Freeman v. U.S. Dep't of the Interior, Civil Case No. 12–1094 BAH

• Decision Date: 16 April 2014
• Docket Number: Civil Case No. 12–1094 BAH
• Citation: 37 F.Supp.3d 313
• Parties: Walter B. Freeman, Plaintiff, v. United States Department of the Interior, et al., Defendants.
• Court: U.S. District Court — District of Columbia

37 F.Supp.3d 313

Walter B. Freeman, Plaintiff

v.United States Department of the Interior, et al., Defendants.

Civil Case No. 12–1094 BAH

United States District Court, District of Columbia.

Signed April 16, 2014

Richard M. Stephens, Groen Stephens & Klinge LLP, Bellevue, WA, for Plaintiff.

Ruth Ann Storey, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

BERYL A. HOWELL, United States District Judge

The plaintiff Walter B. Freeman filed this action under the Administrative Procedures Act (“APA”), 5 U.S.C. § 706(2), against the United States Department of the Interior (“DOI”) and two of its components, the Interior Board of Land Appeals (“IBLA”) and the Bureau of Land Management (“BLM”), seeking to set aside two decisions of the IBLA relating to the plaintiff's mining rights, on the grounds that the decisions were arbitrary, capricious, and lacked substantial evidence. See Compl. at 19 (“Prayer for Relief”), ECF No. 1. Pending before the Court is the plaintiff's Motion for Partial Summary Judgment on his First Cause of Action, challenging the May 7, 2008 IBLA decision in United States v. Freeman, 174 IBLA 290 (2008) ( “2008 IBLA Decision”),¹ which upheld the jurisdiction of DOI's Office of Hearings and Appeals (“OHA”) to determine the validity of unpatented mining claims at historical dates when the claims were allegedly subject to a government taking within the meaning of the Fifth Amendment of the Constitution. Pl.'s Mot. Partial Summ. J. & Mem. Supp. (“Pl.'s Mot.”) at 2–3, ECF No. 15.² For the reasons explained below, the plaintiff's motion is denied and the 2008 IBLA Decision stands.³

I. BACKGROUND

The Court first briefly reviews the statutory and regulatory framework for assessing the validity of mining claims under the General Mining Law of 1872 (“Mining Law”), 30 U.S.C. §§ 22 –54 (2006), before turning to a summary of the two decades of administrative proceedings that have culminated in this lawsuit.

A. Statutory and Regulatory Framework

“To encourage mining in the western United States, Congress enacted the General Mining Act of 1872.” Orion Reserves Ltd. P'ship v. Salazar, 553 F.3d 697, 699 (D.C.Cir.2009) ; see also Watt v. W. Nuclear, 462 U.S. 36, 47–49, 103 S.Ct. 2218, 76 L.Ed.2d 400 (1983) (noting that “[w]ith respect to land deemed mineral in character, the mining laws provided incentives for the discovery and exploitation of minerals”). As an incentive to explore for valuable mineral deposits, the Mining Law permits citizens “to go onto unappropriated, unreserved public land,” United States v. Locke, 471 U.S. 84, 86, 105 S.Ct. 1785, 85 L.Ed.2d 64 (1985), and to “stake, or locate, claims to extract minerals without prior government permission and without paying royalties to the United States.” Orion Reserves, 553 F.3d at 699 (citing 30 U.S.C. § 26 ) (internal quotation marks omitted); see also Kunkes v. United States, 78 F.3d 1549, 1551 (Fed.Cir.1996) ; Cook v. United States, 85 Fed.Cl. 820, 823 (2009), aff'd, 368 Fed.Appx. 143 (Fed.Cir.2010) ; Freese v. United States, 639 F.2d 754, 757–58 (Ct.Cl.1981).⁴ Those who locate “mining locations” on public land are expressly granted “the exclusive right of possession and enjoyment” but only “so long as they comply with the laws of the United States, and with State, territorial, and local regulations....” 30 U.S.C. § 26.

1. Requirements for Valid Mining Claim

Before a Congressional moratorium was enacted in 1994, claimants could “apply for purchase of a deed, or ‘patent,’ conveying full legal title to the land on which their claims are located.” Orion Reserves, 553 F.3d at 699 (citing 30 U.S.C. § 29 ).⁵ To qualify for a patent, the applicant must establish that the mining claim is valid. United States v. Shumway, 199 F.3d 1093, 1101–02 (9th Cir.1999) (“[N]o right arose from an invalid claim.”). The D.C. Circuit has pointed out, however, that “[e]ven without a patent, claimants can maintain their mining rights indefinitely so long as they comply with federal, state, and local requirements” for a valid claim. Orion Reserves, 553 F.3d at 699 (citing 30 U.S.C. §§ 26, 28 ). These possessory interests are “unpatented” claims and give the owner equitable title, as opposed to “patented” claims, in which a private owner has been bestowed full legal title. Kunkes v. United States, 32 Fed.Cl. 249, 252 (Fed.Cl.1994), aff'd, 78 F.3d 1549 (Fed.Cir.1996) (noting that for an unpatented claim “legal title to the land remains in the United States, [but] the claimant enjoys a valid, equitable title in the claim, possessing all of the incidents of real property”); Ford v. United States, 101 Fed.Cl. 234, 238 n. 6 (Fed.Cl.2011) (“An unpatented mining claim is an interest in only the minerals in the land and not in the land's surface; the government retains fee title to the land.”).

An unpatented mining claim is valid against the United States only when both a discovery of valuable mineral deposit within the limits of the claim has been made, and the claimant has complied with all statutory and regulatory requirements relating to the location, recordation, and filing of claims. See 30 U.S.C. §§ 22, 26, 28, 28e.⁶ See also Best v. Humboldt Placer Mining Co., 371 U.S. 334, 336, 83 S.Ct. 379, 9 L.Ed.2d 350 (1963) (unpatented mining claims are “valid against the United States if there has been a discovery of mineral within the limits of the claim, if the lands are still mineral, and if other statutory requirements have been met”). As the Supreme Court explained almost a century ago, “no right arises from an invalid claim of any kind ... otherwise they work an unlawful private appropriation in derogation of the rights of the public.” Cameron v. United States, 252 U.S. 450, 460, 40 S.Ct. 410, 64 L.Ed. 659 (1920).

Thus, although a claimant may explore for mineral deposits before perfecting a mining claim, without a discovery, the claimant has no right to the property against the United States or an intervenor. 30 U.S.C. § 23 (mining claim perfected when there is a “discovery of the vein or lode”); see also Cole v. Ralph, 252 U.S. 286, 295–96, 40 S.Ct. 321, 64 L.Ed. 567 (1920) ; Waskey v. Hammer, 223 U.S. 85, 90, 32 S.Ct. 187, 56 L.Ed. 359 (1912) (noting that discovery is “a prerequisite to the location of the claim”); Am. Colloid Co. v. Babbitt, 145 F.3d 1152, 1156 (10th Cir.1998) ( “Before one may obtain any rights in a mining claim, one must ‘locate’ a valuable deposit of a mineral.”); Mineral Policy Ctr. v. Norton, 292 F.Supp.2d 30, 48 (D.D.C.2003) (“ ‘A mining claim does not create any rights against the United States and is not valid unless and until all requirements of the mining laws have been satisfied.’ ” (quoting Skaw v. United States, 13 Cl.Ct. 7, 28 (1987) )).

To satisfy the discovery requirement for a valid claim, the mere physical presence of a mineral is insufficient. Instead, “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, 20 L.Ed.2d 170 (1968) (internal quotations omitted); see also Cameron, 252 U.S. at 459, 40 S.Ct. 410 (“[T]o support a mining location the discovery should be such as would justify a person of ordinary prudence in the further expenditure of his time and means in an effort to develop a paying mine. That is not a novel or mistaken test, but is one which the Land Department long has applied and this court has approved.”); Davis v. Nelson, 329 F.2d 840, 846 (9th Cir.1964) ( “[V]alidity of [ ] title ... depends upon the resolution of a question of fact, that is, has there been a discovery of valuable mineral within the limits of the claim?”); Foster v. Seaton, 271 F.2d 836, 838 (D.C.Cir.1959). “The obvious intent was to reward and encourage the discovery of minerals that are valuable in an economic sense.” Coleman, 390 U.S. at 602, 88 S.Ct. 1327. If the discovered deposits fail the “prudent person” test, the Government has the right to clear the title and the right to the possession of its land from a “useless and annoying encumbrance.” Davis, 329 F.2d at 846 (quoting Mulkern v. Hammitt, 326 F.2d 896, 897 (9th Cir.1964) ).⁷ On the other hand, if the discovered deposits are valuable under the “prudent person” test, the unpatented mining claim “is a property right in the full sense, unaffected by the fact that the paramount title to the land is in the United States.” Union Oil Co. of Cal. v. Smith, 249 U.S. 337, 349, 39 S.Ct. 308, 63 L.Ed. 635 (1919). This constitutes a property interest, “which is within the protection of the Fifth Amendment's prohibition against the taking of private property for public use without just compensation.” Skaw v. United States, 740 F.2d 932, 936 (Fed.Cir.1984).

2. Administrative Review of Contested Claims

BLM is a subagency within DOI tasked with administering mining claims on federal public land. See generally 43 C.F.R. § 3809; Nat'l Wildlife Fed'n v. Burford, 835 F.2d 305, 307–08 (D.C.Cir.1987) (BLM is “the subagency of the Department charged with land management responsibilities, with permanent, comprehensive guidelines for carrying out its mandate”). To determine whether a claim is valid, BLM conducts a mineral examination. If the examination indicates the lack of discovery of a valuable mineral deposit or that the applicant failed to meet other administrative requirements under the Mining Law, the BLM may initiate an administrative mining contest proceeding to challenge the validity of the claim, since either of those examination results, if substantiated, may render the mining claimant ineligible for a patent.

Prior to validity proceedings, unpatented claims amount to a potential property interest, since it is the discovery of a valuable mineral deposit and satisfaction of statutory and regulatory requirements that bestows possessory rights. See Ickes v. Underwood, ...