Lara v. SECRETARY OF INTERIOR OF UNITED STATES
| Decision Date | 01 May 1986 |
| Docket Number | No. CV 84-1272-PA.,CV 84-1272-PA. |
| Citation | 642 F. Supp. 458 |
| Parties | Robert B. LARA, Plaintiff, v. The SECRETARY OF the INTERIOR OF the UNITED STATES of America, Defendant. |
| Court | U.S. District Court — District of Oregon |
Richard F. Lancefield, Portland, Or., for plaintiff.
Charles H. Turner, U.S. Atty., James L. Sutherland, Asst. U.S. Atty., Eugene, Or., for defendant.
Plaintiff Robert Lara seeks judicial review of administrative proceedings that invalidated his three placer mining claims. Defendant Secretary of the Interior counterclaims, seeking an order that plaintiff vacate the claims and remove structures on them by a certain date. I affirm the Secretary's decision, and grant the relief requested by the Secretary in his counterclaim.
Placer mines are superficial deposits of ore that have been eroded from a vein or lode and washed downstream. The deposits are in a loose state, and are often recovered by dredging a stream bed or digging up material from a riverbank and sluicing gravel and other material away from the mineral.
The placer claims here are all located in the Rogue River National Forest. Two of the claims, Madeline No. 1 and Madeline No. 2, are located in Oregon along the Applegate River. The other claim, Sunshine, is in northern California along Elliot Creek, a tributary of the Applegate. A considerable amount of gold has been taken from the Applegate and its tributaries, but there has been no prior history of gold production from these claims.
The Madeline and Sunshine claims were first located in the early 1930's. Lara purchased the Madeline claims in 1971 and the Sunshine claim in 1975, from private persons.
Lara does not make his living by mining. At the time of the hearing, he lived near the Sunshine claim on patented mining land that he bought in 1975. This land is not the subject of this action. A cabin is on the Sunshine claim, however, and another is on one of the Madeline claims. A greenhouse stands on the other Madeline claim. At the time of one of the hearings, both cabins were occupied by persons Lara describes as caretakers. One of the caretakers is Lara's son. Lara lived in his son's cabin before this. The Sunshine cabin was rented for some time to another person. Mining activities on the claims by Lara and his predecessors appear to have been limited and irregular.
In 1973, the Forest Service published notice in the Federal Register of a proposed withdrawal of the lands on which the Madeline claims are located. A Forest Service campground adjoins the Madeline claims, and the Forest Service sought to enlarge the campground onto the claims. In 1971, the Sunshine claim was also withdrawn from the federal mining lands.
In 1977 and 1979, Paul Boswell, a Forest Service mining engineer, tested material from all three claims. He concluded that a mineral discovery existed in the southwest corner of the Sunshine claim, but not in the northern half. Boswell also concluded that the Madeline claims did not contain a mineral discovery.
In 1978, the Forest Service filed administrative complaints contesting the validity of the three claims. The complaints alleged that sufficient minerals did not exist to constitute a discovery, and that the claims were being used for "other than bona fide mining purposes." As to the Madeline claims, the Forest Service also alleged that Lara had failed to comply with annual assessment requirements.
Hearings were held in 1979 before an administrative law judge (ALJ) in Sacramento and Portland.* In 1980, the ALJ issued an opinion finding that the Madeline claims were invalid. The ALJ reached only the first issue in the complaint, holding that the claims were invalid because they lacked a valid discovery. He did not decide whether the claims were being used for other purposes or whether assessment requirements were violated.
The ALJ also found that the northern half of the Sunshine claim was invalid, because it was nonmineral in character and severable from the rest of the claim under the Ten Acre Rule. The ALJ dismissed the complaint as to the southernmost ten acres, finding that the Forest Service had not made a prima facie case that this part of the claim lacked a discovery. The ALJ did not decide whether the claim was being used for other purposes.
Lara appealed to the Department of the Interior's Interior Board of Land Appeals (IBLA). In 1982, the IBLA issued an opinion affirming the ALJ. United States v. Lara, 67 IBLA 48 (1982). Lara moved for reconsideration, arguing the northern half of the Sunshine claim was not invalid. The IBLA agreed to hear the motion, but affirmed its earlier decision, with slight modifications. 80 IBLA 215 (1984). In the second opinion, the IBLA drew a new dividing line between the valid and invalid portions of the Sunshine claim.
Plaintiff then brought this action for judicial review, pursuant to 28 U.S.C. § 1331(a). The Secretary filed a counterclaim, seeking an order that Lara vacate the claims and remove all structures on them. I affirm and grant the relief requested in the counterclaim.
Judicial review of IBLA decisions is limited to whether they are arbitrary, capricious, an abuse of discretion, unsupported by substantial evidence, or not in accordance with the law. Dredge Corp. v. Conn, 733 F.2d 704, 707 (9th Cir.1984). The court may not substitute its judgment for that of the IBLA. Baker v. United States, 613 F.2d 224, 226 (9th Cir.1980).
Lara argues that the ALJ and IBLA applied the wrong legal standards, and that their opinions are not supported by substantial evidence. Lara requests that I remand the action for further testing of the Madeline claims.
When the Government contests a mining claim, it bears the initial burden of presenting a prima facie case that the claim is invalid. To meet this burden, the Government must present sufficient evidence that there was no discovery of a "valuable mineral deposit" under 30 U.S.C. § 22. The burden then shifts to the claimant to show by a preponderance of the evidence that a valuable mineral deposit has been discovered. Rodgers v. Watt, 726 F.2d 1376, 1380 (9th Cir.1984).
When a claim is on land that is later withdrawn from appropriation, the claim must be supported by a discovery at the date of the withdrawal, as well as the date of the hearing. Rodgers, 726 F.2d at 1379; United States v. Forsythe, 15 IBLA 43 (1974). If there is no discovery as of the date of withdrawal, the IBLA has held that the ALJ need not examine whether there was a discovery at the date of the hearing. United States v. Rogers, 32 IBLA 77, 84 (1977).
Lara argues that the IBLA incorrectly assumed he needed to establish profitable production to have made a discovery prior to the discovery date. I disagree. The ALJ and IBLA applied the proper legal standards.
The ALJ applied the prudent man test, under which a discovery exists only "where the minerals found are of such a character that a person of ordinary prudence would be justified in further expenditure of his labor and means with a reasonable prospect of success in developing a valuable mine." ALJ Opinion at 6. Relying on the Supreme Court's language in United States v. Coleman, 390 U.S. 599, 88 S.Ct. 1327, 20 L.Ed.2d 170 (1968), the ALJ held that the prudent person test "requires a showing of marketability; that is, a showing that the mineral can be presently extracted, removed, and marketed at a profit." ALJ Opinion at 6. The IBLA applied a similar standard. Lara apparently argues this standard is incorrect.
Lara cites Converse v. Udall, 399 F.2d 616, 622 (9th Cir.1968), cert. denied, 393 U.S. 1025, 89 S.Ct. 635, 21 L.Ed.2d 569 (1969), decided after the Supreme Court's decision in Coleman. Coleman dealt with placer claims for sand and gravel, common minerals for which a showing of marketability is vital to the claim. Converse dealt with a lode claim for principally base metals and small amounts of precious metals, all listed as valuable minerals in 30 U.S.C. § 23. The Converse court felt these distinctions warranted a more liberal application of the marketability test.
Under this more liberal test, there "need not be a full showing of marketability," as in Coleman. The "economics of the situation," such as the cost of extraction and transportation, may be considered, but "this does not mean that the locator must prove that he will in fact develop a profitable mine." 399 F.2d at 622.
The tests mandated in Coleman and Converse are difficult to reconcile. The "prudent person" test appears to require only a reasonable prospect of profits, while the marketability test appears to require a certain prospect of profits based on present market figures. Presented with this conflict, the Court in Coleman opted for a present showing of profits. In Converse, the Circuit attempted to explain this conflict. While Converse might be partially justified by fluctuating market prices in precious metals and stones, the resulting test is difficult to apply.
It is questionable whether the vague, sliding scale marketability test in Converse is good law. In Rodgers v. Watt, supra, the Ninth Circuit reversed an IBLA decision invalidating a sunstone claim. The court reasoned that the Government had failed to make a prima facie case, the key element of which was a showing that the market for the discovered material is "not sufficiently profitable to attract the efforts of a person of ordinary prudence." 726 F.2d at 1380. Sunstones, while not specifically listed as valuable minerals in 30 U.S.C. § 23, are semi-precious stones that are much different than sand or gravel. Nevertheless, the Rodgers court cited the marketability test used in the sand and gravel cases without mention of Converse or the character of the mineral involved. While the Rodgers court did not need to reach these issues, the case...
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Lara v. Secretary of Interior of U.S.
...all structures on them. On May 1, 1986, the district court affirmed the IBLA and granted the relief requested in the counterclaim. 642 F.Supp. 458 (D.Or.1986). A May 1, 1986 order required Lara to vacate the claims and remove all structures from them within 120 days of the date of the Lara ......
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