In Conoco Inc. v. United States, the United States Court of Federal Claims held that the federal government breached oil and gas lease contracts it entered into for the offshore areas of North Carolina by taking actions as required by the Outer Banks Protection Act of 1990 (OBPA). In an attempt to shield itself from liability for this breach of oil lease contracts, the federal government unsuccessfully attempted to use the sovereign acts doctrine. This Note will present the legal background of the Conoco case and will discuss the sovereign acts doctrine as it relates to the court's eventual holding. Lastly, this Note will argue that there is a fundamental problem in the manner in which the Conoco court applied the sovereign acts doctrine apart from whether or not it would shield the federal government in this case. Conoco contributes a body of case law that provides a functional definition of the sovereign acts doctrine, and continues a trend towards narrowing the definition of an act that is considered "public and general in nature." This definition of an act that is "public and general in nature" directly impacts environmental protection and legislation. Although the OBPA was enacted with the specific intent to protect the offshore area of North Carolina from severe environmental damage, the court found that the OBPA was not intended to promote the public interest. Instead, the court found that the act's sole effect was to obstruct performance of a specific governmental contract. For this reason, the court held that the government was liable for significant damages. Through the judicial analysis in this case, the court takes a narrow and severe view toward the overall purpose of environmental legislation. Along with a series of recent decisions, the Conoco court's definition of an act with public and general applicability can be seen as part of a judicial movement towards narrowing the definition of a sovereign act.
Mary K. Roe,
Conoco Inc. v. United States: A Narrowing Of The Sovereign Acts Doctrine,
Ocean & Coastal L.J.
Available at: http://digitalcommons.mainelaw.maine.edu/oclj/vol3/iss1/9