USA v. Shumway, 96-16480

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Citation199 F.3d 1093
Docket NumberNo. 96-16480,96-16480
Parties(9th Cir. 1999) UNITED STATES OF AMERICA, Plaintiff-Appellee, v. RAY SHUMWAY; MOLLY SHUMWAY, Defendants-Appellants
Decision Date12 June 1997

Page 1093

199 F.3d 1093 (9th Cir. 1999)
RAY SHUMWAY; MOLLY SHUMWAY, Defendants-Appellants.
No. 96-16480
U.S. Court of Appeals for the Ninth Circuit
Argued and Submitted June 12, 1997--San Francisco, California
Filed December 28, 1999

Page 1094

Copyrighted Material Omitted

Page 1095

Arthur E. Lloyd, Payson, Arizona, for the defendants-appellants.

Robert Bartels, Assistant United States Attorney, Phoenix, Arizona, for the plaintiff-appellee.

Appeal from the United States District Court for the District of Arizona; Stephen M. McNamee, District Judge, Presiding. D.C. No. CV-95-00024-SMM

Before: Joseph T. Sneed and Andrew J. Kleinfeld, Circuit Judges, and Evan J. Wallach1

Opinion by Judge KLEINFELD; Concurrence by Judge Wallach

KLEINFELD, Circuit Judge:

This is a mining law case. Issues arise regarding the extent to which the owner of an unpatented mining claim or mill site has surface rights despite the absence of approval of his operating plan or bond, and also the constraints on disapproval.


Ray and Molly Shumway own seven mill sites in the Tonto National Forest in Arizona. Two of the seven mill sites, BLM claim numbers AMC 203225 and 209240, are the subject of this lawsuit. The mill sites were held pursuant to mill site claims. Mining claims and mill site claims, in mining law terminology, are vested possessory rights which are recognized as interests in real property; they are not merely assertions of rights, as claims are in the more common sense of the word. Because this case was decided on summary judgment, the facts, where disputed, are taken most favorably to the Shumways based on the cognizable evidence submitted on the summary judgment motions2.

The mill sites are subject to Forest Service operating plan approval because they are in a national forest. 3 Approvals of the Shumways' plans of operations have been repeatedly granted. The first approval in the record was in 1979, for 1979-80. In its 1981 approval, the Forest Service approved a cyanide leaching operation on the

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sites (cyanide combines usefully with gold and silver, so is used extensively to extract those valuable metals from their ores). The Forest Service required the Shumways to have someone live on site to discourage vandalism.

Friction appears to have begun between the Shumways and the Forest Service in the late 1980s. Mr. Shumway states in his affidavit that a Mr. Rodney Byers of the Forest Service came to the district and told him that he "would try to figure out a way to get me off of" his claims before patents for which Mr. Shumway had applied were issued. In 1987, the Forest Service directed Shumway to stop stabling a horse on the property, and clean up trash and junk. But Mr. Shumway felt he needed the horse to inspect the perimeter of his millsites and to inspect mines in the forest, because no motor vehicles were allowed. Mr. Shumway states in his affidavit that "[a]ll of the equipment and materials stored on the mill sites have been or were incidental to the milling operations." That same year, the Forest Service ordered the Shumways out of their home in a travel trailer on one of the sites, though in 1981 it had required that someone live there to guard against the risk of vandalism. No more cyanide leaching was taking place by then, which had been the Forest Service's stated reason for requiring residence on the site, but other chemicals were being used.

The Forest Service also changed its bond requirements with respect to the Shumway mill sites. The operating plan approved in 1979 required the Shumways to post a $2,000 cash or surety bond to assure eventual reclamation of the disturbed area. In 1980, the Forest Service increased the required performance bond to $3,200. The $3,200 amount was approved again in 1981. By 1990, the bond amount had crept up to $5,200, although less ore was being processed than in the 1980s and no cyanide leaching was taking place. But in 1990, the Forest Service raised the required bond to $18,000.

The Shumways submitted a corporate surety bond, adequate in amount, from Globe Insurance Company, Ltd., but the Forest Service rejected the bond because Globe was not listed by the Department of the Treasury as an accepted surety. The Shumways unsuccessfully appealed the increase in the bond requirement and were unable to post it. They found that no sureties on the Department's approved list were writing such bonds, and they did not have $18,000 cash they could spare from the milling operations. In 1991, the Forest Service ordered them to stop all milling and mining and leave their residence on the mill site, because they had not posted the bond. The Forest Service subsequently advised the Shumways that if they tried to obtain approval for a new operating plan, they could expect the bond to be raised to $150,000 or $200,000.

Meanwhile, the Shumways, in 1994, applied for patents to their mill sites. A "patent" "is the conveyance by which the [federal government] passes its title to portions of the public domain."4 A patent does not merely pass title, like a deed, but operates as an official declaration of title which is, with limited exceptions, unassailable and not rebutable.5 The Shumways duly recorded, posted, and published notice. The Secretary of the Interior had, in 1993, revoked his delegation of authority to the Bureau of Land Management to sign the critical document preceding a patent, the "First Half of the Mineral Entry Final Certificate," so the Shumways' papers were forwarded to the Secretary himself. On December 1, 1994, the Secretary of the Interior personally signed the First Half-Mineral Entry Final Certificate for the mill sites at issue and five other Shumway claims.

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The Department then advised the Shumways that a patent would issue "if all is found regular and upon demonstration and verification of use and/or occupancy." This would be verified "by a mineral examiner in an on-the-ground examination." But the Shumways' case file was not assigned by the Department to a mineral examiner. As of the summer of 1995, the Arizona BLM was proceeding with only two field examinations, and those had been requested seven and eight years before. There were eleven more to go before the BLM got to the Shumways' field examination.

In 1995, the United States sued the Shumways to evict them from the two mill sites, and require them to remove all their things and clean the sites up. The Complaint alleges that the Shumways were not conducting any milling at the mill sites, had no approved plan of operations, had failed to post the required bond, and were trespassing. The district court granted summary judgment in favor of the government, ordering the Shumways to remove themselves and all their things from the sites and to restore the sites to their natural condition, or if they did not, they would forfeit the sites and be required to pay damages sufficient to restore the sites. The Shumways appeal.


It is hard to understand this dispute about a relatively arcane area of law without reference to history. During the first half of the nineteenth century, the United States established a mineral leasing system, so that the government would realize much of the economic benefit of minerals found on public lands. But President Polk reported to Congress in 1845 that the cost of government administration was more than four times the lease income, and the leasing system was abandoned.6 The California gold rush in 1849 took place without much law to guide it, so the miners developed their own rules and customs. They evolved in the miners' meetings, which were used to govern mining camps before any official government existed at these remote locations. Among the earliest successful prospectors in the 1849 California gold rush were experienced miners from Cornwall, England, Chile, participants in the Dahlonega, Georgia gold rush of 1829, and other experienced prospectors and miners, who already knew something about what practical rules were needed.7 That the rules were so successful may reflect this combination of practical experience with considerable learning, for "[i]n 1849 hardly a camp existed on the great Sierra slope that did not contain miners who were graduates of colleges and law-schools or were lawyers of considerable experience"8.

The miners' meetings operated as might be expected of a highly democratic process. They favored the interests of those who were there--mostly individuals and small firms without much capital. A much more centralized governmental process in Washington might have favored those with influence in the national government--perhaps those who might want to maximize federal revenue, preserve federal lands, or protect large firms from having to pay huge amounts to buy claims from small scale prospectors who discovered minerals but lacked the capital to extract them.

Other approaches were possible, and might have commended themselves to people with different interests. Justice Field took the position, to the great displeasure of the miners, that under the common law after Alta California became American,

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minerals passed to the owner of the land, so that the miner could not invade land privately held. 9 Another alternative might have been the Mexican, based on the Spanish custom, whereby the sovereign was entitled to a royal share, or royalty, of one fifth of the gold.10 Yet another approach might be the English, where unlike the Spanish quinto, if any gold or silver was found in a mine the king was entitled to the whole, at least if the precious metals were worth more than the base metals (though by two statutes of William and Mary, the king allowed the owner to keep the mine provided that the gold and silver must be sold to the king for the value of the tin in the ore).11 In the American gold rushes in the West, the miners made the rules, so the miners made the...

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