Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-93-04138/USCOURTS-ca10-93-04138-0/pdf.json

Parties Involved:
18.57 Acres Land
Not Party
Consolidated Mayflower Mines, Inc.
Appellant
Stichting Mayflower Mountain Fonds
Appellee
Stichting Mayflower Recreational Fonds
Appellee
United States of America
Appellee

Document Text:

PUBLISH F I L E D ___ Uldted States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit 

TENTH CIRCUIT 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

v. 

CONSOLIDATED MAYFLOWER MINES, INC. 

Defendant-Appellant, 

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STICHTING MAYFLOWER MOUNTAIN FONDS ) 

and STITCHING MAYFLOWER RECREATIONAL ) 

FONDS, ) 

Defendants-Intervenors-Appellees, 

and 

18.57 ACRES LAND, more or less located in 

Central Wasatch County, State of Utah, 

Defendant. 

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UNITED STATES OF AMERICA, ) 

Plaintiff-Appellee, 

v. 

18.57 ACRES OF LAND, more or less located in 

Central Wasatch County, State of Utah, 

Defendant, 

and 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

JUL 2 4 1995 

PATRICK FISHER 

Clerk 

No. 93-4138 

No. 93-4151 

Appellate Case: 93-4138 Document: 01019279159 Date Filed: 07/24/1995 Page: 1 
CONSOLIDATED MAYFLOWER MINES, INC., ) 

) 

Defendant-Appellee, ) 

) 

STICHTING MAYFLOWER MOUNTAIN FONDS, ) 

STICHTING MAYFLOWER RECREATIONAL ) 

FONDS, ) 

) 

Defendants-Intervenors-Appellants. ) 

Appeals from the United States District Court 

for the District of Utah 

(D. C. No. 88-CV-251G) 

E. Scott Savage (Patrick J. O'Hara, with him on the brief), VanCott, Bagley, Cornwall & 

McCarthy, Salt Lake City, Utah, for the Defendant Consolidated Mayflower Mines, Inc. 

E. Craig Smay, Salt Lake City, Utah, for Defendants Stitching Mayflower Mountain Fonds 

and Stichting Mayflower Recreational Fonds. 

Joan M. Pepin, Attorney, United States Department of Justice, Washington, DC (Lois J. 

Schiffer, Acting Assistant Attorney General, United States Department of Justice, 

Washington, DC, Scott M. Matheson, Jr., United States Attorney for the District of Utah, 

Sale Lake City, Utah, Stephen J. Sorenson, Assistant United States Attorney for the District 

of Utah, Salt Lake City, Utah, Jacques B. Gelin, Attorney, United States Department of 

Justice, Washington, DC, and Eric G. Williams, Attorney, United States Department of 

Justice, Washington, DC, with her on the brief), for Plaintiff. 

Before TACHA, FAIRCHILD·, and WGAN, Circuit Judges. 

FAIR CHILD, Senior Circuit Judge. 

·The Honorable Thomas E. Fairchild, Senior Judge, United States Court of Appeals for the 

Seventh Circuit, sitting by designation. 

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Appellate Case: 93-4138 Document: 01019279159 Date Filed: 07/24/1995 Page: 2 
These appeals, argued the same day, arise from a condemnation trial.1 The 

government, pursuant to its power of eminent domain, took 18.22 acres of land, except 

subsurface minerals, owned by Consolidated Mayflower Mines, Inc. ("CMMI"), for relocation 

of United States Highway 40 and a natural gas pipeline due to construction of a dam and 

reservoir near Heber City, Utah. The taking date was March 22, 1988. The parties agreed 

that the land was worth $67,500, if valued for development as recreational home sites. 

CMMI claimed, however, that the highest and best use was as a staging area for access to 

and operation of the Mayflower Mine, to which CMMI has rights under mining leases. The 

jury found that the highest and best use of the land was for development as recreational 

home sites, rather than as a mine staging area. That meant that just compensation was 

$67,500, the amount conceded by the government. CMMI appeals from the judgment 

entered accordingly (No. 93-4138). Stichting Mayflower Mountain Fonds and Stichting 

Mayflower Recreational Fonds ("the Stichtings"), intervenors below, are successors to one 

of CMMI's lessors. On their appeal (No. 93-4151), they challenge limitations the district 

court placed on the issues they could present at the trial. We affirm. 

L 

1 While not formally consolidated, we choose to deal with both appeals, reflected in the 

above caption, in a single opinion. 

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Appellate Case: 93-4138 Document: 01019279159 Date Filed: 07/24/1995 Page: 3 
The 18.22 acres2 were part of a larger parcel of land, made up of 25.08 acres ("the 

25 acres"), and owned in fee simple, excluding mineral rights, by CMMI. CMMI also had, 

under long-term leases, the exclusive right to mine and remove all ores and minerals from 

4600 acres owned by the Stichtings and surrounding the 25 acres. The entire area is within 

lands known as the Park City Mining District. 

The principal bone of contention is the underground Mayflower Mine located within 

the 4600 acres. Discovered in the late 1800s, it produced gold and other minerals until1972. 

It was then owned by Newpark Resources. In 1972, Newpark removed and sold trackage, 

equipment, and pumps; the Mine flooded. 3 

In 1972, Newpark sold the 4,600 acres to LON Investment Company, which planned 

to develop a ski resort on the property. Newpark reserved some of the mineral rights. The 

old portal to the Mine was on and surrounded by the land sold to LON; no other access to 

the Mayflower Mine has been created. 

In 1975, Newpark and LON created CMMI (now a wholly-owned subsidiary of 

2 The 18.22 acres are made up of 17.41 acres of surface estate in fee, and .81 acres in a perpetual 

slope easement. After taking, CMMI's remainder is 6.86 acres and the fee interest in the .81 acres, 

subject to the easement. 

3 The 1971 Newpark annual report stated that ore research data showed that the mine is 

approaching the end of profitable ore production, and that there would be an end to profitable 

mining operations during the third quarter of 1972. The 1972 annual report stated that ore reserves 

were depleted to a point where profitable operations could no longer be sustained. The price of gold 

was $64.00 per ounce at the end of 1972. At the time of taking, it was $443.00 per ounce. 

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Appellate Case: 93-4138 Document: 01019279159 Date Filed: 07/24/1995 Page: 4 
Newpark), and each issued a mining lease to CMMI, giving it the exclusive right to mine 

their properties. They conveyed the 25 acres to CMMI, evidently as a staging area for 

mining. The Stichtings obtained LON's properties in December 1977, for resort 

development. They, therefore, stand as lessor of CMMI's mineral rights, and owner of the 

4,600 acres, including the old portal. Pursuant to the mining lease between CMMI and LON 

(now the Stichtings), the Stichtings were entitled to a 0.6% royalty on net smelter returns 

for minerals mined. The Stichtings also could withhold consent for CMMI activity which 

would or might interfere with the surface use.4 This background is more fully recounted 

in the opinion in Stichting Mayflower v. Newpark Resources, 917 F.2d 1239 (lOth Cir. 1990). 

Operation of the Mayflower Mine could be accomplished most economically through 

the old portal, owned by the Stichtings. They do not permit its use. There was evidence 

that possible alternative points of access, other than the 25 acres, and including the nearby 

Ontario Mine, are not feasible. 

In simplistic terms, Mayflower Mine consists of a vertical shaft from at or near the 

surface to a depth of 3,000 feet, with drifts and raises branching off. The adit (often 

referred to as a tunnel) from the old portal reaches the shaft 800 feet below its top. The 

4 The lease provided that 

Lessee agrees that it will not make, allow or permit any operation or activity 

of any type which involves any occupation or use of the Surface Premises or 

which would or might interfere with any actual or contemplated use of the 

Surface Premises by Lessor, without the prior written consent of Lessor, which 

will not be unreasonably withheld. 

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Appellate Case: 93-4138 Document: 01019279159 Date Filed: 07/24/1995 Page: 5 
adit is about 7,000 feet in length. 

At trial, Mr. Miller, an experienced mining engineer, produced a plan for working the 

Mayflower Mine from the 25 acres. A new adit would be driven from a new portal on the 

25 acres, about 1,800 feet, passing under an area known as the Village Site, and would 

intersect the old adit about 300 feet from the old portal. The elevation of the new portal 

would be 6,360 feet above sea level, and the new adit would have to be graded to rise 80 

feet in order to intersect with the old adit. 

The mine had flooded, with water in the shaft pretty well up to the old adit. Mr. 

Miller described how the new adit would be driven, buildings built on the 25 acres, pumps 

installed so as to remove an estimated 150 million gallons of water, plus normal 

accumulation thereafter, trackage, hoist, and equipment replaced, and electric power brought 

in. A road would be prepared for hauling ore to a mill (which would be installed at a 

distance of 7.9 miles), and a pipeline laid to carry water about two miles to a treatment 

facility. The preliminary work would take 18 months. Production, with a work force of 70, 

would start then, and continue for 3-1/2 years. 

Mr. Simas, who had been head geologist at the Mayflower Mine when operating, 

testified that in 1988 there were 175,000 tons of ore which would be profitable to mine at 

the then gold price of $443.00 per ounce, cost of operation being taken into consideration. 

Mr. Miller calculated that that amount of ore could have been produced under the plan. 

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Appellate Case: 93-4138 Document: 01019279159 Date Filed: 07/24/1995 Page: 6 
He estimated that $32 million would have been received for ore during the 3-1/2 years, 

$6,100,000.00 would have been spent as capital over the first 1-1/2 years. Total cost of 

operation, and cost of shutdown would be $20,256,000, yielding a net return of $5,644,000, 

over the period of operation. 

Mr. Stuart, a retired accountant, testified to an opinion that the fair market value of 

the Mine was $8 million. His opinion was based on his estimates of interest on borrowings 

and Mr. Miller's estimates of the capital requirements, costs, and receipts for the 175,000 

tons of ore. He computed the present value (1988) of cash flows over the five-year period 

at $3.522 million. It was difficult to find sales of comparable properties. In an effort to 

come as close as possible to comparables, he looked at 31 sale or acquisition transactions 

in 1987 and 1988 involving companies related to gold-mining. He narrowed these down to 

20 and then pared them down to eight or nine that he thought were most comparable where 

the properties were working mines. In most instances, only a fractional interest in a gold 

mine had been acquired, but he calculated the amount paid for each dollar of revenue. He 

ultimately computed three types of multipliers and derived values, based on Mr. Miller's 

figures, of 57.8 million dollars, 28.1 million dollars, and 53.5 million dollars. He considered 

these high and gave the average of them only 10% weight. He gave the 3.522 million dollars 

derived from the income approach 90% weight and thus reached his final opinion of a 

market value of 8 million dollars. 

The government produced evidence to show that carrying out Mr. Miller's plan would 

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Appellate Case: 93-4138 Document: 01019279159 Date Filed: 07/24/1995 Page: 7 
ultimately result in loss of some of the initial capital outlay. Mr. Bohnet is a mining engineer 

with experience in underground mines and in preparing feasibility studies for mining projects. 

He had gone over Mr. Miller's plan and testified to items where he believed Mr. Miller had 

allowed an inadequate amount, such as for dewatering the mine, had omitted needed 

equipment, such as air conditioning for the hot portions of the mine, had proposed 

equipment inadequate to perform the needed function, such as an eight inch pipeline for 

dewatering where a 12 inch diameter was needed. He estimated the required capital outlay 

at $10,440,270.00. He also believed that operating cost would amount to $116.20 per ton 

instead of Miller's $73.50 per ton, and felt there would be less revenue because the declining 

grade of ore would result in less recovery of gold per ton. He testified that according to his 

figures, the return from 175,000 tons of ore would be greater than the cost of operating the 

mine, but would not pay back the capital required to begin operation. 

He also testified that large companies look for gold mines with a potential of 500,000 

ounces of gold. The Mayflower was expected to produce from 50,000 to 75,000 ounces. 

William Pincus, a government witness, is manager of the mineral economics 

department of a consulting firm. He is a geologist, with experience in the mining industry. 

He testified that serious investors in the mining business tend to have a conservative 

approach because of the risk. Large mining companies want big projects, and would not be 

interested in the Mayflower Mine, because it is small. With a short proven reserve life, a 

flooded mine in an environmentally sensitive area, not in production for 15 years, it would 

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Appellate Case: 93-4138 Document: 01019279159 Date Filed: 07/24/1995 Page: 8 
be characterized as a high risk project, and conventional bank financing would be unlikely. 

Mr. Pincus testified that in his opinion, the project is clearly uneconomic. He used a gold 

price of $443.00 per ounce, the price at the date of taking. The industry standard at this 

time, however, was $400.00. 

Mr. Pincus computed that the project would have lost $7,369,000 if carried out. 

A different, major consideration, adverse to any buyer's interest in the 25 acres, was 

brought before the jury, in part by the government, and in part by the Stichtings. It was that 

CMMI's right to conduct mine operations might require the Stichtings' consent and that the 

Stichtings were unwilling to give consent. As put by government counsel in his opening 

statement: 

... [O]ne factor that a willing buyer in the market as of 1988 ... would 

be that if anyone tried actually to mine from that property in 1988, they would 

face a legal hornet's nest from the [Stichtings ]. 

Who's right and who's wrong in that issue really doesn't matter ... ; the 

point is a buyer would know that that extra expense and delay would be part 

of developing that property for mining .... 

Although the lease provided CMMI with the right to remove ores in such manner as 

CMMI deems advisable, its right was subject to restrictions which would make its operations 

dependent to some extent upon the Stichtings. See portions of the lease, quoted Stichting, 

917 F.2d 1246-47. Parts of the amended judgment entered on remand of that litigation 

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provide that whenever lessors reasonably believe that a proposed mining use would or might 

interfere with actual or contemplated resort uses, they may refuse consent; lessee may 

contest the refusal on the ground that it was unreasonable; in order to prevail, lessee must 

show that the use proposed cannot interfere with any actual or contemplated resort use; 

lessee may not use or occupy an area described as the "Village Site." 

Mr. Mower, the manager of the United States operations for the Stichtings from 1980 

to 1988, testified that the Stichtings would not have consented to the proposed adit, pipeline, 

or road beneath or across their property because these would or might interfere with the 

resort development they contemplated. 

Additionally, the adit, as proposed, would have run beneath the Village Site, referred 

to in the lease. The Stichtings contend that, properly interpreted, the provision that the 

lessee shall have no right to use the Village Site applies to its subterranean dimension as 

well as the surface. Tunnelling under it would thus be unconditionally forbidden, and they 

would argue that the provision against unreasonably withholding consent would not apply. 

Thus there is support for the government's assertion that a hypothetical buyer at the 

time of taking would have evaluated the difficulties and probable outcome of a lawsuit, as 

well as the capital outlay and costs and returns of the mining operation itself. 

Other objective evidence tending to show that reopening the Mayflower Mine could 

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Appellate Case: 93-4138 Document: 01019279159 Date Filed: 07/24/1995 Page: 10 
be profitable was that in April, 1981, Newpark made agreements with Noranda Mining 

Company, of Canada, to resume operations. For purposes of the agreements, the mining 

property was valued at $6 million. The agreements were canceled, however, when Noranda 

withdrew from all United States operations. The Noranda agreement, however, has little 

probative value in this case because it was based on gaining access from the old portal, and 

not the 25 acres. The required capital outlay is about $1.5 million less if the old portal can 

be used. There have been negotiations between CMMI and the Stichtings about the use of 

the old portal and the area giving access to it, but those negotiations have been unsuccessful. 

The issues were submitted to the jury by special verdict. Question 1 asked the jury 

to indicate by check-mark whether the highest and best use of the 25 acres was development 

as recreational homesites or development as a mining staging area. The jury checked the 

former, and then, as instructed, did not answer the other questions. Had the jury found that 

a mining staging area was the highest and best use, Question 2 asked whether, after the 

taking of the 18.22 acres, it would have been just as possible and practicable to develop a 

staging area on the remaining 6.86 acres (as the government had contended). If not, 

Questions 3, 4, and 5 asked the fair market value of the 25 acres before the taking, the fair 

market value of the remaining 6.86 acres after the taking, and the difference between those 

amounts. 

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II. APPEAL NO. 93-4138 

CMMI seeks a new trial, arguing that part of an instruction on highest and best use 

was erroneous, and that CMMI was prejudiced by activity of counsel for intervenor 

Stichtings, going beyond any legitimate purpose of intervention. 

A. Jury Instruction on Highest and Best Use 

The court instructed the jury that 

fair market value in this case is to be regarded by you as that sum of money 

which considering all of the circumstances existing on March 22nd, 1988 

probably could have been obtained for the property on the open market, that 

is the amount in terms of cash or its equivalent that in all probability would 

have been paid for the property after fair negotiations between a fully 

informed owner willing to sell and a fully informed purchaser willing and able 

to buy, with neither being under any compulsion to act and a reasonable time 

being allowed for negotiations. The same definition applies to the fair market 

value of the property which remains after the taking. 

Now to determine the property's fair market value, you should consider 

its highest and best use. This means you should find how a fully informed 

purchaser in the marketplace would most likely use it in the reasonably near 

future after March 22, 1988 without the government's taking. 

The land's highest and best use must be shown by substantial credible 

evidence to have been reasonably probable in the reasonably near future. 

Mere possibility of a use is not enough. Speculative schemes of the owner or 

witnesses are to be excluded from your consideration. 

Jan. 27, 1993 Tr. at 235-236 (emphasis added). 

The significance of the instruction defining highest and best use is made clear by the 

form of the verdict. Unless the jury found that the highest and best use was development 

as a mining staging area, the jury would never reach the question of market value. 

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CMMI takes issue with the italicized portions of the instruction. CMMI had objected 

to them at the end of the trial, 5 and had requested an instruction based on Cal-Bay 

Corporation v. United States, 169 F.2d 15, 18 n.2 (9th Cir.), cert. denied, 335 U.S. 859 (1948). 

That instruction would not have required a finding of probable mining in the reasonably near 

future, but would have told the jury that "[w]here there is reasonable possibility of 

production in paying quantities [mining] leases are common subject of barter and sale and, 

therefore, have a definite ascertainable n1arket value." 

"We review the jury instructions as a whole, in light of the record, to determine 

whether they correctly state the applicable law and provide the jury with ample 

understanding of the issues and standards of the case." Shamrock Dn"lling Fluids, Inc. v. 

Miller, 32 F.3d 455, 459 (lOth Cir. 1994) (internal quotation marks and citations omitted). 

We will reverse the district court only if, after reviewing the record, we determine that an 

instructional error was prejudicial. F.D.l.C. v. United Pacific Ins. Co., 20 F.3d 1070, 1077 

(lOth Cir. 1994). 

The dispute concerning the instruction narrows down to whether, where land taken 

has access to valuable minerals, not yet developed, the owner cannot have the value of the 

minerals reflected in the fair market value unless he can show that the extraction of the 

minerals is the highest and best use of the land and would have been reasonably probable 

5 We note that CMMI did not object to a similar preliminary instruction which was 

earlier given to the jury. 

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in the reasonably near future. Or would it be enough to show a reasonable possibility of 

production in paying quantities? 

The reasonably probable in the reasonably near future requirement is derived from 

Olson v. United States, 292 U. S. 246, 255, 257 (1934). Olson asserted that the highest and 

most profitable use is to be considered in determining just compensation. Olson, and many 

of the cases which apply its holding, did not involve evaluation of mineral deposits underlying 

the land being taken. See McCandless v. United States, 298 U.S. 342, 345, 348 (1936); United 

States ex rei. T. VA. v. Powelson, 319 U. S. 266, 275-76 (1943); Wilson v. United States, 350 

F.2d 901, 908 (lOth Cir. 1965); United States v. 46,672.96 Acres of Land, A-fore or Less, etc., 

521 F.2d 13, 15 (lOth Cir. 1975); U.S. v. 77,819.10Acres of Land More or Less, etc., 647 F.2d 

104, 110 (lOth Cir. 1981), cert. denied, 456 U. S. 926 (1982). 

CMMI does not appear to have objected to the form of the special verdict, which 

made a finding that mining was the highest and best use a condition precedent to any further 

consideration of market value. Indeed, in its answer, it had alleged that providing surface 

mining access for its leasehold mineral interests was the highest and best use of the 25 acres. 

The Pretrial Order stated that CMMI and the Stichtings assert that the highest and best use 

of the property was for mining purposes. CMMI, however, argues on appeal: 

The undue emphasis placed by the lower court on the challenged 

highest and best use instruction was improper in this case. The improper 

instruction obscured the proper measure of just compensation: market value. 

The jury was directed away from the market for the taken property and 

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required to narrowly focus upon whether mining from that property was 

reasonably probable in the near future. 

CMMI brief in No. 93-4138, p.19. 

CMMI is essentially contending that the Olson standard for considering a use not yet 

undertaken must be relaxed where the use is the extraction of minerals. In support, CMMI 

cites Afontana Railway Co. v. lVarren, 137 U. S. 3-+S, 353 ( 1890). There the Supreme Court 

approved an award based on opinion testimony as to the value of a relatively undeveloped 

mining claim through which the land being taken ran. The Court said, 

It may be conceded that there is some element of uncertainty in this 

testimony; but it was the best of which, in the nature of things, the case was 

susceptible. That this mining claim, which may be called 'only a prospect,' had 

a value fairly denominated a market value, may, as the Supreme Court of 

Montana well says, be affirmed from the fact that such 'prospects' are the 

constant subject of barter and sale. Until there has been full exploiting of the 

vein its value is not certain, and there is an element of speculation, it must be 

conceded, in any estimate thereof. And yet, uncertain and speculative as it is, 

such 'prospect' has a market value; and the absence of certainty is not a 

matter of which the railroad company can take advantage, when it seeks to 

enforce a sale. 

As recently as 1989, the Court cited Montana Railway as recognizing that the difficulty 

in appraising mineral rights does not defeat the existence of a market value in them. Asarco, 

Inc. v. Kadish, 490 U. S. 605, 628 n.3 (1989). 

Several Courts of Appeals, including this one, have supported an award of market 

value, based on underlying gas, oil, or minerals, without requiring the owner to show that 

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extraction was the highest and best use, or a reasonable probability that it would begin in 

the reasonably near future. Eagle Lake lntprovement Co. v. United States, 141 F.2d 562, 564 

(5th Cir. 1944) ("·where oil interests are involved, ... where there is a reasonable possibility 

of production in paying quantities, mineral rights are a common subject of barter and sale, 

and therefore have a definite, ascertainable market value, even where the prospects of 

successful development are too speculative and remote to be 'reasonably probable."'); CalBay Corporation v. United States, 169 F.2d 15, 18-19 (9th Cir.), cert. denied, 335 U. S. 859 

(1948) (error to refuse instruction "that in the determination of the value of gas and oil 

leases, it may be based on the reasonable possibility of production in paying quantities, even 

though there were not a reasonable probability shown of such value"); Phillips v. United 

States, 243 F.2d 1, 3, 6 (9th Cir. 1957) (error to assume that appellant was entitled to 

payment only on the basis of highest and best use; error to foreclose appellant from making 

proof as to either possibility or probability of mineral deposits); United States v. Silver Queen 

Mining Company, 285 F.2d 506, 510 (lOth Cir. 1960) (some speculation inherent in the 

ascertainment of value of all resource property). 

In two cases, this court has approved applying the Olson test before considering the 

value of the extraction of minerals. In United States v. 494.10 Acres of Land in Cowley Cty., 

592 F.2d 1130 (lOth Cir. 1979), the government took farmland with sand and gravel under 

it. A Commission decided that the highest and best use was agriculture and other surface 

uses. It assigned no value to the gravel deposits. This court approved, citing Olson, and 

saying, "The 'reasonably likely to take place in the near future' element of use is significant 

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here. It is apparent that if the 'future' is beyond or very much beyond the 'near future,' the 

use becomes speculative." /d. 1132. See U.S. v. 179.26 Acres of Land in Douglas Cty., Kan., 

644 F.2d 367, 368 (lOth Cir. 1981) (Commission found that highest and best use was that of 

commercial quarry and livestock and grain production; consideration of limestone reserves 

held not clearly erroneous). See also U. S. v. 69.1 Acres of Land, 942 F.2d 290 (4th Cir. 

1991) (finding that highest and best use was commercial and mining was not clearly 

erroneous; reasonably-near-future means near enough to affect the current value). 

There seems to be some tension between the Olson requirement of reasonable 

probability of use in the reasonably near future, when applied to future extraction of mineral 

deposits, and the line of cases based on Montana Railway, permitting valuation of underlying 

minerals where there is a reasonable possibility of production in paying quantities. We 

conclude, however, that United States v. 494.10 Acres resolved any tension in this circuit, 

adopted the Olson requirement, and requires our approval of the instruction given in this 

case. 

We note also our view that the difference between the instruction given and one 

requiring only a reasonable possibility would not, in this case, have produced a different 

verdict. As we read the record, the testimony of CMMI's witnesses, if fully credited, would 

establish that producing a profit by reopening the Mayflower Mine from the 25 acres was 

both possible and probable, but the testimony of government witnesses would establish that 

a profitable outcome was not even possible. That was the principal thrust of the 

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government's closing argument, and if the jury's finding on highest and best use was not 

based on acceptance of government testimony, it would have been based, as argued by the 

Stichtings, on the view that mining was not practicable without consent by them. Nothing 

suggests that the jury believed that production at a profit was possible, but probably would 

not have occurred within the reasonably near future. 

B. CMMI's Challenge to the Role Played by the Stichtings 

The lease which gave CMMI the right to mine also gave the Stichtings the right to 

a royalty on mining production. If CMMI obtained an award reflecting the value of minerals 

it could have mined but for the taking of the 18.22 acres, a portion of the award 

commensurate with the royalty would belong to the Stichtings. The court allowed the 

Stichtings to intervene as defendants, understandably without objection. They could have 

protected their right to an apportionment representing the royalty and could, if they saw fit, 

have joined in advocating an appropriate award. The district court made it clear that the 

apportionment would be decided by the court. 

On motion of the government, the court limited the Stichtings to presentation of 

evidence relevant to the fair market value of their royalty interest. Later, they were 

permitted also to prove that they would have feared adverse effects from the mining and 

would not have consented to the construction of the ad it, roadway, and pipeline which would 

have been involved in reopening the mine from a portal on the 25 acres. Their counsel's 

cross-examination of witnesses was generally of a sort adverse to an award to CMMI and 

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closing argument to the jury was in a similar vein. Generally, they took a position favorable 

to the government, although not formally aligned with it. 

CMMI correctly notes: ''This was not a quiet title action or a declaratory judgment 

action by the lessee against the lessor under the lease to challenge the reasonableness of the 

Royalty Holder's refusal to consent to a specific mining plan. This was an action to 

determine just compensation." Brief, p.45. The Stichtings' counsel's rhetoric often sounded 

as if he were seeking an injunction against a mining operation about to begin. 

CMMI contends that the Stichtings' "double-teaming" with the government made a 

fair trial impossible. 

We have considerable sympathy with counsel's frustration. It has been difficult for 

us on appeal to understand the reasoning and approach of the Stichtings' counsel. We think 

it was an abuse of discretion to permit him to go beyond the limit the court originally set. 

Nevertheless, we do not agree that CMMI was deprived of a fair trial. The evidence that 

the Stichtings would not have consented to the adit, pipeline, and roadway was relevant to 

whether the 25 acres could have been used as a staging area, and doubtless would have been 

introduced by the government if not by the Stichtings. We see no basis for concluding that 

the presence of counsel for nominal defendants in addition to counsel for the government, 

or the fact that he offered evidence or argued against the feasibility of the mining plan 

unfairly influenc~d the jury on the issue of highest and best use. 

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As noted, the government had by motion sought to keep the Stichtings' counsel within 

bounds, and there is no basis for any claim of complicity. 

ill. APPEAL NO. 93-4151 

The Stichtings claim that the district court improperly eliminated their "claim for 

compensation other than a royalty." They say that the court forbade them to produce 

evidence that CMMI's mining lease "was not workable without further consents" from them, 

and that "such further consents could have been available in exchange for a larger share of 

proceeds of mining." Brief, p.2. 

They say they made it "clear that if CMMI claimed proceeds of a mining operation 

which utilized interests in intervenors' lands which CMMI had no existing right to use, 

intervenors, if they consented to such mining operations at all, would not do so for the 

royalty under the Mining Lease, but would claim a larger share of the proceeds of mining." 

Brief, p.6. Although they assert "[ t ]he Pretrial Order was drawn to reflect such a broadened 

claim," we do not find it there. 

Their theory of why they could, in this proceeding, seek to recover more than the 

existing lease would give them, seems to have been: "Intervenors' mineral estate in the 

Mayflower Property, and part of their surface estate, were united in use with CMMI's 25 

Acres and mineral interest. Intervenors were entitled to claim any loss of value of their 

properties united in use with the 25 Acres, resulting from the taking of the 25 Acres." Brief, 

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p.10. They also argue that they were given standing in this proceeding because the 

government had taken part of their surface estate for the Highway 40 project, the subject 

of a different proceeding. They cite no authority specifically dealing with this type of claim. 

We think their standing in this proceeding was limited to protecting their royalty 

interest. In any event, the outcome of possible negotiations with CMMI over modification 

of the lease and the extent of any "larger share" was speculative and represented a loss of 

an opportunity rather than property. The exclusion of such evidence was correct. United 

States ex rel. T. VA. v. Powelson, 319 U.S. 266, 281-82 (1943), United States v. Sowards, 370 

F.2d 87, 89 (lOth Cir. 1966). 

The judgment appealed from is AFFIRMED. 

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