United States Federal Circuit

In a suit claiming that the government breached agreements allowing plaintiffs-lessees to explore and develop offshore oil and gas resources in California, judgment of breach of contract, award of restitution, and denial of additional damages attributable to development costs are affirmed where: 1) congressional enactment of statutes preventing oil and gas exploration was not a repudiation of the lease agreements by the government; 2) the application of those statutes, via the revocation of suspensions requested by plaintiffs, constituted a breach of the lease agreements; 3) the breach was material and justified a restitutionary remedy; 4) plaintiffs did not elect to continue performance despite the breach; 5) the restitutionary award could require the return of the full amount of upfront lease bonus payments made by plaintiffs; and 6) damages for plaintiffs' sunk costs were appropriately denied as the plaintiffs had proceeded on a restitution theory rather than a reliance theory. (Revised opinion)

Appellate Information

• Decided 08/25/2008
• Published 09/26/2008

Judges

• BRYSON, Circuit Judge., Before LOURIE, BRYSON, and GAJARSA, Circuit Judges.

Court

• United States Federal Circuit

Counsel

• For Appellant:
  
• Steven J. Rosenbaum, Covington & Burling LLP, of Washington, DC, argued for plaintiffs-cross appellants.   With him on the brief were E. Edward Bruce, Thomas J. Cosgrove, and Gina L. Paik.


• For Appellees:
  
• Thomas G. Hungar, Deputy Solicitor General, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellant.   On the brief were Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, and Allison Kidd-Miller and Gregg M. Schwind, Trial Attorneys.