Humboldt Placer Mining Co. v. Secretary of Dept. of Interior of U.S.

• Citation: 549 F.2d 622
• Decision Date: 06 January 1977
• Docket Number: No. 74-2762,74-2762
• Parties: HUMBOLDT PLACER MINING COMPANY, a corporation, and Del De Rosier, Plaintiffs-Appellants, v. SECRETARY OF the DEPARTMENT OF the INTERIOR OF the UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 622

549 F.2d 622

HUMBOLDT PLACER MINING COMPANY, a corporation, and Del De

Rosier, Plaintiffs-Appellants, v. SECRETARY OF the DEPARTMENT OF the INTERIOR OF the UNITED

STATES of America, Defendant-Appellee.

No. 74-2762.

United States Court of Appeals, Ninth Circuit.

Jan. 6, 1977.

Rehearing and Rehearing En Banc Denied March 28, 1977.

William B. Murray (argued), Portland, Or., for plaintiffs-appellants.

Edmund B. Clark, Atty. (argued), of Appellate Sec., Land and NRS, Dept. of Justice, Washington, D. C., for defendant-appellee.

Before MERRILL and HUFSTEDLER, Circuit Judges, and JAMESON, ^* District Judge.

MERRILL, Circuit Judge:

At issue are appellants' rights to compensation for the seizure by the United States of appellants' interests in certain unpatented placer mining claims, located on Stuart's Fork of the Trinity River in Trinity County, California. On June 27, 1957, the United States commenced a condemnation action in the District Court for the Northern District of California to secure title to these claims and other property for use in connection with the construction of Trinity Dam and Reservoir. Later, on March 17, 1960, the Secretary of the Interior commenced administrative proceedings to contest the validity of the claims. The jurisdictional propriety of these proceedings was challenged but ultimately upheld. Best v. Humboldt Mining Co., 371 U.S. 334, 83 S.Ct. 379, 9 L.Ed.2d 350 (1963). In this action appellants seek judicial review of those proceedings.

Appellants' claims were all located more than fifty years ago, but applications for patents were not made until 1954. The discovery originally claimed was of gold, assertedly embedded in the gravel of what is known as the Weaverville Formation on Stuart's Fork. The appellants' claims are northeast of the LaGrange mine, which is on the same Weaverville Formation and for many years was operated with apparent success.

Before a hearing examiner of the Bureau of Land Management, appellants asserted that the claims had value not only as a gold placer but also as a gravel deposit. Under the Act of July 23, 1955, 30 U.S.C. § 611, deposits of "common varieties" of gravel are declared not to be valuable mineral deposits within the meaning of the mining laws. Thus the facts present four dates having varying points of relevance: that of the patent application in 1954, that of the effective date of the common varieties act in 1955, that of the taking of the claims by the United States in 1957 and that of the filing of contest by the United States in 1960. Arguments can be advanced in support of any one of them as the critical date for ascertainment of either gold or gravel value. We resist the temptation to resolve the question. Instead, we assume for the purposes of this case that if value existed on any one date, it existed on all.

The hearing examiner held that value was lacking both as to gold and as to gravel. His decision was upheld by the Interior Board of Land Appeals (IBLA). United States v. Humboldt Placer Mining Co., 8 I.B.L.A. 407 (1972). Appellants then sought judicial review and reversal of the IBLA decision. The district court granted summary judgment in favor of the Secretary and this appeal followed. We affirm.

Gold

In support of its contest the United States conducted a comprehensive exploration program on the claims between 1957 and 1961. ¹ Four mining engineers and geologists testified before the hearing examiner that as a result of this exploration program they had formed the opinion that on none of the claims had there been a valid discovery of gold of value sufficient to meet the prudent-man test. See United States v. Coleman, 390 U.S. 599, 602, 88 S.Ct. 1327, 20 L.Ed.2d 170 (1968), citing the standards set in Castle v. Womble, 19 L.D. 455, 457 (1894): "Where minerals have been found and the evidence is 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."

In support of their claim of gold value, appellants submitted various reports. The hearing examiner acted well within his discretion as a finder of fact in discounting these reports. Some of them were business records of the appellants, written prior to 1942. While they reflected some significant gold values, they were very general. The appellants also submitted a report by Merrill Yost which included some drill logs and contained evidence of high gold values. This evidence, however, was refuted by the appellee's sampling conducted in the immediate vicinity of Yost's excavations and drill holes. Moreover, Yost did not testify and subject himself to cross-examination to support his report, although he was apparently available. In weighing the evidence, the hearing examiner could reasonably have found the appellants' reports to be unpersuasive.

Much of appellants' case was based on the fact that the claims were on the Weaverville Formation, the value of which had been established by the success of the LaGrange mine. Discovery must, however, be made on the claims themselves. The LaGrange proximity might indeed persuade a reasonable prospector to continue to search for valuable minerals, but he must succeed in his search before discovery occurs. Henault Mining Co. v. Tysk, 419 F.2d 766 (9th Cir.), cert. denied, 398 U.S. 950, 90 S.Ct. 1869, 26 L.Ed.2d 290 (1970). The reasonably prudent man we are concerned with is the miner who has made his discovery and not the prospector who is still looking.

Appellants also rely on testimony by Florian Gibson, a geologist, that the claims had high value placer gold deposits. As to this testimony the hearing examiner stated:

"The fantastic gold values reported by Gibson were based on surface samples taken over a five hour period, as contrasted with the extensive exploration program conducted by the Contestant involving several man-years. The samples were assayed by the so-called Douglas process involving the use of unidentified solutions. There is no supporting evidence of the nature of the unidentified solutions or positive evidence of the process by which the gold could be recovered. Gold values averaging one hundred dollars per cubic yard, consisting of either coarse or microscopic particles, would surely be identifiable by normal fire assay. The Douglas tests reflecting average gold values of one hundred dollars per cubic yard, and as high as two hundred dollars gold per cubic yard of material in place, are simply unworthy of belief."

Appellants criticized the exploratory work of the government as not extensive enough to establish a lack of value. They assert that the government drill holes should have been extended down to bedrock, where gold is most likely to lodge. Appellants, however, mistake the burden of proof in these cases. The burden of the United States in contesting validity is to make out a prima facie case of lack of value. The burden then shifts to the claimant to show, by a preponderance of evidence, that the claim is valid. United States v. Springer, 491 F.2d 239, 242 (9th Cir.), cert. denied, 419 U.S. 834, 95 S.Ct. 60, 42 L.Ed.2d 125 (1974); United States v. Zweifel, 508 F.2d 1150, 1157 (10th Cir.), cert. denied, 423 U.S. 829, 96 S.Ct. 47, 46 L.Ed.2d 46, reh. denied, 423 U.S. 1008, 96 S.Ct. 438, 46 L.Ed.2d 379 (1975). The United States here undoubtedly had established a prima facie case. If anyone had the burden of going to...