Copar Pumice Co., Inc. v. Tidwell

Citation603 F.3d 780
Decision Date19 April 2010
Docket NumberNo. 07-2211.,07-2211.
PartiesCOPAR PUMICE CO., INC., Plaintiff-Appellant, v. Tom TIDWELL, Chief of the United States Forest Service; United States Forest Service; Gilbert Zepeda, Appeal Reviewing Officer, Deputy Regional Forester, United States Forest Service; Daniel J. Jiron, Forest Supervisor, United States Forest Service, Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

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Joseph E. Manges of Comeau, Maldegen, Templeman & Indall, LLP, Santa Fe, NM, for Plaintiff-Appellant.

Elizabeth Ann Peterson, Attorney, Environment and Natural Resources, United States Department of Justice, Washington, D.C. (John C. Cruden, Acting Assistant Attorney General, Environment & Natural Resources Division, United States Department of Justice, Washington, D.C.; William B. Lazarus, Attorney, Department of Justice, Washington, D.C.; Patricia Leigh Disert, Of Counsel, Office of General Counsel, United States Department of Agriculture, Albuquerque, NM; Andrew R. Varcoe, Of Counsel, Office of the General Counsel, Litigation Division, United States Department of Agriculture, Washington, D.C., with her on the brief), for Defendants-Appellees.

Before HENRY, Chief Judge, HOLLOWAY, and BRISCOE, Circuit Judges.

BRISCOE, Circuit Judge.

Petitioner-Appellant Copar Pumice Company, Inc. ("Copar"), proceeding under the Administrative Procedure Act, 5 U.S.C. § 500 et seq. ("APA"), appeals the district court's denial of its petition for review concerning the Notice of Noncompliance that the United States Forest Service (FS) issued to Copar concerning its pumice mining activities. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

I

Copar operates the El Cajete pumice mine on four unpatented mining claims located within the Jemez National Recreation Area in New Mexico. Pursuant to a written settlement agreement with the FS, Copar may extract pieces of pumice in excess of 3/4 inches in size ("+3/4" pumice"), "subject to all pertinent statutes and regulations." Aplt. App. at 74. Copar's +3/4" pumice is an "uncommon variety" of pumice that has a distinct and special value as a stonewashing agent in the garment finishing industry: the pumice "abrades denim fabric, especially jeans, by creating a worn look on new denim fabric." Aple. Supp. App. at 53. Copar acknowledged in the settlement agreement that it could not dispose of any common variety pumice produced from these claims.

After El Cajete mining operations began, the FS learned that Copar was not exclusively selling its +3/4" pumice to the garment finishing industry; rather, Copar was selling some of its +3/4" pumice to other industries for common variety uses. The FS claimed that this practice violated the applicable regulations, as well as the settlement agreement. According to the FS's interpretation of its regulations, +3/4" pumice not used in an application that utilized its distinct and special value was nothing more than common variety pumice that Copar could not extract from El Cajete. Copar disagreed, and the FS eventually issued Copar a Notice of Noncompliance.

Statutory and Regulatory Background

The "cornerstone of federal legislation dealing with mineral lands" is the General Mining Law of 1872, Act of May 10, 1872, 17 Stat. 91 (1872) (codified as amended at 30 U.S.C. § 22 et seq.). United States v. Coleman, 390 U.S. 599, 600 n. 1, 88 S.Ct. 1327, 20 L.Ed.2d 170 (1968). The General Mining Law declared that "all valuable mineral deposits in lands belonging to the United States ... shall be free and open" to United States citizens, 30 U.S.C. § 22, and allowed citizens "to go onto unappropriated, unreserved public land to prospect for and develop" these mineral deposits, United States v. Locke, 471 U.S. 84, 86, 105 S.Ct. 1785, 85 L.Ed.2d 64 (1985). After discovering a valuable mineral deposit, and complying with minimal procedures to formally locate the deposit, citizens have the right of exclusive possession of the land for mining purposes. See 30 U.S.C. § 26; Locke, 471 U.S. at 86, 105 S.Ct. 1785. These unpatented claims are "fully recognized possessory interests." Locke, 471 U.S. at 86, 105 S.Ct. 1785. Citizens can also patent their claims under the General Mining Law, which allows them to acquire ultimate title to the land. 30 U.S.C. § 29; Freese v. United States, 226 Ct.Cl. 252, 639 F.2d 754, 755 (1981).

Two tests have been applied for determining what qualifies as a "valuable mineral deposit" under the General Mining Law: (1) the "prudent man test," and (2) the "marketability test." A mineral deposit is valuable under the "prudent man test" if the deposit is "of such a character that a person of ordinary prudence would be justified in the further expenditure of his labor and means, with a reasonable prospect of success, in developing a valuable mine." Coleman, 390 U.S. at 602, 88 S.Ct. 1327 (quotation and citation omitted). The "marketability test" is the "logical complement" to the prudent man test: it requires a mining operator to show "that the mineral can be extracted, removed and marketed at a profit." Id. at 600, 602, 88 S.Ct. 1327 (quotation omitted).

Because "certain very common minerals, such as common earth and common clay, were never disposable under either the mining law or the mineral leasing acts," Congress enacted the Materials Act of 1947, 61 Stat. 681 (1947) (codified as amended at 30 U.S.C. § 601 et seq.), to provide a method for their disposal. 1-4 American Law of Mining § 4.16 (2d ed.2008). Congress later amended the Materials Act when it enacted the Surface Resources Act of 1955 (also known as the Common Varieties Act), 69 Stat. 367 (1955) (codified at 30 U.S.C. § 601 et seq.). Together, these Acts provide that the Secretary of the Interior and the Secretary of Agriculture, "under such rules and regulations as they may prescribe, may dispose of mineral materials (including but not limited to common varieties of the following: sand, stone, gravel, pumice, pumicite, cinders, and clay) ... on public lands of the United States."1 30 U.S.C. § 601 (emphasis added). Generally, the disposal of these mineral materials occurs "by contract let through competitive bidding." 1-7 American Law of Mining § 7.032.

Crucial to the issues in this case, the Common Varieties Act removed certain "common varieties" of minerals from the General Mining Law's definition of "valuable mineral deposit."

No deposit of common varieties of sand, stone, gravel, pumice, pumicite, or cinders and no deposit of petrified wood shall be deemed a valuable mineral deposit within the meaning of the mining laws of the United States so as to give effective validity to any mining claim hereafter located under such mining laws....

30 U.S.C. § 611 (emphasis added). Disposal of these "common varieties" was now "permissible only under the Materials Act of 1947." Watt v. W. Nuclear, 462 U.S. 36, 57 n. 15, 103 S.Ct. 2218, 76 L.Ed.2d 400 (1983). However, as its title makes clear, the Common Varieties Act only removed certain "common varieties" of minerals, such as pumice, from the application of the General Mining Law.

"Common varieties" as used in this subchapter and sections 601 and 603 of this title does not include deposits of such materials which are valuable because the deposit has some property giving it distinct and special value and does not include so-called "block pumice" which occurs in nature in pieces having one dimension of two inches or more.

30 U.S.C. § 611 (emphasis added). Thus, an ordinarily common variety mineral, such as pumice, would remain locatable under the General Mining Law as an "uncommon variety" if it had "some property giving it distinct and special value."

The Department of Agriculture has promulgated regulations, contained in 36 C.F.R. Part 228, that regulate mining operations conducted on National Forest System lands. Subpart C of these regulations governs the "Disposal of Mineral Materials" (i.e. those minerals that fall within the ambit of the Materials Act and the Common Varieties Act). Subpart C's regulations set forth the procedures for disposing of "mineral materials" on National Forest Service lands. See generally 36 C.F.R. §§ 228.47-.67.

Subpart A of these regulations governs the removal of "Locatable Minerals" (i.e. those minerals subject to location under the General Mining Law, including the "uncommon varieties" of minerals exempt from the Common Varieties Act) from National Forest Service lands. These regulations require that mining operations "shall be conducted so as to minimize adverse environmental impacts on National Forest System surface resources." 36 C.F.R. § 228.1. Mining operators must submit a plan of operations for approval, which must include a description of mining operations, "the period during which the proposed activity will take place," and the environmental protection measures the mining operator will undertake to comply with the regulations. Id. § 228.4(c)(3). "Forest Officers shall periodically inspect operations to determine if the operator is complying with the regulations in this part and an approved plan of operations." Id. § 228.7(a). When a mining operator fails to comply with its plan of operations or with the regulations, and that noncompliance "unnecessarily or unreasonably causes injury, loss or damage to surface resources," the FS "shall serve a notice of noncompliance upon the operator." Id. § 228.7(b).

The controlling regulation in this case is 36 C.F.R. § 228.41, which defines the "Scope" of the Subpart C regulations. This regulation sets forth a system of classification that determines whether a mineral qualifies as a common variety such that it is subject to Subpart C's regulations, or whether a mineral qualifies as an "uncommon variety" such that it is subject to Subpart A's regulations. Subsection (c) of § 228.41 describes the types of minerals considered to be common variety.

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