Lipscomb v. U.S., 89-7399

• Decision Date: 19 July 1990
• Docket Number: No. 89-7399,89-7399
• Citation: 906 F.2d 545
• Parties: Albert M. LIPSCOMB, Plaintiff-Appellant, v. UNITED STATES of America, Manuel Lujan, Jr., Secretary of the Interior, Amoco Production Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 545

906 F.2d 545

Albert M. LIPSCOMB, Plaintiff-Appellant, v. UNITED STATES of America, Manuel Lujan, Jr., Secretary of the Interior, Amoco Production Company Defendants-Appellees.

No. 89-7399.

United States Court of Appeals Eleventh Circuit.

July 19, 1990.

Allan R. Chason, Chason & Chason, P.C., Bay Minette, Ala., for plaintiff-appellant.

Hugh Craig Forshner, Amoco Production Co., New Orleans, La., Eugene A. Seidel, Asst. U.S. Atty., Mobile, Ala., for defendants-appellees.

Ellen J. Durkee, Appellate Section, Lands Div., Dept. of Justice, Washington, D.C., for U.S. and Manuel Lujan, Jr., Secretary of Interior.

Appeal from the United States District Court for the Southern District of Alabama.

Before JOHNSON, Circuit Judge, HILL ^* and HENLEY ^**, Senior Circuit Judges.

JOHNSON, Circuit Judge:

Albert M. Lipscomb appeals from the district court's grant of summary judgment in favor of the federal defendants in his suit under the Color-of-Title Act, 43 U.S.C.A. Sec. 1068 et seq.

I. STATEMENT OF THE CASE

Appellant Lipscomb's family has farmed a parcel of approximately 41 acres of real property in Baldwin County, Alabama since 1936. On June 16, 1980 Lipscomb acquired title by warranty deed to the land from his mother. He subsequently discovered that the United States actually owned the land, and that the government never had issued a patent to his family. The land also was subject to an outstanding oil, gas, and mineral lease in favor of Amoco Oil Company. ¹ Pursuant to the lease agreement between the government and Amoco, proceeds from the sale of any minerals exploited by Amoco attributable to the federal tract were to be paid into an escrow account.

Under a cover letter dated October 27, 1982, Lipscomb filed a color-of-title application with the Bureau of Land Management ("BLM") on January 12, 1983. He made the application under the Color-of-Title Act, 43 U.S.C.A. Sec. 1068, ² and requested a patent on the property. Lipscomb requested that no mineral rights be reserved with the patent. ³ The application was a class two application. ⁴

Upon review of Lipscomb's application, the BLM determined that more information was necessary to establish chain of title; Lipscomb sent the information by letter. ⁵ The BLM suggested that Lipscomb amend the application to request a class one application, and Lipscomb did so. On July 26, 1985, the BLM determined that Lipscomb was qualified to receive a class one patent without mineral reservation upon satisfaction of three conditions. Lipscomb had to pay the purchase price, publish notice in a local paper, and submit proof of publication to the BLM. A purchase price of $2,654.00 was established when the mineral rights valuation issued for the property on August 1, 1985.

On August 29, 1985, the BLM informed Lipscomb that the United States had taken the position that the revenue accrued in the Amoco escrow account was the property of the United States. Lipscomb disagreed, contending that because he and his family had occupied the land for some time, the money made from the sale of the mineral resources belonged to him. By letter dated September 26, 1985, Lipscomb protested the escrow issue to Stuart Carlson of the BLM. Lipscomb paid the purchase price to the BLM on October 1, 1985, and on January 8, 1986, a land patent without mineral reservation was issued to Lipscomb. On February 24, 1986, the BLM announced that the United States was entitled to all funds accruing to the escrow account between the date that Lipscomb submitted his application and the date that he met all of the statutory requirements. Lipscomb met the last of the statutory requirements on October 1, 1985, when he paid the purchase price. ⁶ The BLM advised Amoco, however, to credit Lipscomb with all revenue accruing after January 8, 1986, which was the date on which the patent issued, and to credit the United States with the revenue accruing before that time.

Lipscomb appealed the BLM decision to the Interior Board of Land Appeals ("IBLA"). The IBLA concluded that equity rights do not vest in a class one claimant until the patent issues, and on October 15, 1987, the IBLA affirmed the decision of the BLM. On December 9, 1987, Lipscomb appealed the IBLA decision to the district court by means of the Declaratory Judgment Act (28 U.S.C.A. Sec. 2201) and the Administrative Procedure Act (5 U.S.C.A. Sec. 702). He named the Secretary of the Interior, the United States, and Amoco as defendants. ⁷ Both Lipscomb and the federal defendants moved for summary judgment. On May 2, 1989 the district court granted summary judgment in favor of the federal defendants, holding that equitable ownership did not vest in Lipscomb until he met all the requirements of the Act. The district court also adopted the agency interpretation of the Act. The district court ordered, however, that the proceeds accrued in the escrow account prior to August 15, 1985 be paid to the United States, with all proceeds accrued after that date to go to Lipscomb. ⁸

On appeal, therefore, we are faced with a confusing array of dates. Lipscomb maintains that his rights vested as of the date of application (January 12, 1983), the agencies maintain that his rights vested when the patent issued (January 8, 1986), the district court maintains that his rights vested on the date of the mineral valuation (August 1, 1985), ⁹ and the government maintains that his rights vested when he met the last of the statutory requirements (October 1, 1985). We must determine when an applicant for a patent to public lands under the Color-of-Title Act who filed his original patent application as a class two application, then amended his application to be a class one application, and who satisfies the requirements of a class one claim, acquires a vested right to the mineral rights underlying the land.

II. ANALYSIS

Conclusions of law rendered by summary judgment are subject to the same standard of review as any other question of law raised on appeal. Erwin v. Westfall, 785 F.2d 1551, 1552 (11th Cir.1986), aff'd, 484 U.S. 292, 108 S.Ct. 580, 98 L.Ed.2d 619 (1988). Thus this Court's review of the district court's interpretation of 43 U.S.C.A. Sec. 1068 is de novo. The standard used in reviewing an agency interpretation of a statute which it administers depends on whether Congress has spoken on the interpretational issue. If Congress has spoken to the precise question at issue, no deference is required. Chevron, USA, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984). If Congress has not addressed the issue, the court must defer if the agency interpretation is reasonable. Id. at 843-44, 104 S.Ct. at 2781-83. A finding of reasonableness does not require a finding that the agency interpretation was the only possible construction, or that the agency made the same finding the court would have made. Curse v. Director, Office of Workers' Compensation Programs, 843 F.2d 456, 460 (11th Cir.1988) (quoting Chevron, 467 U.S. at 843 n. 11, 104 S.Ct. at 2782 n. 11). A court may set aside an agency decision if the decision is (1) arbitrary, capricious, an abuse of discretion, or contrary to law, or (2) in excess of statutory authority. 5 U.S.C.A. Sec. 706(2)(A), (C). See also Charter Peachford Hosp., Inc. v. Bowen, 803 F.2d 1541, 1543 (11th Cir.1986).

A. Congress Has Not Expressed Intent With Respect To When Rights Vest Under Section 1068

Lipscomb first argues that the district court owed no deference to the IBLA's interpretation of the Color-of-Title Act because Congress had a specific intent regarding this issue. In support of this contention, he points to the statement in the accompanying Senate report that the 1953 amendment ¹⁰ to the Act was intended to "create a vested right in the land on the part of a settler with a genuine color-of-title claim which meets the requirements." S.Rep. No. 588, 83rd Cong., 1st Sess., reprinted in 1953 U.S.Code Cong. & Admin.News 2014, 2015. This statement does not clarify the issue of when the rights vest; Lipscomb even admits this in his brief. Because the statute makes no reference to when the rights vest, and because the legislative history shows no congressional intent on the issue, the district court correctly deferred to the agency interpretation of the Act if that interpretation was reasonable.

B. The Agency Interpretation of the Statute Was Reasonable

The IBLA found that although appellant's rights to the land vested upon compliance with the statutory requirements coupled with the filing of an application under the Color of Title Act, this did not entitle him to all appreciation in the value of the land which occurred prior to patent or to the benefit of mineral exploitation of the land prior to patent.

The agency reached this conclusion by looking at the IBLA decision in Benton C. Cavin, 83 IBLA 107 (1984). In Benton C. Cavin, the IBLA considered the question of when rights vest as the question pertained to appraisal under section 1068a. That section states that when an application for patent is filed, the Secretary of the Interior shall cause the lands to be appraised "on the basis of the value of such lands at the date of appraisal." The appellant in Benton C. Cavin argued that the purchase price should have been determined by the value of the land at the time of application for the patent. The IBLA rejected this interpretation, stating that "if Congress had intended all appreciation in value from the date of application to be considered an element of the applicant's equity, Congress certainly would merely have directed that the appraisal be based on the value of the land at the time of the application." 83 IBLA 127-28. The IBLA applied the same reasoning in Lipscomb's case to determine that equitable ownership does not vest in the claimant at the time of the application alone, but rather after the claimant has both filed an application and satisfied all of the...