Source: https://openjurist.org/291/f3d/1250
Timestamp: 2019-11-19 15:07:35
Document Index: 185941856

Matched Legal Cases: ['§ 701', '§ 28', '§ 193', '§ 28', '§ 28', '§ 193', '§ 37', '§ 706', '§ 28', '§ 28', '§ 28', '§ 37', '§ 28', '§ 242', '§ 242']

291 F3d 1250 Cliffs Synfuel Corporation v. Norton Lp | OpenJurist
291 F. 3d 1250 - Cliffs Synfuel Corporation v. Norton Lp
291 F3d 1250 Cliffs Synfuel Corporation v. Norton Lp
Cliffs Synfuel Corp. appealed the A.L.J.'s decision to the Board, asserting that the resumption doctrine was still in effect in 1977 — the year the claim owner resumed assessment work, after 46 years of inactivity. An Administrative Judge of the Board affirmed the A.L.J.'s ruling.
Appellee thereafter filed a complaint in the district court for a review of the Board's final order, as authorized by the Administrative Procedure Act, 5 U.S.C. §§ 701-706.2 Appellee requested that the court reverse the agency action on the ground that its decision was arbitrary, capricious and otherwise inconsistent with current law. The district court granted the relief, concluding that the Board had misinterpreted the Hickel decision:
In sum, Hickel does not hold that failure to do assessment work, even substantial noncompliance with the assessment requirement, is somehow self-effectuating, or results in the ipso facto loss of rights under a pre 1920 mining claim. Rather, the Hickel decision stands for the proposition that the Department of the Interior has standing to challenge the holder of oil shale mining claims for failure to substantially comply with the assessment requirements. The IBLA Decision, following Herr, seemingly discarded § 28 and § 193's straightforward language to reach an alternative, strained, and erroneous reading of Hickel. This was arbitrary, capricious, and an abuse of discretion.
In reaching its conclusion the court held that although Appellee failed to perform the necessary annual statutory assessment work for 46 years, as mandated by 30 U.S.C. § 28, its resumption of assessment work in 1977, before the initiation of a government contest action, cured the 46 year lapse. The court concluded that the four claims were valid and in good standing and granted Appellee's Motion for Summary Judgment, vacated the Board's decision, and directed the Department of the Interior to diligently process patents for the claims. This appeal followed.
In her appeal, the Secretary contends that the district court failed to respect the fundamental interpretation of § 28 and § 193 as set forth in Hickel in the following discrete particulars: (1) the necessity for the claimant to perform annual assessment work each year; (2) that "token assessment work, or assessment work that does not substantially satisfy the requirements of 30 U.S.C. 28, is not adequate to `maintain' the claims within the meaning of § 37 of the Leasing Act." Hickel, 400 U.S. at 57, 91 S.Ct. 196; and, most important for our purposes, (3) that by the terms of the Mineral Leasing Act of 1920, the United States becomes the beneficiary of all pre 1920 oil shale mining claims that are invalidated because of a failure to perform the annual assessment work for a substantial period of time. The Secretary argues that the effect of this, insofar as oil shale mining claims are concerned, is that where there has been a history of decades of failure to respect the annual assessment requirements, the savings clause exception of Mineral Leasing Act of 1920 does not apply.
"[I]n reviewing a district court's review of an agency decision, the identical standard of review is employed at both levels; and once appealed, the district court's decision is accorded no particular deference." Valley Camp of Utah, Inc. v. Babbitt, 24 F.3d 1263, 1267 (10th Cir.1994) (internal quotation marks and citations omitted). The district court's granting of summary judgment is reviewed de novo. Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir.1990).
Under the Administrative Procedure Act, in reviewing the underlying agency decision denying Appellee's application for a patent, the standard is whether the agency's decision was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). "The duty of a court reviewing agency action under the `arbitrary or capricious' standard is to ascertain whether the agency examined the relevant data and articulated a rational connection between the facts found and the decision made." Olenhouse v. Commodity Credit Corp., 42 F.3d 1560, 1574 (10th Cir.1994) (footnote omitted). In reviewing the agency's explanation, the reviewing court must determine "whether the agency considered all relevant factors and whether there has been a clear error of judgment." IMC Kalium Carlsbad, Inc. v. Interior Bd. of Land Appeals, 206 F.3d 1003, 1012 (10th Cir.2000) (quoting Olenhouse, 42 F.3d at 1574). However, "the ultimate standard of review is a narrow one." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971).
Additionally, when reviewing an agency's interpretation of a statute that it administers, a court must apply the two-step analysis set forth by the Court in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). This court has interpreted Chevron as follows:
The enactment of the Mineral Leasing Act of 1920 marked a "complete[ ] change[ ][in] the national policy over the disposition of oil shale lands." Hickel, 400 U.S. at 51, 91 S.Ct. 196. The Act removed oil shale (and other specified minerals) from subsequent location and private appropriation under the General Mining Law of 1872. "Thereafter such lands were no longer open to location and acquisition of title but only to lease." Id.
Prior to Hickel, the Court had taken the view that, even after the enactment of the Mineral Leasing Act, an owner of a pre 1920 oil shale claim was under no obligation to perform the requisite assessment work on an annual basis so long as they were able to avail themselves of the resumption doctrine before the claim was relocated by a subsequent claimant. Wilbur v. Krushnic, 280 U.S. 306, 317, 50 S.Ct. 103, 74 L.Ed. 445 (1930). Moreover, defaults in assessment work did not mandate that the lands subject to oil shale claims be automatically returned to the government. Instead, the Court intimated that failure to perform assessment work made the claims subject to relocation only by third parties but that "[s]o far as the government was concerned, failure to do assessment work for any year was without effect." Ickes v. Virginia-Colorado Dev. Corp., 295 U.S. 639, 645, 55 S.Ct. 888, 79 L.Ed. 1627 (1935) (citing Krushnic, 280 U.S. at 317, 50 S.Ct. 103).
The Court radically altered these two concepts in re-examining the Leasing Act's effect on pre-1920 oil shale clams in Hickel, a case in which oil shale claimants sued the Department of the Interior seeking a reinstatement in the late 1950's3 of claims "cancelled in the early 1930's on the ground that the amount of labor or improvements specified in § 28 had not been made `during each year.'" Hickel, 400 U.S. at 50, 91 S.Ct. 196. The Court first rejected its earlier formulations that had declared the government to be a disinterested party, unable to assert rights to a pre-1920 oil shale claim upon which assessment work had been discontinued. It stated that "if we assume, arguendo, that failure to do assessment work as provided in the 1872 Act concerned at the time only the claimant and any subsequent relocator, the United States, speaking through the Secretary of the Interior, became a vitally interested party by reason of the 1920 Act." Hickel, 400 U.S. at 53, 91 S.Ct. 196. Further, the Court said:
From the Court's statement "that every default in assessment work does not cause the claim to be lost," it logically follows that in each case we must consider the quantum of the actual assessment work performed and the length of time the claimant failed to meet the annual assessment work required by the Mining Act of 1872.4
The Court set forth the template in Hickel. It noted that in the case before it, the claims had been "cancelled in the early 1930's on the ground that the amount of labor or improvements specified in § 28 had not been made `during each year.'" Hickel, 400 U.S. at 50, 91 S.Ct. 196. Some twenty years would pass before the claimants re-asserted their right to these claims and during this period they performed no assessment work. Annual assessment work had basically ceased prior to the 1930's as well as in the twenty years thereafter. It was this long period of inactivity that influenced the Court to distinguish the facts in Hickel from those in Krushnic and Virginia-Colorado. By way of contrast, in Krushnic, the Court held that the Secretary could not cancel a claim where assessment work had lapsed for only a year. The Court reached a similar decision in Virginia-Colorado, where the claimants had performed assessment work from 1917 to 1930 and omitted assessment work for only fifteen months preceding the Secretary's action. Moreover, when the assessment work ceased in 1931, the claimant had stated its intention and made arrangements to resume assessment work shortly thereafter. Virginia-Colorado, 295 U.S. at 643, 55 S.Ct. 888.
While [a claimant] is required to perform labor of the value of $100 annually, a failure to do so does not ipso facto forfeit the claim, but only renders it subject to loss by relocation.... and we think it is no less clear that after failure to do assessment work, the owner equally maintains his claim, within the meaning of the Leasing Act, by a resumption of work, unless at least some form of challenge on behalf of the United States to the valid existence of the claim has intervened ...
This statement was the polestar of the district court's approach to this case. The court was of the view that divestment of an oil shale claim "could only occur upon the simultaneity of the claim holder's failure to maintain and the subsequent relocation of the claim by a third person." Cliffs Synfuel Corp., 147 F.Supp.2d at 1124 (emphasis in original). It noted that under 30 U.S.C. § 28, "[o]ne can redeem a claim by resuming performance of the necessary labor or improvement to the claim before another person `relocates' the claim." Id. at 1122. Therefore, because Appellee had resumed annual assessment work in 1977, before the government had undertaken any action, the district court opined that the four oil shale claims were valid and in good standing.
In its more precise approach in Hickel that limited the sweep of Krushnic and Virginia-Colorado, the Court validated the ability of the government, as the "beneficiary of all claims invalid for lack of assessment work," sua sponte to challenge pre-1920 oil shale claims. The Court referred to the legislative history of the Mining Law of 1872 and emphasized that "[w]hile the objective of the 1872 Act was to open the lands `to a beneficial use by some other party,' once the original claimant defaulted, the defeasance inevitably accrued to the United States, owner of the fee." Id. at 55, 91 S.Ct. 196. The Court declared that "we are of the view that § 37 of the 1920 Act makes the United States the beneficiary of all claims invalid for lack of assessment work or otherwise." Id. at 57, 91 S.Ct. 196. We hold that this is precisely the legal consequence of the long term inactivity on the four claims at issue before us.
On the basis of Hickel's teachings, we conclude that the 46 years of inaction on Appellee's claims reflects "token assessment work, or assessment work that does not substantially satisfy the requirements of 30 U.S.C. § 28...." Id. at 57, 91 S.Ct. 196. Therefore, in this case, "the 1920 Act makes the United States the beneficiary of all claims invalid for lack of assessment work or otherwise." Id. The court erred in granting summary judgment in favor of Appellee and should properly have entered judgment in favor of the Secretary of the Interior.
In so concluding, we perforce reject Appellee's suggestion that its assessment work, which took place from 1977 through 1992, offsets the previous 46 years of dereliction and restores a legitimate right to the claims by constituting more than "token assessment work." The short answer to this is that by appropriate analogy, this argument was rejected by the Court in Hickel when it noted that a decades-long lapse on assessment work "might be the equivalent of abandonment...." Id. at 57, 91 S.Ct. 196. Applying the rationale of the Court, we hold that prior to 1977 Appellee's "default in doing the assessment work... ma[de] the United States the beneficiary of all claims invalid for lack of assessment work" long before it resumed assessment work in 1977. Id. at 57, 91 S.Ct. 196. Appellee's activity that began in 1977 was too little, too late.
This, too, must be said. Amendments to the Mining Law, together with subsequent congressional enactments, further confirm that the district court's decision is in conflict with Congress' intent in the Leasing Act to require claimants to perform annual assessment work in order to preserve the validity of their pre 1920 oil shale claims. To be sure, the Court has cautioned that "arguments predicated upon subsequent congressional actions must be weighed with extreme care." Andrus, 446 U.S. at 666 n. 8, 100 S.Ct. 1932. However, it also teaches (in construing another facet of the 1920 Act) that subsequent congressional actions should not be "rejected out of hand as a source that a court may consider in the search for legislative intent." Id.
Similarly, the Energy Policy Act of 1992, which revised and clarified the requirements for patenting oil shale claims, confirms the Court's holding in Hickel. The Act provides that "[t]he holder of a valid oil shale mining claim who has filed a patent application and received first half final certificate for patent by October 24, 1992, may obtain a patent pursuant to the general mining laws of the United States." 30 U.S.C. § 242(b). The Act further provides that for claims which had not received the final certificate, "the claim holder shall no longer be required to perform annual labor, and instead shall pay to the Secretary $550 per claim per year...." 30 U.S.C. § 242(e)(2) (emphasis added). The language "shall no longer be required" evidences Congress' understanding that prior to the statute's enactment, a claim holder was required to perform annual labor in order to maintain his claim.
A description of oil shale mining claim activity before and subsequent to the passage of the Mineral Leasing Act of 1920 is set forth in the Secretary of the Interior's Petition for a Writ of Certiorari to the United States Court of Appeals for the Tenth Circuit in theHickel case:
Proceedings against such claims began in the late 1920's, and took on substantial proportions. Investigation showed more than 30,000 oil shale claims, embracing more than 4,000,000 acres of public domain in Colorado, Utah and Wyoming, which were not being maintained by the performance of annual assessment work. In the fiscal year ending June 30, 1932, the Secretary declared 10,918 locations, embracing 1,294,500 acres, null and void; and in fiscal 1933, 11,146 locations embracing 1,448,980 acres were cancelled. It is apparent from the volume of claims disposed of that the great majority of the mining claimants must have defaulted, taking no action to protect their interest in what then appeared to be worthless property. Indeed, of the claims involved in this case, only the then holders of the claims now made by respondent Brown appealed the cancellation within the administrative process; when that administrative appeal was lost, no effort was made to seek judicial review. The infrequency with which judicial review was sought is striking when it is considered that, when sought, it succeeded. In January, 1930, this Court held in Wilbur v. Krushnic, 280 U.S. 306, 50 S.Ct. 103, 74 L.Ed. 445, that the Secretary could not cancel a claim where assessment work had lapsed for a year, but had been resumed before any administrative action had been undertaken against the claim. That decision left open the question whether cancellation would be proper where the Secretary took affirmative action against a claim after a lapse in assessment work and before resumption. The Secretary promptly began to take such action, posting property with challenges to the claims when it was determined that assessment work had not been done during an immediately preceding year. The massive and basically unopposed clearance of claims described above then took place.
Among the few who contested these proceedings were the claimants in Virginia-Colorado, supra, who appear to have omitted their assessment work for only fifteen months preceding the Secretary's action, and who alleged in their papers that they stood ready to resume it but for the Secretary's cancellation of their claim. In 1935, as already indicated, they brought their challenge to this Court, which ruled that even in a contest brought prior to resumption of assessment work, failure to do that work for a year was not a valid reason to cancel the claim and that, in doing so, the Secretary "went beyond the authority conferred by law." 295 U.S. at 647, 55 S.Ct. 888. The Secretary promptly "overruled" the contrary administrative decisions, The Shale Oil Company, 55 I.D. 287, vacated pending cancellation proceedings, and for a time stood ready to reopen cancellations which had already been made final. It appears that only about 74,000 acres of the several million involved were reclaimed in this fashion.
With the recent revival of interest in oil shale, speculators and others have been buying up the old, cancelled claims....
Petition for a Writ of Certiorari to the United States Court of Appeals for the Tenth Circuit at 3-6, Hickel v. Oil Shale Corp., 400 U.S. 48, 91 S.Ct. 196, 27 L.Ed.2d 193 (1970), reprinted in Appellant's Supp.App. at 427-431 (original record citations omitted).
Where jurisdiction for the review of agency action is exclusively in the courts of appeals, "[r]eview of an agency order is commenced by filing ... a petition for review with the clerk of a court of appeals authorized to review the agency order." Rule 15(a)(1), Federal Rules of Appellate Procedure. See also Dillard v. U.S. Dep't of Hous. and Urban Dev., 548 F.2d 1142, 1143 (4th Cir.1977) (Per curiam).
The precise time frame is delineated in the Secretary of the Interior's Petition for a Writ of Certiorari to the United States Court of Appeals for the Tenth Circuit inHickel:
Respondents are the present owners of claims to oil shale mining locations in Colorado. These claims were cancelled by the Secretary of Interior in 1928-1931 when he determined that the then owners of the claims had failed to meet a statutory obligation to do assessment work — $100 annual labor or improvements on each claim — as required by 30 U.S.C. 28. In 1935, this Court held that the requirement of assessment work could not be used as a ground for cancellation by the government, but was significant only for the purpose of determining rights to the claim as between competing prospectors. Ickes v. Development Corp. (Virginia-Colorado), 295 U.S. 639, 55 S.Ct. 888, 79 L.Ed. 1627. The present claims were not involved in that case, and no attempt was made then, or until the late 1950's, to revive them. They remained cancelled on the Department's records.
Petition for a Writ of Certiorari to the United States Court of Appeals for the Tenth Circuit at 2, Hickel v. Oil Shale Corp., 400 U.S. 48, 91 S.Ct. 196, 27 L.Ed.2d 193 (1970), reprinted in Appellant's Supp.App. at 427 (original record citations omitted).
In so framing our path of inquiry, we perforce reject the more sweeping statement inUnited States v. Herr, that "the resumption doctrine was no longer applicable to oil shale claims." Herr, 130 IBLA 349, 367 (1994).