Independence Mining Co. v. Babbitt

• Decision Date: 07 April 1995
• Docket Number: No. CV-N-94-609-ECR.,CV-N-94-609-ECR.
• Citation: 885 F. Supp. 1356
• Parties: INDEPENDENCE MINING CO., Plaintiff, v. Bruce BABBITT, in his capacity as Secretary of the United States Department of the Interior, et al., Defendants.
• Court: U.S. District Court — District of Nevada

885 F. Supp. 1356

INDEPENDENCE MINING CO., Plaintiff, v. Bruce BABBITT, in his capacity as Secretary of the United States Department of the Interior, et al., Defendants.

No. CV-N-94-609-ECR.

United States District Court, D. Nevada.

February 6, 1995.

Order Denying Reconsideration April 7, 1995.

Earl M. Hill and Ross E. deLipkau, of Marshall, Hill, Cassas & deLipkau, Reno, NV and Steven P. Quarles and R. Timothy McCrum, and Mark C. Kalpin of Crowell & Moring, Washington, DC, for plaintiff.

Shirley Smith, Asst. U.S. Atty., Reno, NV, for defendants.

ORDER

EDWARD C. REED, Jr., District Judge.

Independence Mining Company ("IMC") is the majority partner in a joint venture which operates the Jerritt Canyon Mine and Mill in Elko County, in eastern Nevada. Between February 1991 and September 1992, IMC filed twelve applications for patents covering a total of seventy-two lode mining claims and 156 millsites. Years have passed; no patents have been issued. Frustrated by the delay, IMC seeks to compel the Secretary to either issue the patents or deny the applications, within the next thirty to ninety days. The case is here on the parties' cross-motions for summary judgment.¹ Mandamus will not issue, and the government's motion for summary judgment will be granted.

The governing statute is the General Mining Law of 1872, codified at 30 U.S.C. §§ 22 et seq. It provides that

an individual may enter and explore land in the public domain in search of valuable mineral deposits. After minerals are discovered, the claimant may file a `mining claim' with the Bureau of Land Management (BLM), which if approved, entitles the claimant to the right of exclusive possession of that claim, as long as the requirements of the Mining Act are met. Although ownership of a mining claim does not confer fee title to the claimant, the claimant does have the right to extract all minerals from the claim without paying royalties to the United States. In addition, a claimant may file a claim for a `mill site,' which is `nonmineral land ... which is used or occupied by the proprietor ... for mining or milling purposes.' A mill site is a tract of land, not to exceed five acres, on which can be placed processing facilities and other structures used to support the extraction of minerals from the claim. A claimant must follow essentially the same process to obtain a mill site as a mining claim.

An individual who possesses a valid mining claim may go through an additional process to obtain a patent, `thereby purchasing from the Federal Government the land and minerals and obtaining ultimate title to them. Patenting, however, is not required, and an unpatented mining claim remains a fully recognized possessory interest.' A patented mining claim is one in which the government has passed its title to the claimant, giving him exclusive title to the locatable minerals, and, in most cases, the surface and all resources.... Mill sites may also be patented.

Swanson v. Babbitt, 3 F.3d 1348, 1350 (9th Cir.1993) (citations omitted); see also California Coastal Comm'n v. Granite Rock Co., 480 U.S. 572, 575-76, 107 S.Ct. 1419, 1422-23, 94 L.Ed.2d 577 (1987) (citations omitted).²

IMC paid for the mining claims and millsites at various times between 1991 and 1993, and received "first half final certificates."³ At issue here are IMC's applications for patents, which would convey legal title and full ownership. It is a basic proposition of mining law that "the right to a patent immediately arises" when the purchase price is paid. Marathon Oil Co., 751 F.Supp. at 1458 n. 10 (quoting Benson Mining Co. v. Alta Mining Co., 145 U.S. 428, 431-32, 12 S.Ct. 877, 878-79, 36 L.Ed. 762 (1891)) (collecting cases). But that is so only if the patent application is valid:

The right to a patent accrues when the claimant has filed a proper patent application and has paid his fee, regardless of when the Department of the Interior fulfills its purely administerial sic function of issuing the patent....

For a patent right to vest upon application, however, the patent application must have been valid under existing law and the delay in the patent issuance must have been attributed to mere administerial sic delay in processing the otherwise valid application.

Swanson, 3 F.3d at 1353. Hence this dispute. Although IMC's patent applications have been pending for between two and one-half and four years, the Secretary has yet to pass on their validity.

Two stages of the patent application approval process are relevant here. The first stage involves mineral examinations and reports. After an FHFC has been issued, a mineral examiner, certified by the BLM, must "verify the applicant's compliance with the requirements of the mining laws by conducting a mineral examination of the mining claim or millsite." BLM Manual, at VII-1.⁴ The mineral examiner's report "documents the results of the ... field investigation of the mining claim or mill site and also contains the ... examiner's conclusions concerning ... validity and recommendations to management for future actions." Id. at VII-3.

The second stage involves a process that may be termed "secretarial review." Until early 1993, patents could be issued by various Interior Department officials, including the BLM director in each state. See U.S. Dep't of the Interior, Order No. 3163: Delegations—Patenting of Mining Claims (March 2, 1993) ("Order 3163").⁵ On March 2, 1993, Secretary Babbitt issued Order 3163, which revoked the "existing delegations allowing subordinate officials within the Department of the Interior to issue ... patents under the authority of the Mining Law of 1872," so that the Secretary could "assume the review and issuance of patents during the consideration by the 103d Congress of bills which, if adopted, would reform the mining laws...." Patents that could once have been issued by local BLM officials now can be issued only with the approval of the Secretary himself. And patent applications reach the Secretary only after wending their way through a protracted and byzantine process of multi-level administrative review.⁶

The twelve applications fall into two groups, each stuck at a different stage in the process. Three applications (numbers N-54147, N-54148 and N-54149) were filed in February 1991; they cover a total of twelve lode mining claims. A draft mineral examiner's report on these claims was completed in April 1993; they were approved by BLM in November 1994 and now are awaiting the "secretarial review" described above. The other applications, filed between May 1991 and September 1992, cover the other sixty lode mining claims and 156 millsites; no mineral examination has been conducted on them, and no report prepared.

As noted above, IMC complains that secretarial review of its first three applications, and mineral examinations and reports on its other applications, have been unreasonably delayed. It asks the court to order the Secretary to complete these tasks within the thirty to ninety days. It should be emphasized that what IMC complains of is unreasonable delay. It does not claim that the requirement of a mineral examination and report is itself improper, but rather that BLM has taken too long to perform the examinations and write the reports. It does not argue that the Secretary had no right to revoke his subordinates' power to issue patents and introduce instead the process of "secretarial review" described above,⁷ but rather that the review process is proceeding too slowly. And IMC does not ask that the Secretary be compelled to approve the applications and issue the patents, but simply that he be compelled to make a decision on the applications, one way or the other.⁸

The law in this area has been summarized as follows:

In the context of a claim of unreasonable delay, the first stage of judicial inquiry is to consider whether the agency's delay is so egregious as to warrant mandamus.... On reading the cases together, one can discern the hexagonal contours of a standard. Although the standard is hardly ironclad, ... it nevertheless provides useful guidance in assessing claims of agency delay: (1) the time agencies take to make decisions must be governed by a "rule of reason"; (2) where Congress has provided a timetable or other indication of the speed with which it expects the agency to proceed in the enabling statute, that statutory scheme may supply content for this rule of reason; (3) delays that might be reasonable in the sphere of economic regulation are less tolerable when human health and welfare are at stake; (4) the court should consider the effect of expediting delayed action on agency activities of a higher or competing priority; (5) the court should also take into account the nature and extent of the interests prejudiced by the delay; and (6) the court need not `find any impropriety lurking behind agency lassitude in order to hold that agency action is "unreasonably delayed."'

Telecommunications Research & Action v. F.C.C., 750 F.2d 70, 79-80 (D.C.Cir.1984) (citations omitted) ("TRAC"); see also In re Barr Laboratories, Inc., 930 F.2d 72 (D.C.Cir.1991).⁹

A. The Claims Awaiting Mineral Examinations and Reports.

Mandamus relief is inappropriate with respect to the claims awaiting mineral examinations and reports.¹⁰ According to BLM itself, the mineral examination and report stage of the process should take one year, and processing of patent applications "from start to complaint or patent issuance" two years. BLM Manual, at II-4. Unfortunately, the process in real life moves more slowly. The facts are not disputed. According to BLM, it received 59 mineral patent applications in 1988; in 1993, it received 154. Doc. # 11, Exh. "E" (Decl. of Brenda Aird), at 2. While the number of applications was rising, the number of mineral examiners was falling, from about 130 before 1990 to only 52 in November 1994. Id. The result of these trends is not surprising: in 1992, 129 patent applications were...