## F I L E D United States Court of Appeals Tenth Circuit 

### JUN 30 1997 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

MT. EMMONS MINING COMPANY, a corporation, Plaintiff-Appellant,

v. BRUCE BABBITT, Secretary of the United States Department of Interior, DEPARTMENT OF INTERIOR, and BUREAU OF LAND MANAGEMENT, Defendants-Appellees. No. 96-1230

Appeal from United States District Court for the District of Colorado (D.C. No. 94-Z-2978)

Stephen D. Alfers, Alfers & Carver, of Denver, Colo rado (Bruce C. Kirchhoff, Alfers & Carver, of Denver, Colorado; Don H. Sherwo od, Parcel, Mauro, Hultin & Spaanstra, P.C., of Denver, Colorado; and John R. Henderson, Vranesh & Raisch, LLC, of Boulder, Colorado, with him on the brief), for the appellant. Robert H. Oakley, U.S. Department of Justice, Envir onment & Natural Resources Division (Gerald S. Fish, U.S. Department of Justic e, Environment & Natural Resources Division; Lois J. Schiffer, Assistant Att orney General; and Karen Hawbecker, Office of the Solicitor, with him on the brief), of Washington, D.C., for the appellees.-2-

Before EBEL, HENRY, and BRISCOE, Circuit Judges.

BRISCOE, Circuit Judge.

Mt. Emmons Mining Company (Mt. Emmons) appeals fromthe district court's order granting summary judgment in favor of defendant Bruce Babbitt, Secretary of the Interior, (Secretary) in Mt. Emmon s' action to compel the Secretary to continue processing its application fo r several mining patents covering ten lode mining claims in Gunnison, Colora do. The district court found as a matter of law that the Secretary could not further process the patent application because of a congressionally-imposed mo ratorium. We have jurisdiction under 28 U.S.C. § 1291. We reverse an d find that the Secretary has unlawfully withheld agency action in refusing to co ntinue processing Mt. Emmons' application.

I. On December 30, 1992, Mt. Emmons filed a patent app lication for ten lode mining claims with the Colorado office of the Burea u of Land Management (BLM). On March 2, 1993, the Secretary revoked the authority of subordinate1 On its face, the FHFC certifies a patent "may issue if all is found regular and

upon demonstration and verification of a discovery of a valuable mineral deposit." Append. I at 88. According to the BLM Manual H-3860-1, ch. VI, pp. VI-1 and -2, the FHFC "[c]ertifies that the applicant has satisfactorily complied with all of the 'paperwork' requirements of the Mining Law (title, proofs, posting requirements, purchase money)." On appeal, the Secretary concedes "the signing of the FHFC establishes only that the applicant has submitted the appropriate filing fees, affidavits, and necessary documents, and has submitted the purchase prices." Appellees' br. at 11 n.5. -3- officials to issue "first half final certificates" (FHFC's) 1 and patents. Append. I at 25. Nevertheless, patent applications were process ed initially in state BLM offices until they reached the point where the issu ance of an FHFC would be the next step. After review by the proper state direct or, the application, together with (1) a cover memo with concurrence lines, (2) an FHF C prepared for the Secretary's signature, and (3) various documents fr om the case file, were to be sent to the Regional Solicitor's office, then to th e Solicitor, then to the Director, then to the Assistant Secretary of Land and Mineral s Management, and if all concurred, then to the Secretary. The final review process for issuance of a patent follows a similar chain of command. Richard Tate, the senior land law examiner for the Colorado BLM office, completed his review of Mt. Emmons' application and , on September 15, 1994, wrote to Mt. Emmons requesting payment of $875 for purchase of the lands subject to the patent application. Mt. Emmons imme diately tendered payment. On September 19, 1994, BLM accepted payment and on a "Receipt and2The committee failed to report the legislation prior to adjournment.

3The moratorium provisions remain in effect through fiscal year 1997. PL 104- 208, 110 Stat. 3009, Omnibus Appropriations Act 1997, § 314(a)-(b). -4- Accounting Advice," Tate marked "mineral entry allo wed." Append. I at 128. Tate prepared the application to be sent to the Reg ional Solicitor's office, the next level of the review process leading up to issuance of a first half final certificate by the Secretary. On September 30, 1994, Congress enacted the Departm ent of Interior and Related Agencies Appropriations Act, PL 103-332, 10 8 Stat. 2499, § 112, which placed a moratorium on the expenditure of funds by the Department of Interior for processing mining or millsite patent applications a nd issuing patents under the general mining laws "[i]f the House-Senate Committe e on H.R. 322 fails to report legislation which is enacted prior to the adjournme nt of the 103d Congress sine die ." 2 Congress also provided an exemption for certain p atent applications in § 113 of the legislation:

The [moratorium] provisions of section 112 shall no t apply if the Secretary of the Interior determines that, for the claim concerned (1) a patent application was filed with the Secretary on or before the date of enactment of this Act, and (2) all requirements est ablished under sections 2325 and 2326 of the Revised Statutes (30 U.S.C. 29 and 30) for vein or lode claims . . . were fully complied with by the applicant by that date. 3 By Instruction Memorandum (IM) No. 95-01 dated Octo ber 4, 1994, the Secretary adopted the following interpretation of § 113:-5- Only the following applications may be processed: (1) Those for which a FHFC was signed before Octobe r 1, 1994 and; (2) those for which a FHFC was pending in Washingto n, D.C., as of September 30, 1994. Tate retained Mt. Emmons' application in the Colora do BLM office. Mt. Emmons subsequently requested that its application be forwarded to Washington, D.C. Tate responded that local BLM officials no lo nger had authority to sign final certificates and, under the Secretary's interpretation of the moratorium, Mt. Emmons' application could not be processed further. It is undisputed that no FHFC was issued and that the application was not fo rwarded to Washington, D.C. On December 30, 1994, Mt. Emmons filed the complain t in this action, seeking to compel the Secretary to continue process ing its application. The complaint sought relief under the Administrative Pr ocedure Act (APA), 5 U.S.C. § 706, mandamus, and declaratory judgment. Mt. Emm ons filed a motion for discovery on June 7, 1995. The Secretary filed a m otion for summary judgment, arguing he lacked authority to process Mt. Emmons' application. The Secretary argued to the district court, as he urges on appeal , that his construction of the scope of the § 113 exemption is a reasonable constr uction and is entitled to judicial deference. Mt. Emmons filed a Rule 56(f) motion for a continua nce pending discovery. Mt. Emmons argued that, despite the Secretary's exp lanation of his treatment of the application, discovery was needed to determine the Secretary's-6-

"contemporaneous construction of IM 95-01." Mt. Em mons further argued its claim for unreasonably delayed agency action prior to the effective date of the moratorium required discovery into the reasons for that delay. The magistrate judge found the only determinative issues in the ca se dealt with the Secretary's interpretation of § 113 and, thus, discovery was no t needed. The magistrate recommended that summary judgment be rendered in favor of the Secretary. The magistrate specifically held that Mt. Emmons was no t entitled to an exception to the moratorium under § 113 because (1) an FHFC had not been issued to Mt. Emmons before October 1, 1994, and (2) its patent application had not been forwarded to Washington, D.C., and therefore was no t "filed with the Secretary on or before the enactment of the Act" as required by § 113. The district court agreed and granted summary judgment on the basis th at the moratorium prevented the Secretary from processing the patent applicatio n and that the § 113 exemption did not apply under the Secretary's interpretation of that exemption in IM 95-01.

II. Mt. Emmons raises two issues on appeal: (1) whethe r the Secretary's refusal to continue processing its patent applicati on violates § 113; and (2) whether the district court erred in refusing to per mit Mt. Emmons to conduct discovery prior to granting summary judgment in fav or of the Secretary.-7-

Under the APA, 5 U.S.C. § 706(2)(A), as a reviewing court, we must set aside the Secretary's action if it is "arbitrary, c apricious, an abuse of discretion, or otherwise not in accordance with the law." See Washington v. Department of Transp. , 84 F.3d 1222, 1224 (10th Cir. 1996); Osborne v. B abbitt , 61 F.3d 810, 812 (10th Cir. 1995). Moreover, as a reviewing cou rt, we must "compel agency action unlawfully withheld or unreasonably delayed. " 5 U.S.C. § 706(1). The availability of a remedy under the APA technically precludes Mt. Emmons' alternative request for a writ of mandamus, Western Shoshone Business Council v. Babbitt , 1 F.3d 1052, 1059 (10th Cir. 1993), although the mandatory injunction is essentially in the nature of mandamus relief, Es tate of Smith v. Heckler , 747 F.2d 583, 591 (10th Cir. 1984). Consequently, we m ust determine whether the Secretary's refusal to continue processing Mt. Emmo ns' application unlawfully withholds agency action. Our review of the adminis trative record is de novo and we accord no deference to the district court. Sant a Fe Energy Products Co. v. McCutcheon , 90 F.3d 409, 413 (10th Cir. 1996). The question of whether the Secretary, through IM 9 5-01, lawfully applied the moratorium to Mt. Emmons' patent application re quires us to interpret § 113 and apply it to the facts presented. If a statute is clear and unambiguous, the court must interpret the statute to effect the unam biguous intent of Congress, regardless of the interpretation given to the statu te by an administrative agency-8-

with responsibility for enforcement. See Chevron U.S.A. v. Natural Resources Defense Council , 467 U.S. 837, 842-43 (1984); Wyoming v. Alexander , 971 F.2d 531, 535 (10th Cir. 1992). "[W]hen a court is revi ewing an agency decision based on a statutory interpretation, 'if the statute is s ilent or ambiguous with respect to the specific issue, the question for the court is w hether the agency's answer is based on a permissible construction of the statute. '" National R.R. Passenger Corp. v. Boston and Maine Corp. , 503 U.S. 407, 417 (1992) (quoting Chevron , 467 U.S. at 843). "[A]n agency's interpretation of a statute is not entitled to deference when it goes beyond the meaning the statu te can bear." MCI Telecommunications Corp. v. American Tel. & Tel. Co

. , 512 U.S. 218, 229 (1994). Therefore, no deference is due an agency i nterpretation which fails to incorporate the plain meaning of the statute. Publ ic Employees Retirement System of Ohio v. Betts , 492 U.S. 158, 171 (1989). Similarly, a reviewing court need not accept agency interpretations which "frust rate the policy that Congress sought to implement." Securities Industry Ass'n v. Board of Governors of Federal Reserve System , 468 U.S. 137, 143 (1984). Our initial inquiry is whether the § 113 moratorium exemption is ambiguous. Under § 113, two requirements must be m et before the exemption applies. First, the application must be filed with the Secretary on or before the date of enactment of the moratorium. The Secretary concedes on appeal that Mt.4The Secretary acknowledges that the reasoning of the district court is flawed in

holding the Secretary's requirement that the application be in Washington, D.C. is based on the statutory requirement that the application be filed with the Secretary. The Secretary acknowledges that applications filed in state BLM offices are filed with the Secretary. Appellees' br. at 27.

5Section 30 is not at issue in Mt. Emmons' patent claim; therefore, the focus is only on compliance with § 29. -9- Emmons satisfied this requirement when it filed its application with a state BLM office. 4 Thus, the Secretary does not assert that ambiguity in this provision justifies his interpretation of the statute. The s econd prerequisite to qualify for an exemption is that all requirements of 30 U.S.C. §§ 29 and 30 "were fully complied with by the applicant" by the date of enac tment of the moratorium. We have held that an applicant meets its obligations u nder § 29 5 when it files all necessary papers required to process the applicatio n, and that from that point forward complete responsibility lies with the Secre tary. Marathon Oil Co. v. Lujan , 937 F.2d 498, 500-501 (10th Cir. 1991). The Secr etary argues ambiguity in this second provision requires this court to def er to the Secretary's interpretation as expressed in IM 95-01. The Secre tary argues the second provision is inconsistent with the moratorium itsel f in that it would require the Secretary to process the patent application, for wh ich he cannot use appropriate funds, to determine whether the exemption applies. The Secretary concludes at one point in his brief that Congress intended only some ambiguous limited review of an applicant's compliance with the mining laws. The Secretary's argument6Further support for Mt. Emmons' position that the Secretary's interpretation of

the scope of the exemption is unreasonable is found in the language of a similar moratorium exemption passed by Congress on oil shale patent applications in 1991. That act explicitly provided the moratorium applied "unless the holder of a valid oil shale mining claim has received first half final certificate for patent by date of enactment of this (continued...) -10- ignores the fact that Congress has explicitly defin ed the content of the limited review permitted under the moratorium--the applican t's compliance with the paper requirements for a patent application. Thus, the p rovision is not ambiguous but clearly requires the Secretary to determine eligibility of pending applications for FHFC's--that is, whether the application is complet e in that the applicant has complied with all requirements for applying fora patent. Cf. R.T. Vanderbilt Co. v. Babbitt , 113 F.3d 1061 (9th Cir. 1997) (application is not"complete" so as to qualify for continued processing under § 113 if pur chase price is not paid). Even if we were to accept his argument that the statute is in some respects ambiguous, the Secretary's position would not be mu ch aided. In the event of ambiguity, the Secretary's interpretation must be r easonable in order to be entitled to deference. As Mt. Emmons argues, the Secretary' s interpretation is contrary to the language of § 113. The Secretary bases an appl icant's eligibility for exemption on how far the Secretaryhas processed the application (whether an FHFC was signed or transmitted to the BLM office inWashington, D.C.), while § 113 clearly and unequivocally bases the applicant's eligibility only on the applicant's actions (compliance with 30 U.S.C. §§ 20 and 30). 66 (...continued)

Act." PL 102-154, 105 Stat. 990 (1991). Congress did not use this same language with explicit reference to the receipt of an FHFC in § 113. Had Congress intended to adopt the Secretary's rule, it clearly knew how to do so. -11- Although the Secretary is free to adopt a reasonabl e interpretation of an ambiguous statute, he is not free to disregard an u nambiguous aspect of the statute to clarify and effect an ambiguous one. Th e moratorium provisions contain no ambiguity to permit the Secretary's inte rpretation of the scope of the § 113 exemption. The Secretary's argument on appeal that he cannot e xpend funds to determine whether an application filed before enact ment of the moratorium is complete or to determine whether the application is entitled to an FHFC is inconsistent with his own interpretation of §§ 112 and 113. Under the Secretary's IM 95-01, applications without FHFC's (and which mi ght ultimately be determined to be ineligible for FHFC's) can continu e to be processed if they are physically located in Washington, D.C. The Secreta ry's distinction based on the physical location of the application package is unr easonable and impermissible in light of the statute's focus on the applicant's compliance as the determining factor for eligibility for the exemption. The Secretary is unable to support his position wit h any language in the moratorium statute. He attempts to justify his con struction by reference to the legislative history of the moratorium, pointing outthere is history supporting the-12-

view that the exemption would exempt those classifi cations of applications identified in IM 95-01:

The managers agree that those applications having r eceived firsthalf-final certificates on or before the date of en actment of this Act are not subject to the prohibition in Section 112. In addi tion, the managers agree that those applications for first-half-final certif icates currently pending in the Office of the Solicitor in Washington, D.C. or elsewhere in the Department of the Interior in Washington, D.C. will not be subject to the moratorium in Section 112. 140 Cong. Rec. H9536-01 (1994). In the absence of ambiguity requiring clarification , there is no need to resort to the legislative history. See United States v. Gonzales , 117 S. Ct. 1032, 1035 (1997). The ambiguity identified by the Secre tary in his brief comes not from the moratorium statute but from an overly broa d paraphrase of the language of § 113 in the legislative history itself--that § 113 requires a determination of entitlement to a patent rather than compliance with the paper requirements of 30 U.S.C. § 29 in the application. H.R. Rep. 103-740, at 37. Moreover, the excerpt from the legislative history is not tied to any spe cific language in the moratorium statute and does not plainly support the Secretary' s construction of the moratorium. While it may indicate an intent that applications with signed or pending FHFC's in Washington, D.C. would be exempt from the moratorium, it does not indicate that onlythose applications would be exempt, which is the position the Secretary has adopted. The legislativ e history is still more uncertain7Section 113 says only "if the Secretary of Interior determines," without

specifying the mechanism the Secretary must use. -13- as it contains expressions elsewhere that § 113 was intended to exempt from the moratorium any pending application entitled to an FHFC. H.R. 103-551. This is exactly the determination Mt. Emmons seeks and the Secretary refuses. The Secretary argues in part that the statute is am biguous, but more importantly he argues it is silent on the importantquestion of how he is to decide whether an applicant is eligible for the moratorium exemption. The Secretary argues Congress left the mechanism for determining eligibility to him and he could therefore adopt the two-part test in IM 95-01 . While the Secretary is indeed free to implement an internal procedural mechanism of his own choice to determine exemption eligibility, 7he is not free to change the standard for qualifying for the exemption by selection of one me chanism over another to exclude from the exemption applications Congress ha d chosen under the language of the statute to include. Yet this is what the Se cretary has done through IM 95- 01 by refusing to determine whether applications fi led before enactment of the moratorium but not yet forwarded to Washington, D.C ., qualify for the exemption. The Secretary also argues an applicant has not comp lied with the responsibility to file a complete application as co ntemplated by § 113 until he decides the application is complete. He argues Mt. Emmons is not qualified for-14-

the exemption until and unless the Secretary makes a final determination that Mt. Emmons is entitled to an FHFC, which he has not don e and will not do as long as the moratorium is in effect. The Secretary's circu lar argument again ignores the emphasis of § 113 on the applicant's actions ratherthan the Secretary's actions, and ignores the duty Congress places on the Secreta ry to determine if the application is complete so as to qualify for the ex emption. Finally, the Secretary argues Mt. Emmons is not ent itled to compelled agency action because it is not unquestionably enti tled to a patent. The Secretary misconstrues the relief which Mt. Emmons seeks. Mt . Emmons seeks an order requiring the Secretary to continue to process its patent application. This relief is appropriate without regard to Mt. Emmons' ultimate entitlement to a patent. See Marathon Oil , 937 F.2d at 500.

III. The district court's order granting summary judgment in favor of the Secretary is REVERSED. The Secretary is ordered to continue processing Mt. Emmons' patent application to determine whether it is sufficiently complete to qualify for the § 113 exemption as interpreted here in. Given our interpretation of § 113, the question of whether Mt. Emmons should have been permitted discovery-15-

before entry of summary judgment is moot. Both of Mt. Emmons' motions to supplement the record are DENIED.