United States v. Coleman

• Decision Date: 22 April 1968
• Docket Number: No. 630,630
• Citation: 88 S.Ct. 1327,20 L.Ed.2d 170,390 U.S. 599
• Parties: UNITED STATES et al., Petitioners, v. Alfred E. COLEMAN et al
• Court: U.S. Supreme Court

390 U.S. 599

88 S.Ct. 1327

20 L.Ed.2d 170

UNITED STATES et al., Petitioners,

v Alfred E. COLEMAN et al.

No. 630.

Argued March 28, 1968.

Decided April 22, 1968.

Rehearing Denied May 27, 1968.

See 391 U.S. 961, 88 S.Ct. 1834.

Frank J. Barry, Tucson, Ariz., for the United States and others; Solicitor General Griswold, Assistant Attorney General Martz, Robert S. Rifkind, Roger P. Marquis and George R. Hyde on the brief.

Howard A. Twitty, Phoenix, Ariz., for respondents; George W. Nilsson, W. Howard Gray, Edward A. McCabe and Monta W. Shirley on the brief.

Winston S. Howard and Don H. Sherwood for New Jersey Zinc Co. as amicus curiae.

Mr. Justice BLACK delivered the opinion of the Court.

In 1956 respondent Coleman applied to the Department of the Interior for a patent to certain public lands based on his entry onto and exploration of these lands and his discovery there of a variety of stone called quartzite, one of the most common of all solid materials. It was, and still is, respondent Coleman's contention that the quartzite deposits qualify as 'valuable mineral deposits' under 30 U.S.C. § 22¹ and make the land 'chiefly valuable for building stone' under 30 U.S.C. § 161.² The Secretary of the Interior held that to qualify as 'valuable mineral deposits' under 30 U.S.C. § 22 it must be shown that the mineral can be 'extracted, removed and marketed at a profit'—the so-called 'marketability test.' Based on the largely undisputed evidence in the record, the Secretary concluded that the deposits claimed by respondent Coleman did not meet that criterion. As to the alternative 'chiefly valuable for building stone' claim, the Secretary held that respondent Coleman's quartzite deposits were a 'common variet(y)' of stone within the meaning of 30 U.S.C. § 611,³ and thus they could not serve as the basis for a valid mining claim under the mining laws. The Secretary denied the patent application, but respondent Coleman remained on the land, forcing the Government to bring this present action in ejectment in the District Court against respondent Coleman and his lessee, respondent McClennan. The respondents filed a counterclaim seeking to have the District Court direct the Secretary to issue a patent to them. The District Court, agreeing with the Secretary, rendered summary judgment for the Government. On appeal the Court of Appeals for the Ninth Circuit reversed, holding specifically that the test of profitable marketability was not a proper standard for determining whether a discovery of 'valuable mineral deposits' under 30 U.S.C. § 22 had been made and that building stone could not be deemed a 'common variet(y)' of stone under 30 U.S.C. § 611. We granted the Government's petition for certiorari because of the importance of the decision to the utilization of the public lands. 389 U.S. 970, 88 S.Ct. 476, 19 L.Ed.2d 460.

We cannot agree with the Court of Appeals and believe that the rulings of the Secretary of the Interior were proper. The Secretary's determination that the quartzite deposits did not qualify as valuable mineral deposits because the stone could not be marketed at a profit does no violence to the statute. Indeed, the marketability test is an admirable effort to identify with greater precision and objectivity the factors relevant to a determination that a mineral deposit is 'valuable.' It is a logical complement to the 'prudent-man test' which the Secretary has been using to interpret the mining laws since 1894. Under this 'prudent-man test' in order to qualify as 'valuable mineral deposits,' the discovered deposits must be of such a character that 'a person of ordinary prudence would be justified in the further expenditure of his labor and means, with a reasonable prospect of success, in developing a valuable mine * * *.' Castle v. Womble, 19 L.D. 455, 457 (1894). This Court has approved the prudent-man formulation and interpretation on numerous occasions. See, for example, Chrisman v. Miller, 197 U.S. 313, 322, 25 S.Ct. 468, 49 L.Ed. 770; Cameron v. United States, 252 U.S. 450, 459, 40 S.Ct. 410, 64 L.Ed. 659; Best v. Humboldt Placer Mining Co., 371 U.S. 334, 335—336, 83 S.Ct. 379, 9 L.Ed.2d 350. Under the mining laws Congress has made public lands available to people for the purpose of mining valuable mineral deposits and not for other purposes. ⁴ The obvious intent was to reward and encourage the discovery of minerals that are valuable in an economic sense. Minerals which no prudent man will extract because there is no demand for them at a price higher than the costs of extraction and transportation are hardly economically valuable. Thus, profitability is an important consideration in applying the prudent-man test, and the marketability test which the Secretary has used here merely recognizes this fact.

The marketability test also has the advantage of throwing light on a claimant's intention, a matter which is inextricably bound together with valuableness. For evidence that a mineral deposit is not of economic value and cannot in all likelihood be operated at a profit may well suggest that a claimant seeks the land for other purposes. Indeed, as the Government points out, the facts of this case—the thousands of dollars and hours spent building a home on 720 acres in a highly scenic national forest located two hours from Los Angeles, the lack of an economically feasible market for the stone, and the immense quantities of identical stone found in the area outside the claims—might well be thought to raise a substantial question as to respondent Coleman's real intention.

Finally, we think that the Court of Appeals' objection to the marketability test on the ground that it involves the imposition of a different and more onerous standard on claims for minerals of widespread occurrence than for rarer minerals which have generally been dealt with under the prudent-man test is unwarranted. As we have pointed out above, the prudent-man test and the marketability test are not distinct standards, but are complementary in that the latter is a refinement of the former. While it is true that the marketability test is usually the critical factor in cases involving nonmetallic minerals of widespread occurrence, this is accounted for by the perfectly natural reason that precious metals which are in small supply and for which there is a great demand, sell at a price so high as to leave little room for doubt that they can be extracted and marketed at a profit.

We believe that the Secretary of the Interior was also correct in ruling that '(i)n view of the immense quanti- ties of identical stone found in the area outside the claims, the stone must be considered a 'common variety" and thus must fall within the exclusionary language of § 3 of the 1955 Act, 69 Stat. 368, 30...