Kunkes v. U.S., 95-5031

• Citation: 78 F.3d 1549
• Decision Date: 15 March 1996
• Docket Number: No. 95-5031,95-5031
• Parties: , 26 Envtl. L. Rep. 21,107 Charles R. KUNKES and Marguerite V. Kunkes, Plaintiffs-Appellants, v. The UNITED STATES, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1549

78 F.3d 1549

64 USLW 2589, 26 Envtl. L. Rep. 21,107

Charles R. KUNKES and Marguerite V. Kunkes, Plaintiffs-Appellants, v. The UNITED STATES, Defendant-Appellee.

No. 95-5031.

United States Court of Appeals, Federal Circuit.

March 15,1996.

Appealed from U.S. Court of Federal Claims; Judge Bruggink.

Lynn C. Rodgers, Hall, Ansley, Rodgers & Condry, P.C., Springfield, Missouri, argued for plaintiffs-appellants. With him on the brief were David W. Ansley and Lindell R. Church.

Lisa E. Jones, Attorney, Department of Justice, Washington, DC, argued for defendant-appellee. With her on the brief were Lois J. Schiffer and Marc A. Smith. Also on the brief was Karen Hawbecker, Office of the Solicitor, U.S. Department of the Interior, Washington, DC, of counsel.

Before RICH and PLAGER, Circuit Judges, and COWEN, Senior Circuit Judge.

PLAGER, Circuit Judge.

This case arises under the Takings clause of the Fifth Amendment to the Constitution. ¹ By legislation enacted in 1992, Congress required that in order to retain their unpatented mining claims, claim holders must pay a per-claim annual fee of $100 for each of the years 1993 and 1994. This cash payment requirement replaced a prior requirement that the claim holders perform $100 worth of exploration and development work yearly on those claims. Appellants Charles and Marguerite Kunkes, who owned a number of these unpatented mining claims, failed to pay the amount required by the new legislation. Under the terms of the fee statute, nonpayment results in conclusive deemed abandonment of the claims and corresponding forfeiture to the Government. Appellants take the position that the new requirement has worked a taking of their property without just compensation in violation of the Fifth Amendment, and sued the United States for $575 million in compensation for their losses resulting from the forfeiture of the claims. The Court of Federal Claims held that forfeiture of appellants' unpatented mining claims for failure to pay the statutory fee did not work a taking, and dismissed. ² Appellants challenge that decision here. We affirm.

BACKGROUND

To encourage private development of mineral deposits, federal law permits private parties to discover, explore, and reclaim mineral deposits in federally-owned lands. 30 U.S.C. § 22 (1994) ("[A]ll valuable mineral deposits in lands belonging to the United States ... shall be free and open to exploration and purchase, and the lands in which they are found to occupation and purchase, by citizens of the United States ... under regulations prescribed by law."); see also 30 Thus federal law permits private parties to acquire exclusive possessory interests in federal land for mining purposes, interests which entitle claim holders to extract and sell minerals without paying royalties to the Government. See United States v. Locke, 471 U.S. 84, 86, 105 S.Ct. 1785, 1788, 85 L.Ed.2d 64 (1985). Title to the underlying fee simple estate in the land remains in the United States. These possessory mineral interests are known as "unpatented" claims to distinguish them from the ownership interest of the private owner who has obtained a "patent," that is, an official document issued by the United States attesting that fee title to the land is in the private owner. ⁴ See generally, Jan G. Laitos & Richard A. Westfall, Government Interference with Private Interests in Public Resources, 11 HARV. ENVTL. L. REV . 1 (1987). Even though title to the fee estate remains in the United States, these unpatented mining claims are themselves property protected by the Fifth Amendment against uncompensated takings. See Best v. Humboldt Placer Mining Co., 371 U.S. 334, 83 S.Ct. 379, 9 L.Ed.2d 350 (1963); cf. Forbes v. Gracey, 94 U.S. 762, 766, 24 L.Ed. 313 (1876).

                U.S.C. § 21a (1994). 3  The Mining Act of 1872, 30 U.S.C. § 26, provides that "[t]he locators of all mining locations made on any mineral vein, lode, or ledge, situated on the public domain, their heirs and assigns, ... so long as they comply with the laws of the United States ... shall have the exclusive right of possession and enjoyment of all the surface included within the lines of their locations, and of all veins, lodes, and ledges throughout their entire depth...."  30 U.S.C. § 26
                

Under the Mining Act of 1872, unpatented mining claimholders could maintain ownership of their claims by performing $100 of assessment work or providing $100 of improvements for each claim during each year (referred to as the "assessment year"). An Act to Promote the Development of the Mining Resources of the United States, ch. 159, § 5, 17 Stat. 91, 92 (1872) (codified at 30 U.S.C. § 28). In 1976, Congress passed the Federal Land Policy and Management Act of 1976 ("FLPMA"), Pub.L. No. 94-579, 90 Stat. 2743 (codified at 43 U.S.C. §§ 1701-1782), which further required unpatented mining claimholders to file annually a notice of intention to hold the claim, an affidavit of the assessment work performed on the claim, or a BLM reporting form. 43 U.S.C. § 1744(a). Failure to comply with the filing requirement "shall be deemed conclusively to constitute an abandonment of the mining claim ... by the owner." 43 U.S.C. § 1744(c).

In 1992, Congress passed appropriations legislation for the Interior Department, which substituted a $100 per claim "maintenance fee" for the $100 of assessment work requirement, for the 1993 and 1994 assessment years. Department of the Interior and Related Agencies Appropriations Act, 1993, Pub.L. No. 102-381, 106 Stat. 1374, 1378 (1992) ("Appropriations Act"). ⁵ Claimholders were required to pay the 1993 and 1994 maintenance fees by the end of the 1993 assessment year. Failure to pay the fee "shall conclusively constitute a forfeiture of the unpatented mining claim ... by the claimant and the claim shall be deemed null and void by operation of law." 30 U.S.C. § 28i.

Between 1969 and 1992, appellants located and filed 573 unpatented claims to minerals beneath public lands in Mohave County, Arizona. During that time, appellants provided affidavits attesting to their provision of $100 of assessment work per claim per year, and complied with all other requirements of the Mining Act and FLPMA. However, appellants did not pay the claim maintenance fee Appellants sued the Government in the Court of Federal Claims, asserting that the forfeiture of their claims constituted an uncompensated taking. The trial court granted summary judgment for the Government. Kunkes v. United States, 32 Fed. Cl. 249 (1994). The trial court found that although unpatented mining claims are property rights protected by the Fifth Amendment, under the principles of Texaco, Inc. v. Short, 454 U.S. 516, 102 S.Ct. 781, 70 L.Ed.2d 738 (1982), and United States v. Locke, 471 U.S. 84, 105 S.Ct. 1785, 85 L.Ed.2d 64 (1985), Congress may impose reasonable conditions on their retention without effecting a taking. 32 Fed. Cl. at 252-54. The trial court found that Congress had broad power in this regard, due in part to the fact that Congress created the rights at issue and, until patented to the claimant, the Government owns the fee title to the land on which the claims are located. Id. at 254. Further, the trial court found that claimholders had always been subject to some proof of interest in developing mineral resources, that the maintenance fee did not effect a substantial difference in the claimholders' obligation, and that the fee was motivated by the legitimate governmental desire to eliminate stale or worthless claims as encumbrances on public lands. Id. at 255. The trial court concluded that a $100 fee, measured against valuable mineral deposits (appellants cited an appraisal of their deposits at more than $80 million), was not unreasonable, and may be employed by Congress to require claimholders to evaluate whether the claims are sufficiently valuable to warrant their retention. Id. The trial court concluded therefore that abandonment of appellants' claims resulting from nonpayment of the statutory fee did not work a taking.

                for 1993 and 1994, which totalled roughly $115,000 for the 573 claims, asserting that they could not afford to do so.   Accordingly, their claims were deemed abandoned
                

The trial court accepted appellants' assertion that due to their limited personal income, shown to be in the neighborhood of $35,000 annually, they could not themselves pay the total fees due, but found that this did not render the fee unreasonable. The court noted that appellants could have borrowed on the value of the claims, abandoned or sold less promising claims, or obtained third party funding for the fees. Id.

Appellants appealed to this court. We have jurisdiction over the appeal under 28 U.S.C. § 1295(a)(3).

DISCUSSION

The trial court correctly found that the principles enunciated in Texaco and Locke govern this case, and properly applied them to find no taking in these circumstances. In Texaco, the State of Indiana had enacted legislation providing that mineral interests that were unused for 20 years would be extinguished automatically and revert to the surface land owner, unless the mineral interest owner filed a statement of claim with the county recorder of deeds within 2 years of the statute's passage. The statute did not require any specific notice to the mineral owners before a statutory extinguishment of their interests. ⁶

Owners of severed mineral interests alleged, inter alia, that the statute deprived them of property without due process and effected a taking without just compensation. Id. at 522-23, 102 S.Ct. at 788-89. The Supreme Court upheld the constitutionality of the statute and found no taking. The Court first found that the state had the power to extinguish mineral interests created by it if the owners did not meet the conditions outlined in the state statute. "We have no doubt that, just as a State may create a property interest that is entitled to constitutional protection, the State has the...