Getty Oil Co. v. Andrus
| Decision Date | 29 June 1977 |
| Docket Number | No. CV 75-1280-AAH.,CV 75-1280-AAH. |
| Citation | 433 F. Supp. 1317 |
| Court | U.S. District Court — Central District of California |
| Parties | GETTY OIL COMPANY, a corporation, and Mono Power Company, a corporation, Plaintiffs, v. Cecil D. ANDRUS, Secretary of Interior of the United States of America, Geothermal Resources International, Inc., a corporation, and Chevron Oil Company, a corporation, Defendants. |
COPYRIGHT MATERIAL OMITTED
Hanna & Morton by Edward S. Renwick, and Edward D. MacFarlane, Los Angeles, Cal., for plaintiffs.
William D. Keller, U. S. Atty. by Donald J. Merriman, Asst. U. S. Atty., Los Angeles, Cal., for defendant Cecil D. Andrus.
Costello, Manfredi & Thorpe by George A. Manfredi and Brien F. McMahon, Los Angeles, Cal., for defendant Geothermal Resources Intern., Inc.
Pillsbury, Madison & Sutro by Donald E. Peterson, San Francisco, Cal., for defendant Chevron Oil Co.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The above-entitled cause came on regularly for trial on April 11, 1977 in the above-entitled Court, the Honorable A. Andrew Hauk, Judge, presiding, sitting without a jury.
The parties having submitted extensive trial briefs, the matter was tried on April 11, 1977 whereupon documentary evidence was introduced, offers of proof were made, and the cause was argued by counsel and submitted for decision. The Court having reviewed and considered the evidence, read the parties' briefs, and considered the arguments of counsel, and the matter having been submitted for decision, the Court being fully advised in the premises, now renders its Findings of Fact and Conclusions of Law as follows:
FINDINGS OF FACT
1. Plaintiff Mono Power Company (hereinafter "Mono") is and at all times material hereto was a corporation existing under the laws of the State of California, with its principal place of business in the City of Rosemead, County of Los Angeles, within the Central District of California.
2. Plaintiff Getty Oil Company (hereinafter "Getty") is and at all times material hereto was a corporation existing under the laws of the State of Delaware, with its principal place of business in the City of Los Angeles, County of Los Angeles, within the Central District of California.
3. Defendant Geothermal Resources International, Inc. (hereinafter "GRI") is and at all times material hereto was a corporation existing under the laws of the State of Delaware, with its principal place of business in the City of Los Angeles at Marina del Rey, County of Los Angeles, within the Central District of California. At all times material hereto, GRI was and is conducting business within the Central District of California.
4. Defendant Chevron Oil Company (hereinafter "Chevron") is and at all times material hereto was a corporation existing under the laws of the State of California, with its principal place of business in the City of San Francisco, California. At all times material hereto, Chevron was and is conducting business within the Central District of California.
5. At the time of the trial of this action, Cecil D. Andrus was and now is Secretary of Interior of the United States of America. Prior to Cecil D. Andrus' becoming Secretary of Interior, Thomas S. Kleppe was Secretary of Interior. Prior thereto, Stanley K. Hathaway was Secretary of Interior. Prior thereto, Rogers C. B. Morton was Secretary of Interior.
6. This is an action for judicial review under the Administrative Procedure Act ("APA") of a decision of the Secretary of Interior (hereinafter "the Secretary") approving defendant GRI's application to convert certain placer mining claims to federal geothermal steam leases pursuant to the Geothermal Steam Act of 1970 (30 U.S.C.A. §§ 1001-1025) (hereinafter "the Act"), and the Secretary's subsequent issuance of a geothermal lease to GRI.
7. The administrative record before the Department of Interior consisted of Exhibits 1-A through 1-G received in evidence by this Court and has been numbered consecutively from pages 1 through 684, inclusive. As disclosed by the administrative record, the facts surrounding the Secretary's consideration and approval of GRI's application are as follows:
8. In 1959, Magma Power Company ("Magma") acquired a group of geothermal leases on private lands in the Casa Diablo-Long Valley area of California. Magma concluded that a viable commercial development of the area for geothermal purposes was not possible without the inclusion of nearby federal lands and that placer mining claims were the appropriate way to obtain geothermal rights on those lands. Consequently, in 1959, Magma proceeded to acquire certain placer mining claims within that area.
9. During 1959, Magma and an associate, Nevada Thermal Power Company ("Nevada"), commenced exploration and development in the Casa Diablo area and expended substantial sums for the actual drilling of wells. However, by 1960 it became apparent to Magma and Nevada that a large amount of capital — in excess of Magma's financial capabilities — would be needed to develop the prospect to the point where a utility company would be interested in buying the geothermal steam. (A.R., 563-65) Accordingly, in July, 1960, Magma and Nevada entered into a partnership agreement with Endogenous Power Company ("Endogenous"), a California limited partnership formed for the express purpose of financing the exploration and development of the lands in the "Mammoth area." (A.R., 561-62, 565, 574-85) The partnership among Magma, Nevada and Endogenous was known as the "Magma-Endogenous Power Project." (A.R., 575) The partnership agreement provided that the funds contributed by Endogenous were to be expended for the "exploration for and development of natural steam, steam power and thermal energy" from the "lands situated within an area ten (10) miles in all directions from the outer boundaries of the lease known and described as the Ritchie Lease . . .." (A.R., 574-76) The lands so described included the federal lands at issue in this action. (A.R., 576, 669)
10. During 1962, the Endogenous partners, in effect, incorporated the partnership by exchanging all of its assets for all of the stock of Natural Steam Corporation. In 1965, Natural Steam Corporation, Vulcan Thermal Power Company, Hawaii Thermal Power Company and Tecopa Development Company merged into a single company which ultimately changed its name to Geothermal Resources International, Inc. ("GRI"). (A.R., 562)
11. On or about June 8, 1961, the Secretary of Interior announced that the Department considered the drilling for geothermal steam on public lands a trespass and ordered that no further drilling take place on federal lands. (A.R., 565, 673) Accordingly, the exploration work financed by GRI was confined to drilling on private lands or to annual assessment work with respect to mining claims on the federal domain. (A.R., 566-67, 669)
12. From 1960 through 1972, GRI — known for part of that time as Endogenous or Natural Steam — made expenditures totalling not less than $352,714.37 for the exploration, development or production of geothermal steam on private lands approximately three to seven miles from the federal lands at issue in this action. (A.R., 100-151, 561-69, 660-63, 669) Of this amount, $342,714.37 was expended by GRI prior to December 24, 1970. (A.R., 660-65) 13. There is no evidence in the administrative record that Standard Industrial Minerals, Inc. ("Standard Industrial") made any expenditures for the exploration, development or production of geothermal steam. The Secretary's reference, in his February 13, 1975 dismissal of plaintiffs' protest, to "Standard Industrial" as the entity which made substantial geothermal expenditures was erroneous. Why it was done does not appear.
14. The Ninety-First Congress enacted the Geothermal Steam Act for the purpose of making geothermal steam and associated resources on the public domain available for exploration and development. The Act became effective on December 24, 1970.
15. On January 14, 1971, the Secretary gave notice to prospective applicants for conversion rights under the Act of the procedure to be followed in claiming conversion rights. The notice was published in the Federal Register on Friday, January 15, 1971 (Vol. 36, No. 10, at 623).
16. On March 26, 1971, by instrument entitled Assignment of Placer Mining Claims and recorded in Mono County, California on December 17, 1973 in Volume 163, page 80, Standard Industrial sold, assigned, transferred and conveyed to Magma certain placer mining claims commonly known as Little Antelope Nos. 5 and 6, Kaolinite Nos. 1 to 55, inclusive, and Huntley Placer Nos. 1 to 41, inclusive. (A.R., 169-78)
17. On June 15, 1971, by instrument entitled "Assignment of Placer Mining Claims" and recorded in Mono County, California on December 6, 1974 in Volume 179, page 155, Magma transferred, assigned and conveyed to GRI certain of the placer mining claims Magma had acquired from Standard Industrial, consisting of Huntley No. 33 and Kaolinite Nos. 22 to 50, inclusive. (A.R., 179-86)
18. On June 22, 1971, counsel for GRI, Mr. Joseph Aidlin, filed GRI's "Application to Convert Placer Mining Claims on the Public Domain to Federal Geothermal Leases" with the Sacramento office of the Bureau of Land Management (hereinafter the "Bureau"). Prior to June 22, Mr. Aidlin had been advised by Bureau employees in both the Sacramento and Riverside officers that GRI's application should be filed with the Sacramento office. The Bureau's Sacramento office accepted GRI's application on June 22 and several days later transmitted the application to the Riverside office. (A.R., 670-73) (Pretrial Conference Order, ¶ V(A))
19. As of September 7, 1965, the lands with respect to which GRI made its application were subject to the following existing mining claims:
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