (B) whether the Secretary exercised that discretion; and (C) if so, whether such conduct was reasonable under the circumstances. Rocky Mountain Oil and Gas Ass’n. v. Andrus, 500 F.Supp. 1338 (D.Wyo.1980), rev’d on other grounds sub nom; Rocky Mountain Oil and Gas Ass’n. v. Watt, 696 F.2d 734 (10th Cir.1982).

Where an agency construes the statute under which it operates, and which it is required to enforce, and especially where the agency construes its own regulations, the Court must give due weight to the agency interpretation, and should not reject the agency’s construction where it is one of two or more equally reasonable interpretations. Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965); Brennan v. Occupational Safety and Health Com’n., 513 F.2d 553 (10th Cir.1975); Frontier Airlines, Inc. v. C.A.B., 621 F.2d 369 (10th Cir.1980). In determining whether the Secretary’s conduct was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law, the Court must review the whole record, or those parts of the record cited by the parties, giving deference to the rule of prejudicial error. 5 U.S.C. § 706. Under these standards the Court must presume the agency’s action to be lawful. It will not substitute its judgment for that of the agency. Instead, the Court must affirm the agency’s decision where it is supported by a rational basis, whether or not the Court may agree with its conclusion. Union Pac. R. Co. v. United States, 637 F.2d 764 (10th Cir.1981); Environmental Defense Fund, Inc. v. Costle, 657 F.2d 275 (D.C.Cir.1981); Citizens Against Refinery’s Effects, Inc. v. U.S. Env. Prot. Agency, 643 F.2d 178 (4th Cir.1981).

Initially, the Court concludes that Getty’s appeal is timely. Although the State of Wyoming alleges that Getty waived its right to challenge the authority of the Secretary, or the Director of USGS, to condition the grant of a suspension, it is obvious that Getty acted properly in asserting this appeal from the IBLA decision which in effect enforced that provision. An earlier challenge would not have been ripe, and it would not have permitted the agency to exercise its primary jurisdiction to construe the provisions of the suspension order. 30 U.S.C. § 226-2; 30 C.F.R. §§ 290.2 (1979); Copper Valley Mach. Works, Inc. v. Andrus, 653 F.2d 595, 606 (D.C.Cir.1981). Getty could not determine whether it would be “adversely affected” as a result of this provision until IBLA entered its decision remanding this matter for preparation of a supplemental EIS. Getty filed a timely appeal from that decision.

The Court also concludes that the issues presented in this case are ripe for judicial review. The decision of the IBLA constitutes final agency action, and the issues are now fit for judicial review. Abbott Laboratories v. Gardner, 387 U.S. 136, 148-49, 87 S.Ct. 1507, 1515, 18 L.Ed.2d 681 (1967); In re Grand Jury, April, 1979, 604 F.2d 69, 72 (10th Cir.1979); Gardner v. Toilet Goods Ass’n, 387 U.S. 167, 171, 87 S.Ct. 1526, 1528, 18 L.Ed.2d 704 (1967); Rocky Mountain Oil and Gas Ass’n v. Watt, supra, 696 F.2d at 741 and note 9. The decision of the IBLA has an immediate and direct impact upon Getty in delaying the drilling upon the lease, and additional costs and expenses will be incurred as a result of the delay. Getty will suffer “hardship” as a result of such decision. Norvell v. Sangre de Cristo Development Co., Inc., 519 F.2d 370, 376 (10th Cir.1975); State of Utah v. Andrus, 636 F.2d 276, 278 (10th Cir.1980), and business-related economic uncertainty constitutes sufficient “hardship” to give Getty standing to assert its challenge to the IBLA decision at this time. EPA v. National Crushed Stone Ass’n., 449 U.S. 64, 72-73 n. 12, 101 S.Ct. 295, 301-02 n. 12, 66 L.Ed.2d 268 (1980). Frozen Food Exp. v. United States, 351 U.S. 40, 44, 76 S.Ct. 569, 571, 100 L.Ed. 910 (1956); Abbott Laboratories v. Gardner, supra, 387 U.S. at 152, 87 S.Ct. at 1517; Columbia Broadcasting System, Inc. v. United States, 316 U.S. 407, 417-19, 62 S.Ct. 1194, 1200-01, 86 L.Ed. 1563 (1942); Rocky Mountain Oil and Gas Ass’n. v. Watt, supra, 696 F.2d at 741-742.

The IBLA conclusion that the Secretary of Interior had authority to condition the grant of Getty’s suspension request so as to enable him to deny drilling operations, should it be determined that such operations would result in unacceptable impacts on wilderness characteristics of the area, was not arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law. Getty correctly asserts, and defendants admit that the preFLMPA leases committed to the Bear Thrust Unit, including Lease No. W-20472, did not authorize the Secretary to prevent any activities upon the property that disturb its surface even in the face of significant environmental impacts, but rather only allowed the imposition of mitigating measures designed to minimize the impact. Sierra Club v. Peterson, 717 F.2d 1409, 1414 and note 7 (D.C.Cir.1983). However, these “inviolable rights” may subsequently be altered or even lost through the expiration of the primary lease term, or through a denial or conditioning of a lease suspension requested by a unit operator or lessee.

Section 209 of Title 30, U.S.C., states, in part, as follows:

“The Secretary of Interior, for purpose of encouraging the greatest ultimate recovery of ... oil, [and] gas ..., and in the interest of conservation of natural resources, is authorized to ... suspend

operations under any Federal lease. The Secretary is not required to grant a suspension request whenever application is made, but rather is vested with discretion to deny such a request under appropriate circumstances.

Following the enactment of NEPA, the Secretary’s authority under such provision was recognized to include power to grant, deny or mandate a suspension of operations in the interest of conserving the environmental values of the leased property. Copper Valley Mach. Works, Inc. v. Andrus, supra, 653 F.2d at 600-02 and note 8; Gulf Oil Corporation v. Morton, supra, 493 F.2d 141. The language of the statutory provision clearly vests the Secretary with discretion to grant or deny a requested suspension subject to the guidelines set forth in the provision. The overriding requirement is that he act in a manner which is reasonable under the circumstances. Rocky Mountain Oil and Gas Ass’n. v. Watt, supra, 696 F.2d at 745; Blue Cross Ass’n. v. Harris, 664 F.2d 806, 809 (10th Cir.1981), citing Ernst & Ernst v. Hochfelder, 425 U.S. 185, 201, 96 S.Ct. 1375, 1384, 47 L.Ed.2d 668 (1976).

Because this statutory language does not specifically state that the Secretary may condition a suspension order, plaintiff argues that suspension is an all-or-nothing proposition, that the Secretary may only grant or deny a request, and that any attempt to condition a suspension is beyond his statutory authority. This is a question of first impression.

30 U.S.C. § 189 provides:

The Secretary of the Interior is authorized to prescribe necessary and proper rules and regulations and to do any and all things necessary to carry out and accomplish the purposes of this chapter,

This provision grants the Secretary broad powers and authority commensurate with the broad responsibilities imposed upon his office. Grindstone Butte Project v. Kleppe, 638 F.2d 100-102 (9th Cir.1981); Pan American World Airways v. U.S., 371 U.S. 296, 311-13, 83 S.Ct. 476, 485-86, 9 L.Ed.2d 325 (1963); United States v. Wilbur, 283 U.S. 414, 419, 51 S.Ct. 502, 504, 75 L.Ed. 1148 (1931); United States v. Grimaud, 220 U.S. 506, 31 S.Ct. 480, 55 L.Ed. 563 (1911); Knight v. U.S. Land Association, 142 U.S. 161, 12 S.Ct. 258, 35 L.Ed. 974 (1891); Williams v. United States, 138 U.S. 514, 11 S.Ct. 457, 34 L.Ed. 1026 (1891); United States v. Midwest Oil Co., 236 U.S. 459, 35 S.Ct. 309, 59 L.Ed. 673 (1915). As stated by the Court of Appeals:

The Court is not limited to the mere words of a statute, or what is expressly declared therein, and that which is incidentally necessary to a full exposition of the legislative intent should be upheld as being germane to the law. In the construction of a grant of powers, it is a general principle of law that where the end is required the appropriate means are given and every grant of power carries with it the use of necessary and lawful means for its effective execution. There is therefore conferred by necessary implication every power proper and necessary to the exercise of the powers and duties expressly given and imposed.

Marrow v. Clayton, 326 F.2d 36, 44 (10th Cir.1963).

Getty's construction of the Secretary’s powers under 30 U.S.C. § 209 is unduly restrictive. It would effectively hinder the Secretary in performing the duties and obligations imposed upon him by Congress. Under the holding in Copper Valley, he may deny a suspension request when reasonably necessary to protect the environmental values of the leased property, or he may grant the request when he reasonably determines that environmental concerns are inadequate to override the lessee’s interest in conducting drilling operations upon the property. To deny him the right to grant the suspension while conditioning it in a manner reasonably tailored to enable the effective protection of the environmental values pending further environmental study, would unjustifiably restrict him in attempting to administer the Federal leases placed under his jurisdiction. Section 209, by implication, authorizes the Secretary to condition the granting of a requested suspension in a manner reasonably tailored to protect the interests of conservation, including conservation of the environmental values of the leased premises.

Getty argues that, even if the Secretary could condition or deny a suspension under some circumstances, he could not do so under the circumstances presented here because of the holding in Copper Valley, supra. There the lessee applied for, and received, an APD which contained a stipulation designed to protect the tundra/permafrost surface values of the leased premises by permitting drilling operations during the winter season only, and denying access to the property for six months of the year, during the summer thaw. The lessee commenced drilling operations during the primary term of the lease, and diligently pursued them, receiving a two year extension provided by applicable regulations 43 C.F.R. § 3107.1 (1984). Subsequently, the lessee sought a further twelve-month extension upon the ground that it had been denied access to the property for a total of twelve months because of the surface stipulation. The Court held that the stipulation was, in substance, a lease suspension mandated by the Secretary to conserve the surface values of the premises, and concluded that the operator was entitled to an automatic extension for the period of the suspension as a matter of right, since such an extension is mandated by 30 U.S.C. § 209 and 43 C.F.R. § 3103.4-2(b) (1984). Copper Valley Mach. Works v. Andrus, supra, 653 F.2d at 597-600. The issue presented in Copper Valley was “whether a restriction in a drilling permit prohibiting summer drilling in the interest of conservation worked a ‘suspension of operations and production’ that would extend the life of an oil and gas lease under Section 39 of the Mineral Leasing Act of 1920, as amended, 30 U.S.C. § 209.” Id. at p. 597. The Court answered this question in the affirmative, stating:

Where, by reason of positive directions of the Secretary of Interior, or by mutual assent of the Secretary and the lessee, production is prohibited from the leased area, the suspension period should not be counted as a part of the prescribed term.

Id., at p. 603, quoting from H.R. Report No. 1737, 72nd Cong. 1st Sess. 2-3 (1932).

Getty urges that Copper Valley mandated the grant of its suspension request, removing any discretion the Secretary might otherwise have had, and that, since the Secretary lacked authority to deny the suspension under the circumstances, he also lacked authority to condition this suspension. In effect, Getty argues that since the Secretary delayed access to the property by denying staking when requested and by taking approximately four months to process the proposed unit agreement for the Bear Thrust unit, that delay constituted a de facto lease suspension mandating an extension of the lease term.

In Copper Valley the stipulation denying the lessee access to the property for a period of six months each year was a mandated lease suspension. The Court enforced the mandatory requirements of the MLA to extend any lease suspended by order of the Secretary for the period of such suspension. But, in this case the denial of staking, prematurely requested by Reserve, and the delay caused by the processing of the Bear Thrust unit agreement, did not constitute lease suspensions, defined by the lease itself.

Section 39 of the MLA makes a distinction between suspensions mandated by order of the Secretary and suspensions granted upon the request of the lessee or unit operator which was recognized by the Court in Copper Valley. As was stated by the Court:

This is not a case where the Secretary was asked to revoke a retroactive suspension, but one where he was asked to recognize that a suspension was invoked by his action. Whatever relevance dilatory drilling may have when a lessee asks for a suspension, it is not a consideration where the suspension has already been directed by the Secretary.

Copper Valley Mach. Works v. Andrus, supra, 653 F.2d at 604. We believe that the Secretary has discretion to grant, deny or condition a suspension upon request by a lessee or operator, but should he grant or require a suspension, he must extend the lease term due to the mandatory language of 30 U.S.C. § 209.

Getty argues that, even assuming the Secretary had authority to condition or deny the requested suspension under the circumstances presented in this case, still such authority had not been delegated to the Director of the USGS, at least to the extent such condition would alter the basic rights and obligations of the parties under the leases in question; but, suffice it to say, any power which the Secretary had to condition leases, without reservation, was delegated to the Director of the USGS, prior to the time that the suspension order in question was entered. Therefore, the Director of USGS was authorized to condition the lease in the manner stated above. 45 F.R. 18,375 (3-21-80), codified at 43 C.F.R. § 3103.3-8(a) (1980).

The question remains of whether the delay resulting from the conduct of the USGS and Forest Service was such that any attempt by the Secretary to deny or condition the suspension requested by Getty would constitute an abuse of discretion. The determination by the IBLA that the Secretary, through the Director of USGS, exercised his discretion to condition the lease suspension by reserving the right to deny any oil and gas drilling operations within the Bear Thrust unit because of a determination that such operations would result in unacceptable impacts on the wilderness characteristics of the area, was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law. Getty relies upon affidavits executed by two BLM officials in the proceeding before the IBLA, C.J. Curtis, and Gerald R. Daniels, stating that they did not intend nor construe the language contained in the lease suspension as empowering the Secretary to deny any drilling upon the Bear Thrust unit. Their affidavits state that such language was included because of an erroneous belief that the Secretary was already empowered to deny such activities under the terms of the leases in question. Getty urges the Court to give effect to the intentions of the parties by ignoring this language as being superfluous and mistakenly included in the suspension letter.

Our review must be upon the record as a whole. The Court may not give inordinate weight to these two affidavits to the exclusion of the inconsistent evidence included in the record. The IBLA decision considered and rejected the Getty argument, stating that the intentions of C.J. Curtis and Gerald R. Daniels were not relevant to the issue of the proper construction of the suspension language, and not adequate to override the clear, unambiguous language contained in the suspension. The IBLA found a large body of evidence in the record indicating the language means what it says, including tacit admissions by Getty itself that drilling operations could be prohibited upon the premises. C.J. Curtis was the signatory of the suspension letter, but the record reveals that the suspension language, adopted from the prior Cache Creek suspension order, was included at the direction of his superior officer, the Director of USGS. While Gerald R. Daniels played a role in drafting this language for use in the Cache Creek suspension, he was only one of many authors included in the process. The primary question is the intention of the Secretary himself who approved the Cache Creek suspension upon the condition that such language be included in the suspension letter, and the Director of USGS who similarly approved the Bear Thrust suspension.

There is nothing in the record to disprove that the Secretary of Interior, or the Director of USGS, did not intend an unambiguous result following the inclusion of the suspension language. It must be presumed that they knew that the leases did not authorize denial of access to the property, in the absence of evidence to the contrary. The showing that subordinate agency personnel interpreted the order differently from the interpretation ultimately adopted by the IBLA means only that there was some conflict within the agency concerning the meaning of the order. It is not adequate to establish that the agency itself adopted differing interpretations, or to hold that the agency is bound by such a differing interpretation. F.T.C. v. Anderson, 631 F.2d 741 (D.C.Cir.1979). Getty’s understanding or interpretation then becomes largely irrelevant in construing the effect of the order in question. The IBLA, as the highest Department of Interior authority to pass on the issue, has determined that the suspension language means what it says, and effectively empowered the Secretary to deny any drilling operations upon the premises under the conditions stated. 43 C.F.R. §§ 4.1 and 4.2. Judge Seymour, speaking for the Tenth Circuit Court of Appeals in KVK Partnership v. Hodel, 759 F.2d 814 (10th Cir.1985), which involved Interior Department regulations relating to the issuance of oil and gas leases, observed:

“... we are mindful that ‘(t)he scope of review under the “arbitrary and capricious standard” is narrow and a court is not to substitute its judgment for that of the agency.’ Motor Vehicle Manufacturer’s Association v. State Farm Mutual Automobile Insurance Co. [463 U.S. 29], 103 S.Ct. 2856, 2866 [77 L.Ed.2d 443] (1985). We may not set aside agency action that is ‘rational, based on consideration of the relevant factors and within the scope of the authority delegated to the agency by the statute.’ Id."

Since this decision under review was supported by the weight of the evidence in the record, and was rendered after a full and careful review of the record, it cannot be disturbed by this Court.

Finally, even if contract principles should govern the proper construction of the suspension language, the evidence in the record supports the conclusion that the parties intended the suspension to include a grant to the Secretary of power to deny any drilling operations upon the premises because of unacceptable impacts on wilderness characteristics of the area. Getty has not carried its burden of showing mutual mistake, or that the parties did not intend that result. White v. Roughton, 689 F.2d 118, 120 (7th Cir.1982), cert. denied 460 U.S. 1070, 103 S.Ct. 1524, 75 L.Ed.2d 947 (1983); Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123 (3d Cir.1969); Cave Construction, Inc. v. United States, 387 F.2d 760 (10th Cir.1967).

We must conclude that the decision by the Secretary of the Interior, through the Director of USGS, conditioned the lease suspension on denial of drilling operations if such operations would result in unacceptable impacts on the wilderness characteristics in the area. That decision was not arbitrary, capricious, or an abuse of discretion, nor was it not in accordance with the law.

Getty has attempted to distinguish this suspension order from the order issued in the Cache Creek unit proceedings upon the ground that this suspension order empowered the Secretary to deny drilling operations throughout the entire unit, while the Cache Creek order was limited to operations upon a single lease. The suspensions of the other leases are not before the Court. This review is limited to the suspension order relating to Lease No. W-20472. More importantly, however, Northwest sought an order broader than that issued for the Cache Creek suspension order; Northwest asked for an order that would authorize suspension of any lease committed to the Bear Thrust Unit upon application. This request was made pursuant to the provisions of the unit agreement and governing regulations, which pooled the leases and imputed each suspension to the remaining leases in the unit. Thus, broader language utilized in the Bear Thrust suspension order was in response to the lessee’s request; and, it should not be utilized to invalidate the order. Since the Department has not yet determined that any drilling operations should be denied, the narrow issue presented is whether such an order would be impermissible, in the event it is issued, under the circumstances presented in this case as a matter of law.

NEPA requires an agency to evaluate the environmental effects of major federal actions at the point of commitment. Sierra Club v. Peterson, supra, 717 F.2d at 1414. Since the enactment of NEPA, the Secretary is required to manage lands under Wilderness Act review so as not to impair the suitability of such areas for preservation as wilderness. The Secretary must, to the fullest extent possible, interpret and administer the policies, regulations and public laws of the United States in accordance with the policies embodied in NEPA, if there is no direct conflict between such policies and the law applicable to the agency’s operations, in this instance the MLA. 42 U.S.C. §§ 4331, 4332. Rocky Mountain Oil and Gas Ass’n. v. Watt, 696 F.2d at 739; Natural Resources Defense Council v. Berklund, 458 F.Supp. 925, 935 (D.D.C.1978), aff'd 609 F.2d 553, 558 (D.C.Cir.1979); Delaware Water Emergency Group v. Hansler, 536 F.Supp. 26 (E.D.Pa.1981), aff'd 681 F.2d 805 (3d Cir.1982). Environmental concerns must be evaluated in conjunction with the determination of whether or not to grant a suspension of operations requested by an operator or lessee under a Federal lease. Copper Valley Mach. Works, Inc. v. Andrus, supra; Gulf Oil Corporation v. Morton, 493 F.2d at 144-45; Calvert Cliffs’ Coord. Com. v. United States A.E. Com’n., 449 F.2d 1109, 1112-13 (D.C.Cir.1971); State of New Hampshire v. Atomic Energy Commission, 406 F.2d 170, 175 (1st Cir.1969); Zabel v. Tabb, 430 F.2d 199, 211 (5th Cir.1970); Natural Resources Defense Council, Inc. v. Morton, 458 F.2d 827, 836 (D.C.Cir.1972); Grindstone Butte Project v. Kleppe, supra, 638 F.2d 100. The Secretary is not only permitted, but is required, to take environmental values into account in carrying out his regulatory functions, unless there is a clear and unavoidable statutory authority prohibiting the Secretary from complying with NEPA’s mandate. Grindstone Butte Project v. Kleppe, supra, 638 F.2d at 103; Detroit Edison Co. v. U.S. Nuclear Reg. Com’n., 630 F.2d 450 (6th Cir.1980); Flint Ridge Dev. Co. v. Scenic Rivers Ass’n., 426 U.S. 776, 787-88, 96 S.Ct. 2430, 2437-38, 49 L.Ed.2d 205 (1976). Had the Secretary failed to weigh the environmental concerns in conjunction with Getty’s application for lease suspension, he would have violated his duties under NEPA.

Getty contends that it, and its predecessor in interest, were denied timely access to the leased property by the conduct of the USGS and the Forest Service, and that any attempt by the Secretary to deny access under the suspension language would be an abuse of discretion as a matter of law. However, the lease in question was subject to the Krug Memorandum at the time it was issued. The requirements of unitization, environmental evaluation and approval were then clearly foreseeable. The possibility of delay was further increased early the next year by the enactment of NEPA which mandated an environmental analysis before activities could be commenced upon the premises. Getty urges that the extent of the delay was unusual and was not foreseeable; but, The Sierra Club has refuted Getty’s statistical analysis, by showing that the length of this delay was not unusual for unit agreements within the areas covered by the Krug Memorandum. Even if the length of that delay was not normal, neither are the lands involved here of the usual type of lands subject to such leases. Any reasonable operator or lessee would naturally expect that an APD would not be granted pro forma. Unusual delays would have to be anticipated for proposed operations upon lands embodying the unique pristine values contained in lands subject to the Krug Memorandum. It was surely no surprise to Getty, by the time it filed its application for approval of the proposed unit, to learn that it could not expect to proceed with drilling operations without the grant of a lease suspension or extension.

The language of the suspension order denying Getty timely access to the property does not compel a different result. Several suspension orders are contained in the record. The Department of Interior’s practice evidently was to grant a suspension whenever environmental studies in any way delayed the lessee in commencing operations on the lease on the grounds that the lessee was denied timely access to the premises. Although the Secretary may have chosen to exercise his discretion to permit suspensions in most instances, this does not constitute a waiver of his power to deny a suspension request, or to condition a suspension order. The suspension order, under the circumstances presented in this case, cannot now reasonably be said to be an abuse of the Secretary’s discretion to condition the suspension.

The purpose of an EIS is to insure that the agency has considered all possible courses of action in assessing the environmental consequences of each proposed action. 42 U.S.C. § 4332(2); Sierra Club v. Watt, supra 717 F.2d at 1414; Rocky Mountain Oil and Gas Ass’n. v. Watt, supra, 696 F.2d at 739; Natural Resources Defense Council v. Berklund, supra, 458 F.Supp. at 938, aff'd., supra, 609 F.2d at 558. The current EIS relating to Getty’s APD failed to assess the “no action alternative.” The IBLA’s decision to remand the APD for preparation of a supplemental EIS on that alternative was clearly within its authority, was in accordance with law, and in fact is mandated by NEPA. Swain v. Brinegar, 517 F.2d 766, 780 (7th Cir.1975); Keith v. Volpe, 352 F.Supp. 1324 (C.D.Cal.1972), affirmed 506 F.2d 696 (9th Cir.1974), cert. denied 420 U.S. 908, 95 S.Ct. 826, 42 L.Ed.2d 837 (1975) .

The Court must add this caveat: This decision is limited to the record before the Court and the very unusual circumstances of this case. While it is conceivable that under some circumstances a delay imposed by the Secretary could be so severe that a denial of a request for lease suspension would constitute an abuse of discretion, this is not that case. Also, the Court expresses no opinion as to whether or not operations should in fact be denied because of environmental concerns. That decision was not made by the IBLA below, and must be made in the first instance by the Department of the Interior.

Finally, the record shows that in October, 1984, Congress passed the Wyoming Wilderness Act of 1983, by which the property in question was added to the Gros Ventre Wilderness Area. The legislative history of the Act recognizes that the leases in question were the subject of litigation in this Court and before the Department. Congress expressly stated that it was not the intent of Congress to express an opinion concerning the validity of these leases. 130 Cong.Ree. S13, 275, S13, 280 (daily ed. Oct. 3, 1984), H10, 899 (daily ed. Oct. 1, 1984). The Wilderness area was declared subject to “valid existing rights.” Id. Intervenor defendants argue Getty’s interests do not constitute “valid existing rights” and are voided by the enactment of the Wyoming Wilderness Act of 1983. They request the Court to declare such rights void. This Court may not consider contentions that were not presented in the administrative proceeding below. Cisternas-Estay v. Immigration & Nat. Service, 531 F.2d 155 (3rd Cir.), cert. denied, 429 U.S. 853, 97 S.Ct. 145, 50 L.Ed.2d 127 (1976) ; Dobbs v. Train, 409 F.Supp. 432 (N.D.Ga.1975); aff'd. sub nom Dobbs v. Costle, 559 F.2d 946 (5th Cir.1977); Getty Oil Co. v. Andrus, 607 F.2d 253 (9th Cir.1979); American Elec. Contracting Corp. v. United States, 579 F.2d 602, 217 Ct.Cl. 338 (1978). This is especially true where, as here, the proper construction of the term “valid existing rights” is far from clear under applicable precedent, cf., Rocky Mountain Oil and Gas Ass’n. v. Watt, supra, 696 F.2d at 739, 746 n. 27; Natural Resources Defense Council v. Berklund, supra 458 F.Supp. at 938 and note 21. The Department of the Interior must pass upon this issue in the first instance in conjunction with the remand in Sierra Club, et. al. (On Judicial Remand).

While the IBLA decision is somewhat ambiguous in this regard, the Court believes that three issues remain to be determined by the BLM on remand: First, the BLM must determine whether or not Getty has a valid existing right that was preserved under the Wyoming Wilderness Act of 1983; Second, if so, the BLM should prepare a supplemental EIS considering the “no action” alternative; and, Third, after such supplemental EIS is prepared, the BLM must determine whether or not oil and gas drilling operations would result in unacceptable impacts on wilderness characteristics of the area and whether Getty’s APD should be granted.

Therefore, it is

ORDERED that the plaintiff’s Motion for Summary Judgment be, and the same hereby, is denied; It is further

ORDERED that the Motions for Summary Judgment of the defendant and the intervening defendants be, and they hereby are, denied; It is further

ORDERED that the decision of the Board of Land Appeals of the Department of the Interior, vacating approval of Getty’s Application for Permit to Drill an exploratory well on Lease No. W-20472 and remanding the application to the Wyoming State Office of the Bureau of Land Management for further action is affirmed and this matter is hereby so remanded.


source: Caselaw Access Project

author: PEREZ-GIMENEZ, Chief Judge.

license: Public Domain

text:
    AMERICAN CONVEYOR CORPORATION, Plaintiff, v. MUNICIPALITY OF GUANICA, et al., Defendants.
    Civ. No. 84-2621(PG).
    United States District Court, D. Puerto Rico.
    July 18, 1985.

      Goldman & Antonetti, Santurce, P.R., for plaintiff.
    Doris Hernandez Diaz, Dept, of Justice, Federal Litigation Div., San Juan, P.R., for defendants.
   OPINION AND ORDER

PEREZ-GIMENEZ, Chief Judge.

Present before the Court is co-defendants Municipal Services Administration (MSA) and Emilio Ortiz Colon’s, in his capacity as Administrator of MSA, motion to dismiss for failure to state a claim and for lack of subject matter jurisdiction or in the alternative for summary judgment. Plaintiff filed its opposition thereto.

American Conveyor Corporation (Convey- or) brought this action for declaratory, injunctive relief and money damages for the alleged violation of plaintiff’s rights under the Constitution and laws of the United States and Puerto Rico. The plaintiff’s claims are brought under the Declaratory Judgment Act, 28 U.S.C. § 2201; the Civil Rights Act, 42 U.S.C. § 1983; and Title I of the Housing and Community Development Act of 1974, 42 U.S.C. § 5301, et seq. Jurisdiction is predicated on 28 U.S.C. § 1331 (federal question); 28 U.S.C. § 1343(a)(3) and (4) (civil rights); and 28 U.S.C. § 1332 (diversity of citizenship).

On or about July 20, 1984, co-defendant Board of Awards' of the Municpality of Guánica (Board of Awards) awarded co-defendant Intendance of International Consultants, Inc., (Intendance) the construction of a packing house for vegetables and fruits and the construction of an irrigation drip system. The plaintiff alleges that this contract for the construction of the packing house should have been awarded to it and the contract for the construction of the drip irrigation system should have been awarded to Netafin Irrigation, Inc., rather than to Intendance because they submitted lower responsible bids.

The first cause of action of the complaint states that the arbitrary and capricious decision to award the contracts to Intendance violated the due process and equal protection clauses of the United States Constitution and the Constitution of Puerto Rico, as well as the state laws.

In the second cause of action plaintiff prays for injunctive relief because it contends that there is no adequate remedy at law.

As a third cause of action plaintiff alleges that the acts of defendants Municipality of Guánica, (Guánica) the Board of Awards and the Honorable Ludovino Garcia Salcedo, in his capacity as Mayor of Guanica, having taken place under color of law, violated plaintiff’s rights under 42 U.S.C. § 1983.

Defendants MSA and its Administrator, Emilio Ortiz Colón, are included as parties in the complaint because “[sjaid administrative body is the disbursing agency for federal funds made available under Title I of the Housing and Community Development Act of 1974; and has the responbility to disburse such funds in accordance with said Act and regulations and in the exercise of such functions to protect the interests of the United States in the valid disbursements and utilization of those funds.” (Complaint par. 40).

Defendants allege that there is no diversity jurisdiction because co-defendants are really the Commonwealth of Puerto Rico and a state cannot be a citizen for diversity purposes.

If the defendant is a municipality, municipal agent, or an officer thereof, the general rule is that the Eleventh Amendment to the United States Constitution will not bar the action since these entities are not considered arms of the state. 13 Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d, § 3524, at 130. Defendants have failed to establish that MSA and its administrator are an alter ego of the Commonwealth of Puerto Rico. The independence or alter ego status of a political subdivision of a state is determined by examining state law. Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d, § 3602, at 369-370. The law that creates a municipality in Puerto Rico provides that it has a legal existence and personality separate and independent from the Government of the Commonwealth of Puerto Rico. 21 L.P. R.A. § 2051. Among the general powers that a municipality shall have is the power to sue and be sued, charge and be charged, file complaints and defend itself in the courts of justice and in the administrative bodies. 21 L.P.R.A. § 2054. A municipality that is independent in character and functions from the state may be considered a “citizen” for purposes of diversity jurisdiction. Reeves v. City of Jackson, 532 F.2d 491 (5th Cir.1976). Thus, MSA and its administrator, Mr. Ortiz Colón, are considered citizens within the meaning of the diversity of citizenship statute. 28 U.S.C. § 1332.

Defendants also contend that plaintiff is barred from seeking injunctive relief because it did not exhaust the state’s administrative and judicial remedies.

A court will generally refuse to grant injunctive relief unless plaintiff shows that he does not have an adequate legal remedy or that he has exhausted any available administrative remedies. 11 Wright & Miller, Federal Practice and Procedure: Civil § 2944. Before challenging a state action in federal court a litigant must normally exhaust “legislative” or “administrative” remedies. 17 Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction § 4233, at 371. However, said litigant need not normally exhaust state “judicial” remedies. Id., at 371-372.

Section 3402(a) of Title 21, L.P.R.A., confers on any aggrieved party the right within 20 days to bring an action in the Superi- or Court of Puerto Rico against the Assembly, the Board of Awards, the Mayor or any municipal official to review or annul any legislative or administrative action which infringes the constitutional rights of the complainants or which is contrary to the laws of Puerto Rico. Section 3402(b) confers on any party aggrieved the right to bring a judicial action to stay the execution of any resolution or order of the Assembly, the Board of Awards, the Mayor, or any municipal official within 20 days from the date when it has been promulgated or communicated to the complainant. The function of the Superior Court of Puerto Rico under the statutory mandate is judicial, to stay the execution of any ordinance or decision, resolution or order of the Assembly, the Board of Awards, the Mayor or any municipal officer, or to review or annul any legislative or administrative action if violative of rights guaranteed by the Constitution or bylaws of the Commonwealth of Puerto Rico. See, e.g., Porter v. Investors Syndicate, 286 U.S. 461, 468, 52 S.Ct. 617, 619, 76 L.Ed. 1226 (1931).

Furthermore, when federal claims are premised on 42 U.S.C. § 1983 and 28 U.S.C. § 1343(a)(3) there is no need to exhaust state judicial or administrative remedies. Steffel v. Thompson, 415 U.S. 452, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974).

Plaintiffs opposition to MSA and Ortiz Colon’s motion to dismiss or in the alternative for summary judgment, filed on January 8, 1985, is almost identical to plaintiff’s opposition to co-defendants Guánica, Intendance, Garcia Salcedo and the Board of Awards’ motion for summary judgment.

In view that the same legal issues are raised in both motions and oppositions they will be decided in one opinion and order.

Co-defendants Guánica, Intendance, Ludovino Garcia Salcedo, in his capacity of Mayor of Guánica, and the Board of Awards filed on December 13, 1984, a motion for summary judgment. Co-defendants request the Court to dismiss the complaint because it is time barred. Plaintiff filed its opposition thereto on January 8, 1985.

After examining the pleadings, their annexed exhibits and supporting affidavits, in the light most favorable to plaintiff, the record in this case now reveals no genuine issue of material fact and that defendants are entitled to judgment as a matter of law.

Findings of Fact

1. On June 1984 co-defendant Guánica let out an invitation to bid on certain contracts for the construction of a packing plant for vegetables and fruits and for the construction of an irrigation drip system.

2. Plaintiff, Conveyor, bid only with respect to the packing plant.

3. Co-defendant Intendance made a combined bid on both projects.

4. Guánica awarded a contract for both projects to Intendance on July 30, 1984. Conveyor was notified on August 8th of Guánica’s decision.

5. On August 13th Conveyor sent a letter to Guánica protesting the award to Intendance.

6. Guánica never answered the letter and Conveyor did nothing else relative to its protest until filing the present complaint on October 18, 1984. (See affidavit of Mr. Ludovino Garcia Salcedo, former Mayor of Guánica and former member of the Board of Awards of Guánica.)

Conclusions of Law

Co-defendants, assuming that plaintiff pled the first two causes of action under the diversity statute, contend that the Puerto Rico substantive law prevails and, thus, the first two causes of action are barred by the statute of limitations contained in 21 L.P.R.A. § 3402. They further contend that the third cause of action, which relies on 42 U.S.C. § 1983, is also time barred because it incorporates by reference all material paragraphs of the first cause of action; and, therefore, the “most analogous” statute to the third cause of action is 21 L.P.R.A. § 3402.

Plaintiff alleges that its claims for monetary, declaratory and injunctive relief are based principally on 42 U.S.C. § 5301, et seq. (Title I of the Housing and Community Development Act of 1974), 42 U.S.C. § 1983 (Civil Rights Act) and the due process clause of the 5th and 14th Amendments to the United States Constitution. Jurisdiction is invoked pursuant to 28 U.S.C. § 1331 (Federal Question), 28 U.S.C. § 1343(a)(3), (4) (Civil Rights and Elective Franchise), and 28 U.S.C. § 1332 (Diversity of Citizenship).

Plaintiff argues that its claims under the first and second causes of action of the complaint arise under Title I of the Housing and Community Development Act of 1974 and that this Court has jurisdiction to hear and decide such claims under the federal question statute, 28 U.S.C. § 1331. Therefore, it alleges that the first and second causes of action are not time barred since Puerto Rico’s substantive law does not control.

One of the underlying issues presented in this case is whether the Community Development Act provides plaintiff with a private cause of action for monetary, declaratory and injunctive relief against the Municipality of Guánica and the other defendants.

Private parties can bring an action upon a statute which does not expressly authorize a private lawsuit. Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 100 S.Ct. 242, 62 L.Ed.2d 146 (1979). The four factors that should be considered in determining whether a plaintiff may bring a private action are:

1. Is the plaintiff one of the class for whose special benefit the statute was enacted?

2. Is there any indication of legislative intent, explicit or implicit, either to create such a remedy or deny one?

3. Is it consistent with the underlining purpose of the legislative schemes to imply such a remedy for the plaintiff?

4. Is the cause of action one traditionally relegated to state law, in an area basically the concern of the states, so that it would be inappropriate to infer a cause of action based solely on federal law? Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975).

We now apply the Cort v. Ash factors to the present case. Only three of the four Cort v. Ash factors are pertinent. The fourth factor which inquires into whether the cause of action “is traditionally relegated to state law,” 422 U.S. at 78, 95 S.Ct. at 2088, does not arise in respect to a federal housing statute whose purpose is to generate federal funds and administer their expenditures. People’s Hous. Develop. Corp. v. City of Poughkeepsie, 425 F.Supp. 482, 490-91 (S.D.N.Y.1976).

The answer to each of the three questions is in the negative. Plaintiff is not a member of the class especially benefited by the Housing and Community Development Act. Congress did not intend to create a private right of action for disappointed bidders.

The Act’s declared purpose evinces no concern on Congress’ part to protect unsuccessful bidders. The Congressional findings and declaration of purpose of the Act are the following:

(a) Critical social, economic, and environmental problems facing Nation’s urban communities
The Congress finds and declares that the Nation’s cities, towns, and smaller urban communities face critical social, economic, and environmental problems arising in significant measure from—
(1) the growth of population in metropolitan and other urban areas, and the concentration of persons of lower income in central cities;
(2) inadequate public and private investment and reinvestment in housing and other physical facilities, and related public and social services, resulting in the growth and persistence of urban slums and blight and the marked deterioration of the quality of the urban environment; and
(3) increasing energy costs which have seriously undermined the quality and overall effectiveness of local community and housing development activities.
(b) Establishment and maintenance of viable urban communities; systematic and sustained action by Federal, State, and local governments; expansion of and continuity in Federal assistance; increased private investment; streamlining programs and improvement of functioning of agencies; action to address consequences of scarce fuel supplies The Congress further finds and declares that the future welfare of the Nation and the well-being of its citizens depend on the establishment and maintenance of viable urban communities as social, economic, and political entities, and require—
(1) systematic and sustained action by Federal, State, and local governments to eliminate blight, to conserve and renew older urban areas, to imporve the living environment of low-and moderate-income families, and to develop new centers of population growth and economic activity;
(2) substantial expansion of and greater continuity in the scope and level of Federal assistance, together with increased private investment in support of community development activities;
(3) continuing effort at all levels of government to streamline programs and improve the functioning of agencies responsible for planning, implementing, and evaluating community development efforts; and
(4) concerted action by Federal, State, and local governments to address the economic and social hardships borne by communities as a consequence of scarce fuel supplies.

42 U.S.C. § 5301.

The primary objective of the Act is “the development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.” 42 U.S.C. § 5301(c); Aertsen v. Landrieu, 637 F.2d 12, 22 (1st Cir.1980). The statute consists of a new system of federal assistance under HUD’s administration and consolidates the previous grant-in-aid efforts into a simple block grant program. The block grant approach was chosen by the drafters “primarily to insure that federal funds would be used with a priority to eliminate slums and blight and to upgrade and make the nation’s cities more livable, attractive and viable places in which to live.” Montgomery Improvement Ass’n. v. U.S. Dept. of H.U.D., 645 F.2d 291, 293 (5th Cir.1981), quoting, U.S.Code Cong.Admin.News, at 4273, 4274 (1974).

It would be inconsistent with the statutory purpose and scheme of the Act to allow a private right of action for disappointed bidders.

Conveyor contends that it falls within the purview of the Community Development Act’s class of beneficiaries because it represents the public’s interest. Therefore, Conveyor alleges it will be acting as a private attorney general. In support of its proposition Conveyor cites and quotes from Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859 (D.C.Cir.1970), where a disappointed second low bidder for a government contract was found to have standing to seek judicial review of a contract awarded to a competing bidder.

In Scanwell Laboratories, Inc., supra, plaintiff was granted standing to challenge a federal agency action under the Administrative Procedure Act (APA), 5 U.S.C. § 701, et seq. Conveyor does not have a right of action against the municipality, its agencies and officials under APA because they are not a federal agency within the meaning of the Act. See, 7 U.S.C. § 701(h)(1); City of Rohnert Park v. Harris, 601 F.2d 1040, 1048 (9th Cir.1979) (APA does not create right of action against city urban renewal agency participating in federal urban renewal project); Gibson & Perin Co. v. City of Cincinnati, 480 F.2d 936, 941 (6th Cir.), cert. denied, 414 U.S. 1068, 94 S.Ct. 577, 38 L.Ed.2d 473 (1973) (same rule with respect to city itself); Muñoz Mendoza v. Pierce, 711 F.2d 421, 425 (1st Cir.1983); Window Systems v. Manchester Memorial Hospital, 424 F.Supp. 331, 336 (D.Conn.1976); St. Michael’s Convalescent v. State of Cal., 643 F.2d 1369 (9th Cir.1981); Sovereign Const. Co. Ltd. v. City of Philadelphia, 439 F.Supp. 692 (E.D.Pa.1977). Federal funding does not subject the defendants to the provisions of the APA. Extensive federal regulations do not convert acts of local and state governmental bodies into federal governmental acts. United States v. Orleans, 425 U.S. 807, 816, 96 S.Ct. 1971, 1976, 48 L.Ed.2d 390 (1976); Forsham v. Harris, 445 U.S. 169, 100 S.Ct. 977, 63 L.Ed.2d 293 (1980) (“Extensive, detailed and virtually day to day supervision” by the federal government is needed before ‘agency’ status could be said to attach).

Standing to sue as “private attorney general” rests on an explicit provision in the regulatory statute confering standing, which is absent here. Gibson & Perin Co. v. City of Cincinnati, 480 F.2d 936 (6th Cir.1973), citing, Data Processing Service v. Camp, 397 U.S. 150, 153 n. 1, 90 S.Ct. 827, 829 n. 1, 25 L.Ed.2d 184 (1970). The Seventh Circuit, nor do we believe the First Circuit, has ever recognized standing for a plaintiff based solely on private attorney general status. See, People Gas, Light & Coke Co. v. U.S. Postal Serv., 658 F.2d 1182, 1200 (7th Cir.1981) (plaintiff claimed that it was within the protected zone of interest because an injury-in-fact coupled with the public interest served to confer standing upon it as a “private attorney general” to assert the interests of the public in postal service compliance with its statutory charges and regulations); Muñoz Mendoza, supra (the requirement to be within the zone of interest to be protected or regulated by the statute or constitutional guarantee in question is excused only in unusual circumstances, such as when Congress has enacted a special “person aggrieved” statute, allowing a plaintiff to act as a “private attorney general”, or where 8 special, e.g., a constitutional reason, exists for allowing one person to assert the interest of another).

A constitutional reason has not been shown to exist for allowing Conveyor to assert the interest of the public in the compliance with the regulatory scheme of the Housing and Community Development Act of 1974.

Plaintiff must assert an interest of its own that is arguably protected by the Housing and Community Development Act of 1974. “The assertion of private attorney general status based solely on injury in fact is insufficient for standing.” Cf, Committee for Auto Responsibility v. Solomon, 603 F.2d 992, 999, n. 22 (D.C.Cir.1979), and cases cited therein. (“A party will be denied standing if his alleged injury is to an interest that is not arguably within the zone of interests protected by the statute in question, even though injury in fact has been sufficiently established.”)

Plaintiff’s argument that plaintiffs stand as private attorney generals is precluded by the Court’s finding that plaintiff is not within the zone of interest intended to be protected by the Housing and Community Development Act of 1974.

An alternative argument alleged by plaintiff is that if the Court determines that plaintiff does not have an implied cause of action under the Community Development Act, that there exists diversity jurisdiction. Plaintiff accepts that the prescriptive term contained in 21 L.P.R.A § 3402 is applicable to the first and second causes of action. Conveyor contends, however, that it has been deprived of property and liberty without due process in violation of the Fifth Amendment to the United States Constitution. Said deprivation consists in the denial by Guánica and its agents of a post-bid meeting which allegedly thwarted plaintiffs efforts to recur to state judicial action because it did not have the necesary information to file the same within the twenty-day period required in 21 L.P.R.A. § 3402. These same allegations form part of plaintiffs third cause of action, which is premised on 42 U.S.C. § 1983.

To maintain a cause of action under Section 1983 a plaintiff must plead and prove: 1) that he has been deprived of a right, privilege or immunity secured by the constitution, laws or treaties of the United States; 2) that the defendants subjected plaintiff to this deprivation or caused him to be so subjected; and 3) that the defendants acted under color of any statute, ordinance, regulation, custom or usage of any state.

We must first determine whether the plaintiff has demonstrated that defendants have deprived it of property or liberty without according it the procedural protection required by the due process clause. Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). In order to determine this we must first answer the threshold question, to wit: whether the interest claimed by plaintiff is a property interest protected by the Constitution. In order to have a property interest in a government benefit, whether it be a job or a public works contract, the party making the claim must show that it has a legitimate claim of entitlement. Board of Regents, supra, at 577, 92 S.Ct. at 2709. Whether or not claimant has such an entitlement to the benefit is to be decided by reference to state law. J.P. Mascaró & Son, Inc. v. Township of Bristol, 497 F.Supp. 625, 627 (E.D.Pa.1980), citing, Bishop v. Wood, 426 U.S. 341, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976); Rosenthal v. Rizzo, 555 F.2d 390, 392 (3rd Cir.), cert. denied, 434 U.S. 892, 98 S.Ct. 268, 54 L.Ed.2d 178 (1977). See also, Coyne-Delany Co. v. Development Bd., 616 F.2d 341 (7th Cir.1980); Cincinnati Electronics Corp. v. Kleppe, 509 F.2d 1080, 1083 (6th Cir.1975). We now turn to the law of Puerto Rico to see what rights does it confer on bidders.

21 L.P.R.A. § 3253 provides:

(a) Every municipality must have a Board of Awards composed of no less than three (3) municipal officials appointed by the Mayor, who shall be its Chairman____
(c) The Board shall make an award to the lowest reasonable bidder when it involves purchases, construction or supplying of services, and to the highest bidder when it involves sales or leases, taking into consideration that the bids conform to specifications, delivery terms, the ability of the bidder to fulfill and comply with the contract, financial responsibility of the bidder, business standing and integrity, and other conditions included in the bidding form; provided, that the Board may award a bid to a bidder who may not necessarily be the lowest or the highest bidder, as the case may be, if the public interest is benefited therewith.

Plaintiff contends that since it was the lowest monetary bidder, defendant Board of Awards was required to award it the construction contract as required by 21 L.P.R.A. § 3253(c). In Great Am. Indem. Co. v. Gov’t of the Capital, 59 P.R.R. 903 (1942), the Supreme Court of Puerto Rico established that when there are many factors to which the Administrative Board might give considerable weight in carrying out the mandate of the statute in awarding a contract on public call for bids, no inflexible rule that the contract must be awarded to the lowest bidder can be laid down. The Supreme Court of Puerto Rico held that “[i]n the absence of fraud, bad faith or an abuse of discretion, no bidder is entitled to complain when another bid is selected as the most advantageous. The question must be decided in the light of the public interest, and no bidder has a vested right in any award.” (Emphasis ours) Id., at 908.

Since there is no property interest in dissapointed bidders, no hearing of any type was required by the due process clause of the United States Constitution. See, e.g., ARA Services, Inc. v. School Dist. of Philadelphia, 590 F.Supp. 622 (E.D.Pa.1984).

Plaintiff also claims that the actions of the defendants deprived it of equal protection of the laws, in violation of the Fourteenth Amendment. To a same claim raised by a dissapointed low bidder, in ARA Services, Inc., supra, the court stated at 629:

The function of the equal protection clause “is to measure the validity of classifications created by state laws.” Parham v. Hughes, 441 U.S. 347, 358, 99 S.Ct. 1742, 1749, 60 L.Ed.2d 269 (1979). Since the plaintiffs have not alleged that the defendants have infringed upon a fundamental right or discriminated against a suspect class, their equal protection challenge can succeed only if they show the existence of a legislative classification not rationally related to legitimate public ends. Murillo v. Bambrick, 681 F.2d 898, 901 (3d Cir.), cert. denied, 459 U.S. 1017, 103 S.Ct. 378, 74 L.Ed.2d 511 (1982).

In evaluating an equal protection claim under the rational relation test, the first task is to “identify with particularity the precise classification alleged to be irrational.” Murillo, 681 F.2d at 906. In its brief in opposition to defendant’s motion to dismiss, plaintiff does not identify the classification alleged to be irrational. Assuming arguendo that it is the class of lowest responsible bidders who receive the contracts to which they are entitled under state law and the class of lowest responsible bidders who, through no fault of their own, are denied the contracts to which they are entitled, at most what plaintiff claims amounts to an allegation that state law was missapplied in an individual case. The Supreme Court has made clear that the misapplication of state law alone does not constitute invidious discrimination in violation of the equal protection clause. Beck v. Washington, 369 U.S. 541, 82 S.Ct. 955, 8 L.Ed.2d 98 (1962). The court in ARA Services, Inc., supra, did not find in the equal protection clause the authority to review for constitutional error a decision of a local or state governmental body merely because the decision was alleged to be arbitrary or unlawful. See also, Coyne-Delany Co. v. Capital Development Bd., 616 F.2d 341 (7th Cir.1980). Plaintiff has failed to state a claim for violation of the equal protection clause of the Fourteenth Amendment.

In conclusion, plaintiffs claims for monetary, declaratory and injunctive relief based on the Housing and Community Development Act of 1974 must be dismissed for Conveyor does not have a private cause of action under the same. Plaintiffs civil rights claim must also be dismissed because plaintiff failed to prove any deprivation of a right, privilege or immunity secured by the Constitution or laws of the United States. Furthermore, under the diversity of citizenship statute plaintiffs claims are time barred under 21 L.P.R.A. § 3402.

WHEREFORE, in view of the above, the Court hereby ORDERS THE DISMISSAL of the complaint as to all of the defendants. Judgment shall be entered accordingly.

IT IS SO ORDERED.

      . The Board of Awards, which is composed of no less than three municipal officials appointed by the Mayor, who shall be its Chairman, is in charge of awarding all bids for public construction or improvement that exceeds $40,000. 21 L.P.R.A. §§ 3251, 3253.

      . Intendance is alleged in the complaint to be a private corporation doing business in Puerto Rico.

      . Netafin Irrigation, Inc., is not a party in this case.

      . What constitutes an adequate legal remedy depends on the facts of each case. If plaintiff either can bring a legal action and seek damages that will compensate him fully, the alternative remedy is adequate. 11 Wright & Miller, Federal Practice and Procedure: Civil § 2944, at 396. In the present case, plaintiff cannot bring an action to stay the execution-of the decision or resolution of the Assembly, Board of Awards, the Mayor or any municipal official, nor can it bring an action to review or annul the administrative action because plaintiff did not prosecute the judicial action within the first twenty days from the date on which the administrative act has been performed or from the date on which the resolution or decision has been promulgated or communicated to the plaintiff.
      Furthermore, plaintiff cannot bring a claim against a municipality for damages caused by its fault or negligence because it did not give the municipal executive a written notice within the term prescribed. 21 L.P.R.A. § 3403.

      . Conveyor alleges that just as it has been held by the federal court that the beneficiaries of the Community Development Act’s funds claiming violations of the antidiscriminatory provisions of said Act have an implied cause of action, it too falls within the purview of the Community Development Act's class of beneficiaries. However, the comparison falls flat on its face for the Community Development Act grants persons of "low and moderate income” certain rights and expressly forbids discrimination or exclusion from benefits based on race, color, national origin or sex. 42 U.S.C. § 5309(a); People's Housing Development Corp. v. City of Poughkeepsie, 425 F.Supp. 482 (D.C.N.Y.1976).

      . 21 L.P.R.A. § 3402 provides in pertinent part: The Supreme Court of Puerto Rico shall have exclusive jurisdiction to take cognizance of and resolve the following matters by request of the aggrieved party.
      (a) To review or annul any legislative or administrative action of the Assembly, the Board of Awards, the Mayor or any municipal official who infringes the constitutional rights of the complainants or which is contrary to the laws of Puerto Rico.
      (b) To stay the execution of any ordinance, decision, resolution or order of the Assembly, the Board of Awards, the Mayor or any municipal official, which infringes the rights guaranteed by the Constitution of the Commonwealth of Puerto Rico or by the laws of the Commonwealth____
      In the first two cases the judicial action may only be prosecuted within the first twenty days from the date on which the legislative or administrative act has been performed, or the ordinance, resolution, decision or order has been promulgated or communicated to the complainant, unless otherwise provided by law.

      . The property interest alleged is the one that arises from plaintiff's status as the lowest reasonable bidder for the packing house construction project.

      . In order for private persons to be held liable under Section 1983 the plaintiff must show that the private defendants conspired with public officials to deprive plaintiff of his constitutional rights. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Talley v. Crosson, 663 F.2d 713 (7th Cir.1981), cert. denied, 460 U.S. 1037, 103 S.Ct. 1426, 75 L.Ed.2d 787; Sykes v. State of California Dept. of Motor Vehicles, 497 F.2d 197 (9th Cir.1974). Plaintiff fails to make such a showing as to Intendance, a private corporation. There is not a single allegation in the complaint as to Intendance being a willfull participant in joint activity with Guánica or its agents.

      . Although plaintiff always adds "liberty interest,” it does not state how defendants deprived it of a liberty interest.

      . In Ortega Cabrera v. Municipality of Bayamón, 562 F.2d 91 (1st Cir.1977) the First Circuit Court of Appeals rejected plaintiffs position that a federal constitutional violation follows necessarily from the fact that the individual defendants authorized municipal actions that were contrary to state law. The Court stated at 102: “The illegality of official conduct under local law 'can neither add to nor substract from its constitutional validity.’ Snowden v. Hughes, 321 U.S. 1, 11, 64 S.Ct. 397, 402, 88 L.Ed. 497 (1944). A violation of a federal constitutional provision must be shown.”

      . Due to the fact that plaintiff has failed to prove that it has been deprived of a right, privilege or immunity secured by the Constitution or laws of the United States, it is not necessary to determine which is the state statute "most analogous” to the alleged civil rights cause of action to determine the statute of limitation to be applied.