United States v. Copar Pumice Co.

• Decision Date: 06 May 2013
• Docket Number: No. 12–2104.,12–2104.
• Citation: 714 F.3d 1197
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. COPAR PUMICE COMPANY, INC.; Kelly Armstrong; Richard P. Cook; Shirley A. Cook; Debbie Cantrup, Defendants–Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

714 F.3d 1197

UNITED STATES of America, Plaintiff–Appellee,

v.COPAR PUMICE COMPANY, INC.; Kelly Armstrong; Richard P. Cook; Shirley A. Cook; Debbie Cantrup, Defendants–Appellants.

No. 12–2104.

United States Court of Appeals,Tenth Circuit.

May 6, 2013.

Joseph E. Manges of Comeau, Maldegen, Templeman & Indall, LLP, Santa Fe, New Mexico, for Defendants–Appellants.

Ignacia S. Moreno, Assistant Attorney General; Kenneth J. Gonzales, United States Attorney; Ruth Fuess Keegan, Assistant United States Attorney; William B. Lazarus, Andrew A. Smith, Dominika N. Tarcynska, Elizabeth Ann Peterson, Attorneys, Environment & Natural Resources Division, Department of Justice, Washington, D.C.; Steve Hattenbach, Office of General Counsel, U.S. Department of Agriculture, Albuquerque, New Mexico, of Counsel, for Plaintiff–Appellee.

Before BRISCOE, Chief Judge, BRORBY, Senior Judge, and MURPHY, Circuit Judge.

BRISCOE, Chief Judge.

This is an interlocutory appeal arising out of an action filed by the United States against Defendants Kelly Armstrong, Debbie Cantrup, Richard Cook, Shirley Cook (collectively “the Cooks”), and Copar Pumice Company, Inc. (“Copar”) for trespass, conversion, and unjust enrichment. The claims are based on allegations that the Cooks and Copar removed and used undersized pumice from their mine in violation of their settlement agreement with the United States, the Jemez National Recreation Area Act (“JNRAA”), 16 U.S.C. § 460jjj, and applicable regulations. Although the case remains pending in the district court, the Cooks and Copar have filed an interlocutory appeal from discovery orders requiring their former and present law firms to produce documents containing legal advice counsel gave to them regarding the legality of mining, transporting, processing, and marketing pumice from their mine. Specifically, the Cooks and Copar appeal the denial of their motion for protective order and their motion to quash subpoenas, contending that this court has appellate jurisdiction under the collateral order, Perlman, and pragmatic finality doctrines. The United States has filed a motion to dismiss this appeal for lack of jurisdiction. We grant the motion and dismiss the appeal.^*

IBackground and Previous Litigation

Before addressing the jurisdictional question, we will briefly describe the parties'nearly ten-year legal dispute involving the Cooks' and Copar's mining operations in the New Mexico Santa Fe National Forest.

Under the General Mining Law of 1872, 30 U.S.C. § 22 et seq., “citizens may enter and explore the public domain and, if they find valuable mineral deposits, may obtain title to the land on which such deposits are located by application to the Department of the Interior.” United States v. Coleman, 390 U.S. 599, 600 n. 1, 88 S.Ct. 1327, 20 L.Ed.2d 170 (1968) (quotation omitted). Before a mineral may be “locatable” under the General Mining Law, “the substance discovered must not only be a ‘valuable mineral’ ..., but must also be the type of valuable mineral that the 1872 Congress intended to make the basis of a valid claim.” Andrus v. Charlestone Stone Prods. Co., 436 U.S. 604, 611 & n. 8, 98 S.Ct. 2002, 56 L.Ed.2d 570 (1978). The Common Varieties Act, 30 U.S.C. § 611, excluded “common variety” pumice from the General Mining Law's definition of “valuable mineral deposit.” Accordingly, common variety pumice is not locatable under the General Mining Law. However, pumice that is “valuable because [it] has some property giving it distinct and special value” is not considered common variety, and, therefore, is locatable under the General Mining Law. Id. § 611 (prescribing that “ ‘block pumice[,]’ which occurs in nature in pieces having one dimension of two inches or more,” is also locatable). A citizen who discovers a valuable mineral deposit and follows the procedures to locate the deposit has the right to exclusive possession of the land for mining purposes, but the government maintains title to the land. United States v. Locke, 471 U.S. 84, 86, 105 S.Ct. 1785, 85 L.Ed.2d 64 (1985). A citizen may also patent a mining claim to obtain title to the land. “Patenting, however, is not required, and an unpatented mining claim remains a fully recognized possessory interest.” Id.

In 1988, the Cooks located 23 mining claims (known as the Brown Placer Claims) in the Jemez Mountains in the Santa Fe National Forest. These claims were leased to Copar—a closely held company owned by Richard Cook's three daughters, Kelly Armstrong, Debbie Cantrup, and Katharine Fishman—to mine pumice. Aplee. Suppl. App., at 22. In 1993, while the Cooks were in the process of obtaining a patent for their claims, Congress passed the Jemez National Recreation Area Act (“JNRAA”), 16 U.S.C. § 460jjj. The Act created the Jemez National Recreational Area and mandated that no mining patents shall be issued for land within the recreational area. Id. § 460jjj–2(a)(1). Under the Act, the Secretary of Agriculture must “examine all unpatented mining claims, including those for which a patent application has been filed, within the recreation area” and determine whether “the elements of a contest are present.” Id. § 460jjj–2(d). The Act then required that the Secretary of the Interior determine the validity of such claims. Id.

After examining the Brown Placer Claims, the Forest Service contested the validity of all claims except claims nine through twelve, which became known as the El Cajete Mine. See Copar Pumice Co. v. Tidwell, 603 F.3d 780, 788 (10th Cir.2010). The Department of the Interior examined the Brown Placer Claims and agreed that only claims nine through twelve were valid and that Copar could mine these claims for stonewash pumice that was 3/4 inches or larger (“+3/4? pumice”) because such pumice was an uncommon variety that is used in the stonewash laundry industry to abrade denim fabric to look “worn.” See id. at 784, 788 (quotation omitted). In 1997, the Santa Fe National Forest approved a ten year plan of operations for Copar to mine +3/4? pumice from the El Cajete Mine. Under the plan of operation, Copar would separate the locatable pumice (3/4? or larger) from the common variety pumice, which would be set aside for reclamation.

The Cooks administratively appealed the Department of Interior's decision that some of their mining claims were invalid. The Cooks also filed a takings claim against the government in the Court of Federal Claims in response to the enactment of the JNRAA. Cook v. United States, 42 Fed.Cl. 788 (1999). The Court of Federal Claims granted partial summary judgment to the Cooks on their takings claim. Id. at 795. Thereafter, in 2002, the Cooks and the government settled the takings claim and the administrative appeal by entering into an agreement wherein the Cooks would retain Brown Placer Claims nine through twelve as unpatented mining claims with the understanding that they could not dispose of common variety pumice from these claims. Aplee. Suppl. App., at 18–19. In return, the government paid the Cooks approximately four million dollars. Id. at 19.

In 2002, Copar stated that it was crushing the +3/4? pumice to sell for common variety purposes other than use in the laundry industry. The Forest Service determined that any +3/4? pumice removed and not sold for laundry industry purposes rendered the pumice common variety in violation of the settlement agreement, JNRAA, and applicable regulations. When Copar failed to provide documentation to confirm that it was selling the pumice only for laundry industry purposes, the Forest Service issued a Notice of Noncompliance in 2003, which required Copar to provide complete records of its pumice sales since 2002. Copar filed an administrative appeal to this Notice, and the Forest Service affirmed. Copar, 603 F.3d at 790. Copar then filed suit in the United States District Court for the District of New Mexico seeking review and reversal of the Forest Service's decision. The district court denied Copar's petition for review, and this court affirmed. Id. at 793.

Present Litigation

In 2009, the United States brought the present action against Copar and the Cooks alleging trespass, conversion, and unjust enrichment arising from the operation of the El Cajete Mine. Aplt.App. at 33, 42–44. In their Answers, Copar and the Cooks ¹ claimed that the removal of +3/4? pumice was legal. Id. at 64, 73. In February 2011, the government served interrogatories requesting that Defendants “[i]dentify and describe all legal advice provided to Defendants regarding the legality of the mining, transportation, processing, marketing, trade, gift or sale of pumice at or taken from Brown Placer Mining Claims 9–12,” as well as requests for production of related documents. Id. at 115. Defendants objected and asserted that such information and documents were within the attorney-client and work-product privileges. Id. at 114. In July 2011, Defendants responded to the government's continued requests for such information by stating that their good faith defense had been documented in pleadings and memoranda filed in previous litigation to which the government was a party. Aplee. Suppl. App., at 10.

The government then moved to compel production of the documents contending that Defendants had waived the attorney-client privilege by asserting a good faith defense based on advice of legal counsel. Aplt.App., at 107–09. On October 26, 2011, after conducting a hearing, the magistrate judge determined that Defendants had waived the privilege by asserting a good faith defense based on legal advice, and granted the government's motion to compel. Id. at 157–58.

Defendants did not comply with this order. The government then served three subpoenas for production of documents: one on Defendants' current counsel, and two on Defendants' previous counsel. Id. at 186, 193, 200. The subpoenas directed production of “[a]ll documents reflecting legal advice provided to [Defendants] ... regarding the legality of...