F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

C U P R I T E M I N E P A R T N E R S L L C, an Ariz ona limited liability

company , Plaintiff-Appellee

,

v.

J O H N H. A N D E R S O N , a married man, acting in his sole and separate capacity ; T O D D C H R

I S T I A N A N D E R S O N , a married man, acting in his sole and separate capacity ; M A R G A R E T J A N E A N D E R S O N L I L J E M Q U I S T , a married woman, acting in her sole and separate capacity ; P E T E R H A

A K O N A N D E R S O N , a sing le man; S T A C E Y E L I Z A B E T H A

N D E R S O N O R

D , a married woman, acting in her sole and separate capacity

, Defendants-Appellants

. No. 13-16657

D.C. No. 4:12-cv-00286- DCB

- L AB

OPI NI O N

A ppeal from the United States District Court for the District of Ariz o na David C. B ury , District J udg e, Presiding

Arg ued and Submitted November 17, 2015—San F rancisco, CaliforniaC U P R I T E M I N E P A R T N E R S V

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N D E R S O N 2

F iled December 31, 2015

B efore: F ERDI

NAND F . F ERNANDEZ and MI L AN D. SMI TH, J R., Circuit J udg es, and B RI AN M. MORRI S, *

District J udg e.

O pinion by

J udg e Milan D. Smith, J r.

SUMMARY * *

A rizona Law / Mining Claim s

The panel affirmed the d i strict court’s summary judg men t , a

nd held that the d istrict court properly a pplied Ariz ona substantive law r eg a rding partition of mining c laims and federal procedural standards for summary judg ment.

Plaintiff is a limited liability c o mpany formed by children of Guy Anderson (or their successors-in-interest) who wished
to sell their interests in G uy ’s mining claims o n a piece o f property in Ariz ona’s Copper Mountain Mining District, a nd the defendants were Guy ’s remaining child, and his children, who did not want to sell th e i r i n terest in the mining claims. The district court entered judg ment ordering partition b y sale, and approved the sale of the property

.

* T h e H o n orab l e B rian M. Mo rris, District J u d g e f o r th e U .S. District Co u rt f o r th e District o f

Mo n tan a, sittin g b y

d esig n atio n

.

** T h is su m m ary co n stitu

t es n o p ar t o f t h e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.C U P R I T E M I N E P A R T N E R S V

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N D E R S O N 3

The panel held that the district c ourt di d n ot a buse its discretion in allowing all of the defendants to be joined in a sing le partition action.

The panel held that the d istrict c o u r t d i d not err in
g ranting summary judg ment in fav o r of plaintiff. As an initial matter, the panel held that p laintiff had a leg al rig ht to partition under Ariz ona law w hich g ives any ow ner o r claimant of property held in c otenancy the rig ht t o co m p el partition without reg ard to the preferences of other owners o r claimants. T he panel also held that the district court properly concluded that partition by sale was more appr o p r i at e than partition in kind. The panel further held that the district court reasonably structured the p artition sale, and t he sale d id not violate any

terms of the operative Ariz ona statute.

The panel held that the district court p roperly resolved the
summary judg ment motion according to the F ederal Rules o f Civil Procedure. Specifically

, the panel h eld that even if Ariz ona law prohibited summary judg m e nt and instead required a trial in a suit for partition by sale, such a suit was procedural in n ature and a federa l c o u rt sitting in diversity

was required to follow fede r a l

, not state, procedural r u les. The panel held that according to t h e facts as presented on

s u m m ary judg ment the outcome – partition by sale – would have been identical even if the district court had held a trial. The pan e l c o n cluded that the district court properly g ranted relief o n summary judg ment wh e r e there was no g enuine dispute of material fact to be resolved at trial.C U P R I T E M I N E P A R T N E R S V

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N D E R S O N 4

COUNSEL

Gary F rank U rman (arg

ued), J ohn Carleton L acy , DeConcini McDonald Yet w i n & L a cy , P.C., Tucson, A r iz ona, for Plaintiff-Appellee.

Todd C. Anderson ( arg ued), Troy C. M c M a h an, J ohn Anderson L aw, San Clemente, California, f o r D e fendantsAppellants.

OP INION

M. SMI TH, Circuit J udg e :

This is a n appeal of a d iversity action to partition mining claims under Ariz ona law. W e conclude that the district court properl y applied Ariz ona’s substantive law reg arding
p a r t ition a

nd federal procedural standards for summary judg ment, and we affirm.

F ACTS AND P ROCEDURAL BACK G ROUND

G u y Anderson (Guy

) owned six teen mining claims i n Ariz ona’s Copper Mountain Mining District. 1 Upon his death in 1975, h e bequeathed them to his six c h i ldren, with e ach child r eceiving an undivided o ne-six th interest in each mining claim.

1 T h e reco rd in d icates th at t h e p ro p erty as a w

h o le h as h isto rically b een treated as o n e p i ece o f p ro p erty th at co m p rises six teen m in in g c l a im s. Co p per m in in g cla i m s are lim ited in area to 1 5 0 0 f eet alo n g a v ein an d 3 0 0 f eet o n eith er sid e o f

th e m id d le o f

th e v ein . 3 0 U.S.C. § 2 3

.C U P R I T E M I N E P A R T N E R S V

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N D E R S O N 5

F ive of Guy ’ s children ( or their successo rs in interest) wished to sell their interests in the mining claims to F reeportMcMoRan Morenci I nc. (F reeport), the owner of a n open-pit
copper mine operating on adjacent property

. Guy ’s remaining

c h ild, J ohn H. Anderson (J ohn), did n ot want to sell h i s interest in the mining claims. T h o s e w ho wished to sell formed the Plaint i f

f entity Cuprite Mine Partners, L L C (Cuprite)

, w hich filed a p artition action ag ainst J ohn in the District o f Ariz ona. I n the o rig inal c o mplaint, Cuprite pray ed alternatively

for partition in kind or partition by sale.

S h o r tly after the complaint was filed, J ohn ex ecuted a series of q

uitclaim deeds in w hich h e g r anted his interest in twelve of th e mining c laims to his f our children. Each child received three of the mining claims, and J ohn kept fou r for himself. He a

pportioned the cl a ims among his children in such a way that no sing le owner w oul d h a v e a n interest in contig uous claims.

After J ohn ex ecuted the q uitclaim d eeds, Cuprite f

iled an Amended Complaint to add J ohn’s children as additional defendants (collectively

, th e D efendants). I nstead o f requesting either partition in kind or partition by sale, the Amended Complaint requested only partition by sale. Cuprite

a l l eg ed that because the q uitclaim deeds diffused J ohn’s interest over multiple non-contig uous tracts o f l a nd, the
p roperty c ould no long er b e realistically partitioned in ki n d without depreciating its v alue

, a n d that partition by sale would be more beneficial. Ariz . Rev. Stat. § 12-1218(B ).

I n response to the A mended Complaint, t h e D efendants filed a motion to dismiss, a rg uing that it was improper to join all of the Defendants in a sing le partition action. T he district court denied the motion.C U P R I T E M I N E P A R T N E R S V

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N D E R S O N 6

Cuprite moved f

or summary judg ment, arg uing that no material facts were in dispute

, a n d that as a matter of law it

was entitled to judg ment ordering p artition b y s a l e

. The district court g ranted summary judg ment to Cuprite. The
court appointed a c ommis s i o n er to ex e cute the sale of the property , and directed the commissioner to sell the p roperty

on terms “at least as favorable” as the terms o u t l i n e d in an outstanding offer letter from F reeport. The commissioner was instructed n ot to sell the property for six ty day s following the entry o f the order, during which time any party could procure and present a b e t ter offer to purchase the property

. The commissioner was ordered to proceed with whatever offer he believed to b e th e most f avorable after the six ty -day period had passed.

B y the e nd of the six ty -day period, no one b ut F reeport had submitted an offer to p urchase the p roperty

. 2 On April 24, 2 0 1 4, the district court approved the sale of the p roperty to F reeport.

The Defendants timely

appealed.

JURISDICTION AND STANDARD OF REVIEW

The d istrict court had diversity j u r i s d iction in this case pursuant to 28 U.S.C. § 1332, and w e review the court’s final judg ment pursuant to 2 8 U.S.C. § 1 291. W e revie w the district court’s denial of the motion to dismiss for i m p r o p er

2 A f te r th e ex p iratio n o f th e s i x ty

- d ay d ead lin e, an o th er co m p an y

su b m itted an “ ex p ressio n o f in terest” to th e co m m issio n er. In ad d i tio n to b ein g u n t i m ely

, th e d istrict co u rt f o u n d th at t h e letter w as n o t an actu al b in d in g o f

f er, an d th at i t w as “ on ly d eb atab le” w h eth er th e t erm s w ere b etter th an

th o se p ro p o sed b y

Freep o rt.C U P R I T E M I N E P A R T N E R S V

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N D E R S O N 7

joinder for abuse o f d i s cretion. S ee Bakia v. Cty. of Los Angeles

, 687 F. 2 d 2 99, 3 01 (9th Cir. 1982). “A district court’s g rant of s u m m ary judg ment is reviewed de novo

. ” Davis v. City of Las Ve

g a s , 4 78 F .3d 1048, 1053 (9th Cir. 2007).

D ISCUSSION

On appeal, the Defenda n t s assert that they were improperly j o ined into a sing le partition action. They also contend t hat the district court e rred in apply ing Ariz ona’s partition statute by : (1) not f ollowing the procedures outlined in each and e very provision of t h e partition statute, a nd instead proceeding immediately to partition by sale; (2) ordering sale to Fr ee p o r t instead of sale at auction; a nd (3) ordering sale on summary j u d g ment instead o f after a trial. We find all of the Defendants ’ a rg uments to be unavailing , and we affirm.

I. Joinder of

the Def endants

The district court did not abuse its discretion in allowing all of the Defendants to b e joined in a sing le partition action. The district c ourt concluded t h a t because of the close
prox imity of the mining claims and the nature of strip mining

, p a r titioning each claim individually could adversely affect t h e propert y r i g hts of the adjacent claim holders. This sug g ests that joinder w as mandatory under Fe d. R. Civ. P. 19(a). However, even if joinder was n ot mandatory

, it was c ertainly permissive. All the properties included in the partition action

a re part of the same cotenancy created by Guy
, Cup r i t e i s seeking the same relief from each party , and the relevant law

a n d facts are common to all the Defendants. F ed. R. Civ. P. 20(a)(2). Permissive joinder is t o b e liberally construed toC U P R I T E M I N E P A R T N E R S V

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N D E R S O N 8

promote the ex pediti o u s determination of disputes, and to prevent mult i p l e lawsuits. League to Save Lake Tahoe v

. Tahoe Reg’l Planning Agency
, 558 F .2d 914, 917 ( 9 th Cir. 1977). T he district c ourt acted w ell within its discretion in

con c l u d i ng that a sing le partition action was the most

ex p editious way of resolving this dispute, and in allowing all of the Defendants to be joined in that action.

II. P artition

The d istrict court did not e r r when it g ranted summary judg ment in favor of Cuprite and ordered partition by sale to F reeport.

As an initial matter, Cuprite has a leg al rig ht to partition under Ariz ona law. T he Defendants s u g g est that instead o f partiti o n , C uprite could have sold its fractional interest to F reeport, which as a cotenant could m i n e t h e land and pay

r oy alties to the Defendants. Even if this plan were fe a s i b l e, Ariz ona’s partition statute g ives any owner or claimant o f property held in cotenancy the r ig ht to compe l partition without reg ard to the preferences of other o w n e r s o r claimants. Ariz

. Rev. Stat. § 12-1211 ( A ) ; McCready v

. McCready

, 810 P.2d 624, 6 26 (Ariz

. Ct. App. 1 991) (“[ T] he rig ht of partition is an incident of common ownership and is specifically

authoriz ed by

statute.”).

The Defendants’ r emain i n g contentions are that the district court erred by improperly apply ing the A riz o na partition statut e in ordering sale without f ollowing the procedures in each provision of the statute, in ordering sale to F reeport instead of a public auction, and in ordering a sale on summary judg ment instead o f after a trial. W e address e ach contention in turn.C U P R I T E M I N E P A R T N E R S V

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N D E R S O N 9

A. P artition by Sale

The district court properly concluded that partition by sale

was more appropriate than partition in k ind. The statute g ives

cou r t s broad authority to order partition by sale when appropriate:

I f o n t h e t r i a l of the action, it appears to the
court that fair partition of the property cannot be mad e without depreciating the value
t hereof, or that for any reason a sale is mor e beneficial to the parties or any of them, it shall in the firs t i n stance, e nter a judg ment directing that the real property be sold.

Ariz

. Rev. Stat. § 12-1218(B ). T h e Defendants arg ue that the distric t c ourt should have followed the procedural requirements o f all of the other provisions in the p ar t i t ion statute, including appointing a panel of three commissioners
t o s u r vey the property and divide it into tracts. See id. § 1 2- 1215(B ). B ut not every provision applies to every partition. The Ariz ona Supreme Court has held that where partition b y sale is appropriate under s e c tion 12-1218(B ), the provisions apply ing to partition in kind ( such a s a p p o inting

c o m m issioners to survey a nd divide the land) n eed not be followed. B l e d

soe v. Hood

, 36 P.2d 564, 565–66 (Ariz

. 1934). 3 I nstead, the c ourt may order such a sale “o n i t s o wn motion” and “ without the aid of commissioners.” Id. at 565. Thus, when the court determines that partition b y s a l e is appropriate, section 12-12 1 8 ( B ) i s t h e o p e rative provision a

nd

3 T h e Bled

so e co u rt w as in terp retin g an earlier v ersio n o f th e statu te th at is su b stan tiv ely id en ti c a l to th e cu rren t statu te at issu e. Co mp a re A riz. Rev . Stat. § 1 2

- 1 2 1 8(B ) (2 0 1 3 ) with A riz. Rev . Stat. § 4 3 3 5 (1 9 28 ).C U P R I T E M I N E P A R T N E R S V

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N D E R S O N 10

the provisions that apply to p artition in kind a re not applicable.

On the undisputed facts i n t h e record, the district court properly wielded the power g r anted to it by section 12- 1218(B ) in concluding that partition by sale was “more beneficial to the parties or any of them.”

F irst, the nature of mining cla i m s g enerally make them unsuitable for partition in kind. Manley v. Boone
, 1 59 F

. 633, 636 ( 9th Cir. 1908). The mining claims at issue apparently will need to be strip mined in order to obtain max imum value. The d istrict court found that strip mining “takes two feet on the surface f

o r each foot of g round mined underneath,” making “in-kind par t i tion of one-six th of each claim im p o s s i ble.” Even if strip mining five-six ths of the area o f each of the claims were technical ly possible, it would “seriously depreciate the value of the mining claims.”

Second, the “parties a

re so a t odds with each other that inkind partition would be impossible.” Par t i t ion b y sale is appropriate where the parties are “unable to deal with e ach other in their best interes t s , ” o r where there is a “problem with access to a porti o n of the property .” Arnold v. Cesare
, 668 P.2d 891, 895–96 (Ariz

. Ct. App. 1983). Such is the case here; if the land were partitioned in kind, it is unlikely that the parties would be able to cooperate with o ne another to ensure that Cuprite (or its successor) could fully mine its property , and a t the same time ensure that the Defendants could still

access their small, scattered, and isolated tracts. B ased on the undisputed facts before it, the district court properly applied

sec t i on 12-1218(B ) in concluding that partition by sale was “more beneficial to the parties or any of them.”C U P R I T E M I N E P A R T N E R S V

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N D E R S O N 11

B. Sale to F reeport

The D efendants nex t assert that it was i n a p propriate to order sale to F reeport instead o f ind i v i dually auctioning off each claim to the hig hest b i dder. They reason that e ach D efendant separately “would enjoy a tremendous strateg ic position,” a

nd that each acre would sell for more money than if the entire parcel were sold at once. This is both speculative and irrelevant.

I t is speculative because it is not at all clea r t h at e ach Defendant would necessarily have m ad e more money in individual auctions; they c ould h a v e very well made less. Given the prox imity of its mining operations, all of the parties concede that F reeport is the log ical buy er of the claims. No firm b uy er materializ ed during the six ty -day offer window set by the district court, so there is no reason to b elieve that one would have a ttended an auction for individual tracts w ithin a similar time frame. I f F reeport h ad been the on l y i n t e rested buy er a t an auction, and the D efendants we r e r eq u ired to

a c cept the hig hest b id, F reeport could potentially h a v e purchased the property for less than the terms in its operative offer. F urther, the purchase price of each individual claim mig ht have varied sig nificantly us i n g t his method of sale, depending o n the o r der in which they were auctioned off, a s well as their location and accessibility

. Arguendo

, even if the Defendants are correct, and at least

some claims could have commanded a hig her price at auction, the stat ute does not require the district court to order sale in

a way that max imiz es the pr o ceeds to particular individual

owners. I n stead, the statute only directs the court to “appoint

a commissioner to make the sale

. . . and return the proceeds into c ourt to b e divided between the persons entitled theretoC U P R I T E M I N E P A R T N E R S V

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N D E R S O N 12

according to their r espective interests.” Ariz

. Rev. Stat. § 12- 1218(C). “Such commissioner shall sell the real property in the time and manner, a n d a f ter n otice, as directed by the

co u r t .” Id. The district court did not err in ex ercising the discretionary authority g rante d t o i t by the statute in a way that took advantag e of F reeport’s offer and e nsured t h a t the proceeds were divided equally among the owners “according
to the i r respective interests.” Id. Accepting the current offer

o r any better terms that c ould be had was a reaso n a b l e w a y for the dist r i c t court to structure the partition sale, and does not violate any

terms of the operative statute.

C. Sum m ary Judgm e nt

F inally

, the D e f

endants contend that the summary judg ment order should be reversed because a trial is r equired in an Ariz o na partition action. W e acknowledg e that section 12-1218(B ) contemplates p artition by sale “on the trial of the action.” I t is not clear whether this l an gu a g e means that
summary judg ment is never appropriate in a partition action under Ariz ona law. 4

4 L ik e th e f

ed eral ru les, t h e Ar i z o n a ru les o f p ro ced u re allo w f or

su m m ary j u d g m en t w

h en th ere are n o g en u in e d isp u tes o f m a t e r i a l f act. A riz. R

. C iv

. P

. 56 (a). A n d th e p artitio n statu te states th at t h e ru les of
p r o c e d u re “ w

h ich g o v ern all o th er civ il actio n s sh all g o v ern actio n s f o r p artitio n w

h en n o t in co n f

lict w ith th e p ro ceed in g s p ro v i d ed b y th is article.” A riz. R ev

. S t a t

. § 1 2

- 12 2 4 (B ). T h e Def en dan ts u rg e u s to

co n clu d e th at th e “ trial” lan g u ag e f ro m sectio n 1 2

- 1 2 1 8 (B ) co n f licts w i th Ru le 5 6
, m ak in g it in ap p licab le to p artitio n actio n s. A rizo n a co u rts d o n o t ap p ear to tak e th is v iew

. In Reg ist er v. Co lema n , th e A rizo n a S u p rem e Co u rt h eld th at i t w as ap p ro p riate to o rd er partitio n b y sale o n s u m m a r y j u d g m en t, b u t w it h o u t sp ecif ically ad d ressin g th e “ trial” ref eren ced in sectio n 1 2- 12 1 8 (B ). 6 3 3 P .2 d 4 18 , 4 2 1 (A riz. 1 98 1 ).C U P R I T E M I N E P A R T N E R S V

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N D E R S O N 13

B u t we n e ed not (and do not) decide whether the statute requires Ariz ona state courts to conduct a trial in all partition by sale cases. Reg a

rdless of wh e t h e r an Ariz ona state court

wo uld have been required to hold a trial, the district court

c o rrectly resolved the summary judg ment motion accord i n g to the F ederal Rules of Civil Procedure.

Under the Erie d octrine, federal c o u rts sitting in diversity apply state substantive law an d federal procedural r u les. Gasperini v. Ctr. for Humanit i e s , Inc.
, 518 U.S. 415, 427 (1996). The “pr o c e d u ral aspects of summary judg ment” a re g overned by the F ederal Rules of Civil Procedu re, and “the law of the forum controls the su b s t antive issues.” Caesar Elecs. Inc. v. Andrews

, 905 F

. 2d 2 87, 290 n. 3 ( 9th Cir. 1990). W e hold that even if Ariz on a s tate law prohibits summary judg ment and instead requires a trial in a suit for partition b y sale, such a r equirement is procedural in nature and a federal

c ourt sitting in diversity is required to follow federal, not state, p rocedural rules. See e.g. Marou les v. Jumbo, Inc.
, 452 F .3d 639, 645–46 (7th Cir. 2006) (“ Fe d e r a l courts may

. . . g rant summary judg ment under Rule 56 upon concluding that no reasonable jury could re t u r n a verdict f or the party opposing the motion, even if the state would require the judg e to submit an identical case to the jury .”).

I n determining whether a state law i s substantive o r procedural, we ask whether the law is outcome determinative; in other words, whether it wou l d “ sig n ificantly affect the result of a litig atio n fo r a federal court to disreg ard a law o f

a State that would be controlling in an action upon the same claim by the same parties in a State court[ ] .” Gas p e rini
, 5 1 8 U.S. at 427 (quoting Guaranty Trust Co. v. Y or k

, 3 2 6 U.S. 99, 109 (1945)). W e do not apply this test mechanically

, but rather, g uided b y “the twin aims of the E rieC U P R I T E M I N E P A R T N E R S V

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N D E R S O N 14

rule: d iscourag ement of forum-shopping a nd avoidance o f inequitable ad m i nistration of the laws.” Id. at 428 (quoting Hanna v. Plumer , 380 U.S. 460, 468 (1965)).

Even if A riz ona courts required trials in suits for partition by sale, t h a t would not be outcome determinative h ere. According to the facts as p resented o n summary judg ment, the outcome—partition by sale—would have b e e n identical

even if the district court had held a trial. 5 There are no material disputed facts that would sug g e st that Cuprite is not entitled as a matter of law to partition by sale. Cuprite has an interest in the property and w ishes to end its cotenancy with
t he D efendants. The D efendants speculated, withou t a g enuine basis, that a more beneficial result could be achieved by not ordering partition, orderin g partition in kind, o r

or d e r i n g sale b y auction, but nothing in the record sug g ests that these issues needed to be e lucidated in a trial for t h e district court to apply the appropriate leg al standa r d s

. S ee supra Part I I .A.

The district court properly applied al l of the substantive provisions o f Ariz ona’s partition statutes that are relevant to this case, and properly applied F e d. R. Civ. P. 56( a) in
g ranting relief on summary j u d gment where there w as no g enuine dispute of material fact to be resolved at trial.

5 W e ap plied sim ilar reaso n in g in S n ea d v. Metro

. Pro

p

. & Ca s

. In s. Co

. , 2 3 7 F.3 d 1 0 8 0
, 10 9 1 (9 th Cir. 2 0 1 0 ). In th at case, w e h eld th at th e f ed eral McDo n n ell Do u g la s stan d ard sh o u ld b e ap p lied in a d i v er s i t y actio n f or

em p l o y m en t d iscrim in atio n , ev en w h ere t h e law o f th e f

o ru m allo w ed th e p lain tif f to m eet a lo w er stan d ard t o s u r v i v e su m m ary j u d g m en t. Id

. at 1 0 9 0

. T h e p an el reaso n ed th at if th e p l ain tif f co u ld n o t satisf

y t h e h eig h ten ed f

ed eral stan d ard at su

m m ary j u d g m en t, sh e w ou ld certain l y n o t p rev ail at trial. Id

. at 1 0 9 1.C U P R I T E M I N E P A R T N E R S V

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N D E R S O N 15

AF F IRMED.