Hickel v. Oil Shale Corp

• Decision Date: 08 December 1970
• Docket Number: No. 25,25
• Citation: 400 U.S. 48,91 S.Ct. 196,27 L.Ed.2d 193
• Parties: HICKEL, Secretary of the Interior v. OIL SHALE CORP. et al
• Court: U.S. Supreme Court

400 U.S. 48

91 S.Ct. 196

27 L.Ed.2d 193

HICKEL, Secretary of the Interior

v OIL SHALE CORP. et al.

No. 25.

Argued Oct. 22, 1970.

Decided Dec. 8, 1970.

Syllabus

The General Mining Act of 1872 provided that until a patent issued for a mineral location on lands belonging to the United States 'not less than $100 worth of labor shall be performed or improvements made during each year,' and that a patent could issue on a showing that the claimant had expended $500 of labor or improvements on the claim. Failure to do the assessment work generally entitled others to relocate the claim. Under the Mineral Leasing Act of 1920 lands theretofore open to location and acquisition of title became available only on a lease basis, but a Saving Clause covered valid claims existent on February 25, 1920, 'and thereafter maintained in compliance with the laws under which initiated.' All the claims involved in this suit were cancelled by the Secretary of the Interior in the early 1930's because the annual assessment work, required by the 1872 Act, had not been performed. In attempting to establish their oil shale claims in Colorado under the 1872 Act, respondents brought this action in the District Court to require the Secretary of the Interior to patent the claims or to expunge his rulings cancelling the claims for lack of annual assessment work and to enjoin him from enforcing them. The District Court and the Court of Appeals, ruling in favor of respondents, held that the Department of the Interior had no jurisdiction to cancel the claims. The courts relied on Wilbur v. U.S. ex rel. Krushnic, 280 U.S. 306, 50 S.Ct. 103, 74 L.Ed. 445, and Ickes v. Virginia-Colorado Development Corp., 295 U.S. 639, 55 S.Ct. 888, 79 L.Ed. 1627, where this Court declined to interpret the Mineral Leasing Act as requiring the return to the Government of full possessory rights to lands subject to oil shale claims for defaults in assessment work. The decisions indicated that failure to perform such work made the claims subject to relocation by others but not forfeiture to the Government. Held: The Saving Clause of the Mineral Leasing Act makes the United States the beneficiary of all claims that are invalid for lack of assessment work or otherwise, and the Department of the Interior had subject matter jurisdiction to determine whether respondents' claims were 'maintained' within the meaning of that clause, including the per- formance of adequate assessment work. Krushnic, supra, and Virginia-Colorado, supra, must be confined to situations where there has been substantial compliance with the assessment work. Pp. 51-58.

406 F.2d 759, reversed and remanded.

Peter L. Strauss, Washington, D.C., for petitioner.

Fowler Hamilton, New York City, for respondents.

Mr. Justice DOUGLAS delivered the opinion of the Court.

This case involves six groups of claims to oil shale located in Colorado and asserted under the General Mining Act of 1872, 17 Stat. 91, now 30 U.S.C. §§ 22, 26, 28, and 29. Section 28 provides that until a patent issued 'not less than $100 worth of labor shall be performed or improvements made during each year.'¹ And § 29 provides that a patent to the claim could issue on a showing that the claimant had expended $500 worth of labor or improvements on the claim. These claims are not patented and were canceled in the early 1930's on the ground that the amount of labor or improvements specified in § 28 had not been made 'during each year.'²

Some of the claimants in this case applied for patents between 1955 and 1962. The General Land Office rejected the patent applications because the claims had been canceled. On appeal, the Secretary of the Interior, acting through the Solicitor, ruled that these cancellations were effective, later judicial determinations of the invalidity of the grounds for cancellation notwithstanding. Union Oil Co., 71 I.D. 169.³ These claimants then sought an order to compel the Department to issue the patents. They argued that the Land Office was without authority to cancel the claims when it did and that the Secretary of the Interior had nullified all the contest proceedings in 1935. In the alternative, they sought judicial review of those contest rulings. Respondent Oil Shale Corp. commenced this action in the District Court, not to require the Secretary to issue a patent, but to expunge the rulings of the Secretary canceling the claims and to enjoin him from enforcing them. All the cases were consolidated for trial in the District Court. The District Court granted the relief, 261 F.Supp. 954, and the Court of Appeals affirmed, 406 F.2d 759, both holding that cancellations for lack of assessment work were void because the Department did not have jurisdiction over the subject matter. The case is here on petition for certiorari, which we granted to consider whether Wilbur v. U.S. ex rel. Krushnic, 280 U.S. 306, 50 S.Ct. 103, 74 L.Ed. 445, and Ickes v. Virginia-Colorado Development Corp., 295 U.S. 639, 55 S.Ct. 888, 79 L.Ed. 1627, had been correctly construed and applied to invalidate the Secretary's action in protection of the public domain.

Before a we come to a consideration of the Krushnic and Virginia-Colorado cases it should be noted that in 1920, Congress by enacting § 21 of the Mineral Lands Leasing Act, 41 Stat. 445, 30 U.S.C. § 241(a), completely changed the national policy over the disposition of oil shale lands. Thereafter such lands were no longer open to location and acquisition of title but only to lease. But § 37 contained a Saving Clause which covered 'valid claims existent on February 25, 1920, and thereafter maintained in compliance with the laws under which initiated, which claims may be perfected under such laws, including discovery.' 30 U.S.C. § 193. Respondents contend that their claims fall within that exception.

Respondents assert that a like claim was recognized and approved in the Krushnic case. In that case, however, labor in the statutory amount had been performed, including the aggregate amount of $500. The only default was in the failure to perform labor for one year during the period. Mandamus for the issuance of a patent was directed, the Court saying:

'Prior to the passage of the Leasing Act, annual performance of labor was not necessary to preserve the possessory right, with all the incidents of ownership * * *, as against the United States, but only as against subsequent relocators. So far as the government was concerned, failure to do assessment work for any year was without effect. Whenever $500 worth of labor in the aggregate had been performed, other requirements aside, the owner became entitled to a patent, even though in some years annual assessment labor had been omitted.' 280 U.S., at 317, 50 S.Ct., at 104.

The Court further held that the claims were 'maintained' within the Saving Clause of the Leasing Act by a resumption of the assessment work before a challenge of the claim by the United States had intervened.

Virginia-Colorado also involved claims on which labor had been expended except for one year. It was alleged, however, that the claimant had planned to resume the assessment work but for the Secretary's adverse action and that the claims had not been abandoned. The Court held that the claims had been 'maintained' within the meaning of the Saving Clause of the Leasing Act of 1920.

Those two cases reflect a judicial attitude of fair treatment for claimants who have substantially completed the assessment work required by 30 U.S.C. § 28. There are, however, dicta both in Virginia-Colorado and in Krushnic that the failure to do assessment work gives the Government no ground for forfeiture but inures only to the benefit of relocators.

Indeed 30 U.S.C. § 28, which derives from the 1872 Act, as already noted,⁴ provides that upon the failure to do the assessment work, 'the claim or mine upon which such failure occurred shall be open to relocation in the same manner as if no location of the same had ever been made,' provided the assessment work has not been 'resumed' upon the claim 'after failure and before such location.' It is therefore argued that so far as the 1872 Act is concerned the failure to do the assessment work concerns not the Government but only 'rival or adverse claimants.'⁵

The problem in those two cases and the present one concerns the Saving Clause in the Leasing Act which, as noted, makes available for patent 'valid claims existent on February 25, 1920, and thereafter maintained in compliance with the laws under which initiated.' Concededly, failure to maintain a claim made it 'subject to disposition only' by leasing by the United States. See § 37 of the 1920 Act, 30 U.S.C. § 193. Hence if we assume, arguendo, that failure to do assessment work as provided in the 1872 Act concerned at the time only the claimant and any subsequent relocator, the United States, speaking through the Secretary of the Interior, became a vitally interested party by reason of the 1920 Act. For it was by that Act that Congress reclaimed portions of the public domain so that land might be disposed of by a different procedure (leasing) to the same end (oil shale production⁶) or devoted to wholly different purposes⁷ within the purview of public policy as determined by Congress.

It appears that shortly before 1920 oil shale claims were affected by a speculative fever. Then came a period of calm. By the late forties and continuing into the sixties speculators sought out the original locators or their heirs, obtained quitclaim deeds from them, and thereupon eliminated all other record titleholders by performing assessment work for one year.⁸ It appears that 94 of the 98 claims involved in the present litigation were of that character. There is nothing reprehensible in the practice, if the procedure is one which Congress has approved. But the command of the 1872 Act is that assessment work of $100 be done 'during each year' and the Saving Clause of § 37 of the 1920 Act requires...