Barrows v. Hickel

• Decision Date: 27 September 1971
• Docket Number: No. 25944,26045.,25944
• Citation: 447 F.2d 80
• Parties: Esther BARROWS, as an individual and as Executrix of the Last Will of E. A. Barrows, Deceased, Plaintiff-Appellant, v. Walter J. HICKEL, as Secretary of the Interior of the United States of America, Defendant-Appellee. UNITED STATES of America, Plaintiff-Appellee, v. The ESTATE of E. Arthur BARROWS, Deceased, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

447 F.2d 80 (1971)

Esther BARROWS, as an individual and as Executrix of the Last Will of E. A. Barrows, Deceased, Plaintiff-Appellant, v. Walter J. HICKEL, as Secretary of the Interior of the United States of America, Defendant-Appellee.

UNITED STATES of America, Plaintiff-Appellee, v. The ESTATE of E. Arthur BARROWS, Deceased, et al., Defendants-Appellants.

Nos. 25944, 26045.

United States Court of Appeals, Ninth Circuit.

August 17, 1971.

Rehearings Denied September 27, 1971.

John B. Lonergan (argued), Lonergan, Jordan, Gresham & Varner, San Bernardino, Cal., for appellant Barrows.

Robert E. Kopp, Dept. of Justice (argued), William D. Ruckelshaus, Asst. Atty. Gen., Washington, D. C., Robert L. Meyer, U. S. Atty., Los Angeles, Cal., for appellants Barrows' Estate and others.

Robert S. Lynch (argued), Edmund B. Clark, Dept. of Justice; Walter Kiechel, Jr., Acting Asst. Atty. Gen., Washington, D. C., Robert L. Meyer, U. S. Atty., Ernestine Tolin, Asst. U. S. Atty., Los Angeles, Cal., for appellees.

Before CHAMBERS, MERRILL and KILKENNY, Circuit Judges.

MERRILL, Circuit Judge:

In 1953 Barrows and his wife posted and filed a location notice, whereby they purported to locate a mining claim for sand and gravel at a site on Grout Creek in the San Bernardino National Forest. The Barrows leased the claim in 1960 to the Big Bear Rock and Materials Company, which, with others, has since operated a large commercial sand and gravel mining and processing plant on the claim.

In 1964 the United States Forest Service initiated an administrative proceeding in the Bureau of Land Management of the Department of the Interior to contest the validity of the claim. The Secretary ultimately determined that the claim was void, and his decision was upheld by the District Court on review.

While administrative proceedings were pending, the United States brought a separate action in federal court to obtain damages for trespass and conversion and interim relief until the validity of the mining claim was settled.¹ After the Secretary's decision was upheld by the District Court, the United States filed an amended complaint that sought to permanently enjoin the Barrows and their lessees from any further mining operations on the claim, and to obtain an accounting and money damages for materials removed from the land. Thereafter, the District Court entered summary judgment evicting the Barrows and their lessees, requiring removal of their mining plant and equipment, and enjoining any use of or entry on the lands in furtherance of their interests in the disputed claim.

The appeals in these two cases have been consolidated for our review.

I. Case No. 25,944

In this case Barrows appeals from the District Court's grant of summary judgment affirming a decision of the Secretary of the Interior that the Barrows' Grout Creek claim was null and void under 30 U.S.C. §§ 22, 611 (1964) for lack of timely discovery of a "valuable mineral deposit" prior to July 23, 1955.

In order for a mineral claim on public lands to be valid it is necessary that the discovered mineral deposits be "valuable." 30 U.S.C. § 22 (1964). By Act of July 23, 1955, 69 Stat. 368, 30 U.S.C. § 611, Congress determined that "common varieties" of sand and gravel could not thereafter qualify as "valuable mineral deposits" within the meaning of the mining laws of the United States. The record clearly establishes that the disputed Grout Creek deposit is a "common varieties" deposit within the meaning of the Act. Consequently, if the Barrows did not discover valuable sand and gravel deposits on the claim site prior to July 23, 1955, they do not have a valid claim.

The proceedings in the Department of the Interior focused on whether the Grout Creek deposits were "valuable" prior to July 23, 1955, under the "prudent-man test"² and its complement and refinement, the "marketability test."³ It seems reasonably clear that both tests would have been satisfied under the circumstances that existed at the time of the administrative hearing. The hearing examiner found that the material in the Barrows' claim was in 1964 "equal or superior" to other aggregate materials found in the area. In 1964 there was a substantial local demand for sand and gravel from the Barrows' claim, and the Grout Creek deposits were being profitably exploited. The Secretary determined, however, that these conditions did not exist until 1960, and that the deposits failed to satisfy the "prudent-man test" between 1953, when the Barrows purported to locate their claim, and the effective date of the 1955 Act.

Appellant argues that the Secretary's decision conflicts with the "prudent-man test" by requiring actual successful exploitation rather than the potential for profitable exploitation. Noting the Secretary's emphasis on the fact that until 1960 Barrows was a "small operator" who had only a small part of the market, appellant contends that the Secretary improperly required a showing of substantial profit in the limited market that was left over after established operators had had their share. The effect of the Secretary's decision, appellant asserts, is to encourage monopolization at the expense of small mining operators.

Actual successful exploitation of a mining claim is not required to satisfy the "prudent-man test." See United States v. Coleman, 390 U.S. 599, 602, 88 S.Ct. 1327, 20 L.Ed.2d 170 (1968); United States v. Anderson, 74 I.D. 292, 298 (1967). The Secretary's opinion makes it clear, however, that the Department did not require appellant to prove that he had an economically successful operation prior to July 23, 1955. The opinion only pointed out that the quantity of material actually sold by appellant prior to the effective date of the 1955 Act was, in and of itself, too insubstantial to establish that a prudent man would have tried to develop the Grout Creek claim.

We agree that a claimant's ability to meet the "marketability test" cannot be made to depend on the extent of the market not already preempted by established operators. But the Secretary did not base his decision on the notion that the needs of the local market prior to 1955 were satisfied by large established operators. Rather, the Secretary determined that there was no market for material of the quality of the Barrows' Grout Creek deposit that was prudently worth pursuing in the years 1953 to 1955, because in those years deposits of superior quality were being actively exploited in the area and there was only a limited local demand for sand and gravel.⁴

There is support in the record for the Secretary's finding, and we are not at liberty to disregard it.⁵

Nor can we accept appellant's argument that the "prudent-man test" should be deemed satisfied if an increased market and the depletion of better quality reserves are reasonably to be anticipated. The "marketability test" requires claimed materials to possess value as of the time of their discovery. Locations based on speculation that there may at some future date be a market for the discovered material cannot be sustained. What is required is that there be, at the time of discovery, a market for the discovered material that is sufficiently profitable to attract the efforts of a person of ordinary prudence.

In case No. 25,944, judgment is affirmed.

II. Case No. 26,045

In this case Barrows and his lessees appeal from the District Court's summary judgment enjoining them from maintaining or operating a sand and gravel plant on the land and ordering them to remove their machinery from the forty acre quarter section that encompasses the disputed claim. The court reserved the issue of damages and accounting for later disposition and stayed enforcement of the judgment pending this appeal.

Appellants contend that the District Court's order is overbroad because it bars any claim they might assert on the property and prohibits prospecting and exploration of any kind by them, and because it applies to an area of forty acres, although the mining claim covers only nineteen acres.

We disagree. As the Government concedes, the court's order can be read to apply only to the claim in dispute in these proceedings; it does not deny appellants any rights of access or exploration that are enjoyed by the general public. The nineteen acre claim is periodically submerged beneath the waters of Big Bear Lake and its boundaries would be difficult to...