Woods Petroleum Corp. v. U.S. Department of the Interior

Woods Petroleum (plaintiff) leased oil-and-gas rights from Native American lessors and, with other working- interest owners, signed a communitization agreement pooling their mineral interests before the lease's expiration; production occurred elsewhere in the pooled unit, which would normally extend Woods's lease. The Bureau of Indian Affairs approved the agreement, but the DOI's assistant secretary (defendant) reversed that approval — explicitly because the lessors wanted Woods's lease to expire so they could sign a new lease with Tomlinson, which promised a $400,000 bonus. With the communitization agreement rejected, Woods's lease expired, and the DOI then approved an identical communitization agreement once Tomlinson became the lessee instead.

Whether, in evaluating a communitization agreement filed for approval, the Department of the Interior must evaluate the agreement itself, rather than whether the previously approved underlying leases were a good or bad deal in hindsight.