455 F.2d 432 (9th Cir. 1971), 25164, United States v. Consolidated Mines & Smelting Co.

Docket Nº:25164, 25241.
Citation:455 F.2d 432
Party Name:UNITED STATES of America, Plaintiff-Appellant, v. CONSOLIDATED MINES & SMELTING CO., LTD., & Hugh Brown, Defendants-Appellees. UNITED STATES of America, Plaintiff-Appellee, v. CONSOLIDATED MINES & SMELTING CO., LTD., et al., and Hugh Brown, Defendants-Appellants.
Case Date:December 06, 1971
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 432

455 F.2d 432 (9th Cir. 1971)

UNITED STATES of America, Plaintiff-Appellant,

v.

CONSOLIDATED MINES & SMELTING CO., LTD., & Hugh Brown, Defendants-Appellees.

UNITED STATES of America, Plaintiff-Appellee,

v.

CONSOLIDATED MINES & SMELTING CO., LTD., et al., and Hugh Brown, Defendants-Appellants.

Nos. 25164, 25241.

United States Court of Appeals, Ninth Circuit.

December 6, 1971

Rehearing Denied Dec. 12, 1971.

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Raymond N. Zagone (argued), Dept. of Justice, Washington, D. C., Shiro Kashiwa, Asst. Atty. Gen., S. Billingsley Hill, Washington, D. C., Dean C. Smith, U.S. Atty., Robert M. Sweeney, Asst. U.S. Atty., Spokane, Wash., for the United States.

William C. Harrison (argued), Spokane, Wash., for Consolidated Mines and others.

Before JERTBERG and CARTER, Circuit Judges, and LUCAS [*], District Judge.

JAMES M. CARTER, Circuit Judge:

This case concerns mining claims on an Indian reservation. Our decision breaks new ground in holding that the doctrine of exhaustion of administrative remedies does not require completion of appellate or review proceedings within the agency. The decision also considers the effect of a withdrawal of Indian lands from entry and disposal under the Land and Mining laws of the United States, and holds that revocation of withdrawals may not be accomplished by circumstances or procedures less formal than those attending the withdrawal. The decision also considers questions of estoppel against the government, adverse possession and the effect of relocations of prior located mining claims.

There were six decisions by the Department of the Interior considered by Chief Judge Powell in well written district court opinions. On the authority of the opinion filed on June 28, 1968, and the portion of the supplemental opinion relating to the first five claims filed on December 18, 1968, we affirm the district court in its action as to the first five decisions of the Department of the Interior.

We set forth hereafter, and adopt the opinion of June 28, 1968, and a portion of the supplemental opinion of December 18, 1968.

Following the opinions we add a few words as to some of the aspects of the case, and then consider the district court's actions as to decision No. 6 of the Department of the Interior, reverse the judgment as to Decision No. 6 and remand to the district court on that matter.

United States District Court Eastern District of Washington Northern Division

United States of America, Plaintiff,

vs.

Consolidated Mines & Smelting Company, Ltd., a Corporation, and Hugh Brown, Defendants.

Civil No. 2412

OPINION

The United States as trustee seeks to quiet title to lands within the diminished Colville Indian Reservation. The defendant, Consolidated Mines & Smelting Co.,

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Ltd. (Consolidated), asserts fifty-six mining claims on the land.

Consolidated's mining claims were declared null and void by six decisions of the Department of the Interior. 1 The initial determinations in decisions 1, 2, 3 and 6 were made unilaterally by the Spokane Land Office manager. No "contest proceedings" were held. (Contest proceeding is Interior Department terminology for adjudicative processes within the department, which include hearings.) The initial determinations in decisions 4 and 5 followed contest proceedings. Decisions 1 and 2 were appealed through the Secretary of the Interior. Decisions 3, 4 and 5 were appealed through the Director, Bureau of Land Management (a branch of the Interior Department). Decisons 3, 4 and 5 were not, however, appealed to the Secretary. Decision 6 was not appealed from the land office manager to the Director. Decisions 1, 2, 3 and 6 invalidated certain claims because they had been located after the reservation had been withdrawn from entry under the mining laws by order of the Secretary of the Interior. Decisions 4 and 5 held that certain claims were not supported by valid discoveries.

The records in decisions 1, 2 and 5 are before the Court. The records in decisions 3, 4 and 6 are not. These three records were not offered because the Court previously entered a summary judgment affirming decisions 3, 4, 5 and 6. Summary judgment was granted on the ground that Consolidated's failure to take administrative appeals was a failure to exhaust administrative remedies which precluded judicial review. The record in decision 5 was received in evidence when Consolidated alleged lack of notice of the Director's decision and a tary.

In order to determine the issues in this case it is necessary to review the history of the Colville Indian Reservation. It was carved out of the public domain by President Grant's Executive Order of July 2, 1872. In 1892 Congress restored what is commonly referred to as the "northern half" of the Reservation to the public domain. Act of July 1, 1892, 27 Stat. 62. Title to the southern half, the "diminished Colville Indian Reservation," remained in the government for the use and occupancy of the Indians. 27 Stat. 62, 64 (1892); Seymour v. Superintendent, 368 U.S. 351, 82 S.Ct. 424, 7 L.Ed.2d 346 (1962).

By Act of July 1, 1898, 30 Stat. 593, Congress opened the diminished Reservation to mineral entry. By Act of March 22, 1906, 34 Stat. 80, disposition of unallotted lands on the Reservation was authorized. 2 Proceeds of disposition were to be held by the government for the credit of the Colville Tribe. These openings did not restore lands on the diminised Reservation to the public domain. Seymour v. Superintendent, supra. See Ash Sheep Co. v. United States, 252 U.S. 159, 40 S.Ct. 241, 64 L.Ed. 507 (1920).

The next legislation affecting the Reservation was the Wheeler-Howard Act of June 18, 1934, 25 U.S.C. § 461 et seq.

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(now commonly referred to as the "Indian Reorganization Act"). According to its title, one of the purposes of this Act was to "conserve and develop Indian lands and resources." Section 3 of the Act, 25 U.S.C. § 463, authorized the Secretary of the Interior "to restore to tribal ownership the remaining surplus lands" which were formerly part of an Indian reservation but which had been open to disposal by the United States under any of its public land laws. It was provided that "valid rights or claims of any persons to any lands so withdrawn existing on the date of the withdrawal shall not be affected by this Act." Ibid.

Shortly after approval of the Indian Reorganization Act the Commissioner of Indian Affairs recommended a temporary withdrawal of certain Indian lands from entry and disposal under the land and mining laws. The remaining surplus lands on the Colville Reservation were included in this recommendation. A month later, Secretary Ickes ordered the withdrawal. This order is set forth in Restoration of Lands Formerly Indian to Tribal Ownership, 54 I.D. 559 (1934). The order provides in part as follows:

"* * * all undisposed-of lands of the Indian reservations named above that have been 'opened,' or authorized to be 'opened,' to sale, entry, or any other form of disposal under the public land laws, or which are subject to mineral entry and disposal under the mining laws of the United States, * * * be temporarily withdrawn from disposal of any kind, subject to any and all existing valid rights, until the matter of their permanent restoration to tribal ownership, as authorized by Section 3 of the Act of June 18, 1934, supra [the Indian Reorganization Act], can be given appropriate consideration."

(Hereinafter this order will be referred to as the "Ickes withdrawal.")

The Ickes withdrawal order has not been formally revoked either by the Executive or by Congress. Section 18 of the Indian Reorganization Act, 25 U.S.C. § 478, provided that the Act would not apply to any reservation on which a majority of the adult Indians voted against it. On April 6, 1935 a majority of the Colville Tribe voted against application of the Act. Thus the restoration of these lands to tribal ownership as contemplated by the Ickes withdrawal was frustrated. But by Act of July 24, 1956, 70 Stat. 626, Congress restored the surplus lands on the reservation to tribal ownership. Congress thus overrode the Tribe's rejection of the Indian Reorganization Act.

In support of its action to quiet title, the government relies upon these six Interior Department decisions. In opposition, Consolidated claims: 1) The Ickes withdrawal is invalid and ineffective; 2) A letter and enclosures from the Interior Department misled the corporation and estops the government; 3) It's claims have been perfected by adverse possession, and 4) Some of its location notices filed after the withdrawal are really relocation notices which relate back to a time prior to the Ickes withdrawal and remain unaffected by that order.

I

Exhaustion Of Administrative Remedies

Summary judgment was entered against the claims in decisions 3, 4, 5 and 6. On motion for reconsideration because of lack of notice of the Director's decision, the claims invalidated in decision 5 were taken under advisement after trial. The summary judgment was based on failure to take administrative appeals.

It is established doctrine that administrative remedies must be exhausted prior to judicial review of administrative action. Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638 (1938). But some care must be taken to distinguish between the different fact patterns to which the doctrine has been applied. Judicial relief is commonly withheld when a party seeks

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to have an administrative question litigated before it is administratively...

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