Udall v. Oil Shale Corporation, 9581-9584.

• Decision Date: 04 February 1969
• Docket Number: No. 9581-9584.,9581-9584.
• Citation: 406 F.2d 759
• Parties: Stewart L. UDALL, Secretary of the Interior, Appellant, v. The OIL SHALE CORPORATION et al., Appellees. Stewart L. UDALL, Secretary of the Interior, Appellant, v. Joseph B. UMPLEBY et al., Appellees. Stewart L. UDALL, Secretary of the Interior, Appellant, v. Barnette T. NAPIER et al., Appellees. Stewart L. UDALL, Secretary of the Interior, Appellant, v. Penelope Chase BROWN et al., Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

406 F.2d 759 (1969)

Stewart L. UDALL, Secretary of the Interior, Appellant, v. The OIL SHALE CORPORATION et al., Appellees.

Stewart L. UDALL, Secretary of the Interior, Appellant, v. Joseph B. UMPLEBY et al., Appellees.

Stewart L. UDALL, Secretary of the Interior, Appellant, v. Barnette T. NAPIER et al., Appellees.

Stewart L. UDALL, Secretary of the Interior, Appellant, v. Penelope Chase BROWN et al., Appellees.

Nos. 9581-9584.

United States Court of Appeals Tenth Circuit.

February 4, 1969.

Edmund B. Clark, Atty., Dept. of Justice, Washington, D. C. (Harold S. Harrison, Acting Asst. Atty. Gen., Lawrence M. Henry, U. S. Atty., Roger P. Marquis and Thos. L. McKevitt, Attys., Dept. of Justice, Washington, D. C., with him on the brief), for appellant.

Fowler Hamilton, New York City, for appellees, The Oil Shale Corp., and others, and Penelope Chase Brown, and others.

Fred M. Winner, Denver, Colo., for appellees, Joseph B. Umpleby, and others.

Karl Ranous, Denver, Colo., for appellees, Barnette T. Napier, and others (Tweedy, Mosley & Young, Denver, Colo., and Cleary, Gottlieb, Steen & Hamilton, New York City, with them on the brief).

Before PHILLIPS, HILL and SETH, Circuit Judges.

SETH, Circuit Judge.

These are appeals in four consolidated cases wherein the United States District Court for the District of Colorado entered judgments for the plaintiffs. These plaintiffs were asserting that the Secretary of the Interior had no authority to deny applications for patents for oil shale mining claims on the ground that assessment work had not been done, or on the ground that the claims had previously been cancelled by the Department for the same reason. The Secretary in Union Oil Company of California, 71 I.D. 169, and 72 I.D. 313, had taken the position that he could deny such applications under his construction of the opinions of the Supreme Court in two cases involving departmental cancellation of claims for failure to do assessment work. The issue on this appeal is whether the trial court was correct in holding that these two previous decisions were binding in the present case, and that they had held that the departmental adverse proceedings and the cancellation orders there litigated were void as were all others entered on the same ground.

In three of the cases the plaintiffs sought relief by mandamus, and in the fourth case a declaratory judgment was sought.

There follows a brief summary of the history of the four groups of claims in the consolidated cases:

The Oil Shale Corporation Claims (Case No. 9581):

These claims were located in December 1919 and January 1920. Contest proceedings were started against these claims by the Land Office in 1927 as Nos. 11,757, 11,759, and 11,761, for failure to do assessment work. In 1928 the Commissioner entered a decision that the claims were void. The decision was entered upon the failure of the contestees to appear and to answer the departmental assertion that assessment work was not done for the years 1921-1927. All the claimants of this group of claims have not made application for patents and were not parties in Union Oil Company of California, 71 I.D. 169.

Umpleby Claims (Case No. 9582):

These oil shale claims were located in 1918, were contested by the Land Office in No. 12,029 in 1929, and declared to be invalid and cancelled for failure to perform annual assessment work. Recently the claimants made application for patents which were rejected by the Secretary in Union Oil Company of California, supra.

Napier Claims (Case No. 9583):

These claims were located in 1918, were contested by the Land Office in No. 12,972 in 1931, and declared to be invalid and cancelled for failure to do assessment work. Patent applications for these claims were rejected by the Secretary in Union Oil Company of California, supra.

Brown Claims or Oyler Claims (Case No. 9584):

These claims were located in 1916, and in 1929 contested by the Land Office in No. 12,039, and declared invalid and cancelled for failure to do assessment work. Patent applications were rejected by the Secretary in Union Oil Company of California, supra.

When these placer claims were located the federal mining laws provided that upon a discovery of valuable mineral deposits upon the public domain, a mining claim could be established simply by marking the location so that its boundaries could be easily followed. The mining districts and the states added some additional requirements, but it was not necessary to secure the consent of any federal officials nor to even advise them of the location. Thus the discoverer could himself take steps immediately to protect his find. This was, of course, a practical and effective method for the prospector and miner, and it served to develop the mineral resources as was intended by Congress.

The markings at the location and state required notices served to advise other miners of the claim when they would go on the same ground. After the location was made it was required that the claimant perform a certain amount of work each year to demonstrate that he was holding it in good faith and to further advise others interested in the same ground that the claim was being asserted. Chambers v. Harrington, 111 U.S. 350, 4 S.Ct. 428, 28 L. Ed. 452. This assessment work was a requirement in virtually all of the mining districts by rule before the first federal statute on the subject was enacted. O'Reilly v. Campbell, 116 U.S. 418, 6 S. Ct. 421, 29 L.Ed. 669. Under the rules and the statute, if the work was not performed as and when required, the ground was then open to location by another person as if no prior claim had been staked. However, if no stranger so relocated the ground, the initial claimant could, after any failure to perform the work, resume assessment work and thereby the claim would not be subject to location by others. Belk v. Meagher, 104 U.S. 279, 26 L.Ed. 735. The assessment work year has been changed by Congress from time to time, and it has also provided moratoria for assessment work.

The basic federal requirements, the staking, and the assessment work were all acts relating to the ground itself and to create some condition which could be observed by persons seeking to locate claims in the same area. It was an inter-miner-prospector matter, and the federal government was not initially involved. The claims could, of course, be held indefinitely against others, and the Government, and be mined without doing more than making a valid location and performing the required assessment work. Upon the valid location, a possessory title passed from the United States to the locator which was a property right universally recognized. A patent could thereafter be sought by making application to the Land Office, but this was not a required step. The states in various ways supplemented the methods of marking and added a variety of notice, recording or filing requirements.

As to the assessment work aspect of claims made at the times these in question were made, it is apparent that the issue as to whether the work had been performed was a matter between rival claimants. It was precipitated by an overstaking and the resultant dispute as to whether the ground was then open for location. The issue was decided by the courts between the individuals concerned. 17 Stat. 93; see the older Departmental Regulations, 37 L.D. 757 (1909). Cameron v. United States, 252 U.S. 450, 40 S.Ct. 410, 64 L.Ed. 659. The current Regulations also expressly so provide. 43 C.F.R. § 3420.4.

It is important to consider the claims in question and the assessment work problems in this context of practice, district rules, and statutes alluded to above. The Federal Mining Leasing Act of 1920 (30 U.S.C. § 193, 41 Stat. 451) removed a few minerals including oil shale from the traditional method of location, and it must also be examined in this setting. As to those minerals not included in the Act, the traditional method generally prevails today. See Brennan v. Udall, 379 F.2d 803 (10th Cir.).

When the Mineral Leasing Act became effective, no new mining locations could be made for oil shale as there was substituted a leasing method. Thus those locators who already had made valid locations before the Act were not thereafter faced with the possibility of other locators overstaking their claims for oil shale if assessment work was not performed. Thus the assessment work requirement on pre-Mineral Leasing Act oil shale claims could not be "enforced" or tested by the acts of a second oil shale locator versus a prior locator. The pre-Act claims were thus placed in a unique position.

The General Land Office soon after the passage of the Mineral Leasing Act undertook an ambitious program to eliminate the pre-Mineral Leasing Act oil shale claims upon which assessment work had not been done. This program included the claims here in issue, and they were all cancelled by departmental action following contest proceedings directed against them for a failure to do assessment work. The program led to litigation to test the authority of the Department to cancel claims for such a reason. This culminated in Wilbur v. United States ex rel. Krushnic, 280 U.S. 306, 50 S.Ct. 103, 74 L.Ed. 445, decided by the Supreme Court in 1930, and in Ickes v. Virginia-Colorado Development Corp., 295 U.S. 639, 55 S.Ct. 888, 79 L. Ed. 1627 in 1935. The claims in issue were cancelled before the decision in Virginia-Colorado.

It would not seem necessary to analyze at any length the two cases — Krushnic and Virginia-Colorado. They are treated by the trial court in its opinion at 261 F.Supp. 954, at 966, and in the literature on the subject of assessment work. 2 American Law of Mining, Title VII, § 7.1. It is sufficient to say that these cases held that the doctrine outlined above relative to assessment work and who could challenge locations for failure to do such work was not changed by the Mineral Leasing Act. The Court clearly held that the Department ...