Reoforce, Inc. v. United States, 11-884

• Decision Date: 07 October 2014
• Docket Number: No. 11-884,11-884
• Parties: REOFORCE, Inc., Theodore SFMONSON, and Ronald STEHN, Plaintiffs, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

REOFORCE, Inc., Theodore SFMONSON,and Ronald STEHN, Plaintiffs, v. THE UNITED STATES, Defendant.

No. 11-884

United States Court of Federal Claims

October 7, 2014

The California Desert Conservation Act, 43 U.S.C. § 1781;

The California Desert Protection Act, 16 U.S.C. § 1410aaa-7j;

The Common Varieties Act, 30 U.S.C. § 611;

The Federal Land Management and Policy Act of 1976, 43 U.S.C. § 1701 et seq.;

The Mining Law of 1872, 30 U.S.C. §§ 22-54;

Takings Clause of the Fifth Amendment to the United States Constitution, U.S. Const. amend. V, cl. 4;

Unpatented mining claims; 28 U.S.C. § 2501 (statute of limitations); RCFC 12(h)(3) (lack of subject matter jurisdiction).

Richard Meritt Stephens, Groen, Stephens & Klinge, LLP, Bellevue, Washington, Counsel for Plaintiffs.

Kristofor Ross Swanson, Trial Attorney, United States Department of Justice, Washington, D.C., Counsel for the Government.

MEMORANDUM OPINION AND FINAL ORDER

BRADEN, Judge.

On August 7, 1995, the United States Department of Interior's Bureau of Land Management ("BLM" or the "Government") entered into a Memorandum of Understanding ("MOU") concerning the potential transfer of certain federal land to the State of California ("California" or the "State"). In this case, it is alleged that the BLM effected a taking of Plaintiffs' unpatented mining claims on this land from the date the MOU issued until May 12, 2008, when the validity of Plaintiffs' property rights on three of these claims was recognized.

To facilitate a review of this Memorandum Opinion and Order, the court has provided the following outline:

I. THE RELEVANT FEDERAL STATUTES AND REGULATIONS GOVERNING UNPATENTED MINING CLAIMS. ......... 3

A. The 1872 General Mining Law. ......... 3

B. The 1955 Common Varieties Act. ......... 6

C. The California Surface Mining And Reclamation Act of 1975. ......... 7

D. The 1976 Federal Land Policy And Management Act. ......... 7

E. The 1976 California Desert Protection Act and the 1994 California Desert Protection Act. ......... 8

II. THE RELEVANT FACTS. ......... 8

A. Activities Regarding Plaintiffs' Unpatented Mining Claims From The Early July 1995. ......... 8

B. On August 7, 1995, The Bureau Of Land Management Entered Into A Memorandum Of Understanding With The State Of California. ......... 22

C. Activities Regarding Plaintiffs' Unpatented Mining Clams After The August 7, 1995 Memorandum Of Understanding Was Operational. ......... 25

D. On May 13, 1997, The Bureau of Land Management Withdrew Certain Public Lands, "Subject To Valid Existing Rights" And Subsequent Activities Regarding Plaintiffs' Unpatented Mining Claims Until March 2006. ......... 26

E. On March 15, 2006, The Bureau of Land Management Instituted A Contest Proceeding To Determine The Validity Of Plaintiffs' Unpatented Mining Claims. ......... 32

F. The Contest Proceeding And May 12, 2008 Settlement Agreement. ......... 32

G. Activities Regarding Plaintiffs' Mining Claims After The May 12, 2008 Settlement Agreement. ......... 33

III. PROCEDURAL HISTORY. ......... 33

IV. DISCUSSION. ......... 36

A. Whether 28 U.S.C. § 2501 Bars Plaintiffs' Takings Claims. ......... 36

B. Whether Plaintiffs Have Standing. ......... 38

C. Whether The August 7, 1995 Memorandum Of Understanding Between The Bureau Of Land Management And The State Of California Effected A Taking of Plaintiffs' Unpatented Mining Claims. ......... 40

1. Whether Plaintiffs Had A Compensable Property Right On August 7, 1995, When The Department Of The Interior Entered Into The Memorandum Of Understanding With The State Of California. ......... 40

2. Assuming, Arguendo, That Plaintiffs Had A Compensable Property Right On August 7, 1995, Whether The Character Of The Memorandum Of Understanding Effected A Taking. ......... 40

D. Assuming, Arguendo, That The August 7, 1995 Memorandum Of Understanding Effected A Taking Of Plaintiffs' Mining Rights, Compensation Is Not Warranted.. ......... 41

V. CONCLUSION. ......... 43

* * *

I. THE RELEVANT FEDERAL STATUTES AND REGULATIONS GOVERNING UNPATENTED MINING CLAIMS.

A. The 1872 General Mining Law.

In 1872, Congress enacted 30 U.S.C. §§ 22-54 ("the General Mining Law") that provides:

[A]ll valuable mineral deposits in lands belonging to the United States, both surveyed and unsurveyed, 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[.]

30 U.S.C. § 22.

The General Mining Law "made public lands available to people for the purpose of mining valuable mineral deposits," with the aim of "reward[ing] and encourag[ing] the discovery of minerals that are valuable in an economic sense." United States v. Coleman, 390 U.S. 599, 602 (1968); see also Cal. Coastal Comm'n v. Granite Rock Co., 480 U.S. 572, 595 (1987) (Powell, J., concurring in part and dissenting in part) ("In general, [the General Mining Law of 1872] opens the public lands to exploration. If one discovers valuable mineral deposits, the statute grants him the right to extract and sell the minerals without paying a royalty to the United States, as well as the right—subject to certain statutory requirements—to obtain fee title to the land.").

To secure rights under the General Mining Law, a claimant first must "locate" a valid mining claim on federal lands, physically mark the boundaries of the claim, post a discovery monument and notice, and satisfy other applicable statutory and regulatory requirements. See 30 U.S.C. § 28 (enumerating the requirements for "location" of a mining claim, including distinctly marking the boundaries of the claim and maintaining adequate records concerning the date of location and boundaries of the claims); see also United States v. Locke, 471 U.S. 84, 86 (1985) ("'Discovery' of a mineral deposit, followed by the minimal procedures required to formally'locate' the deposit, gives an individual the right of exclusive possession of the land for mining purposes[.]"). But the location of a mining claim is only the first step in the process, because "a mining claimant acquires no vested rights by location of a mining claim. Even though a claim may be perfected in all other respects, unless and until a claimant is able to show that the claim is supported by a discovery of a valuable locatable mineral within the boundaries of the claim, no rights are acquired." United States v. Rocky Conner, 139 IBLA 361, 365 (1997) (emphasis added).

For mining claims² located on areas designated as "Limited Use" or "Class L" lands, the BLM requires an operator to submit and obtain approval of a plan of operations "before beginning operations greater than casual use." 43 C.F.R. § 3809.11(a).³ This requirement has been in place since 1980, when the BLM promulgated surface management regulations for mining operations, to prevent "unnecessary or undue degradation of federal lands which may result from operations authorized by the mining laws." NOTICE OF FINAL RULEMAKING, 45 FED. REG. 78,902, 78,909 (Nov. 26, 1980); see also id. at 78,911 (promulgating 43 C.F.R. § 3809) ("An approved plan of operations is required prior to commencing . . . [a]ny operation, except casual use, in . . . [the] California Desert Conservation Area"); 43 C.F.R. § 3809.1-4 (1983) ("An approved plan of operations is required prior to commencing . . . [a]ny operation, except casual use, in . . . [l]ands in the California Desert Conservation Area designated as 'controlled' or 'limited' use areas[.]"); 43 C.F.R. § 3809.1-4 (1994) (same); 43 C.F.R. § 3809.11(c) (same); 43 C.F.R. § 3809.11(c)(1) (2014) (same).

The BLM requires that a plan of operations must include: operator information; a description of the mining operations to be undertaken; maps; water management plans; and other information "sufficient for BLM to determine that the plan of operations prevents unnecessary or undue degradation." 43 C.F.R. § 3809.401. Once a plan of operations is approved, an operator is entitled to begin mining, consistent with the plan and applicable statutory and regulatory requirements. See 43 C.F.R. § 3809.412 ("You must not begin operations until BLM approves your plan of operations[.]"); see also 43 C.F.R. § 3809.415(a) (obligating a mining claimant to comply with "the terms and conditions of your notice or approved plan of operations and other Federal and State laws related to environmental protection and protection of cultural resources"); 43 C.F.R. § 3809.3 (requiring a mining claimant to follow state laws or regulations for operations on public lands, unless they conflict with the BLM's regulations). When a miningoperator decides to make changes to the "operations described in [the] approved plan of operations," the operator is requires to submit, and have approved, a modified plan of operations. See 43 C.F.R. § 3809.431; see also id. § 432(a) (explaining that the "BLM will review and approve a modification of your plan of operations in the same manner as it reviewed and approved your initial plan [of operations]").

As a matter of law, the "location" of a mining claim and an approved plan of operations do not convey a compensable property interest to extract and sell minerals. See Skaw v. United States, 13 Cl. Ct. 7, 28 (1987), aff'd, 847 F.2d 842 (Fed. Cir. 1988) ("Until the discovery of a valuable mineral deposit, the locator has only a gratuity from the United States.") (emphasis added); see also id. ("A valuable mineral deposit is an occurrence of mineralization of such quantity and quality as to warrant a person of ordinary prudence in the expenditure of time and money in the development of a mine and the extraction of the mineral."); Payne v. United States, 31 Fed. Cl. 709, 711 (1994) ("[A] finding that the unpatented claim is valid against the United States . . . can only be made if there has been a discovery of [a] mineral within the limits of the claim.").

A "discovery" sufficient to vest a claimant with a compensable property right requires that the claimant...