Attorney General Becerra Prevails in Lawsuit Challenging Trump Administration’s Repeal of Valuation Rule

Friday, April 12, 2019
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SACRAMENTO- California Attorney General Xavier Becerra and New Mexico Attorney General Hector Balderas today issued the following statement in response to a district court ruling striking down the Trump Administration’s unlawful repeal of a rule that ensures taxpayers and states receive fair value for oil, gas, and coal extracted from public and tribal lands:

“Today we protected a commonsense rule, and thus the American people, to the tune of $71 million a year," said Attorney General Becerra. "The biggest winners today are the American taxpayers who will now receive their fair share of royalties from private companies that profit from oil, coal, and natural gas extracted from federal lands. Once again, the Trump Administration has been checked by the courts in its unlawful attempt to bend over backwards to please special interests at the expense of hardworking Americans.“

"I will always fight to ensure that New Mexicans are properly compensated for the use of our natural resources," said New Mexico Attorney General Balderas. "This win today ensures that Trump must follow the law as opposed to putting the profits of a few favored corporations above our environment."

Finalized in July 2016, the rule at issue – known as the Valuation Rule – replaced antiquated regulations that determine how much producers must pay in royalties for the oil, gas, and coal they extract from public and tribal lands. The Valuation Rule took effect on January 1, 2017.

Less than two months later, however, the Department of the Interior issued a notice attempting to postpone the Valuation Rule’s requirements. Attorneys General Becerra and Balderas filed suit, alleging that the Department acted unlawfully by postponing implementation of the Rule. On August 30, a Federal District Court agreed that the Department acted unlawfully.

Simultaneously, the Department began a process to repeal the Valuation Rule in its entirety. In public comments, Attorneys General Becerra and Balderas urged the Department of the Interior not to move forward with a repeal that would reopen loopholes exploited by coal companies and deprive taxpayers of a fair return on public resources.  Nonetheless, the Department went ahead with the repeal without offering any reasoned basis for doing so.

Today, U.S. District Court Judge Saundra Brown Armstrong found that the agency’s repeal was arbitrary and capricious under the Administrative Procedure Act.

A copy of the ruling can be found here.

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