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Mobil Oil Exploration & Producing Southeast, Inc. v. United States | 530 U.S. 604 (2000)
In 1981, Mobil Oil Exploration paid the United States millions of dollars for a ten-year lease contract that gave Mobil the right to explore for and develop oil off the coast of North Carolina. But first it had to jump through a bunch of hoops, one of which led to the breach-of-contract case Mobil Oil Exploration versus United States.
Before Mobil could start exploring, it had to present its exploration plan to the Department of the Interior. If the Department found that the plan wouldn’t cause serious harm to aquatic life and the environment, it had thirty days to approve it. Then Mobil could proceed to the next challenges, such as getting state permission and waste-disposal permits.
In 1989, Mobil entered into a memorandum of understanding with North Carolina and the Department describing plans to explore off the Outer Banks. In its initial reviews of the exploration plan drafts, the Department found no significant danger to marine life or the environment. Mobil submitted its final plan, expecting approval within thirty days. However, two days earlier, the new Outer Banks Protection Act had come into effect. The Department informed Mobil that, although Mobil’s exploration plan complied with the law, the Department was going to comply with the act’s requirement that it delay approval of new exploration plans for thirteen months. Ultimately, the plan was never approved.
Mobil sued the United States for breach of contract. The Court of Federal Claims held that by failing to approve the exploration plan within thirty days, the government had broken its promise and repudiated the contract. The Federal Circuit reversed. The United States Supreme Court granted cert.
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