Baker v. U.S.

• Decision Date: 11 February 1980
• Docket Number: No. 77-2783,77-2783
• Citation: 613 F.2d 224
• Parties: 10 Envtl. L. Rep. 20,264 Melton E. BAKER, Plaintiff-Appellant, v. UNITED STATES of America; Cecil D. Andrus, Individually and as Secretary of the Interior; Stanley Grunewald, Individually and as District Ranger of the Forest Service of the United States, Department of Agriculture, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 224

613 F.2d 224

10 Envtl. L. Rep. 20,264

Melton E. BAKER, Plaintiff-Appellant, v. UNITED STATES of America; Cecil D. Andrus, Individually and as Secretary of the Interior; Stanley Grunewald,

Individually and as District Ranger of the Forest Service of

the United States, Department of Agriculture, Defendants-Appellees.

No. 77-2783.

United States Court of Appeals, Ninth Circuit.

Feb. 11, 1980.

Robert J. Cruse, Phoenix, Ariz., for plaintiff-appellant.

Raymond N. Zagone, Washington, D. C., argued for defendants-appellees; Michael A. Johns, Asst. U. S. Atty., Phoenix, Ariz., James W. Moorman, Washington, D. C., on the brief.

Appeal from the United States District Court for the District of Arizona.

Before SNEED and ANDERSON, Circuit Judges, and PORT, ^* District judge.

J. BLAINE ANDERSON, Circuit Judge:

This court is called upon to review an administrative extension of the marketability test which is used for proving the validity of mining claims. This extension adds a new element, that is, the claimant must now prove that he or she has not claimed "too much" of the mineral in question. After a thorough review of the mining laws, we conclude that there is no basis to support the Too much rule. We therefore vacate the judgment of the district court which had affirmed the decision of the Interior Board of Land Appeals (IBLA). 23 IBLA 319 (1976).

I. FACTS

The defendants concede that there is no dispute about the facts of this case. In 1952 the appellant Baker began to mine cinders from a cinder cone in the Coconino National Forest near Flagstaff, Arizona. Baker filed a patent application for five placer mining claims on the volcanic field in 1965. The claims were described as Wildcat Hill numbers one through five.

The Bureau of Land Management, at the request of the Forest Service, began administrative proceedings against Baker's claims in 1966. Cancellation of all the Wildcat Hill claims was initially sought, but the allegations concerning the fifth claim were later dismissed from the complaint. The proceedings below decided the validity of the remaining four Wildcat claims.

After conducting a five-day hearing, a hearing officer validated all four of Baker's claims in 1970. The Forest Service then appealed this decision to the IBLA. Although the IBLA agreed with the factual findings made by the hearing officer, the patents on the number one and four claims were declared null and void, while the validity of the number two and three claims was upheld. The IBLA based its decision on its finding that all four of the claims, considered together, covered 15 million tons of cinders. This was, according to the IBLA, simply too much. The second and third claims were singled out for approval because most of Baker's workings and improvements were located on them.

Baker applied for review of the IBLA decision in the district court which had jurisdiction under 28 U.S.C. § 1331(a). See Andrus v. Charlestone Stone Products Co., 436 U.S. 604, 607 n. 6, 98 S.Ct. 2002, 2005, n. 6, 56 L.Ed.2d 570 (1978); Doria Mining & Engineering Corp. v. Morton, 608 F.2d 1255, 1256 n. 1 (9th Cir. 1979). On cross motions for summary judgment, the district court dismissed the complaint and action. Baker then filed a timely notice of appeal to this court which has jurisdiction under 28 U.S.C. § 1291.

II. MINING LAWS

The basic philosophy underlying federal mining law is that all valuable mineral deposits on federally-owned mineral land are open to exploration and purchase. 30 U.S.C. § 22. Generally, by complying with certain procedural requirements, a person may locate a claim on federal land. Charlestone Stone Products Co., supra, 436 U.S. at 606, 98 S.Ct. at 2004. One who does so gains the exclusive right to possess the land and extract minerals from it. Id.

At issue in the present case is whether Baker's first and fourth claims were valuable mineral deposits so as to come within the terms of 30 U.S.C. § 22.

Over the years, two complementary tests have been developed for determining whether a mineral discovery is valuable. Under the prudent-man test, "the discovered deposits must be 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 . . . .' " United States v. Coleman, 390 U.S. 599, 602, 88 S.Ct. 1327, 1330, 20 L.Ed.2d 170 (1968), Quoting Castle v. Womble, 19 LD 455, 457 (1894). The marketability test requires a showing that the mineral can be extracted and marketed at a profit. Coleman, supra, 390 U.S. at 600, 88 S.Ct. at 1329. In Foster v. Seaton, 106 U.S.App.D.C. 253, 271 F.2d 836 (D.C.Cir.1959), the marketability test was explained as follows:

"Thus, such a 'mineral locator or applicant, to justify his possession, must show that by reason of accessibility, Bona fides in development, proximity to market, Existence of present demand, and other factors, the deposit is of such value that it can be mined, removed and disposed of at a profit.' " (citations omitted)

106 U.S.App.D.C. at 255, 271 F.2d at 838 (referred to as the Foster v. Seaton test.) This court has specifically approved the Foster v. Seaton test. Verrue v. United States, 457 F.2d 1202, 1203 (9th Cir. 1972).

Since common varieties of cinder, such as that claimed by Baker, were removed from location under the mining laws on July 23, 1955, the validity of his claims must be tested as of then. ¹

In its decision, the IBLA agreed with the hearing officer that Baker had satisfied both the "prudent-man" and "marketability" tests. The IBLA found that "Baker discovered a valuable deposit of common variety cinders prior to July 23, 1955, for which there was an existent demand, that there was an adequate access to the deposit, the deposit was within reasonable proximity to the market, and that he then initiated a bona fide effort to develop a mine." 23 IBLA at 332. By this the IBLA held that Baker had met the Foster v. Seaton test for proving marketability. After concluding that Baker had met the two traditional tests, the IBLA went on to find that Baker had located claims in excess of the reasonably anticipated market need for cinders (the Too much Test). Because of this, the IBLA held that Baker's less developed claims one and four were void for lack of discovery.

III. STANDARD OF REVIEW

In reviewing decisions of the IBLA, this court exercises a limited standard of review. Multiple Use Inc. v. Morton, 504 F.2d 448, 452 (9th Cir. 1974); See Henrikson v. Udall, 350 F.2d 949, 950 (9th Cir. 1965), Cert. denied, 384 U.S. 940, 86 S.Ct. 1457, 16 L.Ed.2d 538. We cannot merely substitute our judgment for that of the IBLA. Multiple Use Inc., supra, 504 F.2d at 452; See United States v. Consolidated Mines & Smelting Co., Ltd., 455 F.2d 432, 448 (9th Cir. 1971). Our review is limited to an examination of whether the decision of the IBLA was arbitrary, capricious, an abuse of discretion, unsupported by substantial evidence, or not in accordance with the law. 5 U.S.C. § 706; See United States v. Wharton, 514 F.2d 406, 408-409 (9th Cir. 1975).

Baker's central argument on appeal is his challenge to the legal standard (the Too much test) which was applied by the IBLA to invalidate claims one and four. Because there is no dispute over the facts, the substantial evidence standard has no bearing on this case and our review is therefore limited to the IBLA's determination of the applicable law. See Ballard E. Spencer Trust, Inc. v. Morton, 544 F.2d 1067, 1069 (10th Cir. 1976). Generally, great deference is shown to an administrative agency's interpretation of the law which it is charged with administering. ² Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965). However, the courts do not merely "stand aside and rubber-stamp their affirmance of administrative decisions that they deem inconsistent with a statutory mandate or that frustrate the congressional policy underlying a statute." NLRB v. Brown, 380 U.S. 278, 291, 85 S.Ct. 980, 988, 13 L.Ed.2d 839 (1965), Quoted in Volkswagenwerk v. FMC, 390 U.S. 261, 272, 88 S.Ct. 929, 935, 19 L.Ed.2d 1090 (1968). Nor will the courts "defer to an administrative construction where there are compelling indications that it is wrong." Marathon Oil Co. v. Kleppe, 556 F.2d 982, 986 (10th Cir. 1977). With these considerations in mind, we now turn to the Too much test which was relied upon to invalidate Baker's claims one and four.

IV. THE TOO MUCH TEST

Interior ³ argues that the mining laws, its own decisions, and a single court decision established the excess reserve or the Too much test, and support its application to the present case. ⁴ Our examination leads us to the opposite conclusion.

The only court decision ⁵ relied upon by Interior is this court's decision in Clear Gravel Enterprises v. Keil, 505 F.2d 180 (9th Cir. 1974), Cert. denied, 421 U.S. 930, 95 S.Ct. 1657, 44 L.Ed.2d 87. However, Clear Gravel cannot be read as establishing or even supporting a Too much test. In that case this court was merely reviewing whether there was substantial evidence to support the finding that the claimant had failed to satisfy the marketability test. In a brief per curiam decision we made the following observation:

"While the marketability of the mineral could have been demonstrated by the Appellant by a showing of its accessibility, its proximity to the market, the demand for it and by the Appellant's bona fide efforts to develop the claims and compete in the market with the product extracted from those claims, nonetheless, the record demonstrates that Appellant's evidence fell far short of the required showing."

505 F.2d at 181. This was simply a restatement and application of the Foster v. Seaton test for determining marketability. The decision then went on to summarize some of the evidence. This had included the testimony of two government experts who said that the minerals could not be...