The Small Business Administration, which had considered supporting the owner of a small business in an unprecedented lawsuit against the Department of Interior, now has decided against it.
The SBA's office of advocacy had considered filing a friend-of-the-court brief in a case that could have severe consequences for small oil and gas companies, "but we're not going to intervene," an SBA spokesman said.
Sources within the agency and on Capitol Hill said the Interior Department pressured the SBA into not filing the brief, which could have pitted one agency against another in an administration dedicated to internal harmony.
An aide to Rep. Andy Ireland (D-Fla.) said the congressman's Small Business subcommittee on export opportunities and special small business problems may look into the issue when he returns to Washington. "We knew they were working on filing a brief," the aide said. "We intend to find out why they didn't."
A source on the Senate Small Business Committee also said the SBA had requested the opportunity to file a brief in support of the businessman but changed its mind after being pressured by other administration officials.
The SBA's chief counsel for advocacy, Frank Swain, said the agency had considered filing a brief in the case, but he denied that he was pressured into not entering the case. "We looked at the issues legally," Swain said. "For us to get into this particular case would have created more smoke than light."
Swain said suggesting he was pressured is "something easy to speculate," but he said it was "the legal situation that got more complex." However, Swain wouldn't say what the legal complexities were, because the case is pending.
The businessman "made a very strong statement on key issues involved" in the case, Swain said, but he declined to say whether the agency would have supported him if it had entered the case.
The controversy centers around a lawsuit brought by Stephen Thompson, owner of a Dallas-based small oil and gas drilling firm, challenging the Interior Department's decision to increase the cost of the filing fee for all federal noncompetitive oil and gas lease applications from $25 to $75 and the cost of renting a lease from $1 an acre for the 10-year term of the lease to $1 an acre for the first five years and $3 after that.
Thompson claims in his suit that the Interior Department didn't follow the new Regulatory Flexibility Act requiring agencies to determine the impact of their decisions on small businesses. According to congressional sources, the case is the first involving the recently enacted legislation.
Thompson contended that the Interior Department's action would reduce the projected number of lease applications in fiscal 1982 from between 4 million and 5 million to between 2 million and 3 million. In addition, he claimed that the rent increase in the sixth year of the lease term would cause as much as half of the firms to relinquish their leases.
The Interior Department defended its action this week before U.S. District Court Judge June L. Green, saying a provision of the flexibility act precludes judicial review of the agency's decision.