Skaw v. U.S., 84-614

• Decision Date: 23 July 1984
• Docket Number: No. 84-614,84-614
• Parties: Francis SKAW et al., Appellants, v. UNITED STATES, Appellee. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 932

740 F.2d 932

22 ERC 1008

Francis SKAW et al., Appellants, v. UNITED STATES, Appellee.

Appeal No. 84-614.

United States Court of Appeals, Federal Circuit.

July 23, 1984.

Thomas W. Frizzell, Missoula, Mont., argued for appellant.

Blake A. Watson, Washington, D.C., argued for appellee. With him on the brief were F. Henry Habicht, II, Asst. Atty. Gen., David C. Shilton, Susan J. Rubin, and James B. Snow, Washington, D.C.

Before FRIEDMAN, Circuit Judge, COWEN, Senior Circuit Judge, and RICH, Circuit Judge.

COWEN, Senior Circuit Judge.

This appeal is from a judgment of the United States Claims Court (Claims Court) ¹ which granted the government's motion for summary judgment, dismissed the complaint, and held that the appellants (plaintiffs) were not entitled to recover for a Fifth Amendment taking of their unpatented mining claims. We vacate the judgment of the Claims Court and remand the case to it.

I. Factual Background and Prior Proceedings

Plaintiffs, holders of unpatented mining claims situated in Shoshone County, Idaho, in the vicinity of the upper St. Joe River from Spruce Tree Campground to Heller Creek, properly recorded them with the Bureau of Land Management, as required by the Federal Land Policy and Management Act of 1976, 43 U.S.C. Sec. 1744. The principal minerals claimed were garnet and gold. Plaintiffs never applied for a patent on any of the claims in issue.

In 1968, Congress established the national wild and scenic rivers system to preserve selected rivers with outstandingly remarkable values in a free-flowing condition, with the rivers and their immediate environments protected for the benefit and enjoyment of present and future generations. The Wild and Scenic Rivers Act of 1968, Pub.L. 90-542, 82 Stat. 906, designated eight rivers as components of the system, and listed 27 rivers as potential additions to the system, including in section 5(a)(22): "Saint Joe, Idaho: The entire main stem."

Section 9 of the 1968 Act, 16 U.S.C. Sec. 1280, provides:

(a) Nothing in this chapter shall affect the applicability of the United States mining and mineral leasing laws within components of the national wild and scenic rivers system except that--

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(iii) subject to valid existing rights, the minerals in Federal lands which are part of the system and constitute the bed or bank or are situated within one-quarter mile of the bank of any river designated a wild river under this chapter or any subsequent Act are hereby withdrawn from all forms of appropriation under the mining laws and from operation of the mineral leasing laws including, in both cases, amendments thereto. [Emphasis added.]

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(b) The minerals in any Federal lands which constitute the bed or bank or are situated within one-quarter mile of the bank of any river which is listed in section 1276(a) of this title are hereby withdrawn from all forms of appropriation under the mining laws during the periods specified in section 1278(b) of this title. Nothing contained in this subsection shall be construed to forbid prospecting or the issuance of leases, licenses, and permits under the mineral leasing laws subject to such conditions as the Secretary of the Interior and, in the case of national forest lands, the Secretary of Agriculture find appropriate to safeguard the area in the event it is subsequently included in the system.

On November 10, 1978, the Wild and Scenic Rivers Act was amended by section 708 of the National Parks and Recreation Act of 1978, Pub.L. 95-625 (codified as 16 U.S.C. Sec. 1274(a)(23)). The amendment added the St. Joe River as a part of the national system, providing in pertinent part as follows:

Dredge or placer mining shall be prohibited within the banks or beds of the main stem of the Saint Joe and its tributary streams in their entirety above the confluence of the main stem with the North Fork of the river. * * * For the purposes of this river, there are authorized to be appropriated not more than $1,000,000 for the acquisition of lands or interest in lands. [Emphasis Added.]

Id.

Since the mining claims are located within the St. Joe National Forest, plaintiffs are required to comply with Forest Service regulations promulgated for the protection and preservation of national forests. 36 C.F.R. Sec. 228 (1983) (formerly 36 C.F.R. Sec. 252). The stated purpose of these regulations is to ensure that mining operations are "conducted so as to minimize adverse environmental impacts on National Forest Systems surface resources." 36 C.F.R. Sec. 228.1. A mine operator contemplating operations which would cause significant disturbance of surface resources is required by the regulations to submit a proposed plan of operations and to post a bond to ensure compliance with reclamation requirements.

Plaintiffs' operating plan was filed with the Forest Service in 1976, but that agency withheld action on the plan for 2 years while it considered the need for an environmental impact statement. In 1978, action on the plan was again deferred pending the outcome of a mineral contest proposed to be filed in behalf of the Forest Service by the Bureau of Land Management (BLM) of the Department of the Interior (Interior). So far as the record shows, no decision approving or rejecting the plan has ever been made by the Forest Service.

The present action was filed in the then Court of Claims on March 5, 1979, claiming just compensation in the amount of ten million dollars, and alleging that:

1. The mining claims at issue were validly owned and are leased in compliance with the mining laws of the United States.

2. The United States effected a legislative taking of the mining claims by the enactment of section 708 of the National Parks and Recreation Act of 1978.

3. Pursuant to that Act, the United States has prevented and prohibited the owners of the claims from exercising rights possessed under the Federal mining laws.

In order to ascertain the extent and validity of any property rights the plaintiffs possessed on November 10, 1978, the trial court, by order of August 22, 1979, stayed proceedings on the government's motion to permit the Secretary of the Interior to determine the validity of the mining claims, including the issue of discovery, in administrative contest proceedings.

On January 15, 1981, on behalf of the Forest Service, BLM filed an administrative complaint contesting the plaintiffs' placer mining claims. The claims were alleged to be invalid on the grounds of improper location, location or relocation on lands withdrawn from appropriation, abandonment, and lack of discovery of valuable mineral deposits sufficient to support a mining location.

On November 13, 1981, while the mineral contest was pending, the Idaho State Office of BLM declared the mining claims abandoned and void because of plaintiffs' failure to file evidence of assessment work or notice of intention to hold the claims, as required by 43 U.S.C. Sec. 1744. In view of this determination by BLM, the mining contest was dismissed without prejudice to either party by the Office of Hearings and Appeals, Department of the Interior, Salt Lake City, Utah. The decision left undecided the allegation that plaintiffs' claims were invalid for lack of discovery of valuable minerals. Plaintiffs did not appeal the dismissal, but did appeal the declaration of abandonment to the Interior Board of Land Appeals (IBLA). There plaintiffs argued that since the government had taken their claims on November 10, 1978, by section 708, the claims were no longer owned by them, and therefore, that the claims could not have been abandoned on November 13, 1981, when the BLM so decided. However, the IBLA upheld the BLM decision on April 19, 1982, stating that:

The United States Court of Claims is being advised that the Department of the Interior now considers the claims to be abandoned and void.

After the stay of proceedings was lifted, the Claims Court granted summary judgment for the government on July 6, 1983. Initially, the court held that the government was entitled to judgment as a matter of law on the ground that the mining claims were invalid for lack of discovery of valuable mineral deposits. Alternatively, the court held that even if the claims were assumed to be valid as of November 10, 1978, the enactment of section 708 did not constitute a compensable taking, and that plaintiffs could not show any governmental action which constituted an inverse condemnation of their claims.

II. The Validity of the Unpatented Mining Claims

After discovery of a valuable mineral deposit upon a properly located claim, the possessory right of the locater is

[A] property right in the full sense, unaffected by the fact that paramount title to the land is in the United States [citation omitted] and it is capable of transfer by conveyance, inheritance, or devise.

Union Oil Co. v. Smith, 249 U.S. 337, 349, 39 S.Ct. 308, 311, 63 L.Ed. 635 (1919). A fortiori it is a property right which is within the protection of the Fifth Amendment's prohibition against the taking of private property for public use without just compensation. Freese v. United States, 639 F.2d 754, 226 Ct.Cl. 252 (1981).

The test approved by the Supreme Court for a valuable mineral deposit is the "prudent man" test--the discovered deposits must be of such character that a person of ordinary prudence would be justified in the further expenditure of labor and means with a reasonable prospect of success in developing a valuable mine. Actual successful or profitable mining is not required. United States v. Coleman, 390 U.S. 599, 88 S.Ct. 1327, 20 L.Ed.2d 170 (1968).

Although these well established principles were discussed in the trial judge's opinion, we think he erred in applying them to the facts before him and in granting the government's motion for summary judgment on the ground that the mining claims were invalid for lack of discovery of a valuable mineral deposit. We vacate his decision...