Copar Pumice Co., Inc. v. Bosworth

• Citation: 502 F.Supp.2d 1200
• Decision Date: 05 July 2007
• Docket Number: No. CV-06-97 WJ/WPL.,CV-06-97 WJ/WPL.
• Parties: COPAR PUMICE CO. INC., Plaintiff, v. Dale BOSWORTH, Chief of the United States Forest Service; Lucia M. Turner, Appeal Reviewing Officer, Deputy Regional Forester, United States Forest Service; Gilbert Zepeda, Forest Supervisor, United States Forest Service, Defendants.
• Court: U.S. District Court — District of New Mexico

502 F.Supp.2d 1200 COPAR PUMICE CO. INC., Plaintiff,
v.
Dale BOSWORTH, Chief of the United States Forest Service; Lucia M. Turner, Appeal Reviewing Officer, Deputy Regional Forester, United States Forest Service; Gilbert Zepeda, Forest Supervisor, United States Forest Service, Defendants. No. CV-06-97 WJ/WPL. United States District Court, D. New Mexico. July 5, 2007.

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Caroline W. Blankenship, Marte D. Lightstone, Miller Stratvert P.A., Albuquerque, NM, J. Scott Hall, Miller, Stratvert P.A., Arita Fe, NM, for Plaintiff.

Patricia Leigh Disert, U.S. Department of Agriculture, General Counsel, Raymond Hamilton, U.S. Attorney's Office, Albuquerque, NM, for Defendants.

MEMORANDUM OPINION AND ORDER DISMISSING PETITION FOR REVIEW AND REVERSAL OF AGENCY DECISION

WILLIAM P. JOHNSON, District Judge.

THIS MATTER comes before the Court as an appeal from an administrative decision. Petition for Review and Reversal of Agency Decision, filed February 3, 2006. Having heard oral argument on the matter on June 26, 2007, and having considered the parties' briefs and the applicable law, I find that Plaintiff has not satisfied its burden under the applicable legal standard and that therefore the Petition will be denied.

Plaintiff Copar operates the El Cajete pumice mine on mining claims located on Forest Service lands in Sandoval County, New Mexico in the Jemez National Recreation Area. El Cajete is an open pit pumice mine and pumice screening plant. Defendants are the U.S. Forest Service ("Forest Service," "agency," or "Government") and representatives of the Forest Service. The appeal concerns Defendants' administrative decisions issued on November 21, 2005 and December 6, 2005, affirming the December 23, 2003 Notice of Noncompliance issued to Plaintiff.

The Notice of Noncompliance notified Copar that it was violating federal regulations because it was not selling all of the pumice extracted from the El Cajete mine to the stonewash laundry industry. Under the Government's interpretation of the relevant regulations, the only type of pumice Copar is permitted to extract under federal law is the "uncommon variety" of pumice which is defined by its marketability, or end use, to the stonewash laundry industry for use as an abrasive or laundry conditioner (as in stonewashed jeans).

BACKGROUND

Some information on general mining law is helpful in discussing the background of this case.

I. General Mining Law

The Forest Service is authorized to manage surface resources by federal statute, but not to interfere with mining claims. See, Converse v. Udall, 262 F.Supp. 583, 585 (D.C.Or.1966) (discussing the Surface Resources Act, 30 U.S.C. § 612). The General Mining Law of 1872 ("General Mining Law," 30 U.S.C. § 22 et seq.) allows one to locate and stake either of two types of claims — patented and unpatented. A patented claim is obtained by locating a valuable mineral deposit on the claim and then obtaining a patent certificate from the Government. An unpatented mining claim is obtained by locating a deposit in a mineral vein or lode on public lands, and staking the boundaries of the claim. In the latter case, title to the land where the mining claim is located remains with the Government, but the severed minerals and proceeds are the personal property of the miner.

Mineral deposits are generally classified by type as "locatable," "leasable," or "saleable."

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This case involves the "locatable" variety, which includes the base and precious metal ores and certain classes of industrial minerals. A mining claim or "location" is staked over the deposit and permits are necessary to begin mining the material.

A. Pertinent Mining Laws and Regulations

A "valuable mineral deposit" means a deposit of a character such that a person of ordinary prudence would be justified to expend labor and have a reasonable prospect of success in developing a valuable mine. U.S. v. Coleman, 390 U.S. 599, 602, 88 S.Ct. 1327, 20 L.Ed.2d 170 (1968). There are two tests for determining value — the "prudent man" test (where a person of ordinary prudence would be justified to spend labor and develop a valuable mine), and the "marketability" test (requiring claimed materials to possess value as of the time of their discovery). See, Verrue v. U.S., 457 F.2d 1202, 1203 (9th Cir.1972).

Congress passed the Common Varieties Act of 1955, 30 U.S.C. § 601 et seq., which removed deposits of "common varieties" such as sand, stone, gravel and pumice from the application of the General Mining Law, and made these materials subject to sale under the conditions for disposal which are set out in the Act. The Common Varieties Act clarified the process for the classification and disposition of mineral resources:

The Secretary ... 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, ... if the disposal of such mineral or vegetative materials (1) is not otherwise expressly authorized by law, including ... the United States mining laws, and (2) is not expressly prohibited by laws of the United States, and (3) would not be detrimental to the public interest.

30 U.S.C. § 601. Federal regulations promulgated under the, Common Varieties Act, referred to as "Subpart C regulations," (36 CFR § 228) regulate the disposal of common variety minerals, or minerals having little economic value:

Mineral materials to which this subpart applies. This subpart applies to mineral materials which consist of petrified wood and common varieties of sand, gravel, stone, pumice, pumicite, cinders, clay, and other similar materials. Such mineral materials include deposits which, although they have economic value, are used for agriculture, animal husbandry, building, abrasion, construction, landscaping, and similar uses.

36 CFR § 228.41(c).

B. Exclusions from the Common Varieties Act

Minerals are excluded from the Common Varieties Act if the mineral deposit has some property "giving it distinct and special value":

"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. Federal regulations promulgated under 30 U.S.C. § 611 further clarify the exclusion categories:

Minerals not covered by this supbart. Mineral materials do not include any mineral used in manufacturing, industrial processing, or chemical operations for which no other mineral can be substituted due to unique properties giving the particular mineral a distinct and special

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value; nor do they include block pumice which in nature occurs in pieces having one dimension of two inches or more which is valuable and used for some application that requires such dimensions.

36, CFR § 228.41(d). In addition, § 228.41(e) states that "use" of a mineral could transform a common variety mineral into an uncommon variety (which is another way of excluding that mineral from the regulation's disposal requirements): "A use which qualifies a mineral as an uncommon variety under paragraph (d) overrides classification of that mineral as a common variety under paragraph (c) of this section."

The disposal of minerals which are excluded under the Common Varieties Act is covered under the provisions of the General Mining Law. 36 CFR § 228.41(d). The regulations pertaining to mining operations conducted under the General Mining Laws of 1872 are found in Subpart A regulations, as opposed to the Subpart C regulations which address disposal of common variety minerals. Subpart A regulations include requirements for how mining operations are to be conducted, including the submission and approval of a "plan of operations" for any mining activity. 36 CFR § 228.2 Subpart A. These regulations also provide for the issuance of a notice of noncompliance if a mining operator is not in compliance with the plan of operation and if the noncompliance is causing injury, damage or loss to surface resources — much like the Notice of Noncompliance which led to this appeal."

II. Factual Background to this Case

A. Cook's Mining Claims

Copar is a family business owned by Richard Cook and his family. In the late 1980's, Richard Cook started the development and marketing of twenty-three mining claims, known as the Brown Placer Claims, which were located in the Jemez Mountains in New Mexico. Four of these claims, 9-12 are the claims which form the El Cajete mine, which are at issue in this appeal. Plaintiff filed patents for locatable pumice on these claims. While Mr. Cook was waiting for the second half of his two-part patent application to be issued, Congress passed the Jemez National Recreation Area Act ("JNRAA"), 16 U.S.C. § 460jjj(a)(2), which closed that area to mining claims. This meant that no more patents could be issued after May 30, 1991, and the lands were no longer available for the location of valuable mining claims, or the removal of nonvaluable (or common variety) mineral materials. Persons who had then-existing mining claims in the Jemez area were told to file a "taking without just compensation" claim for the loss of patent rights (16 U.S.C. § 460 jjj-(a)(2)).

Copar filed a takings claim in Federal Claims Court in order to claim the loss of his patent rights. The Federal Claims case was brought by Mr. Cook and his daughter, Kelly Armstrong. See, Cook v. U.S., 42 Fed.Cl. 788, 792-3 (1999). Around the same time, the Forest Service conducted a mineral classification determination on Mr. Cook's claims, and subsequently issued a Classification Report which noted that the Brown Placer claims 9-12 contained pumice...