Cliffs Synfuel Corp. v. Babbitt, 2:99CV0133-ST.
| Citation | 147 F.Supp.2d 1118 |
| Decision Date | 29 January 2001 |
| Docket Number | No. 2:99CV0133-ST.,2:99CV0133-ST. |
| Parties | CLIFFS SYNFUEL CORP., a Utah corporation, Plaintiff, v. Bruce BABBITT, Secretary of the United States Department of the Interior; Thomas Fry, Acting Director, Bureau of Land Management, United States Department of the Interior; G. William Lamb, Director, Utah State Office, Bureau of Land Management, United States Department of the Interior; and the United States Department of the Interior, Defendants. |
| Court | U.S. District Court — District of Utah |
George M. Haley, Home Roberts Owen LLP, Salt Lake City, UT, Robert G. Pruitt, Jr., Michael S. Johnson, Pruitt Gushee & Bachtell, Salt Lake City, UT, Donald L. Morgan, Cleary Gottlieb Steen & Hamilton, Washington, DC, for Cliffs Synfuel Corp.
Donald L. Morgan, Cleary Gottlieb Steen & Hamilton, Washington, DC, for Crippled Horse Investments, Estate of Frederick H. Larson, Tosco Corp.
Jeffrey E. Nelson, U.S. Attorney's Office, Salt Lake City, UT, for Bruce Babbitt, Thomas Fry, G. William Lamb, Dept. of Interior.
The issue before this court is whether the decision of the Interior Department's Interior Board of Land Appeals, ("IBLA"), captioned United States v. Cliffs Synfuel Corp., IBLA 98-306 (the "IBLA Decision") is in error. The IBLA Decision is founded upon a prior IBLA decision, U.S. v. John J. Herr, et al., IBLA 92-448, 101 I.D. 113 (1994), (the "Herr decision"). In Herr, the IBLA construed the United States Supreme Court decision in Hickel v. Oil Shale Corporation, 400 U.S. 48, 91 S.Ct. 196, 27 L.Ed.2d 193 (1970), (the "Hickel decision"), to have abrogated the resumption doctrine—codified at 30 U.S.C. § 28 (1986)—as to oil shale mining claims. Because the IBLA Decision ignores the literal language of 30 U.S.C. § 28, particularly that part which allows resumption of the rights under a mining claim when assessment work is recommenced, and because the IBLA Decision misinterprets the Hickel decision, this Court concludes that the IBLA Decision was arbitrary, capricious, an abuse of discretion, contrary to law, and otherwise an unreasonable interpretation of the statutes, regulations and Supreme Court jurisprudence of the United States of America.
The Green River Formation, located in eastern Utah, is the site of potentially valuable oil shale deposits. Oil shale is defined as "fine-grained sedimentary rock containing solid organic matter that yields significant quantities of oil when heated." Encyclopedia Brittanica (2000). Once mined, oil shale can be a valuable fossil fuel.1 This case involves an attempt by Plaintiff, Cliffs Synfuel Corporation, to patent four oil shale mining claims covering approximately 520 acres within the Green River Formation.
In the mid-Nineteenth century, Congress enacted the General Mining Law of 1872 that essentially gave away valuable mineral deposits, including oil shale deposits, to whomever first located them. The law was premised on a policy of encouraging exploration of valuable mineral deposits in the West. See generally 30 U.S.C. §§ 22-42 (1986). Following mining custom, the General Mining Law of 1872 provided that one who claimed a mineral deposit was required to perform a certain amount of work each year in prosecution of that claim in order to preclude subsequent miners from claiming the same land. 30 U.S.C. § 28 (1986). However, if a claimant failed to perform such work for a period and then later "resumed" work before anyone else asserted a claim on the same land, then his claim remained intact. Id. This became known in later years as the "resumption doctrine."
In 1920, Congress enacted the Mineral Lands Leasing Act, which had the effect of "completely chang[ing] the national policy over the disposition of oil shale lands." Hickel, 400 U.S. at 50, 91 S.Ct. at 198. No longer could one simply explore, stake a claim, and claim title. Rather, lands containing certain valuable mineral deposits, including oil shale, were available only through lease from the United States. See 30 U.S.C. §§ 181, 193, 241 (1986). However, the Act left intact those valid claims for, (among other things), oil shale already in existence as of February 25, 1920, so long as such claims were maintained in compliance with pre 1920 law. See 30 U.S.C. § 193 (1986); Hickel, 400 U.S. at 51, 91 S.Ct. 196 (calling § 193 a "Saving[s] Clause"). Thus, if one had a valid claim that existed prior to February 25, 1920, the claimant would not be required to lease the claimed land on which the claim rested so long as the claim was maintained pursuant to pre-1920 law.
In 1989, Cliffs Synfuel Corporation ("Cliffs"), filed with the Utah State Office of the Bureau of Land Management ("USO/BLM") a mineral patent application, serial number UTU 65275, covering four oil shale mining claims, which claims were originally located in 1917.2 On October 9, 1992, the USO/BLM issued a First Half / Mineral Entry Final Certificate ("Final Certificate") and on February 26, 1993, transmitted the application to a BLM certified mineral examiner in Vernal, Utah, for a field inspection and Mineral Report. The Mineral Report was issued on June 18, 1996. A government contest was initiated by USO/BLM against all four claims alleging (1) lack of discovery on or before February 25, 1920, (2) lack of discovery at the present time, and (3) failure of the claim owners to comply with 30 U.S.C. § 28. On the basis of these charges, USO/ BLM requested that all four claims be declared invalid and canceled.
A two-day evidentiary hearing in Salt Lake City was held on December 15 and 16, 1997, before Administrative Law Judge Nicholas T. Kuzmack of the Interior Department's Office of Hearings and Appeals. Cliffs presented testimony and evidence supporting its position that required "discovery" had been timely made on each claim, and that annual assessment work, deficient for many years, had resumed in 1977, under the resumption doctrine codified at 30 U.S.C. § 28.
ALJ Kuzmack ruled in a written decision dated April 7, 1998, that all four Cliffs' claims met the standards for "discovery" both as of February 25, 1920, and as of the present, and thus rejected the government's two "discovery" challenges. However, Judge Kuzmack ruled that the four claims were still invalid for failure to comply with 30 U.S.C. § 28. ALJ Kuzmack reasoned that his finding on this point was controlled by the Herr decision, which declared the resumption doctrine "abandoned." The Herr decision relied upon the Hickel decision to support its conclusion concerning the status of the resumption doctrine.
Cliffs appealed Judge Kuzmack's ruling to the IBLA insofar as it was adverse to the mining claims, asserting that the resumption doctrine was still in effect in 1977—the year the claim owner resumed deficient assessment work. The USO/ BLM also appealed Judge Kuzmack's ruling on the "discovery" issues, but that appeal was dismissed on jurisdictional grounds. On November 23, 1998, IBLA Administrative Judge James P. Terry issued a written opinion affirming ALJ Kuzmack's ruling, (the IBLA Decision).
On March 3, 1999, Cliffs filed a Complaint with this Court seeking judicial review of the IBLA Decision. Defendants filed an Answer on May 10, 1999. Cliffs then filed a Motion and Memorandum for Summary Judgment on September 10, 1999. On November 5, 1999, a Motion for Leave to File an Amicus Brief, with intended Brief Amicus attached, was filed with the Court by separate counsel for three owners of oil shale mining claims under challenge by the Interior Department on the same "assessment work" issue involved in the IBLA Decision in this case. Oral argument was heard on Cliffs' Motion for Summary Judgment on November 7, 2000.
Judicial review of an agency decision is governed in part by 5 U.S.C. § 706, which provides:
To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall—
. . . . .
(2) hold unlawful and set aside agency action, findings, and conclusions found to be—
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law....
Under the arbitrary and capricious standard, the Court must determine "whether the agency considered all relevant factors and whether there has been a clear error of judgment." IMC Kalium Carlsbad, Inc. v. Interior Board of Land Appeals, 206 F.3d 1003, 1012 (10th Cir.2000).
Additionally, when reviewing an agency's interpretation of a statute that it administers, this Court must apply the two-step analysis enunciated by the Supreme Court in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Tenth Circuit has clearly explained what analysis is required by Chevron:
When reviewing an agency's interpretation of a statute it administers, we first determine whether the statute is unambiguous. If the intent of Congress is clear then we must give effect to that intent. The judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent. If, however, the statute is ambiguous or silent on the issue in question, we must determine whether the agency's determination is based on a permissible construction of the statute. If so, we will defer to the agency's interpretation.
In determining the meaning of a statute, we look at not only the statute itself but also at the larger statutory context. We may ascertain the intent of Congress through statutory language and legislative history.
Osborne v. Babbitt, 61 F.3d 810, 812 (10th Cir.1995) (quoting Utah v. Babbitt, 53 F.3d 1145, 1148 (10th Cir.1995)).
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