§1734 State Suits Under Federal Law

Summary

A State can sue a person to get back royalties, interest, or civil penalties it thinks are due from oil and gas leases on federal land inside the State, if the State has credible evidence. The State must give written notice to the Secretary and wait 90 days before suing, unless the Secretary waives that wait. If the Secretary issues a payment demand within that 90 days, the State must wait 45 days after the demand before suing, unless the payment is made in full during that 45-day time. If the Secretary sends the matter to the U.S. Attorney General during that 45-day period or within 10 business days after it ends, the State may not sue if the Attorney General files a federal civil case within 45 days of the referral and then proceeds with the case. The State must tell the Secretary and the Attorney General when it files suit. A court that decides the case can award litigation costs, including reasonable lawyer and expert witness fees, if it finds that appropriate. Suits must be filed in the U.S. district court where the lease or leasing activity is located. That court can order payment or require compliance no matter the amount at issue or the parties’ citizenship. Any civil penalties the State recovers stay with the State and may be spent as the State chooses. Any rent, royalty, or interest the State recovers must be turned over to the U.S. Treasury under the same rules as federal collections and must be deposited no later than 10 days after the State receives them.