When Federals Make A Mistake,
Someone Else Must Be Blamed

By William Perry Pendley

(Editor's note: William Perry Pendley is president and chief legal officer for Mountain States Legal Foundation, a public interest law firm specializing in issues of property rights and individual liberties.)

Mr. Stanley K. Mann claims title to a geothermal lease issued by the Bureau of Land Management of the U.S. Department of the Interior on October 20, 1981. Over the years, Mr. Mann and others spent more than $1 million making the lease capable of producing geothermal resources — a clean, efficient, renewable energy source — in commercial quantities.

In September 1989, Mr. Mann began teaching at Pepperdine University where he received his mail, including mail forwarded from his prior address. Over the next several months, Mr. Mann was in frequent telephone and written communication with the BLM and the Minerals Management Service, to which Mr. Mann submitted royalty payments. Mr. Mann repeatedly advised both the BLM and the MMS of his address to ensure that he received all correspondence regarding his lease.

In April 1991, in response to a BLM inquiry regarding the bond on his lease, Mr. Mann wrote to the company handling the bond. As a courtesy to BLM, Mr. Mann sent an unsigned copy of that letter to the BLM. Remarkably and inexplicably, especially given the difficulty Mr. Mann had getting the BLM and the MMS to use his correct address, BLM employees noticed that the return address on Mr. Mann's unsigned letter to his agent differed from the address the BLM had been using and changed Mr. Mann's address!

In November 1993, the BLM issued an order indicating that certain geothermal leases were not in compliance with federal law and would be cancelled within 30 days unless the BLM was notified that the leases were in compliance. The BLM sent that notice, by certified mail, return receipt requested, to the address it had assigned, without authorization, to Mr. Mann.

Not surprisingly given that Mr. Mann did not reside and had never resided at that address, the BLM letter was returned "unclaimed." Two years later when Mr. Mann visited the BLM office, he was told that the lease had been cancelled in 1994.

Mr. Mann appealed that cancellation to the Interior Board of Land Appeals, but his appeal was denied. As a result Mr. Mann is now in the U.S. Court of Federal Claims asserting that his geothermal lease was cancelled illegally.

What took place with regard to Mr. Mann's lease is hardly exceptional in the business world. "To err is human," as Alexander Pope once said. Or, as it is more popularly stated, "these things happen." However, the federal government's response to Mr. Mann differs markedly from what one sees in the business community. For while almost every business that committed such a mistake would make it right — if not immediately, then as soon as it became apparent that litigation would be throwing good money after bad — the federal government's response was to call in the lawyers. For only the federal government, the nation's largest law firm, an afford to litigate hopeless causes, hoping to drive the private citizen who has to pay for his lawyers into submission.

Ironically, to Mr. Mann's assertion that his own government has denied him the due process of law guaranteed by the Constitution, government lawyers responded that because the government was operating in its proprietary capacity it had no obligation to accord Mr. Mann "due process." Thus, while the federal government seeks to evade its obligation to treat its citizens in accordance with the Constitution by saying it is acting as a landowning business, it refuses to behave as any such real business would behave.

There is one final irony. Remember the letter the BLM sent to the wrong address to inform Mr. Mann that his leases were subject to revocation? That letter contained three BLM lease numbers, but none of those numbers were for Mr. Mann's lease! Thus even had Mr. Mann received the letter, he would not have been put on notice that his leases were at risk. Like they say — the U.S. Government, like nobody's business.