Idaho Maryland Mines Corp. v. United States

• Decision Date: 06 May 1952
• Docket Number: No. 50182.,50182.
• Parties: IDAHO MARYLAND MINES CORP. v. UNITED STATES.
• Court: U.S. Claims Court

104 F. Supp. 576

122 Ct. Cl. 670

IDAHO MARYLAND MINES CORP. v. UNITED STATES.

No. 50182.

United States Court of Claims.

May 6, 1952.

COPYRIGHT MATERIAL OMITTED

George Herrington, San Francisco, Herbert H. Salinger, Bacigalupi, Elkus & Salinger, and Orrick, Dahlquist, Neff & Herrington, all of San Francisco, Cal., for plaintiff.

Thomas L. McKevitt, Washington, D. C., Wm. Amory Underhill, Asst. Atty. Gen., and Holmes Baldridge, Asst. Atty. Gen., R. W. Koskinen, Washington, D. C., on the brief, for defendant.

LITTLETON, Judge.

This case arises out of an alleged taking, under and within the meaning of the Fifth Amendment to the Constitution, of plaintiff's gold mining properties in the County of Nevada, California, by virtue of the complete closing of plaintiff's mine by the War Production Board pursuant to Limitation Order L-208, issued by that Board, which order, plaintiff insists, upon the facts alleged, was arbitrary and violative of plaintiff's property rights with respect to the operation of its gold mining properties.

The original petition in this case was filed on June 4, 1951. Defendant's answer, filed August 3, 1951, contained special defenses challenging the sufficiency of the complaint and, upon defendant's motion, an order was entered directing that the case be calendared for hearing by the court on the special defenses. Arguments in this case and in two other cases¹ involving similar issues were heard on November 5, 1951. At the oral argument, counsel for this petitioner and counsel for Central Eureka Mining Company (case No. 49468) were granted permission to file amended petitions. Plaintiff herein filed its amended petition on November 19, 1951.

Defendant has moved to dismiss the amended petition on the grounds that it fails to state a claim upon which relief can be granted and also fails to state a claim within the jurisdiction of this court. It is defendant's position that the amended petition raises the identical issue decided adversely to similarly situated mine owners in the case of Oro Fino Consolidated Mines, Inc. v. United States,² where the Government's demurrer was sustained and the petition dismissed; that the amended petition in reality contains nothing new, but merely sets out in greater detail evidentiary material in support of this plaintiff's claim that Limitation Order L-208 "should not have been issued because it was unwise and not effective"; that within the meaning of our decision in the Oro Fino case nothing was taken from this plaintiff; that the United States need not pay compensation for losses or damage occasioned through the exercise of a regulatory power; that this court has no power to review the decisions of the War Production Board; that gold mining is well known to be a useless luxury in time of war and an injurious luxury to the extent that it kept material and workers out of mines producing critical materials, and that this court has already held in the Oro Fino case that it will not and cannot question the War Production Board's decision that continued mining of gold was injurious to the war effort.

Limitation Order L-208, set forth in full below,³ and which is challenged in each of the gold mining cases now before the court as well as in the Oro Fino case and the case of Alaska-Pacific Consolidated Mining Co. v. United States, 120 Ct.Cl. 307, purported on its face to be necessary and appropriate in the public interest and to promote the national defense by the preservation of critical materials for defense, for private account and for export, which materials were used in the maintenance and operation of gold mines. It determined that gold mines, whether lode or placer, were nonessential mines. It provided that on and after the issuance of the order. (October 8, 1942), the operators of such declared nonessential gold mines should immediately close down the mines in the shortest possible time; that no new ore could be broken or any development or new operations proceeded with after 7 days from the issuance of the order; that after 60 days from the issuance of the order, operators of gold mines might not remove ore or waste from the mines, or conduct any other operations in or about the mines, except to the minimum amount necessary to maintain the buildings, machinery and equipment in repair, and the access and development workings safe and accessible. Certain small mining operations were excepted from the order, provided their rate of production did not thereafter exceed 100 tons per month (lode mines) or 100 cubic yards per month (placer mines); that the Director General for Operations might issue preference ratings to permit the obtaining of the minimum amount of material necessary to maintain the gold mine's buildings, machinery and equipment in repair, and its access and development workings safe and accessible, and for no other purpose. The order provided that any person violating any provision of the order would be deemed guilty of a crime, and upon conviction, might be punished by fine or imprisonment, and might be prohibited from making or obtaining further deliveries of, or from using, material under priority control, and might be deprived of priorities assistance; that anyone affected by the order might appeal to the War Production Board and that the Director General for Operations might take such action thereon as he deemed appropriate.

In support of its motion to dismiss, the Government relies chiefly on this court's decision in the Oro Fino case, supra, sustaining defendant's demurrer. In the Oro Fino case, the petition alleged, in substance, that plaintiff was the owner of the mining rights of a gold mining property; that pursuant to Limitation Order L-208, which classified plaintiff's gold mining property as a nonessential mine, the mine was closed; that plaintiff incurred certain expense in the protection of its closed facility; that the limitation order was arbitrary and that plaintiff was therefore entitled to just compensation for the damages sustained by it due to compliance with such arbitrary order. Defendant demurred to the petition for the reason, among others, that the action of the Director General in closing the mine did not constitute a taking under the Fifth Amendment to the Constitution, but was rather an act of the Government in the proper exercise of its war power from which can arise no cause of action against the Government.

The court sustained the Government's demurrer and held that the petition did not allege facts sufficient to establish a taking of plaintiff's property. We held that the petition in the Oro Fino case, when considered with Order L-208, revealed no more than a valid exercise by the Government of its constitutional war power in connection with the national safety.

The original petition in the instant case alleged substantially the same facts as were alleged in the Oro Fino case.

In sustaining the Government's demurrer to the petition in the Oro Fino case, we were mindful of two fundamental rules: (1) that a demurrer admits only well pleaded facts and does not admit allegations which are merely conclusions of law or general conclusions of fact; and (2) that a strong presumption exists in favor of the constitutionality of a regulation or a statute. In the case of Pacific States Box & Basket Co. v. White, 296 U.S. 176, 56 S.Ct. 159, 80 L.Ed. 138, the court had occasion to apply both rules in a matter somewhat similar to the one now before this court. Plaintiff therein, Pacific States Box & Basket Co., brought an action in the federal court in Oregon to enjoin enforcement of an order of the Oregon State Department of Agriculture on the ground that the order, and the statutes purporting to authorize it, violated rights of the plaintiff guaranteed by the Fourteenth Amendment to the Constitution. Defendant, Director of the State Department of Agriculture, moved to dismiss the petition on the ground that it did not state facts sufficient to entitle the plaintiff to relief. The statute there in question authorized the Chief of the Division of Plant Industry, after investigation and public hearing, and subject to the approval of the Director of Agriculture, to fix and promulgate official standards for containers of horticultural products in order to promote, protect, further and develop the horticultural interests of the State. After a public hearing held as prescribed in the act, an order was issued declaring containers of certain prescribed sizes should be standard for raspberries and strawberries. Plaintiff had been manufacturing and selling for many years a type of container used for raspberries and strawberries which did not conform to the newly prescribed standard. The petition alleged that the effect of the order was to prevent the sale by plaintiff of such nonconforming containers; that plaintiff had no facilities for manufacturing containers of the newly prescribed "standard" variety; that because of the expense of installing the requisite machinery and the cost of transporting the appropriate supplies to its plant, it was impractical for plaintiff to make the standard containers; and that the effect of the order was to exclude plaintiff's containers from use in Oregon. Plaintiff then alleged, among other things, that the order violated its rights under the due process clause of the Fourteenth Amendment because the order was arbitrary, capricious, and not reasonably necessary for the accomplishment of any legitimate purpose of the police power. Plaintiff further contended that since the case was heard on a motion to dismiss, all allegations in the petition must be accepted as true, including the charge that there was no necessity for the particular orders relating to strawberries or raspberries based on considerations of public health, or to prevent fraud or deception, or any other legitimate use of the police power; that the particular container described did not of necessity promote, protect,...